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Strategies & Market Trends : Value Investing

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To: E_K_S who wrote (25091)	10/22/2006 11:20:04 PM
From: Spekulatius	Read Replies (1) of 78752

re Community banks - deposits are the cheapest source of funding for loans, so it is my understanding that the deposits are very much correlated with franchise value. Of course there are different sorts of deposits - the non interest bearing one are much more valuable than CD's for example. An acquirer definitely would want to build on the existing deposit base, especially the low interest deposits (Checking accounts etc.) which also tend to be more sticky. Regarding NYB - i do not think this stock is cheap. Deposits are 3x market cap which is OK but not great. Earnings barely cover dividend payments and the capital ratio is quite low. For those reasons NYB seems like a risky stock to me.

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