|
|
 |
Capital Optimization & Formation
|
|
Every de novo's ultimate goal is to maximize its return on equity; effective capital allocation and utilization (leverage) are critical in meeting this goal. Some de novos can accomplish their goal through internal loan originations and retail deposit-gathering activities alone, but for most loan demand and/or deposit flows don't always cooperate. Shay provides de novos capital solutions for either situation. For those with unlimited growth potential, Shay provides access to cost-effective, non-dilutive capital for next stage growth via Trust Preferred issuance. For those whose profitability and ROE are stifled by the pace of loan and deposit growth, Shay' Wholesale Growth Program is the answer.
Capital Optimization:Shay has been helping de novos supplement their loan growth and increase their earnings with Wholesale Growth Programs since 1982. A "wholesale" transaction refers to the purchase of wholesale assets (investment securities and/or loans originated by others) that, in turn, are funded by wholesale liabilities (FHLB Advances, brokered CDs and/or repurchase agreements). By extension, a "wholesale growth program" encompasses a series of scheduled wholesale transactions initiated over a period of three to five years to build a wholesale portfolio intended to utilize excess capital to generate incremental earnings and higher returns on capital.
For more on Wholesale Growth please click here
Capital Formation:De novos are all about growth and it won't be long before additional capital is needed to fuel more growth. Shay's corporate structure is uniquely suited to assist you in raising capital via the highly attractive trust preferred market. Trust preferred issuance offers the unique opportunity to raise money that qualify as tier 1 capital for regulatory purposes but is treated like debt for tax purposes. Consequently, the issuer can rely on it trust preferred proceeds to expand while also deducting (for tax purposes) the interest payments associated with the issuance. These unique characteristics, along with its non-dilutive attribute, make trust preferred issuance a formidable tool in capital management.
Click here for more on Shay's Trust Preferred capabilities
|
|
|
