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I don't own it either...this has to be one of the sickest banks in Ohio. It's amazing they've survived this long but I have my doubts they can continue. They're throwing assets overboard by the handfuls ...assets are only a $100MM now.
It takes money to make money...with assets, loans and deposits all shrinking that will be a real fight.
*Ohio has a high concentration of very small banks by assets compared to other states. Very little is known about this bank at this point. TBV is (-.17)
Not long ago, many banks viewed trust preferred securities (“TPS”) as inexpensive capital, and TPS are on the balance sheets of many bank holding companies today. Now, many of these same companies must raise capital and are finding their TPS an insurmountable impediment.
The reason for this is that TPS, which are considered debt, have priority over common stock upon liquidation. Investors will not invest new equity knowing that it eventually will be used to repay the TPS. This is particularly galling to sophisticated investors, the likely sources of new capital, who have no interest in “bailing out” debt holders. So prospective investors who might otherwise step up are sitting on the sidelines.
For particularly troubled bank holding companies, the failure to raise capital could lead to the failure of the bank subsidiary, leaving little or no value for TPS holders. Faced with thissituation, most debt holders would be motivated to negotiate a discounted payoff. Unfortunately, TPS are different, and negotiations often have proved impossible. To understand why, one must understand how TPS were sold.
To take advantage of a securities registration exemption, many TPS were sold to special purpose entities (“SPEs”) that own pools of assets, usually debt or preferred stocks that provide cash flows. These SPEs, in turn, issued bonds secured by their pools of assets. So, many TPS are owned by SPEs, which in turn have senior and junior bond holders.
Some SPEs have asset managers, who make investment decisions with respect to the SPEs assets. But many SPEs are unmanaged “static pools,” where investment decisions may be made only by the holders of the SPEs bonds. Each SPE has its own set of rules as to when and how decisions may be made. Often, in cases where a security is not in default, decisions must be reached unanimously by senior bond holders or by all bond holders, which is a practical impossibility. Indeed, many SPEs were structured with the intent of prohibiting negotiated settlements; those SPEs have no mechanism for reapportioning the cash flows of their bonds following an asset restructure.
As a result, many distressed bank holding companies seeking to negotiate with TPS holders have found there simply is no one to negotiate with, even in situations where negotiations are so clearly in the best interests of the TPS holders. Tender offers receive no response.
Avoiding bank failure is imperative. Thus, boards of directors who are unable to negotiate with TPS holders have sought ways to raise capital by forcing a reduced payout for TPS holders without their consent.
One approach, completed successfully in Washington in 2010, was the sale by a holding company of its ownership interest in its bank through a bankruptcy process. To do this, the holding company files for bankruptcy and at the same time enters into an agreement with a “stalking horse bidder” to sell the bank. Theholding company then auctions the bank under procedures approved by the bankruptcy court. The bank ultimately is sold to the highest bidder, which likely is the stalking horse bidder. Upon closing, the proceeds from the sale of the bank go to the TPS holders, and the winning bidder recapitalizes the bank.
This type of transaction carries the risk of a run on the bank, as customers may think the holding company bankruptcy means the bank too has failed. For this reason, a well thought out public relations campaign is essential. The holding company should seek court approval for as short an auction process as possible.
A second way to recapitalize a bank without negotiating with TPS holders would be to raise capital at the bank level by selling bank equity to investors. Such a transaction also poses risks,in that if a sufficient ownership interest in the bank is sold it could amount to a breach of the TPS covenant against a sale of all or substantially all of the holding company’s assets unlessthe buyer assumes the TPS obligations. A careful reading of the exact wording of the TPS covenants would be required.
Relief may be on the horizon. Some SP bond holders recently have begun to organize, and there are investors who have acquired TPSwho are willing to negotiate, so it may now be possible to negotiate with at least some TPS holders. This raises the intriguing possibility of a mutually negotiated settlement amongthe holding company, investors and some TPS holders. The negotiated settlement could be enforced against all TPS holders through a prepackaged bankruptcy. The settlement might even give the TPS holders an equity stake in the recapitalized bank, which would be an opportunity to recover in the future some of their lost value.
One thing is certain – TPS will continue to be an impediment to bank holding companies who need to recapitalize their bank subsidiaries, and so long as TPS holders are unwilling or unable to negotiate, companies will continue to seek creative solutions to break the logjam, even if it means deliberately breaching TPScovenants.
The lawsuit against BB&T-BankAtlantic transaction was filed in Delaware Chancery Court by Hildene Capital Management and Alesco Preferred Funding. Both Hildene and Alesco are indirect beneficiaries to BankAtlantic’s TruPS.
I realize look1 this is old news but the subject matter surrounding TruPS & recapitalization efforts remains very relevant.
BB&T-BankAtlantic Deal Forbidden
February 28, 2012
On Monday, Judge J. Travis Laster of Delaware Court of Chancery gave his judgement over the lawsuit filed by the investors in the trust-preferred securities (TruPS) debt under the BB&T-BankAtlantic deal. The judge has permanently prohibited the deal under which, BankAtlantic, a wholly owned subsidiary of BankAtlantic Bancorp Inc. , was supposed to sell most of its banking assets to BB&T Corporation (BBT - Analyst Report).
Earlier on November 1, 2011, BB&T announced its plan to acquire BankAtlantic. Under the terms of the deal, the company was supposed to acquire $2.1 billion in loans and $3.3 billion in deposits (90% core and low-cost funds) for $301 million premium, representing 9.05% of the deposits at BankAtlantic on September 30. However, deposit premium may rise or fall depending on the amount of deposits at BankAtlantic prior to the closing of deal, but it will not exceed $315.9 million.
However, BankAtlantic Bancorp’s strategy was to hold on nonperforming and criticized loans worth $623 million and sell off $2.1 billion in assets to BB&T. Moreover, the company has no plans to pay off $289 million in principal TruPS debt owed by the holding company.
Therefore, in November 2011, a group of corporate debt investors of BankAtlantic filed a lawsuit against the firm to stop it from selling its loans, deposits and branches to BB&T. These investors believed that this sale infringes the terms of their creditors’ agreement. Finally, the investors have won the ruling as the judge has permanently forbidden the deal.
Charges Against the Deal
In the first opposition to the deal, the plaintiffs accused both BB&T and BankAtlantic of structuring the transaction in such a way that the acquirer could evade TruPS obligations. They charged the parent company, BankAtlantic Bancorp, of breaching an agreement, stating that the transfer or sale of majority of its assets will not happen without ensuring that the acquirer will also assume TruPS.
However, BB&T’s deal would transfer nearly 83% of BankAtlantic assets, without assuming the TruPS. Hence, the plaintiffs want either TruPS to be included in the agreement or the deal to be blocked.
The plaintiffs also stated that following the closure of the transaction, BankAtlantic Bancorp would become a holding company with no branches and will own large amounts of nonperforming loans and foreclosed real estate assets. Therefore, the company will no longer resemble its present operations.
The lawsuit against BB&T-BankAtlantic transaction was filed in Delaware Chancery Court by Hildene Capital Management and Alesco Preferred Funding. Both Hildene and Alesco are indirect beneficiaries to BankAtlantic’s TruPS.
Similar Opposition Before
Earlier in 2010, BankAtlantic faced similar opposition related to its TruPS. At that time, the company had tried to repurchase nearly $230 million of these securities at a discount to boost its capital levels. However, the offer was withdrawn following strong oppositions from certain section of investors.
The judge claimed that the sale of all BankAtlantic’s branches and deposits, along with most of its assets to BB&T would breach the terms of TruPS corporate debt. According to the ruling, the debt should either be repaid or acquire by BB&T.
Therefore, the ruling put forward by the judge warns all bank holding companies not to evade repayment of TruPS debt while selling their banks. However, ruling in favor of BankAtlantic Bancorp would have dissuaded the investors from helping the banks to raise capital with TruPS.
Our Viewpoint
The BB&T-BankAtlantic deal was expected to be highly advantageous to both the companies. For BankAtlantic, the agreement was expected to resolve some of its balance sheet and higher operating expense related problems.
For BB&T, the transaction was expected to enable it to speed up its expansion strategy in Florida region. Also, the deal would have added 78 branches to BB&T’s 64-branch network in Florida region. Besides substantially increasing BB&T’s market share and footprints, the acquisition would have improved the company’s top line over the medium term.
However, the judge should consider investors’ interest and come up with proper solutions to maximize the profits of all the concerned parties.
Opus Bank Files Registration Statement for Proposed Initial Public Offering
March 13, 2014 7:00 AM ET
Opus Bank, which specializes in commercial, retail, merchant and correspondent banking, today announced that a registration statement on Form 10 has been filed with the Federal Deposit Insurance Corporation for the proposed listing of Opus Bank common stock in connection with a proposed initial public offering. The shares will be offered by Opus Bank and certain selling stockholders. Opus Bank has applied to list its common stock on The NASDAQ Global Select Market under the ticker symbol "OPB." The number of shares of common stock to be offered and the price range for the offering have not yet been determined.
J.P. Morgan, Credit Suisse, Sandler O’Neill + Partners, L.P., and Keefe, Bruyette & Woods will act as joint book-running managers.
Opus Bank is an FDIC insured California-chartered commercial bank with over $3.7 billion of total assets, $2.9 billion of total loans, and $2.7 billion in total deposits as of December 31, 2013.
The offering will be made only by means of an offering circular. The registration statement on Form 10, which includes the preliminary offering circular relating to the offering, is available at http://www2.fdic.gov/efr/login335.asp. The preliminary offering circular has not been approved by the California Commissioner of Department of Business Oversight and is subject to further revision and amendment.
A registration statement on Form 10 relating to these securities has been filed with the Federal Deposit Insurance Corporation, but has not yet become effective. These securities also may not be sold, nor offers to buy be accepted, prior to the time Opus Bank has obtained a permit for the sale of the securities from the California Commissioner of Department of Business Oversight. A permit for the sale of the securities has not yet been granted. This press release is for informational purposes only and shall not constitute an offer to sell or a solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. These securities are neither insured nor approved by the Federal Deposit Insurance Corporation, California Department of Business Oversight—Division of Financial Institutions or any other governmental agency.
About Opus Bank
Opus Bank provides high-value, relationship-based banking products, services and solutions to its clients comprised of small and mid-sized commercial business, entrepreneurs, real estate investors, professionals and consumers. Opus Bank offers a suite of treasury and cash management and depository solutions, and a wide range of loan products, including commercial and industrial, commercial real estate, multifamily residential, and is an SBA preferred lender. Opus Bank is an Equal Housing Lender. Opus Bank operates 60 banking offices, including two banking offices in the Phoenix metropolitan area of Arizona, 34 banking offices in California and 24 banking offices in the Seattle/Puget Sound region of Washington.
Opus Bank Mr. Jeff L. Leonard SVP, Dir. of Corporate Strategy/Communications (949) 251-8146
Opus Bank Files Registration Statement for Proposed Initial Public Offering
March 13, 2014 7:00 AM ET
Opus Bank, which specializes in commercial, retail, merchant and correspondent banking, today announced that a registration statement on Form 10 has been filed with the Federal Deposit Insurance Corporation for the proposed listing of Opus Bank common stock in connection with a proposed initial public offering. The shares will be offered by Opus Bank and certain selling stockholders. Opus Bank has applied to list its common stock on The NASDAQ Global Select Market under the ticker symbol "OPB." The number of shares of common stock to be offered and the price range for the offering have not yet been determined.
J.P. Morgan, Credit Suisse, Sandler O’Neill + Partners, L.P., and Keefe, Bruyette & Woods will act as joint book-running managers.
Opus Bank is an FDIC insured California-chartered commercial bank with over $3.7 billion of total assets, $2.9 billion of total loans, and $2.7 billion in total deposits as of December 31, 2013.
The offering will be made only by means of an offering circular. The registration statement on Form 10, which includes the preliminary offering circular relating to the offering, is available at http://www2.fdic.gov/efr/login335.asp. The preliminary offering circular has not been approved by the California Commissioner of Department of Business Oversight and is subject to further revision and amendment.
A registration statement on Form 10 relating to these securities has been filed with the Federal Deposit Insurance Corporation, but has not yet become effective. These securities also may not be sold, nor offers to buy be accepted, prior to the time Opus Bank has obtained a permit for the sale of the securities from the California Commissioner of Department of Business Oversight. A permit for the sale of the securities has not yet been granted. This press release is for informational purposes only and shall not constitute an offer to sell or a solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. These securities are neither insured nor approved by the Federal Deposit Insurance Corporation, California Department of Business Oversight—Division of Financial Institutions or any other governmental agency.
About Opus Bank
Opus Bank provides high-value, relationship-based banking products, services and solutions to its clients comprised of small and mid-sized commercial business, entrepreneurs, real estate investors, professionals and consumers. Opus Bank offers a suite of treasury and cash management and depository solutions, and a wide range of loan products, including commercial and industrial, commercial real estate, multifamily residential, and is an SBA preferred lender. Opus Bank is an Equal Housing Lender. Opus Bank operates 60 banking offices, including two banking offices in the Phoenix metropolitan area of Arizona, 34 banking offices in California and 24 banking offices in the Seattle/Puget Sound region of Washington.
Opus Bank Mr. Jeff L. Leonard SVP, Dir. of Corporate Strategy/Communications (949) 251-8146
First Bank Completes Merger With Heritage Community Bank
Date : 03/10/2014 @ 9:17AM Source : Marketwired Stock : First Bank (MM) (FRBA) Quote : $6.30 0.1 (1.61%) @ 12:57PM
First Bank Completes Merger With Heritage Community Bank
HAMILTON, NJ--(Marketwired - March 10, 2014) - First Bank (NASDAQ: FRBA) announced today that it had completed its previously announced merger with Heritage Community Bank effective as of the close of business on March 7, 2014. Shareholders of both banks approved the merger at special meetings held on March 5, 2014. As a result of the merger, First Bank will operate 8 branches in four New Jersey counties, including the 3 former Heritage Community Bank branches in Morris County.
President and Chief Executive Officer Patrick L. Ryan said, "The closing of the merger represents another step in our continued growth, and we remain excited about our prospects in an industry where headwinds are subsiding and renewed consolidation should create additional expansion opportunities. We believe Morris County will be a great market for our brand of relationship banking."
Peter Kenny, former President and Chief Executive Officer of Heritage Community Bank stated, "A strong community banking operation in the Morris County market is assured by the merger, and I look forward to helping First Bank continue to build out its commercial lending platform."
Each Heritage Community Bank share was exchanged for 0.4534 First Bank shares. First Bank issued an aggregate of 875,251 shares of its common stock.
Among all these strengths what is the weakest link in the chain? NPA's are still a little high at 13.40%..they must continue to come down. The average for all bank's Nationally with between $250MM ~ $500M in assets is 3.03%.
NPA progress report news is good.
At the end of Dec. 2012 the NPA's were $14,352,000.
At the end of Dec. 2013 the NPA's were $9,647,000 .
They took off another $4.7MM which is a 33% improvement YoY. They still have a ways to go but they're ratcheting those down quite well. It's working!
Treasury Department Announces $45.1 Million in Proceeds from Pricing of Auctions of Preferred Stock of Four Financial Institutions
3/7/2014
Auctions Part of Treasury’s Continued Efforts to Wind Down TARP’s Bank Programs
**Proceeds Deliver Additional Profit for Taxpayers on TARP’s Bank Programs
WASHINGTON – As part of the strategy it outlined for winding down its remaining Troubled Asset Relief Program (TARP) bank investments, the U.S. Department of the Treasury announced that it priced auctions of preferred stock (the “CPP Securities”) in the following four institutions at the following prices:
Issuer and Security
BNCCORP, Inc., Bismarck, ND
Fixed Rate Cumulative Perpetual Preferred Stock, Series A Price per share: $1,001.08 Number of shares: 20,093 Aggregate Gross Proceeds: $20,114,700.44
Fixed Rate Cumulative Perpetual Preferred Stock, Series B Price per share: $1,001.25 Number of shares: 1,005 Aggregate Gross Proceeds: $1,006,256.25
Total Borrowed(on Jan. 16, 2009): $20,093,000.00
Total Returned to the Treasury 2014: $21,120,956.69
It's interesting to note that BNCC's TARP auction resulted in a full payment back to the Treasury. A high number of these auctions of late resulted in significant discounts to the amount owed. I suspect BNCC was deemed too healthy to qualify for any discount.
*We now know when ...and we now know how much... but we don't know "who".
==============================
Well whadayaknow...Uncle Sam made a buck...and it was off those much maligned evil bankers!
**TARP’s bank programs have already earned a significant profit for taxpayers. Including the expected proceeds from the transactions announced today, Treasury has now recovered more than $273 billion from TARP’s bank programs through repayments, dividends, interest, and other income – compared to the $245 billion initially invested.
...the Intervenor/RECEIVER/FASCIST has absolutely no business whatsoever wheeling and dealing in the holding company's BK.....................unless Guy/UWBKQ approved the FDIC's involvement..............................
FS, the FDIC as receiver is functionally and legally separate from the FDIC acting in its corporate role as deposit insurer...and the FDIC as a receiver has separate rights, duties, and obligations from those of the FDIC as insurer. Whether we like it or not courts have long recognized these dual and separate capacities. These laws are written with depositors in mind not shareholders.
These were the rules of the road when United became a bank...and they've only gotten stronger since Dodd-Frank became a reality.
I don't make the rules...I'm a smaller gov't is a better gov't kinda guy...but you better damn well understand them before you go all in on something like this.
Banks and the regulating thereof are highly complex.
Newcastle Announces Fourth Quarter and Full Year 2013 Results
Newcastle Investment Corp. (NYSE:NCT; “Newcastle”, the “Company”) today reported the following information for the quarter and full year ended December 31, 2013:
FOURTH QUARTER FINANCIAL HIGHLIGHTS: • GAAP Income of $29.0 million, or $0.09 per diluted share • Core Earnings of $26.8 million, or $0.08 per diluted share • GAAP book value of $3.14 per share • Average uninvested capital of $150 million throughout the quarter
FULL YEAR 2013 FINANCIAL HIGHLIGHTS: • GAAP Income of $145.8 million, or $0.51 per diluted share • Core Earnings of $140.9 million, or $0.50 per diluted share • Spun off New Residential Investment Corp. (NYSE:NRZ) on May 15, 2013
FRESNO, Calif., Jan. 28, 2014 /PRNewswire/ -- United Security Bancshares (http://www.unitedsecuritybank.com/) (Nasdaq Global Select: UBFO) reported today unaudited consolidated net income of $2,945,000 or $0.20 per basic and diluted common share for the quarter ended December 31, 2013 and $7,269,000 or $0.49 per basic and diluted common share for the year ended December 31, 2013, as compared to $1,479,000 or $0.09 per basic and diluted common shares for the quarter ended December 31, 2012 and $6,069,000 or $0.41 per basic and diluted shares for the year ended December 31, 2012.
Nationstar Mortgage Announces Fourth Quarter and Full Year 2013 Financial Results
February 27, 2014 07:00 AM Eastern Standard Time
LEWISVILLE, Texas--(BUSINESS WIRE)--Nationstar Mortgage Holdings Inc. (NYSE:NSM):
-2013 GAAP EPS of $2.40 on net income of $217 million •2013 pro forma EPS of $3.20 on pro forma net income of $289 million •Ending servicing portfolio UPB of $391 billion •2013 servicing portfolio growth of 88% with successful completion of BofA boarding •Q4 2013 servicing operating profitability exceeded 6 basis points •Originations: Funded volume of $24 billion in 2013; Year-over-year growth of 204% •Solutionstar: $185 million and $67 million in revenue and pretax income, respectively in its first full year •2013 return on equity of 25%
Nationstar Mortgage Holdings Inc. (NYSE:NSM) (“Nationstar”), a leading residential mortgage loan servicer, today reported that net income for the year ended December 31, 2013 increased 6% to $217 million, or $2.40 per share, from $205 million in 2012, or $2.40 per share. The net loss in the fourth quarter 2013 was $51 million, or $(0.56) per share compared to net income of $64 million, or $0.71 per share, in the fourth quarter 2012.
If I said the moon is made out of cheddar cheese...would that be good enough proof for you?
True the bank is at a better price than my last post in December [$5.20] but show me with financial numbers that the bank is "cheap".
At todays price of $4.52 the bank sells at 151.1% X Book.
The Price/Book average for all banks in Kentucky is 118.12%
See a problem?
Am I saying this is a terrible bank? No.
Am I saying the banks financial condition isn't improving nicely? No.
There are a couple things I really like about this bank such as the size - they have $850MM in assets. It was over $1 Billion in 2012 which means they've had to throw some junk over-board to keep afloat - that's never a good thing for banks. Banks are healthy when the assets are growing...not receding.
We need to see the 2013 yearly results to see if the bleeding has stopped and they're reversing the trend. If they are that would be great. If you bought this good luck.
Marker: First Financial Serv (FFKY) $4.52 up 0.17 (3.91%) Volume: 324
There are built-in ownership restrictions limiting RES to 34 percent.
This ownership restriction may create somewhat of a little 'Catch - 22' scenerio for RES as we go forward thru the rights offering process. They/We need other large player(s) to come in...but that too has a few kinks that need to be worked out if they can only hold 9.9%.
Restrictions on Ownership of Our Capital Stock
Our charter generally prohibits any shareholder from beneficially owning more than 9.9% of our common stock or 9.9% of any class or series of our preferred stock. Our charter, however, provides for certain exemptions from the ownership limitation, provided generally that the grant of such exemptions will not jeopardize our REIT status. Our board of directors has established such an exemption for RES. RES may not convert its shares of the Series C Preferred Stock or exercise the Warrants to the extent the conversion or exercise would cause RES or any of its affiliates to beneficially own more than 34% of the total number of votes represented by our voting stock. For purposes of RES’s beneficial ownership limitation “voting stock” means capital stock having the power to vote generally for the election of directors of our company and includes the Series C Preferred Stock. See “Description of Capital Stock—Description of Preferred Stock—Series C Preferred Stock” for voting rights of the Series C Preferred Stock’” and “Description of Capital Stock-Restrictions on Ownership and Transfer” for a description of RES’s beneficial ownership limitation. Our charter also prohibits any person from owning or transferring shares of our capital stock if such ownership or transfer would result in our failure to meet certain REIT requirements under the Internal Revenue Code of 1986, as amended, or the Code.
So, buying shares (assuming you fully exercise your rights) and assuming the offering price is here at $3.00 you are investing alongside institutional guys and recapitalizing SPPR at barely over 50% of BV.
My back of the napkin offering price uses something closer to the $4 area (they really need a 100 percent subscription rate to raise maximum capital... which is $30MM) but yes. Looks right...I don't see that you're missing anything.
The mathmatical stamp of approval we really should have is from our BBA/MBA SMU Mustang alumni Banker -- aka Enterprising Investor.
Marker: Supertel Hospitality (SPPR) $2.9312 down -0.3088 (-9.53%) Volume: 142,548
SPPRO opened today at: $15.99 SPPRP opened today at: $5.99
If 2 guys going over the Prospectus on the phone last night at midnight caught it I'm sure somebody at the company will see it in time to correct it.
Details like the prices, dates and share structure (pre & post offering) are purposely either left blank or written in pencil on the initial S-11 filing.
Once the new shares pass the SEC registration process the company will fill in those blanks and correct any typos before the final prospectus is released.
Marker: (2pm EST) Supertel Hospitality (SPPR) $3.13 up 0.98 (45.58%) Volume: 700,765 **currently there are only 2,898,286 shares outstanding :~O
*Stock went as high as $4.25 earlier in the session. Someone is aggressivley scooping these up!
Shares Outstanding Before this rights offering: 2,898,286 shares of our common stock were outstanding as of the record date.
Shares Outstanding After Completion of this rights offering: If all the subscription rights are exercised,*6,648,286 shares of our common stock will be outstanding immediately after completion of this rights offering.
*We think this O/S number they show after the rights offering is completed if all the subscription rights are exercised must be a typo. We think the number should be 9,546,572.
How To Spot The Opportunity In The Problems For Small Banks
November 11, 2013 12:39 PM
[....]
The individuals running the small banks recognize the need to merge into a larger institution
After five years of operating under what can best be described as difficult conditions, many of the smaller banks want to be acquired and get out from under dealing with credit problems and regulatory burdens.
However, most of them have also seen their stock price drop substantially since the 2007 peaks, and they need to get a fair price for the shares. The officers, directors and leading members of the communities in which they are based often have significant amounts of money tied up in shares of the smaller banks. They are willing to sell, but need to get a price that allows them to trim their losses if not turn an outright profit on their shares.
Right now there dozens, if not hundreds of smaller banks trading below their tangible book value. In past post crisis consolidation waves, such as the S&L crisis in the early 1990s and the Long-Term Capital Management (LTCM) meltdown in 1998, takeover premiums were initially around 1.25 times book value before peaking at somewhere near two times book value at the peak. There is no reason to assume that the multiples will not be very similar this time around although most observers and analysts think that this wave of merger activity will last far longer than earlier period.
Investors that buy the smaller stocks while they are trading at a discount to book value and are able to sell at decent premiums stand to make a significant amount of money. As real estate markets stabilize and credit conditions improve, it is also reasonable to assume that dividend payments will increase and book values will rise over the next couple of years so the total return can be much higher over a longer holding period.
The problems and difficult conditions facing the smaller banks create an opportunity for patient investors who buy these shares and ride the consolidation over the next several years.
<this is a good read...to get more click the link>
Wilshire Bank Recognized asLargest SBA Lender in Los Angeles
Date : 02/03/2014 @ 8:00AM Source : GlobeNewswire Inc. Stock : Wilshire Bancorp, Inc. (MM) (WIBC) Quote : $9.75 -0.38 (-3.75%) @ 5:20PM
Wilshire Bank (the "Bank"), a subsidiary of Wilshire Bancorp, Inc. (Nasdaq:WIBC) (the "Company"), today announced that it has been recognized by the U.S. Small Business Administration as the largest producer of SBA loans in the SBA Los Angeles District (Los Angeles, Santa Barbara and Ventura Counties) for fiscal year 2013. Wilshire Bank originated 130 SBA loans totaling $46.1 million in the Los Angeles District during the SBA fiscal year ended September 30, 2013.
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