Community Bank of South Florida Inc (fka CBKS)

[Renee]

CBKS: acquisition or merger. Finra deleted symbol:

http://otce.finra.org/DLDeletions

[vpagano]

Acquired! Congrats to all that stayed in this one.

http://www.bizjournals.com/tampabay/news/2015/10/05/centerstate-banks-looks-to-south-florida-for.html

[Enterprising Investor]

No need to shut down those making progress.

Still undervalued.

I sold some time ago because of lack of movement to the upside, but still on the radar.

[norweger1979]

CBKS 2014 annual results

(not posted on their website but I requested a copy of their 2014 report)

Earning increased 42.2% to $2,411,000 in 2014 from $1,696,000 for 2013.

Equity increased from $41,724,000 in 2013 to $44,333,000 in 2014, shares outstanding still stand at 4,976,521

Book value increased from $8.38 to $8.91

They state:

- Loan demand was strong with year-end loans increasing to $345,456,000.

- Tier 1 Capital of 8.26% and Total Risk-Based Capital of 11.90% continued to improve as we crossed the important Tier 1 threshold of 8%.

- Our Reserve for Loan Losses totaled $5,118,000 (1.48% of total loans) being more than fully reserved to accounting and regulatory standards.

- Nonperforming Assets at year-end 2014 reflected a reduction of 23% to $17,777,000 with the reduction being a major contributor to increased earnings.

- Deposits decreased to $415,515,000 continuing our short-term strategy.

- Bank stock prices have begun to reflect our financial improvement.

We are gratified by our financial results in 2014 but not nearly satisfied.



CBKS still operates under the Consent Order with the FDIC from Feb. 2012. The order requires, among other things, that the Bank shall maintain an 8% Tier 1 Capital and 12% Total Risk Based Capital ratio and submit a written plan to the FDIC and the OFR to reduce classified assets.

At 12/31/2014, the Bank would be considered adequately capitalized under current regulations, however, the Bank was in compliance with the 8% Tier 1 capital ratio but was not in compliance with the 12% Total risk based capital ratio as mandated by the Order. Based on the Bank's 2015 projections, management of the Bank expects to meet the increased capital ratios during 2015.


As 'Enterprising Investor' pointed out in an earlier post CBKS will most likely be allowed to earn its way out from the consent order. Excellent call

Part of the improved earnings of 2014 vs. 2013 is the Provision for income taxes line item ($0 vs $850,000)

[norweger1979]

call report 3/31/2015

$844,000 profit for the quarter


vs.



call report 3/31/2014

$741,000 profit for the quarter

[norweger1979]

CBKS $8.05

FDIC report screen shot 12/31/2014
https://research.fdic.gov/bankfind/detail.html?bank=21258&name=Community Bank of Florida, Inc.&searchName=community bank&searchFdic=&city=&state=&zip=&address=&searchWithin=florida&activeFlag=false&tabId=1

Bank Equity Capital $44,891,000
Net Income full year $2,467,000
Net Income 4th qtr $742,000


based on O/S of 4,976,521, CBKS book value $8.60 to $9, IMO.

[norweger1979]

call report 6/31/2014

$2,013,000 net income

great improvement vs. ~$750k for the 1st qtr. of 2014

[norweger1979]

Was this a good or bad sale?

at 35% discount to foreclosure amount of $4.3 million in 2011, after 3 years sitting non-performing on their books.... to what amount was this written down to or charged off to? probably right around $2.8 million value, in my opinion...

worst case, CBKS recovered what was left sitting on their books (+/- 5%)but CBKS is not in the real estate business and needs to sell off these foreclosed properties. This transaction represents about 15% reduction of their total non-perf. assets, that's good.

Trend of capital ratio improvements is encouraging and I agree that CBKS should be allowed to earn their way back into compliance within the next 2-3 qtrs.

good luck

[Enterprising Investor]

Bank sells shopping center at 35% discount to foreclosure (7/18/14)

Community Bank of Florida sold a Florida City shopping center at a 35 percent discount to its foreclosed mortgage.

The Homestead-based bank seized the property from Sailfish Landing Shopping Center in 2011 with a $4.3 million deed in lieu of foreclosure. The bank previously filed a foreclosure lawsuit over a mortgage in the same amount.

Community Bank of Florida recently sold the 18,831-square-foot shopping center, at 35202 S. Dixie Highway (U.S. 1), for $2.8 million to Miami-based Sailfish Center LLC. The buyer is managed by Ruben Garcia and Jorge I. Garcia-Sarraff.

The shopping center was completed in 2008. It is one of the last developed commercial properties along U.S. 1 before it heads toward the Florida Keys.

Community Bank of Florida had $16.5 million in repossessed property on March 31, so this sale should reduce that count. The bank was “adequately capitalized” and in need of raising capital.

http://www.bizjournals.com/southflorida/news/2014/07/18/bank-sells-shopping-center-at-35-discount.html

[Enterprising Investor]

CBKS will most likely be allowed to earn its way towards meeting capital requirements.

[Enterprising Investor]

Community Bank of Florida boosts profits, despite increase in troubled assets (7/25/14)

Community Bank of Florida received both good news and bad news during the second quarter in its quest to regain “well capitalized” status as the bank’s higher profitability was hindered by more troubled assets.

The Homestead-based bank, a subsidiary of Community Bank of South Florida (Pink Sheets: CBKS), earned $1.27 million, up from earnings of $741,000 in the first quarter.

That pushed its Tier 1 capital to $38 million on June 30. Its Tier 1 leverage capital ratio of 7.88 percent and total risk-based capital ratio of 11.7 percent were improved from capital ratios of 7.86 percent and 11.42 percent, respectively, on March 31.

However, they remained short of the capital ratios of 8 percent and 12 percent, respectively, that regulators required the bank to meet in a previous enforcement action. Therefore, Community Bank of Florida was “adequately capitalized” and must raise its capital levels.

The bank’s net interest income grew to $4.4 million in the second quarter from $4.3 million in the first quarter. As its problem assets increased, the bank took a $313,000 expense to reserve for future loan losses, up from a $208,000 expense in the first quarter.

Community Bank of Florida had $8.8 million in noncurrent loans, or 2.6 percent of total loans, and $20.2 million in repossessed property on June 30. That’s up from $7.2 million in noncurrent loans, or 2.15 percent, and $16.5 million in repossessed property on March 31. It identified $5.5 million in new problem loans during the quarter.

The bank held $5.5 million in reserve for future loan losses to cover 63 percent of its noncurrent loans on June 30. It also faces potential exposure should it have difficulty selling off its repossessed properties at book value.

Community Bank of Florida was the 22nd-largest bank based in South Florida on March 31, with $485 million in assets. By June 30, it was up to $488 million in assets.

The bank had $334 million in loans and $442 million in deposits on June 30. That’s up from $331 million in loans and $440 million in deposits on March 31.

http://www.bizjournals.com/southflorida/news/2014/07/25/community-bank-of-florida-boosts-profits-despite.html

[Enterprising Investor]

New 52-week high.

[56Chevy]

$741K retained earnings X 4,976,521 share outstanding = 0.1489 EPS

Opps...I meant $741K divided by the number of O/S 4,976,521 = 0.1489 EPS.

[56Chevy]

I'll take your word for it norweger1979..thank you for the info...so let's do some basic math.

$741K retained earnings X 4,976,521 share outstanding = 0.1489 EPS

Rounded off our EPS for 2014 Q1 is .15

.15 x 4 gives us estimated annualized earnings = .60

.60 X a conservative & standard P/E ratio of 10 = $6

.60 X 29.38 (the actual average P/E for ALL Florida banks) = $17.62

On the low end we have a $6 bank ...and on the high end we have a $17.62 bank.

Let's split the difference and go with a P/E of 20 = We have a $12 Bank

Pick a P/E....no matter how you slice this there is nothing but blue skies above.

* Keep in mind Q1 is typically not the best qtr for banks.

Marker:
Community Bank Of So (CBKS)
$5.75 0.0 (0.00%)
Volume: 0

[norweger1979]

call report 3/31/2014

$741,000 profit for the quarter

[56Chevy]

I see $1.725MM in net income driven by a 33% increase QoQ on interest and fees from loans.

The average LTM P/E for bank's in Florida is an eye-popping 29.38.

I'm anxious to see what Q1 earnings will look like.

[56Chevy]

Thanx for posting the 2013 Annual Report Pagz.

A couple of encouraging statements From Mr. Epling:

Loan demand improved in the fourth quarter of 2013 although year-end loans decreased to $330,753,000. Our current new Loan Pipeline is the largest in five years.

Bank stock prices have begun to improve although lagging behind performance results.

2014 looks to be the breakout year for these guys.

BV: $8.38
MV: $5.75

CBKS is selling at a 32% discount to BV.

Snap-shot view from Banktracker:

http://banktracker.investigativereportingworkshop.org/banks/florida/homestead/community-bank-of-florida-inc/

Marker:
Community Bank Of So (CBKS)
$5.75 0.0 (0.00%)
Volume: 0

[vpagano]

Not sure if anyone else read through the 2013 Annual Report, but here is the link:

https://www.communitybankfl.com/assets/files/annual-report-2013.pdf

BV up slightly, $.34 EPS for the year.

I still have all my shares from the low- to mid- $3's.

-Pagz

[Gixene]

56Chevy, sorry for the late reply. Thank you for helping me better understand.

[56Chevy]

Oh man.... I knew 10 minutes after I sent the post it was the Farmer's & Merchant bank out of Calif I wanted and not the one in Ohio.

FMBL is the blue ribbon pup in the bunch....thanx for spotting me on that EI ;)

[Enterprising Investor]

Another good example is FMBL.

[56Chevy]

Think of OTC banks as the finest and best homes in a modest neighborhood.

Its true higher risk and OTC companies go hand in hand...however when you'e talking about banks those generalities don't apply.

Banks are the most highly regulated industry on Wall St. Banks can't hide bad news like some of the other OTC companies can. When a bank says they have a dollar in the vault there will be an army of people there physically checking to see if there really is a dollar in the vault...and if it isn't they put the CEO under bright lights and ask why it's not there.

Even though OTC banks aren't under stricter exchange reporting rules many voluntarily offer the same information you would expect to see from a listed company. Some of the most respected and solid banks in the country are on the OTC. FMAO is a prime example.

I follow dozens of banks...the lions share are under $1 Billion in assets. With the exception of just a handful they all list on the OTC. Regulation and SEC compliance costs are more than they've ever been in banking history. In fact the combined higher costs of compliance (Reg and or SEC) is reason #1 why banks are being forced to consider consolidating asap. They simply can't absorb these rising compliance costs alone and thrive doing it for very long. Reg compliance is mandatory..banks don't have a choice if they want to particpate or not. Listing and the cost associated with it are a choice... and many choose not to spend the extra time or money..it doesn't add value..it's just an expense they can do without.

With the exception of a few I get every bit as much info I need as an investor from my OTC banks as I do from the listed ones.

Some OTC banks only put out a yearly report but you can still get the quarterly info you need from the FFIEC.

[Gixene]

56Chevy, I was unaware of this. I haven't been investing/trading that long, but this is the first and only money center bank that I have seen which is OTC listed. I was also unaware that it saves compliance costs. Something about Community Bank of South Florida, Inc. (CBKS) made me want to keep it on the watch list. I assume it's because that's very undervalued based on BVPS and I saw potential. I believe there is still plenty of meat on bone here with (CBKS). I hope I can find other money center banks like (CBKS). Thank you for enlightening me.

[56Chevy]

It's actually very common for smaller banks to be listed OTC. They save a substantial amount on compliance cost and still attract many of the institutional investors.

[Gixene]

56Chevy, I have not. In your opinion, do you believe Community Bank of South Florida, Inc. (CBKS) will up list in the near future? I have had (CBKS) on the watch list since Nov. of 2013. However; I noticed today that (CBKS) is listed OTC. I was quite surprised, I assumed (CBKS) was at least AMEX listed.

[56Chevy]

I'm not aware of any plans to list on another exchange...have you read something indicating they will or plan to?

[Gixene]

56Chevy, does Community Bank of South Florida, Inc. (CBKS) plan to up list in the near future?

[56Chevy]

Community Bank Of So (CBKS)
$6.50 up 0.8 (14.04%)
Volume: 100

5 short months ago last October Mr. Market was selling this for $3.50

Retained Earnings for 2013 were: $1.725MM

To show how much of a turn-around this is the retained earnings for 2012 was a loss of ($4.503MM).

Equity now sits at $42.2MM

https://cdr.ffiec.gov/public/Reports/UbprReport.aspx?rptCycleIds=76%2c72%2c67%2c63%2c58&rptid=283&idrssd=999430&peerGroupType=&supplemental=

O/S is 4,976,521

BV remains at $8.48

Other banks in the state are selling at 1.5X BV

CBKS is on its way to $12

*If this bank had a blonde wig on I'd be in love ;)

[56Chevy]

Any idea when the annual report will come out? Maybe we should ping Mr. Epling.

I sent Mr. Epling an email right after you posted this Pagz. I asked about the annual report and insider holdings. No response back yet. :(

[vpagano]

Any idea when the annual report will come out? Maybe we should ping Mr. Epling. Or I guess I could just not be impatient considering demand > supply right now it seems for shares. I still am wondering what % of the float is locked up by management / insiders.

[56Chevy]

Fantastic!

Net Income for the year [2013] was positive for the first time in at least the last 4 years. Before this the bank had a negative net income of -$15.232 Million dollars.

I see Deferred Tax Assets in our future.

BV is up .02 to: $8.48 *and that is without tax credits :)

MV today is: $5.70

P/B is still a very attractive: 0.6722% *Stop and think about this Pagz - The average P/B for all banks in the State of Florida is 149.95%. I think this is huge going forward.

The only weak link left for management to continue to tackle is NPA's ...and they currently stand at 7.65%.

Everything the CEO [Mr. Robert Epling] told us back in October has held true to form.

http://investorshub.advfn.com/boards/read_msg.aspx?message_id=93179896

With consolidation in full swing CBKS has to be on everyone's "A" list of Banks looking to acquire. Can you spell - premium!

I like it...full steam ahead!

[vpagano]

If you thought Q3 was good, maybe you should check out Q4:

https://cdr.ffiec.gov/public/Reports/UbprReport.aspx?rptCycleIds=76%2c72%2c67%2c63%2c58&rptid=283&idrssd=999430&peerGroupType=&supplemental=

I see $1.725MM in net income driven by a 33% increase QoQ on interest and fees from loans.

BV up slightly as well.

Seeing as how we are still only at 2/3 BV and a very low earnings multiple, I will continue to hold. Shares are scarce and buyers in recent times have had to pay up for them.

-Pagz

[56Chevy]

From the low of $1 CBKS hit in February of 2013 the stock is now up close to 250%.

Community Bank Of So (CBKS)
$4.90 up 0.54 (12.39%)
Volume: 986

*volume and liquidity remain a challenge on most these small obscure bank stocks but for long haulers, planning for an exit strategy, is still possibly years away!

With careful selection(s) and a little luck 2014 should provide us with another great year to "build the stake"!

If I had a wish for America in 2014 it would be to see good Jobs...forget the Gov't programs...all we need are jobs ...and we can take it from there!

[vpagano]

I just realized I had a few Twitter connections from south Florida and their comments today intrigued me about the real estate recovery down there.

"I am involved in transactions where south Florida oceanfront condo owners who bought at peak in 06,07 are selling for 40-50% gains"

That's some serious rebounding.

"huge inflows into south Florida real estate from Europe, Venezuela, etc. real estate is a store of value, no return necessary"

Zero interest rate environment / distrust of government pushes the demand for real estate. We saw Asian buyers pump up the Canadian housing market (that bubble will pop eventually).

"SF oceanfront has its own dynamics, economics (cap rates) do not apply....hard to analyze"

While this sure can suck when the bottom drops out, such uniqueness also juices values on the upswing in a recovery.

Anyway, just explaining my rationale that even though I can't afford to invest in real estate, I'm happy buying derivative plays of banks for 50% of BV

-Pagz

[Gixene]

Enterprising Investor, thank-you for helping me better understand. This seems to be an okay value stock here. I'm having trouble digging up information on it though. So there are no institutional holders it seems?

[Enterprising Investor]

BHC is Community Bank of South Florida, Inc.

The subsidiary bank is Community Bank of Florida.

I was not the one who created the board, but will get it fixed.

[Gixene]

Enterprising Investor, I'm confused. Is this Community Bank of Southern Florida or Community Bank of Florida? The board title says of Florida, the ticker says Southern Florida. These are two legit banks and I want to know which one this board is intended for.

Thanks, Gulley

[Enterprising Investor]

EPS for Q3 would be $.25 based on UBPR.

Since the bank does not issue quarterly earnings press releases, Mr. Market is in the dark.

Well done, my friend.

[I just realized I failed to deliver last week's promise. Hopefully, I can squeeze it in today.]

[Enterprising Investor]

Capital levels continue to improve.

The Tier 1 Capital ratio and Total Risk Based Capital ratio were at 7.0 percent and 11.3 percent, respectively, at 6/30/13. These ratios improved to 7.2 percent and 11.4 percent at 9/30/13.

[bacc]

thank you chevy

[56Chevy]

The CEO (Mr Epling) said they were profitable now and he wasn't kidding!

The UBPR report for 3rd Qtr 2013 reveals Net Income & Retained earnings were: $1.258MM...as opposed to an $861K Loss in the 3rd Qtr of 2012..just one year ago.

Can you spell - Its a new day!

https://cdr.ffiec.gov/public/Reports/UbprReport.aspx?rptCycleIds=75,71,72,67,63&rptid=283&idrssd=999430&peerGroupType=&supplemental=

Equity - $42.1MM

Shares O/S - 4,976,521

BV - $8.46

MV - $3.60

P/B - 0.4255%

*A new request is on its way today asking the CEO what the % of the O/S insiders hold. I'll let everyone know if & when we get a response.

[vpagano]

Full disclosure, I forgot to mention I bought more shares yesterday.

-Pagz

[genlou]

56Chevy,I hope you purchased your shares the ask is $6.00.

[vpagano]

I was just going to comment on the $6 ask as you posted that. Wonder if we could carve out insider holdings to get to the "real" trading float.

[Enterprising Investor]

How about $6.00?

The last of the $3.50 shares being handled by NITE are gone.

One problem. A seller will probably appear somewhere inbetween.

[vpagano]

Want to hear a nice round number?

DTA 12/31/112 = $7.803 MM / 4.976521 s/o = $1.57 per share

$8.43 per share BV
$1.57 per share DTA
$10 per share

I'm in a few shares to diversify Florida banks, can we do some due diligence in person at this branch guys?

100150 Overseas Hwy Key Largo, Fl

https://maps.google.com/maps?oe=utf-8&client=firefox-a&q=100150+Overseas+Hwy+Key+Largo,+Fl&ie=UTF-8&hq=&hnear=0x88d769c6dcee87df:0x68c245df8f7c03b,100150+Overseas+Hwy,+Key+Largo,+FL+33037&gl=us&ei=uG1lUojuLu_B4APk-4HwBw&ved=0CC4Q8gEwAA

[56Chevy]

EI - According to the 2012 Annual Report the number of shares outstanding as of Dec. 2012 was 4,976,521.

I wanted to confirm that number since its been 10 long months when that # was put out. I sent the CFO (Mr. Yunus) an email asking what the current O/S is and I received an email back from the CEO Mr. Robert Epling.

This is what he said in response to the inquiry with portions of his response I put in bold to highlight what I considered key bonus info:

Thank you for your inquiry. The current number of outstanding shares remains at 4,976,521, as it was at year end 2012. As real estate prices in the markets we serve have improved, the non-performing assets of our company has decreased. Our company has stabilized and will show a profit in 2013......and we believe the future will continue to reflect improving profitability. The current book value is approximately $8.43 per share without tax credits. We continue to seek capital through private placement.

Thanking you for your support, we welcome your questions.

Bob Epling


*I appreciate this kind of open response from a company. Sometimes getting info from non-reporting companies is like pulling teeth...but Mr. Epling came through brilliantly.

**Todays closing pps was $3.50 on 2,000 shares of volume.

[Enterprising Investor]

Net Tax Deferred Assets are $7.8 million.

The Net Operating Loss Carry Forward makes up about $5.1 million.

[Enterprising Investor]

I previously expected that the Consent Order would be terminated by early 2014.

When reading something like, "we (management) believe the future will continue to reflect improving profitability", one becomes even more confident. Thank you, 56Chevy, for taking the time to make contact and getting the needed information.

[Enterprising Investor]

Consent Order

On February 2, 2012, the Bank entered into a Consent Order agreement (the “Order”) with the Federal Deposit Insurance Corporation (“FDIC”) and the Florida Office of Financial Regulation (“OFR”) to enhance certain aspects of the Bank’s operations. This Order places certain limitations and established required benchmarks which the Bank needs to attain within predetermined target dates. The Bank cannot conclude with any degree of certainty that it will be able to meet all requirements contained in the Order.

The Order required, among other things, that the Bank maintain an 8% Tier 1 Capital and 12% Total Risk Based Capital ratio and submit a written plan to the FDIC and the OFR to reduce classified assets. As of December 31,2012, the Bank was not in compliance with the increased capital ratios as mandated by the Order (NOTE 14). If the Bank is unable to comply with the increased capital requirements, the Bank may be subject to further
regulatory actions by the FDIC and the OFR.

The Tier 1 Capital ratio and Total Risk Based Capital ratio were at 6.5 percent and 10.0 percent, respectively, at 12/31/12. These ratios improved to 7.0 percent and 11.3 percent at 6/30/13.