They have already been warned by the Feds (OTS) that they have a capital requirment problem. I don't think the Fed window is open to them, which is why they attempted to bring the convertible deal. More loan losses could spell the end here without a white knight.
I agree. This is why the stock is trading at 40% of book, and a fwd PE of 7. No credibility. I think any decent fwd guidance that supports a return to profitability should be positive for the stock. Not a bad speculative play if you believe they will stay in business. I will listen to the earnings call on Wed. before I throw good money after bad.
I am curious how they will have "better than expected earnings"? The major issue for them has been bad loans, most of which are residential. The Case/Schiller report for November showed yet another nasty drop in values in Dallas month over month and year over year. Real estate values are likely to stay low or go even lower before it is all said and done. That means loan losses are not going away yet. Then there is the issue of the money they already needed, evidenced by the convertible note offer they floated out and then pulled. Did their money needs suddenly evaporate, or are they about to get even worse??