Bankstocks.com is operated by Hill & Brown Publishing, LLC, which is owned by two
luminaries of the financial services business: Thomas K. Brown and Vernon
W. Hill II.
Thomas K. Brown has followed the banking industry for many years. He was
the top-ranked banking analyst on Wall Street for ten years in the 1990s, and later
ran the North American financial services group at Tiger Management in New York.
Brown is widely seen as a banking-industry thought leader both, on Wall Street and
in the banking industry itself, and is frequently asked to make presentations to
industry groups, company managements, and financial services company boards of directors.
He currently runs a hedge fund that invests solely in financial services companies.
Vernon W. Hill II is the founder and former CEO of Commerce Bancorp, co-founder
of Commerce Bank/Harrisburg (soon to be Metro Bank, Philadelphia), and chairman
and founder of Hill-Townsend Capital, LLC of Chevy Chase, Maryland. Over the course
of Hill's banking career, he revolutionized the retail banking business with innovations
such as extended and weekend branch hours and free coin counting. Hill opened Commerce
in 1973 with a single branch. When the company was sold 35 years later, it had grown
(almost entirely organically) to 470 branches and was worth $8 billion. Hill currently
operates an investment fund that invests in financial services companies.
Both Tom and Vernon provide regular commentary on Bankstocks.com, as do our regular expert contributors.
Outside experts often write for the site, as well.
Conflicts We Face and How We Resolve Them
As noted, both our chairmen operate investment firms that invest in financial services
companies. Bankstocks.com is a separate entity from either of those investment firms.
As you might imagine, however, there can be tensions between what we post on this
site and how our chairmen manage their firms’ investment portfolios. You should
be aware of that when you read this site. We have put in place a number of policies
and procedures to minimize the conflicts between our Bankstocks.com postings and
the investment advisers’ trading. In general, our strong bias toward is to resolve
these tensions in favor of our chairmen’s fund investors. Highlights of our policies
and procedures include:
- Our chairmen’s firms won’t
trade in a stock immediately before, and immediately after, we post a piece about
it on the site. To keep from benefiting from any volatility that our postings
might create, our chairmen’s firms won’t trade a stock for a full trading day before,
and a full trading day after, we write about that stock on the site. For instance,
if we post a piece on a company before the market opening, the firms will not have
traded the stock during the entire prior trading session, and they will not trade
the stock in the entire trading session that will occur that day. If we post a piece
on a company in the middle of a trading session, the firms will not have
traded that stock during the entire prior trading session, nor will they trade it
during the current trading session, or the next day’s entire trading session.
- If we change our mind about
a company, we won’t necessarily post a story to say so. Please take the disclaimers
we post on this site seriously. For instance, the paragraph at the top of the search
page, that says that we may have changed our minds about the company in question
since the original posting, really is true. The reason we don’t post updates is
simple: we’re time constrained, and do not believe that providing follow-ups to
past articles is the best use of a scarce resource. Even so, like all other investors,
we change our minds about companies from time to time.
- There are times when one or
both of our chairmen’s firms might be sellers of a stock that we say good things
about. We believe every word we post on Bankstocks.com. But there are other
factors besides a company’s fundamental outlook that determine whether our chairmen’s
firms buy or sell the stock in that company. For instance, there might be limits
to the size of the positions the firms can take in a stock. That means that if one
of the firms has a maximum-sized position in a stock that is rising faster than
its portfolio overall, the firm will have to sell that stock to keep the position
below its limit—even though the firm is so bullish on the stock that it literally
owns as much as it can.
Here’s another example: suppose one of the firms’ fund managers decides to cut his
portfolio’s overall equity exposure. One way he might do that would be to sell every
stock in his portfolio in equal proportion—even the ones his most bullish on. (Such
broad portfolio moves, and other such moves, would still be subject to the near-term
trading restrictions, described above, that the firms impose on themselves when
we post articles on individual companies.)
The bottom line: there may be times (although it doesn’t happen often) where our
chairmen’s firms’ portfolio actions might literally be counter to what we say on
the site. We disclose this in our disclaimers, of course. The reason we mention
it now is so that you know we really mean it.
- Sometimes we’ll post positive
articles about companies our chairmen’s firms don’t own.< There are a number
of reasons that the firms won’t own stock in companies we like a lot. Valuation,
for instance. There’s a difference between a company and its stock, after all.
Thus there may be plenty of times that we might profile a company with a great strategy,
led by a brilliant management, that is absolutely shooting the lights out—whose
stock simply seems too rich for our chairmen’s firms to want to invest in. That
doesn’t mean, though, that the company isn’t as terrific as we say it is.
- Some of the companies we write
about might be investors in funds managed by our chairmen’s firms. Several of
the firms’ fund investors are banks, bank holding companies, and non-bank financial
services companies. As a matter of policy, our chairmen’s firms do not disclose
the names of their fund investors. Thus, there may be an occasion where we post
an article about a corporate fund investor—and not disclose that fact.
We know we have a responsibility to our readers, just as our chairmen’s firms have
responsibilities to their fund investors. We work hard to manage those responsibilities
carefully—which is one reason we’re explaining all this to you now. If you have
any questions, feel free to e-mail us.
Matthew Stichnoth is the Editor-In-Chief of Bankstocks.com. In addition,
he's a member of Tom Brown’s investment firm’s Portfolio Team. Prior to joining
Bankstocks.com in June of 2001, Matt ran a special-topics writing group at Goldman
Sachs' research department in New York. Before that, he was a staff writer and columnist
in Bloomberg’s magazine group. Matt also spent several years writing and editing
his own stock market newsletter. Before that, he ran the research desk at Kidder
Peabody in New York. Matt has a BA from Vanderbilt University.
Gary Townsend is a banking industry analyst, and a principal of Hill-Townsend
Capital, LLC, an investment firm that specializes in financial services companies.
Prior to starting Hill-Townsend, Gary was a top-ranked analyst at Friedman, Billings,
Ramsey Capital Markets, Inc. He also spent 15 years as a U.S. government banking
John Tschohl, president of Service Quality Institute, has been called the
“guru of customer service” by Time and Entrepreneur magazines. For
28 years, he has helped organizations drive a service culture through his state-of-the-art
research and his ability to emotionally communicate the power of a compelling service
strategy. As a service strategist, John shows firms how to crush the competition,
rapidly build market share, and build a legendary brand. He is the author
of five best-selling books, including Loyal for Life: How to take Unhappy Customers
from Hell to Heaven in 60 Seconds or Less and
Achieving Excellence Through Customer Service the bible for organizations
who want to learn how and why to implement a service strategy. John’s technology
and books have appeared in 11 languages, in over 40 countries.