As unfortunate as the decline in bank stock prices is, there is a silver lining in this black cloud. The Silver Lining For those with a long-term perspective and an ownership plan, today's market conditions present a golden opportunity for shareholders to transfer wealth.
Stock gifting programs are much more attractive at current pricing levels.
Dividend yields are high and generally appear safe providing greater cash flow for various planning vehicles. Do not forget that the boom in family limited partnerships continues unabated. If anything, the outcome of several recent court cases strengthens the arguments for use of this form of business organization to protect assets, facilitate their management, and keep large blocks of assets under centralized ownership, while transferring a portion of the limited partnership to subsequent generations. The Levels of Value chart shown below is familiar to long-time readers of our newsletters. It provides a framework for looking at stock valuations and for analyzing important factual considerations in determining the fair market value of a block of closely held bank stock.