I am wondering if anyone who is familiar with their bank situation could shed some light on this.
I assume SWS will continue losing money for a while but I don't know for how long or how much.
If SWS continues the loss at the current rate for the next two years before turning profit, the current price would still be below the book value. That is why I intend to hold my shares for a very long time. I am not a trader.
The bank is under an MOU agreement. Requires SWS to reduce their classified loans and keep capital ratios at certain level. Management has brought down the levels of construction and land loans. Now have to deal with its CRE loans. The market is giving no value to the bank and is also assuming the B/D is not worth its net asset value. So I assume the stock is mis-priced and will eventually recover when the bank starts to post lower NPAs.
Thanks, jssssb. That is helpful. I am prepared for a few more bad quarters and hope SWS will come out to be valued properly eventually as you suggested. Now it is a fraction of its net tangible assets value.