Seem to define their plans more concretely, making it quite clear in no uncertain terms, the RMBS portfolio is soon to gone, and that the new CSE will be a bank with a healthcare reit. (untill markets or opportunities stabilize enough for them to ipo or sell the reit at "fair value".
There was only one question for fink, and that was the prioritization of buying another bank or buying loans. He made it clear they would buy loans from distressed sellers not distressed loans. As for buying another bank, possibly fink and delany are jumping around from direcly answering this because of the TARP, but they are implying they clearly want to offer diverse banking services and they will either get staff to do it, or buy an existing operation.
No major comments on the Istar participation deal, they still maintain 12 month payoff.
We are seeing higher non accruals, but the percentages seem reasonable, do want to see more new loans to keep that percentage down. All in all continue to be happy with the company, but as a stock, uggh
personal future concerns are have to do with the RMBS portfolio and affect on earnings when sold
Sirius, the RMBS is low yield compared to other investments CSE makes. It is there just to qualify for REIT status, with the real value supposedly the tax adavantaged status the company gets. CSE said that it would be imprudent or impossible to qualify as a REIT next year, which means it isn't cost effective to try to maintain a massive RMBS portfolio with CSE's new model in this business environment. Nobody knows what the RMBS portfolio will be worth in January when they sell it. A lot depends on interest rates for mortgages in comparison to where the rates were when CSE bought them. Could be a gain. Could be a loss. Could be in the middle. It's a real wildcard. But I suspect that CSE will sell promptly no matter what, b/c they $1.5 billion plus or minus they get from the sale will immediately be used to deleverage (hence the pro forma accounting in the example CSE gave of what it would look like as of 9/30 with the RMBS gone).