| Summary: | 碩士 === 國立臺灣大學 === 會計學研究所 === 94 === Beginning from the early 1990s, there is a trend of dramatic growth in shareholder payout rates among bank holding companies. The rise in stock repurchases is particularly striking, with aggregate repurchases soaring from a negligible level in the beginning of 1990s to an amount almost equal to dividend payments in 1997.
This thesis is to investigate how the motivation factors and the regulatory environment affect the intensity of bank holding companies’ stock repurchase activities in the United States. Although stock repurchases by non- financial firms have been extensively examined in the prior literature, there has not been an equivalent amount of research with regard to stock repurchases by bank industry. In addition, because of the industry uniqueness, banks are under a different regulatory environment from other industries. Repurchases of stock by banks are inevitably linked to the regulatory environment banks operate in.
We then construct our own ten hypotheses and use Tobit model to test our hypotheses. We find that banks’ magnitude of shares buyback are obviously affected by the larger free cash flow they possess; the less growth opportunity they own; the greater first tier capital adequacy ratio and total capital adequacy ratio they have, and the greater potential takeover threats they face. These all meet our expectations. We also find that banks’ magnitude of shares buyback are strongly influenced by the larger assets they have; the less risk they face, and the more cash dividends to net income they pay. These are opposite to our prediction but have some reasonable explanations. Overall, we get satisfying evidences to support our hypotheses.
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