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Heritage Bankshares Inc. Message Board

  • barkingdog78 barkingdog78 May 28, 2014 7:03 PM Flag

    More net value will be realized on bank sale if SBLF is paid off first -

    • Potential buyers of bank are going to view SBLF as a negative and use it as a bargaining chip to lower their offer.
    • Pool of potential buyers is smaller, since not every bank has the liquidity to pay it off.
    • Stock values are high now, so shareholders can sell other stocks and raise the capital now.
    • After SBLF is paid off, shareholders won't have the threat of a stock offering hanging over the HBKS share price.
    • Don't like an insider deal though - that would be a negative. Should be a rights offering of common to all existing shareholders. Convertible debt shouldn't be necessary.
    • In the meantime, it's hard for shareholders to plan for the future liquidity-wise. While SBLF has a low interest rate, shareholders also need to sit on their personal cash while waiting for a potential capital raise. With interest rates being so low and the HBKS stock relatively high, better to bite the bullet now and get it over with!

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