Activist investor Hilton Capital Management LLC urged National Bankshares Inc. President and CEO Brad Denardo to normalize the company's capital levels through repurchases and giving out a special dividend.
In an April 13 letter, Abbott Cooper, portfolio manager for Hilton Capital's financial opportunities strategy, expressed concerns about the Blacksburg, Va.-based company's excess capital, which he deemed as "dead money." He also noted that the excess capital was "created over time through retained earnings."
Cooper suggested that the excess capital be given back to shareholders through repurchases and special dividends. "Why wouldn't you, as a stockholder, want to benefit from this store of capital that you helped create?" he wrote.
Dick Bove, chief strategist for Hilton Capital's financial opportunities strategy, added in a news release that returning all of the excess capital would benefit all shareholders. Bove is a long-time bank equity research analyst who recently moved to the investor side. He urged other shareholders to contact National Bankshares if they support this idea.
