IDEAS home Printed from https://ideas.repec.org/a/spr/jecfin/v37y2013i4p560-583.html
   My bibliography  Save this article

Top performing banks: the benefits to investors

Author

Listed:
  • Greg Filbeck
  • Dianna Preece
  • Xin Zhao

Abstract

In this study, we examine whether superior accounting performance as reported in the annual ABA Banking Journal Top Performing Banks survey translates into higher investor returns. We observe that the announcement effect is more pronounced during the early years of the survey. For the entire survey period and for later sub-periods in which bank holding companies (BHCs) are ranked based on return on equity (ROE), we observe statistically-significant superior holding period returns against both the S&P 500 index and in some cases a matched sample. These results include raw and risk-adjusted returns as well as buy and hold abnormal returns (BHARs). We obtain similar results after controlling for the market return, size, book-to-market ratio, and momentum factors. Copyright Springer Science+Business Media, LLC 2013

Suggested Citation

  • Greg Filbeck & Dianna Preece & Xin Zhao, 2013. "Top performing banks: the benefits to investors," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 37(4), pages 560-583, October.
    • Handle: RePEc:spr:jecfin:v:37:y:2013:i:4:p:560-583
    DOI: 10.1007/s12197-011-9197-4
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1007/s12197-011-9197-4
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s12197-011-9197-4?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Michael C. Jensen, 1968. "The Performance Of Mutual Funds In The Period 1945–1964," Journal of Finance, American Finance Association, vol. 23(2), pages 389-416, May.
    2. Fama, Eugene F., 1998. "Market efficiency, long-term returns, and behavioral finance," Journal of Financial Economics, Elsevier, vol. 49(3), pages 283-306, September.
    3. Gerard T. Olson & Michael S. Pagano, 2005. "A New Application of Sustainable Growth: A Multi‐Dimensional Framework for Evaluating the Long Run Performance of Bank Mergers," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 32(9‐10), pages 1995-2036, November.
    4. Loughran, Tim & Ritter, Jay R, 1995. "The New Issues Puzzle," Journal of Finance, American Finance Association, vol. 50(1), pages 23-51, March.
    5. Barber, Brad M. & Lyon, John D., 1997. "Detecting long-run abnormal stock returns: The empirical power and specification of test statistics," Journal of Financial Economics, Elsevier, vol. 43(3), pages 341-372, March.
    6. Fama, Eugene F. & French, Kenneth R., 1993. "Common risk factors in the returns on stocks and bonds," Journal of Financial Economics, Elsevier, vol. 33(1), pages 3-56, February.
    7. Han, Jcy & Wild, Jj, 1991. "Stock-Price Behavior Associated With Managers Earnings And Revenue Forecasts," Journal of Accounting Research, Wiley Blackwell, vol. 29(1), pages 79-95.
    8. Ritter, Jay R, 1991. "The Long-run Performance of Initial Public Offerings," Journal of Finance, American Finance Association, vol. 46(1), pages 3-27, March.
    9. Gerard T. Olson & Michael S. Pagano, 2005. "A New Application of Sustainable Growth: A Multi-Dimensional Framework for Evaluating the Long Run Performance of Bank Mergers," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 32(9-10), pages 1995-2036.
    10. Jegadeesh, Narasimhan & Titman, Sheridan, 1993. "Returns to Buying Winners and Selling Losers: Implications for Stock Market Efficiency," Journal of Finance, American Finance Association, vol. 48(1), pages 65-91, March.
    11. Gur Huberman & Tomer Regev, 2001. "Contagious Speculation and a Cure for Cancer: A Nonevent that Made Stock Prices Soar," Journal of Finance, American Finance Association, vol. 56(1), pages 387-396, February.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Schwert, G. William, 2003. "Anomalies and market efficiency," Handbook of the Economics of Finance, in: G.M. Constantinides & M. Harris & R. M. Stulz (ed.), Handbook of the Economics of Finance, edition 1, volume 1, chapter 15, pages 939-974, Elsevier.
    2. Daniel, Kent & Hirshleifer, David & Teoh, Siew Hong, 2002. "Investor psychology in capital markets: evidence and policy implications," Journal of Monetary Economics, Elsevier, vol. 49(1), pages 139-209, January.
    3. Benzoni, Luca & Schenone, Carola, 2010. "Conflict of interest and certification in the U.S. IPO market," Journal of Financial Intermediation, Elsevier, vol. 19(2), pages 235-254, April.
    4. Su, Chen & Bangassa, Kenbata, 2011. "The impact of underwriter reputation on initial returns and long-run performance of Chinese IPOs," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 21(5), pages 760-791.
    5. Bessembinder, Hendrik & Zhang, Feng, 2013. "Firm characteristics and long-run stock returns after corporate events," Journal of Financial Economics, Elsevier, vol. 109(1), pages 83-102.
    6. Greg Filbeck & Raymond Gorman & Xin Zhao, 2013. "Barron’s most respected companies," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 53(3), pages 623-641, September.
    7. Lizińska Joanna & Czapiewski Leszek, 2019. "Long-Term Equity Performance in Poland – Searching for Answers with the Calendar-Time Portfolio Approach," Folia Oeconomica Stetinensia, Sciendo, vol. 19(1), pages 43-55, June.
    8. Dionysia Dionysiou, 2015. "Choosing Among Alternative Long-Run Event-Study Techniques," Journal of Economic Surveys, Wiley Blackwell, vol. 29(1), pages 158-198, February.
    9. Farinos, Jose E. & Garcia, C. Jose & Ibanez, Ana M., 2007. "Is the long-run underperformance of seasoned equity issues irrational? Evidence from Spain," International Review of Financial Analysis, Elsevier, vol. 16(2), pages 183-199.
    10. Greg Filbeck & Raymond Gorman & Xin Zhao, 2013. "Are the best of the best better than the rest? The effect of multiple rankings on company value," Review of Quantitative Finance and Accounting, Springer, vol. 41(4), pages 695-722, November.
    11. Krishnamurthy, Srinivasan & Spindt, Paul & Subramaniam, Venkat & Woidtke, Tracie, 2005. "Does investor identity matter in equity issues? Evidence from private placements," Journal of Financial Intermediation, Elsevier, vol. 14(2), pages 210-238, April.
    12. David J. Brophy & Paige P. Ouimet & Clemens Sialm, 2004. "PIPE Dreams? The Performance of Companies Issuing Equity Privately," NBER Working Papers 11011, National Bureau of Economic Research, Inc.
    13. Brav, Alon & Geczy, Christopher & Gompers, Paul A., 2000. "Is the abnormal return following equity issuances anomalous?," Journal of Financial Economics, Elsevier, vol. 56(2), pages 209-249, May.
    14. Seung‐Doo Choi & Inmoo Lee & William Megginson, 2010. "Do Privatization IPOs Outperform in the Long Run?," Financial Management, Financial Management Association International, vol. 39(1), pages 153-185, March.
    15. Lu Zhang, 2017. "The Investment CAPM," European Financial Management, European Financial Management Association, vol. 23(4), pages 545-603, September.
    16. Spiess, D. Katherine & Affleck-Graves, John, 1999. "The long-run performance of stock returns following debt offerings," Journal of Financial Economics, Elsevier, vol. 54(1), pages 45-73, October.
    17. Lu Zhang, 2019. "Q-factors and Investment CAPM," NBER Working Papers 26538, National Bureau of Economic Research, Inc.
    18. Andrikopoulos, Panagiotis, 2009. "Seasoned equity offerings, operating performance and overconfidence: Evidence from the UK," Journal of Economics and Business, Elsevier, vol. 61(3), pages 189-215.
    19. Feng, Xunan & Johansson, Anders C., 2015. "Can mutual funds pick stocks in China? Evidence from the IPO market," Journal of Banking & Finance, Elsevier, vol. 55(C), pages 170-186.
    20. Wu, Congsheng & Kwok, Chuck C.Y., 2007. "Long-run performance of global versus domestic initial public offerings," Journal of Banking & Finance, Elsevier, vol. 31(3), pages 609-627, March.

    More about this item

    Keywords

    Banks; Bank Holding Companies; Shareholder Returns; Accounting Return Measures; G11; G21;
    All these keywords.

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:jecfin:v:37:y:2013:i:4:p:560-583. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.