HGH - Heartland Group Holdings

[Bjauck]

So paying out a large chunk of profit in divies hasn't been so smart?

These reverse mortgages need cash up front - no repayments for yonks ......the more successful this part of the business one must expect more capital to be raised on a regular basis

At least the shareholders could make use of the attached imputation credits. Since they had been considering a capital repayment, their plans must have evolved dynamically. With the share price at a pretty decent level, at least they won't have to issue too many shares to get their capital requirement. It seems that the management are making most of opportunities. We will have to see how the market accepts it.

[Arbitrage]

At least the company is exploring growth opportunities and giving the shareholders a chance to go with it and profit. I would rather this than a capital return...

[percy]

And it wasn't so long ago if my memory is correct that they were considering returning capital to shareholders. If I am correct, things change quickly.

I did point out in my post #8311 AGM thoughts;
"the excess capital has been well used to expand the loan book",while the equity ratio remains at 12.5%."
The $30mil cap raise is being used to fund more growth.
I would expect Heartland Bank will look to do a $50mil to $100mil bond issue as well next year.
Getting such strong organic growth is very positive.

[trader_jackson]

Although I did think a capital raising would take place, I believed it would be for a very different purposed...

But not to worry, very smart what HBL have done these past few years... paid a very nice dividend, while growing well... both factors have, not surprisingly, pushed up the share price.

HBL now recognizes the need to raise a little more capital to further turbo charge growth (well turbo growth in comparison to 'regular' banks), while not having to issue as many shares to raise $30m if it had done so a year or two ago.

I will not be surprised to see the $10m available to 'everyone else' oversubscribed...

Disclosure: I know I for sure have some capital on hand ready to deploy, with a particular focus on companies that have "growth + dividend", and HBL is a prime example of this (along with the top performing stock in the retirement sector this year so far )... so yes I will be taking part in the cap raise

[Beagle]

While they have reaffirmed guidance they have neglected to state the obvious that on an expanded capital base guidance in terms of earnings per share has effectively been reduced !
Interesting approach seeing as a year ago they talked about issuing tier 2 capital and repaying tier 1 capital which would have increased eps.

Now they're still talking about a tier 2 issue at a later date, well over a year ago from first "feeling out" the market...come on for goodness sake come clean, why not do a tier 2 issue now when interest rates are arguably at their lowest in 50 years ? Their approach on the face of it from an eps basis appears to be counter intuitive. Could it just be possible that after all this time there is not sufficient market appetite for a tier 2 issue ?

[winner69]

While they have reaffirmed guidance they have neglected to state the obvious that on an expanded capital base guidance in terms of earnings per share has effectively been reduced !
Interesting approach seeing as a year ago they talked about issuing tier 2 capital and repaying tier 1 capital which would have increased eps.

Now they're still talking about a tier 2 issue at a later date, well over a year ago from first "feeling out" the market...come on for goodness sake come clean, why not do a tier 2 issue now when interest rates are arguably at their lowest in 50 years ? Their approach on the face of it from an eps basis appears to be counter intuitive. Could it just be possible that after all this time there is not sufficient market appetite for a tier 2 issue ?

The Cooperative Bank recently raised $30m by way of Subordinated Notes - easy peasy from all accounts

Obviously Heartland think shareholder money is cheaper

[macduffy]

The Cooperative Bank recently raised $30m by way of Subordinated Notes - easy peasy from all accounts

Obviously Heartland think shareholder money is cheaper

Either that, or it may be that Heartland's need, either now or prospectively, will be for tier 1 capital.

[winner69]

Either that, or it may be that Heartland's need, either now or prospectively, will be for tier 1 capital.

No doubt they will ......as the lending base its bigger and bigger

Paid far too much out in divies over the last few years I reckon - should have retained more earnings to fund growth?

[winner69]

While they have reaffirmed guidance they have neglected to state the obvious that on an expanded capital base guidance in terms of earnings per share has effectively been reduced !
Interesting approach seeing as a year ago they talked about issuing tier 2 capital and repaying tier 1 capital which would have increased eps.

Now they're still talking about a tier 2 issue at a later date, well over a year ago from first "feeling out" the market...come on for goodness sake come clean, why not do a tier 2 issue now when interest rates are arguably at their lowest in 50 years ? Their approach on the face of it from an eps basis appears to be counter intuitive. Could it just be possible that after all this time there is not sufficient market appetite for a tier 2 issue ?

All this talk of acquisitions over the last year or so has just been hot air

Sounds good though

[Hectorplains]

I will not be surprised to see the $10m available to 'everyone else' oversubscribed...

Disclosure: I know I for sure have some capital on hand ready to deploy, with a particular focus on companies that have "growth + dividend", and HBL is a prime example of this (along with the top performing stock in the retirement sector this year so far )... so yes I will be taking part in the cap raise

Recent evidence of post capital raising for a company's share price is not flash. I'd consider selling now and buying back in later as a better play.