Thriving Mich. Thrift Is Focus of Questions on Industry's Future
Klinkerman, Steve, American Banker
Though he is a recognized master of the mortgage business, Thomas R. Ricketts is the first to concede that he cannot control his future. In today's environment, a one-product focus is no guarantee of independence.
As chairman and president of Standard Federal Bank, Mr. Ricketts presides over one of the nation's largest and most profitable thrifts. Based in Troy, Mich., the $10 billion-asset unit, the nation's sixth largest, delivered an eye-opening 1.21% annualized return on average asset in the second quarter.
Despite that sterling performance. Standard Federal's common stock is trading at a limp 1.35 times book value. Stated another way, it is trading at a mere 8.8 multiple over its earnings of the previous 12 months.
Standard Federal is clearly vulnerable to an aggressive bank acquirer.
"Whether we get bought out is an open question," said an unabashedly candid Mr. Ricketts.
Through no fault of his, Standard Federal has become a focal point in an ongoing referendum on the thrift industry. Two major questions loom for healthy thrifts that are at the peak of their profitability.
Do investors dare accord high trading multiples to even healthy thrifts, given the …
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Publication information: Article title: Thriving Mich. Thrift Is Focus of Questions on Industry's Future. Contributors: Klinkerman, Steve - Author. Magazine title: American Banker. Volume: 158. Issue: 171 Publication date: September 7, 1993. Page number: 4. © 2009 SourceMedia, Inc. COPYRIGHT 1993 Gale Group.
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