BCBP
The insider buying is a plus. As with everything there are pluses and minues.
BCBP Earned .32 down from .46 this time last year. Hence can't say that is a positive. But let break down all the metrics to get a better understanding of what is going on here.
Loan Growth and Deposit Growth Loan growth was down slightly sequentially and y/y. As for depsoti growth it has been going slightly higher and quite frankly that happened again in q1. All and all nothing here bothers me.
NIMS Otherwise known as Net interest margin, as one knows this has been dropping for all banks, I am looking for stabilization at this point, and eventually an increase of nims in the coming quarters on the banks i want to buy. The good news is nims went from 2.57% last quarter to 2.50% this quarter, which isn't good at face value, but it had a much slower drop than the previous quarter going from 2.78% to 2.57%, so maybe getting close to troughing. Obviously can't know that for certain, but that would be a plus if it stops going down, right now can't say that though as 1 number is not a trend and it was still going down, so need to see if nims comes in around here next quarter or it declines. Right now NIMS trend is still a negative, but it would be a plus if it is starting to trough for profitability and top line going foward. Not sure yet here if that is the case.
Book value Trades at steep discount too book, so that is a plus.
Dividend Pays a nice divy, than again not thrilled that the payout ratio is approaching 50% on current earnings. That too me is not a plus, although the divy is. How safe that divy is, if this continues is a slight concern.
Asset quality here is the thing that has kept me away from BCBP. Look at the trend of not just non accural Loans, but classified loans. Now clssified loans don't have to go bad, but they are seen as much higher risk, the number was just 17 million in q1 last year, now over 97 million in q1 this year, that is a huge increase. Of course Non accural have gone up significantly and based on what I think will happen they may go up alot further in future quarter would like to see some stabilization with some of these metrics first. Right now I see these numbers going up which is obviosuly a negative. Don't get me wrong asset quality is weaker for alot of banks than it was a year ago, and some of that is that it is coming off numbers where therere were very low levels of bad loans, but in this case, just see these numbers going up a bit faster than I would expect even in that environment.
Now why we should care is BCBP at some point might need to take larger provisions than say 2 million a quarter, and that has to be a concern. Plus asset quality is always the most important thing when you look at a bank.
All and all I would pass as I like numerous banks better than this. Asset quality is very important to me, the metric could be better and i'm being nice, specifically with the trend. Loan and deposit growth is non existant. don't think this should trade at much more than 10 multiple if that, and quite frankly wouldn't surprise me if earnings are under .30 next quarter, hence in the mid 10's it is near FV for me. The divy although great, the payout ratio is approaching 50% which doesn't make me thrilled either. The only real positive I see right now is the discount too book. Barring on the off chance of it being acquired (Not a reason to invest), the stock should remain at a steep discount too book until the EPS Numbers stop declining (if I had to guess next quarter would be under .30) so that would continue the trend of declining, and asset quality gets better which right now the metrics are getting worse. I'll pass, but I wish you the best with it. All is just my opinion, and I could always be wrong though.
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