Bank Of The Carolinas Corp fka BCAR

[illegal_alias]

The company's Tier 1 level are the only items that is affecting 100% compliance with the consent order per the CEO when I asked him early last summer at the shareholder's meeting. They need to do a capital raise, once the Renegade Holding BK trial is over. BCAR is the biggest secured creditor and first in line, so they will get some recovery there. A capital infusioon has been an option the last few years.

[BigCat]

They're really gaining traction!

[Huggy Bear]

Good morning Salty IA and other fellow bank heads.

I know next to nothing regarding BCAR and have just been following vicariously. It seems the bank is moving in the right direction, but what are the primary reasons for the continued losses on the bottom line, impaired loan performance and provisions?

More importantly I was wondering what the bank intends to do about this:

The Company's banking subsidiary had a Tier 1 leverage capital ratio and Tier 1 capital to risk-weighted assets ratio of 3.38% and 4.51% respectively, while its total capital to risk-weighted assets ratio was 5.77% as of September 30, 2013.

Surely they are under mandate to bring these Tier levels up to acceptable levels, correct?

[Penny Stocks 2.0]

Very nice.

[illegal_alias]

BCAR 3rd qtr good news +$0.04 EPS
http://www.marketwatch.com/story/bank-of-the-carolinas-corporation-reports-third-quarter-financial-results-2013-10-25?reflink=MW_news_stmp

and

http://www.bizjournals.com/triad/prnewswire/press_releases/North_Carolina/2013/10/25/CL04740

the great news is that with that horrible 3rd qtr 2012 out of the way, the ttm EPS is now only -$0.16 instead of -$1.56 a year ago. That's 3 of the last 4 qtrs profitable.

With mortgage and lending rates on the rise, loan income and interest income should continue to rise.

[illegal_alias]

Agree. As I said earlier in the year, if this goes through the same trajectory that CLBH went thru, then 2013 is the year they quit the financial hemorraghing and start to take off next year. With interest rates going back up, I'd expect to see significant increases in net loan & interest income over the next year. Something I was reading in Forbes was saying expect longer term rates (like mortgages) to go to 5.5% and even short-term T-bills to also increase yields. That will be good for the small banks.

[SaltyMutt]

We're going to do just fine with BCAR.

[illegal_alias]

BCAR 3rd qtr call rpt released. +$341K net income for bank vs. -$127K for last qtr. Big improvement over 3rd qtr 2012 when bank’s net loss was -$5.11 Million. Interest, fee and loan income up significantly. Regulatory capital ratios basically unchanged. Loan and lease loss provisions reduced by $2.78 million. Don’t know what holding company’s overhead costs are, but this is going in the right direction.

[illegal_alias]

Let's hope so. Looking good the past week.

[illegal_alias]

New institutional investor for BCAR June 2013 - Carroll Financial Associates http://investors.morningstar.com/ownership/shareholders-major.html?t=BCAR®ion=USA&culture=en-US

[SaltyMutt]

I still believe that BCAR will be a solid three bucker by the end of the year.

[illegal_alias]

.75 x .98 - moving that direction. Some buying late Friday.

[SaltyMutt]

I'm looking forward to reading the next quarterly report. I think we're going to see the BCAR pps surge to the $2.00 level, and stay there!

[illegal_alias]

Another site for info on banks:
http://consumer-banking.findthebest.com/l/647/Bank-of-the-Carolinas Searchable at top of screen

[illegal_alias]

L2 looking thin to 0.97 on the ask

[illegal_alias]

Tentative deal on sale of Renegade IP assets

Will be sold to Westgage Distribution for $200K per filing Sept 4, 2013 and need to pony up the balance by COB today (they already put down $80K deposit). BCAR approved the sale. They are the sole lien holders.

[illegal_alias]

I was wondering the same thing. They would be better offering $80K and then take time to find a private buyer or shop it around the industry. Don't smoke so have no opinion of Renegade's former brands, hence no idea of the value of the trademarks.

[Ron3955]

I seem to be right based on my pass experiences with another public company bankruptcy process I was involved with that I mentioned in a previous post. Just when you think things are about to be completed, something else comes along to gum up the works. Seems this matter may go on for quite a while.
I’m glad however to see BCAR objecting to the sale. I thought the sale for 75k would be tantamount to a steal. I’m wondering if BCAR might step in and make a bid for the rights.

[illegal_alias]

BCAR - Bank objects to proposed tobacco brand sale
http://www.journalnow.com/business/business_news/local/article_7611ec14-0c4f-11e3-a441-001a4bcf6878.html

Richard Craver/Winston-Salem Journal Winston-Salem Journal

Bank of the Carolinas Corp. filed an objection Thursday to the proposed $75,000 sale of cigar and pipe tobacco brands and trademarks for three defunct Mocksville tobacco manufacturers.

The 15-year run of making discount cigarettes by Renegade Holdings Inc., Renegade Tobacco Co. and Alternative Brands Inc. ended July 23 when the decision was made to liquidate them after a proposed $25 million deal collapsed involving Globe 360 Tobacco Inc., the U.S. subsidiary of a French tobacco manufacturer.

CB Holdings LLC of Raleigh has offered to buy those brands and trademarks, as well as the ingredient lists, blends and other intellectual property for the companies’ cigarette brands, but not the brands themselves. A hearing on the motion is set for 9:30 a.m. Tuesday at the U.S. Bankruptcy Court in Greensboro.

The bank is the debtors’ largest secured creditor with a claim of $1.05 million as of July 18.

The bank said it is objecting because it cannot confirm the $75,000 is “a reasonable price representing the true value of the assets to be sold,” and that the proceeds would not be paid directly to the bank. The bank also said it will request an order terminating the debtors’ right to continued use of cash collateral.

[Ron3955]

Good info IA. Keep it comming!

[illegal_alias]

BCAR in driver's seat in Renegade Holdings liquidation: http://www.journalnow.com/article_854bd3e8-0b82-11e3-86ce-001a4bcf6878.html

[BigCat]

Nice Fat Bid to Round out the Day here.

[Ron3955]

IA: I would suspect the latter... rumors... 1000 shares separate us from "dollarsville" once again!

[illegal_alias]

Looks like it broke out of that range. No idea what's driving it today. Renegade's next hearing isn't until Aug 13 (so BCAR's payday is a away off) and earnings/PR for 2nd qtr already out.

Two guesses:

1) some retail investors didn't see the PR and don't know how to pull call reports, so waiting for the 10Q. Let's see if this holds past Aug 15.

or,

2) rumor is true or at least circulating...

[SaltyMutt]

Things are looking pretty good on the old BCAR board!

[illegal_alias]

Good to see MM MONR on the bid. That means they are buying for their own account. They must have things set up on auto. Every time I've gone up against MONR on either bid or ask, they jump over me within seconds.

[illegal_alias]

At least nice to see some solid consolidation. I'll need to check in on the Renegade BK case again. Spending $$ on downloads, but should be worth it in the long run.

[BigCat]

A lot of activity in this tight range.

Right when I say something... .55 x .59 now

[Ron3955]

I like that second to last paragraph... Hummmm...

[illegal_alias]

I'm thinking that the $243K is thir interest payment on TARP. I know they elected to defer several quarters, but there is a limit on that. Still, it appears that all options are on the table.

10K on the bid looks good. We may have bottomed out here in the low fifty cent range.

[BigCat]

Just an observation based on past activity in our vast banking field. This is what stood out most to me in the article you provided...

Prior to Central Virginia Bank being acquired by C&F Financial Corporation there was plenty of activity in the preferred stock department. In this recent Quarterly we saw $243,000 added to the banks quarterly loss in preferred stock.... This tells me something may be in the works behind the scenes. Why add injury to insult unless you know something is brewing... I questioned this with Central Virginia Bank for several quarters prior to the acquisition details being disclosed. I kept saying to myself why are they(CVBK) adding to their loss with preferred shares when they are so close to profitability?

10K on the Bid.

[illegal_alias]

Some anaylysis of second quarter results:

http://www.journalnow.com/business/business_news/local/article_e89f9202-f856-11e2-8493-0019bb30f31a.html

The major difference between this quarter and a year ago, is that they did not make any $$ in the sale of marketable securities this quarter. Otherwise, other operations in fairly good shape. But, still, loss is a loss.

[free_bee]

my position is very small. cigarette money.

[Ron3955]

Joey, I hope its a temporary dip and not a dive. I can only average down so much. ;)

[norweger1979]

I was a buyer too! Thought I had missed this one when it hit $1.50's.

Glad I didn't miss it and bought a full position yesterday/today!

Patience will be rewarded here :)

[BigCat]

Major Sponge action going on in the Low .50's.

If I had some funds right now I would have bought here on this dip...

[Ron3955]

Bought more today to average down. :(

[free_bee]

been following you guys for months..

[illegal_alias]

Welcome to the BCAR board. Also join us at the Bank Recovery Room if you are interested in other banks: http://investorshub.advfn.com/The-Bank-Recovery-Room-JOEYSCO-26693/

[free_bee]

bought few.

[illegal_alias]

BCAR, PBIB & two other banks featured in this article:
http://www.smallcapnetwork.com/Small-Cap-Bank-Stocks-With-Extraordinary-Returns-OSBC-BCAR-TRUE-PBIB/s/via/3414/article/view/p/mid/1/id/1437/

[Ron3955]

Thanks IA, excellent deductive reasoning and info!

[illegal_alias]

and a few more after today as well...

[illegal_alias]

So let's discuss it - Ron wants to know the rumor, anyway. Merger is one of the options on the table, I believe, to raise capital to get Tier 1 ratios up. PR from June 23, 2011 when BCAR was trading around $0.90

http://www.reuters.com/article/2011/06/24/idUS182110+24-Jun-2011+PRN20110624

There was no discussion of whether this arrangement is still current during the recent shareholders meeting, but article is still only 1 of 2 items on the Hutchinson website.

http://www.hutchisoncompany.com/news.php

So, FWIW, the "rumor"

As some of us discussed via PMs, there is a rumor (unsubstantiated) by a poster on the Yahoo boards suggesting BNCN as a potential merger partner. Posted July 23, which might be another potential explanation of the recent spike in the pps.

First, if you check the Yahoo Boards, that poster may be off his meds. He was calling it a scam about 10 days before. He is either delusional, sharp when on his meds spotting this, drunk at the time, etc.

But, the funny thing is, everything else fits when you look at the history of the two banks.

1. BNCN has been buying surrounding small banks and also acquired 3 failed banks. It fits their acquisition strategy

2. BCAR actually offered to takeover Randolph a few years ago, which BNCN just announced it was acquiring.

3. BCAR needs a capital infusion and is looking at all options. Everything they are doing is the right stuff, but won't be enough to raise capital ratios. Especially after this quarter, where they need to be profitable to retain earnings to increase capital ratios.

4. The geography is right. Google the locations of BCAR branches and the locations of BNCN branches.

If not BNCN, then someone else. CLBH is in a position to do it and their service area is just to the east. NBBC is adjacent to the north and just acquired a small savings bank. There have been a lot of recent small bank mergers over the last year in NC.

This past quarter puts pressure on BCAR to seriously look at all options. My guess is that if the next few quarters don't look rosy from here, it probably puts itself up for sale and gets bought out within the year. Not bad since some of these sales have been at a 3X or more premium, but pps needs to be higher than it is now.

So, that's it, unsubstantiated rumor FWIW.

[SaltyMutt]

If both BCAR and the economy can get on the right track and stay there, I think $16.00, or very close to it, could happen in two years. Especially if a word like merger slips into the equation.

[illegal_alias]

In 2006, it was over $16. We can only hope.

[SaltyMutt]

Five years or so back, the pps for BCAR was around $8.00. Come 2015, assuming the economy isn't in shambles, I believe the bank will be on it's way back to it's former glory.

[illegal_alias]

Next hearing on the Renegade BK Motion is set for August 13.

Looks like liquidation started last week. Apparently GE screwed it being greedy
http://www.news-record.com/news/local_news/article_7ebc84fe-f305-11e2-ae15-0019bb30f31a.html
now GE will get nothing. BCAR still first in line from what I can tell.

[illegal_alias]

When I bought this originally earlier in the year, I was only expecting a relatively flat year, with upturn in 4th qtr bto between .75-$1. So, $1.50 was pleasant, but temporary, surprise. I see payday in late 2014/early 2015, but bigger than $3

[Ron3955]

Hope you're right. I was looking at two bucks by the end of this year, but because of the 2nd qtr. setback, now looking for about 75 cents to a buck, unless of course some good news other than earnings pop up.