SLRK
Has almost no liquidity and that is a problem.
Earnings were overstated in the quarter, there was a 1.2 Million quarter gain on sale of securities. Hence I would subtract .22 from the EPS. Which is still impressive and cheap, but not as impressive as $1.19.
They took Almost no provision. And although asset quality is improving. There non Perfoming numbers are over 1% at this time in the cycle is not impressive at this point.
Further there criticized Loans are almost triple there Allowance. Yes improving, but asset quality ;leaves me longing for better, in fact almost every bank I look at has better, hence why I wouldn't buy it a deal breaker for me.
Furthermore Loan growth was negative in the quarter, which is yet another negative. Although positive if you ignore PPP. Which is a plus.
It Also looks like they recognized some PPP income as well this quarter which also helped results. Which will soon be not happening.
Conclusion: I will pass on SLRK, it is cheap, and trades under book, but the negatives for me outweigh the positives. Lack of Liquidity, Asset quality although Improving could be better, Loan growth was negative, Although positive with PPP, but still negative. EPS was great this quarter, but unsustainable without the gain, the ppp income, and lower loan balances. All is just my opinion, and I could always be wrong though.
