Explore small cap ideas before they hit the headlines.
Spot liquidity moves with access to US order books.
Someone bid the price up 60% by buying on Friday? I hope in our case, there is inside info floating around that precedes positive events.
http://finra-markets.morningstar.com/BondCenter/BondTradeActivitySearchResult.jsp?ticker=C170460&startdate=08/01/2012&enddate=11/25/2013
One-fourth of bankers surveyed by KPMG expect to become sellers in 2014 as challenges and regulatory scrutiny rise.
Let's find 'em.
http://www.americanbanker.com/issues/178_225/more-small-banks-show-willingness-to-sell-1063814-1.html
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"
"huge inflows into south Florida real estate from Europe, Venezuela, etc. real estate is a store of value, no return necessary"
"SF oceanfront has its own dynamics, economics (cap rates) do not apply....hard to analyze"
$42 Million but we still don't know at what price. I would think it would be accretive but still reasonable so as that over-allotment gets filled.
Something interesting I just thought of as I saw this quote from the prospectus:
Excludes up to $15.0 million to be purchased by certain of our officers, directors, insiders and existing shareholders pursuant to a directed share program, for which the underwriting discounts and commissions will be one percent (1%). See “Underwriting — Directed Share Program.”
Jacksonville among most desirable markets for bank M&A
http://www.bizjournals.com/jacksonville/blog/morning-edition/2013/11/jacksonville-among-most-desirable.html
Bank mergers and acquisitions are heating up in the Southeast and Jacksonville is among the “most hotly pursued markets.”
The Southeast had the second highest amount of merger and acquisition activity among financial institutions nationwide during the 12 months ended Oct. 22, according to data from Banks Street Partners.
The Atlanta-based investment banking firm said banks headquartered in the Southeast have announced 50 deals in the last year, following the Midwest’s 69 deals during the same time period. In the past year, there have been 210 bank mergers announced nationwide.
Banks Street Partners CEO Lee Burrows said almost without exception, banks in the most desirable markets are getting the best pricing. He said the Southeastern markets most in demand from buyers includes: Charleston, S.C.; Charlotte, N.C.; Greenville/Spartanburg, S.C.; Jacksonville, Fla.; Knoxville, Tenn.; Nashville, Tenn.; Norfolk/Virginia Beach/Hampton Roads, Va.; Northern Virginia; Raleigh/Durham/Chapel Hill, N.C.; Richmond, Va.; and Savannah, Ga.
Florida is ripe for community bank mergers and acquisition, as the wave of Florida bank failures is mostly over and the recession in the rearview mirror. The Business Journal took an indepth look at bank mergers and acquisitions in Florida as a whole earlier this year.
Jacksonville among most desirable markets for bank M&A
http://www.bizjournals.com/jacksonville/blog/morning-edition/2013/11/jacksonville-among-most-desirable.html
Bank mergers and acquisitions are heating up in the Southeast and Jacksonville is among the “most hotly pursued markets.”
The Southeast had the second highest amount of merger and acquisition activity among financial institutions nationwide during the 12 months ended Oct. 22, according to data from Banks Street Partners.
The Atlanta-based investment banking firm said banks headquartered in the Southeast have announced 50 deals in the last year, following the Midwest’s 69 deals during the same time period. In the past year, there have been 210 bank mergers announced nationwide.
Banks Street Partners CEO Lee Burrows said almost without exception, banks in the most desirable markets are getting the best pricing. He said the Southeastern markets most in demand from buyers includes: Charleston, S.C.; Charlotte, N.C.; Greenville/Spartanburg, S.C.; Jacksonville, Fla.; Knoxville, Tenn.; Nashville, Tenn.; Norfolk/Virginia Beach/Hampton Roads, Va.; Northern Virginia; Raleigh/Durham/Chapel Hill, N.C.; Richmond, Va.; and Savannah, Ga.
Florida is ripe for community bank mergers and acquisition, as the wave of Florida bank failures is mostly over and the recession in the rearview mirror. The Business Journal took an indepth look at bank mergers and acquisitions in Florida as a whole earlier this year.
As a follow-up to my previous post, here is an older article on Peco Pallet:
http://www.reuters.com/article/2011/08/31/us-column-cohen-peco-idUSTRE77U3Q820110831
Peco, which counts big consumer names among its accounts, but declines to name them, has booked consolidated average growth of 25 percent in revenue for the past four years; annual sales are now about $120 million. With an estimated 6 to 7 percent of the U.S. market for pallet rentals, it charges customers around $5 per pallet, Lee said.
In other news, I randomly was reading this article about investments of the Pritzker billionaires and something caught my eye.
http://www.bloomberg.com/news/2013-11-05/pritzker-billionaire-brothers-turn-from-family-feuding-to-deals.html
They bought Peco Pallet, who claims to be the North American leader in pallets, for an undisclosed amount.
“These guys want to expand, whereas the previous guys didn’t,” says Lee, who expects sales of $190 million for 2013. “They are long-term investors, so they’re not looking to pump something up and get out before the bubble bursts.”
I would think it has something to do with OTC quotes / trading being screwed up indefinitely this morning.
Twitter IPO is engulfing the entire market.
Why might a California bank pay over BV for another bank in a transaction?
The headline of this article may have something to do with it.
http://www.housingwire.com/articles/27823-california-home-prices-return-to-pre-recession-levels?utm_source=dlvr.it&utm_medium=twitter
Hi Zach, here would be my quick response:
When involved in micro-caps, one is nearly doing private equity investing which requires a performance goal of 20% at least. Scenario 1 being the reverse split, there is your 20% discount baked in as a required return.
Scenario 2 being the split does not occur, what is the value of the company on an earnings basis? Consensus is GLGI is cheap on that basis, but if the split did not go through was it because of lack of financing? And if so, that shows a weakness in company fundamentals. You would also be owning a company that is tied to its management from personal financing and related transactions, a situation that many funds would discount the shares heavily for. It requires more attention into a small investment than many would normally undertake.
You will find those here have analyzed the various outcomes and have placed their bets while trying to communicate the best they could with management. Personally handicapping the outcomes with the data available to oneself (and the resultant moves up or down) is key I feel.
And just like that it trades down almost 50% to $8.75. Talk about some portfolio swings in recent times.
http://finra-markets.morningstar.com/BondCenter/BondTradeActivitySearchResult.jsp?ticker=C170460&startdate=08%2F01%2F2012&enddate=11%2F04%2F2013
Think about this one Chevy on a quarter over quarter basis.
Q3 Non-interest income was $1.634 MM vs. $1.087 in Q2 so an increase of $550K
Now look:
Q3 Non-interest expense was $10.95 MM vs. only $7.445 MM in Q2, or an increase of $3.5 MM
Net change of about $3 MM
If there are any one-time items in that category somewhere you would have to add that back into the loss to normalize. It can be pretty tough with these tiny banks on that one.
Point being, it could have been a better quarter than the $2.4MM loss last quarter. During the lumpy earnings stage as a bank recovers, two quarters a trend does not make. Paying off TARP as you know is huge.
FD: no position
I'm in some today at $3.74. Profitability will come and I have a hard time believing if / when they raise capital it will not be a positive when buying at 30% BV.
Step one looking at this year's figures is looking at numbers with the costs of their failed takeover stripped out.
Full disclosure, I forgot to mention I bought more shares yesterday.
-Pagz
Q3 results, sounds like some progress here and a break-even quarter.
“Our primary focus in recent years has been on reducing our problem assets and returning the Company to profitability,” stated CEO Gary Deems. “We are now in a position to refocus some of our efforts on attracting new business and rebuilding our loan portfolio.”
Lots of noise this quarter and a semi-transitional one (sadly no TARP news), have to dig further into this but one must obviously normalize the data. Focusing on ND is a smart move as asset growth has been strong, 17% annually is huge.
Throw rocks at this thinking, it's very back of envelope:
.487 net income
(1.055) life insurance benefit
.3 quarterly saving from Minnesota closings (1.2 / 4)
1.5 impairment charge on real estate sold
1.23 MM / 3.34 MM shares outstanding = $.35 per share
$.35/share x 4 = $1.42 annualized
$13.30 current price / $1.42 = 9.4x earnings multiple
Couple that w/ BV = $13.30 / $14.75 = 90%BV for 17% asset growth
Pinched NIM's are tough, but that asset growth is a positive.
-Pagz
Well that doesn't sound very positive, still have to wonder who is bidding these up (no complaints).
Interestingly enough, I went on ZD to see what prices there were and get this message suggesting why I don't see them anymore:
ERROR:This Bond has matured on 05/15/2013 and can no longer be transacted. (10314)
Look at recent trading days, there's been selloffs into the close routinely. Someone does not want naked exposure overnight perhaps.
Earnings should be out soon if history is any indicator. Even if net income would drop a few hundred $K to roughly $.50 / share, we still would be trading less than a 7x multiple annualized and under BV. Continue to hold all my shares for the moment.
-Pagz
Anyone else notice the price moving up substantially this week? Something going on here?
http://finra-markets.morningstar.com/BondCenter/BondTradeActivitySearchResult.jsp?ticker=C170460&startdate=08/01/2012&enddate=11/01/2013
One of the parties involved in settlement talks buying up chunks of notes to hedge against their costs? Just a shot in the dark obviously, but did seem curious.
-Pagz
September MOR:
$27,909,913 of assets / 300K notes = $93.03 per note
Portion of Liberty Mutual settlement moved from Other Assets (Deposits) to Current Assets (Cash).
http://dm.epiq11.com/TMI/Document/GetDocument/2428639
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.
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
From the FDIC state profile for Florida:
http://www.fdic.gov/bank/analytical/stateprofile/Atlanta/Fl/fl.pdf
Notes:
- Jacksonville is the 3rd largest deposit market ($45.9 Billion), having 41 banks in the area
- There are 24 banks with assets greater than $1 Billion
- 33 banks with assets under $100 Million, the area where JAXB needs to go hunting
Whoops, yup that's what I get for trying to read filings via mobile :p
Regardless, I do like a good ground floor opportunity.
Another article I hope that isn't a re-post:
http://www.bizjournals.com/jacksonville/print-edition/2013/01/11/new-capital-means-local-bank-can-buy.html?page=all
John Rose, who is a board member and a principal at CapGen Capital Group, the private equity firm that provided about half of the funding for the bank’s most recent capital raise, said that the new capital improves the bank’s capital reserves so they exceed regulatory requirements. The capital also puts the bank in a position to take advantage of the local banking market where more than half of the banks need capital to meet regulatory demands.
Scott Hall, the president of Jacksonville Bank, said the goal is to get the bank to a size of at least $1 billion in assets. At its height in 2010, the bank had about $790 million in assets, but shrunk to $549.3 million in assets as of the third quarter, the latest data available. Rose said the bank is now around $600 million in assets because of the new capital.
H/T to @wellmont on Twitter for posting this Jacksonville Business Journal article breaking down institutional and insider investments from before:
http://www.bizjournals.com/jacksonville/blog/2013/03/institutionaldirectors-made-up.html
Leaves me thinking about how many shares are really out there that are NOT in the hands of insiders or long-term holders.
puts the company (Nasdaq: JAXB) back in a position to grow again in a number of ways, including the possibility of acquiring other local banks that still need capital.
Was just looking at some filings, some stock bought / exercised from options by executives here at our buying level:
- William Klich, Director, buys 1,000 shares at $.50
http://www.sec.gov/Archives/edgar/data/1071264/000101532513000038/xslF345X03/primary_doc.xml
- Terrie Spiro, Director, buys 86,383 at $.50
http://www.sec.gov/Archives/edgar/data/1071264/000101532513000039/xslF345X03/primary_doc.xml
- Scott Hall, EVP / President, exercises 300,000 at $.51
http://www.sec.gov/Archives/edgar/data/1071264/000101532513000040/xslF345X03/primary_doc.xml
- Margaret Incandela, EVP / COO / CCO, exercises 1,500,000 at $.51
http://www.sec.gov/Archives/edgar/data/1071264/000101532513000041/xslF345X03/primary_doc.xml
- Valerie Kendall, EVP / CFO exercises 200,000 at $.51
http://www.sec.gov/Archives/edgar/data/1071264/000101532513000042/xslF345X03/primary_doc.xml
Point being, us as investors are inline with management's vested interest.
When the reverse split becomes effective, every 20 shares of common stock held by a shareholder will automatically combine into one (1) new share of common stock, and every 20 shares of nonvoting common stock held by a shareholder will automatically combine into one (1) new share of nonvoting common stock. No fractional shares will be issued as a result of the reverse stock split; any fractional shares that would have resulted from the reverse split will be rounded up to the nearest whole share. The number of authorized shares of common stock and nonvoting common stock will be proportionately reduced as a result of the reverse split; there will be no change in par value for such shares.
1 for 20 reverse split approved to stay NASDAQ compliant....also puts it above the threshold for certain fund investment mandates.
http://finance.yahoo.com/news/jacksonville-bancorp-inc-board-approves-205000940.html
JACKSONVILLE, Fla., Oct. 8, 2013 /PRNewswire/ -- Jacksonville Bancorp, Inc. (the "Company") (JAXB), holding company for The Jacksonville Bank, announced today that its Board of Directors (the "Board") has approved a 1-for-20 reverse stock split of its common stock and nonvoting common stock. The Company anticipates that the reverse stock split will be effective on or about October 24, 2013. The Company's shareholders had authorized the Board to approve a reverse stock split at a ratio of up to 1-for-20 at the special meeting of shareholders in February.
(Logo: http://photos.prnewswire.com/prnh/20020410/JAXBLOGO)
The reverse stock split is being implemented primarily for the purpose of regaining compliance with the $1.00 per share minimum closing bid price requirement for continued listing on the Nasdaq Capital Market, although there is no assurance that this will be achieved.
When the reverse split becomes effective, every 20 shares of common stock held by a shareholder will automatically combine into one (1) new share of common stock, and every 20 shares of nonvoting common stock held by a shareholder will automatically combine into one (1) new share of nonvoting common stock. No fractional shares will be issued as a result of the reverse stock split; any fractional shares that would have resulted from the reverse split will be rounded up to the nearest whole share. The number of authorized shares of common stock and nonvoting common stock will be proportionately reduced as a result of the reverse split; there will be no change in par value for such shares.
The Company
Jacksonville Bancorp, Inc., a bank holding company, is the parent of The Jacksonville Bank, a Florida state-chartered bank focusing on the Northeast Florida market with approximately $522.4 million in assets and eight full-service branches in Jacksonville and Jacksonville Beach, Duval County, Florida as well as our virtual branch. The Jacksonville Bank opened for business on May 28, 1999 and provides a variety of community banking services to businesses and individuals in Jacksonville, Florida. More information is available at its website at www.jaxbank.com.
What is interesting is the price action around the series of events. After a private placement, a rights offering, and then a public offering, we are still trading at the price of these capital raises. Even a fund late to the party could gobble up shares here and take a meaningful position, well after CapGen did! Just seems a little odd.
-Pagz
Took part in "Plan B" a little today.
BNCC broke through book value for the first time at the end of the day, still highly undervalued on that basis.
August MOR out:
$28,484,438 of assets / 300K notes = $94.95 per note
Notes affecting monthly change:
-Mortgage loan held on books for ~ $2MM settled for $1MM between TMST, Luxury Mortgage Corp, and Commonwealth Land Title Insurance Co.
http://dm.epiq11.com/TMI/Document/GetDocument/2419822
U.S. Median Household income vs. North Dakota Household median
http://stocktwits.com/jackdamn/message/15949605?utm_campaign=&utm_source=twitter&utm_medium=community
That's a beautiful trend if you are holding a bank in the area.
52-week high, grinding up. Haven't sold any shares yet.
You guys both beat me to it.
When you are the guy providing financing on numerous occasions (Kruger), taking shares from other shareholders makes perfect sense.
Financial engineering gives him personal returns and then there is little resistance to future moves by shareholders. Not a slimy move in my eyes, merely one done to protect his investment and to grow the business. That said, the $.50 offered could turn out to be a bargain for major holders by management projections.
The nice part is it doesn't take much to add above the threshold to join in the future of the company. I know some have or are contemplating it.
Those with degrees from the Cox School of Business are generally pretty sharp.
Reverse stock split update:
Recent Developments
On June 18, 2013, Greystone filed a Schedule 13E-3, File No. 005-59735 (the "Schedule 13E-3"), and a Preliminary Proxy Statement on Schedule 14A, File No. 000-26331 (the "Preliminary Proxy Statement"), each relating to a Special Meeting of the Shareholders Greystone to be held on August 2, 2013. The sole matter that was to be voted upon at that Special Meeting of the Shareholders was to approve an amendment to the Company’s Certificate of Incorporation, which would have authorized a one for ten thousand (1-10,000) reverse stock split of Greystone’s Common Stock and a cash payment per share for resulting fractional shares equal to $0.50.
Greystone decided to delay the date of the Special Meeting of Shareholders until such later time as Greystone can amend the Schedule 13E-3 and the Preliminary Proxy Statement to (i) respond to comments received by Greystone from the United States Securities and Exchange Commission (the "SEC"), (ii) incorporate into the Preliminary Proxy Statement by reference this Annual Report on Form 10-K, (iii) attach as an exhibit to the Preliminary Proxy Statement this Annual Report on Form 10-K, and (iv) set a new record date and a new special meeting date for the Special Meeting of Shareholders.
Greystone intends to file such amendments to the Schedule 13E-3 and Preliminary Proxy Statement shortly after filing this Annual Report on Form 10-K. A new record date and date for the Special Meeting of Shareholders will be set forth therein. Greystone anticipates that the new date for the Special Meeting of Shareholders will be sometime in the fourth calendar quarter of 2013.
10-K is out if anyone cares to discuss. I'll probably take a look through it over the weekend:
http://www.sec.gov/Archives/edgar/data/1088413/000107261313000384/form10k_17564.htm