Dividend Reinvestment Program

Capital Preservation-Maximizing Opportunity 

Dividend Reinvestment Plans (DRIPs) offer both privately held and publicly-traded community banks the opportunity to provide added value to their shareholders with a product predominately only utilized by large corporations.

CAMELS has designed a special package, specifically tailored for community banks, that is economical to implement, easy to manage and is widely accepted by shareholders. DRIP programs can only be accessed by shareholders.

Simply defined, a DRIP program allows shareholders the singular opportunity to reinvest their cash dividends for the purchase of additional shares in their company. These shares are often purchased directly from the company; therefore, they are acquired without any transactional fees, further increasing one’s ownership.

Capital Preservation and Augmentation

In basic terms, with a properly constructed DRIP cycle, dividend dollars go back into the bank’s equity account. New shares acquired through the program are returned to the companies in the form of capital, while plans that allow shares to be acquired from the street provide greater liquidity to shareholder investments.

Acquisition of shares with dividend dollars can be greatly expanded by allowable contributions, up to $8,000 annually. Make a DRIP program, designed by CAMELS, a continued contributor to the bank’s capital growth.

Maximizing Ownership Opportunity

In many cases, privately-held and publicly-traded institutions suffer from lack of issued shares or that satisfied ownership levels makes the availability of stock derived from normal trading opportunities difficult to increase one’s percentage of ownership. The inclusion of a DRIP program allows an institution with an adequate number of unissued but authorized shares, the ability to support any level of anticipated shareholder participation. DRIP programs must be well thought out to ensure shareholders embrace expansion of ownership.

CAMELS Provides Easily Managed DRIPs

CAMELS provides the structure, operational knowledge, procedures, systems, and marketing insights to make your DRIP program an effective ownership, capital preservation, and growth product. Successful DRIP programs are a direct result of marketing efforts of the company and CAMELS has designed a communication program that secures shareholder sign-ups.

Affordable Expertise, Knowledge and Legal Resources

CAMELS’ legal partnerships have made DRIPs not only feasible, but most importantly, affordable even for the smallest community bank. CAMELS makes the complexities of a DRIP easily understood and recognizes that a cost benefit be immediately recognized in the implementation of this type of program.

To accomplish this task, CAMELS works exclusively with highly recognized legal firm(s) in the review and submission of plan elements to respective state securities agencies. Today’s banking climate requires that institutions continually focus on capital ratios and increasing shareholder value. CAMELS’ DRIP programs accomplish both objectives.

CAMELS provided the DRIP structure, processes, and shareholder communication making the program an integral part of our shareholder offering. DRIP program benefits of capital retention, expansion of shareholder
ownership, and addressing stock liquidity were important factors in incorporating this program.
Gary Sharp

President & CEO, Old Mission Bancorp

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