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Top performing banks: the benefits to investors

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  • 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
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    References listed on IDEAS

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    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

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