Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: FRIDAY, January 17, 1992 TAG: 9201170176
SECTION: BUSINESS PAGE: A-7 EDITION: METRO
SOURCE: MAG POFF
DATELINE: LENGTH: Medium
DOMINION BANKSHARES STOCK SUDDENLY POPULAR
Dominion Bankshares Corp. common stock rose to a five-month high Thursday as investors reacted favorably to announced job cuts and operational streamlining.In the past five trading days alone, stock of the Roanoke-based bank holding company has risen 22.4 percent, from $10.625 to $13 per share in heavy trading. The last time the stock was that high was in August 1991.
The stock, however, was still short of book value, which stood at $14.37 per share at the end of the third quarter. Book value is a per-share representation of company's net assets.
Several Roanoke-area brokers agreed that investors were responding to Dominion's announcement Wednesday of plans to cut both employment and branches by 10 percent, along with other streamlining measures that will save an estimated $10 million a year.
The biggest gain came Tuesday, on rumors of the pending announcement.
Richard Wertz, vice president in Roanoke at A.G. Edwards and Sons Inc., said the 1981 high "was during the merger time." The stock of most Virginia banks ran up last summer on rumors of mergers, then sank back when merger talk died out. Dominion got as high as $14 a share during that period, he said.
Wertz said local investors have come in on both sides of the market this week.
"A lot of people who bought at $8 or $10 are saying they are going to get out" with their profits, he said.
Some investors are scared by the news and want to sell, he said, while others are encouraged by the bank's action and want to buy. "It's pretty mixed."
Wertz said the entire banking industry, which has long been in the stock market doldrums, is finally moving up with other shares. Even Citicorp., the nation's largest but a troubled bank, gained from $10 to $15 over the last three weeks, he said.
Tyler Pugh, vice president at the Roanoke office of Wheat First Securities Inc., found few people selling.
He said most investors who talked to him think "the steps Dominion is taking, although painful steps, are good for the long-term health of the bank."
William Nash, manager of the Roanoke office of Scott & Stringfellow Investment Corp., said he's seen very little local reaction to Dominion's retrenchment.
"A few people have sold into this strength," Nash said, "but not too many. No one is really calling us."
Ryland Hubbard Jr., manager of the Roanoke office of Merrill Lynch Pierce Fenner & Smith Inc., said most customers are "obviously pleased that it's up," although some people expressed "anxiety over the future of the bank."
There was some buying and some selling, Hubbard said, but no trend dominated.