In two months time, WIBC rose another 30% to $9.5 and now back down to barely over $7. Mainly through Mirae acquisition, Wilshire was the only Korean-American bank that grew its loans in 2Q. Too, its bad (Mirae) loans are largely shielded by FDIC. If only it'll trade below book again...
There were few incidences that I could explain price movements, this is not one.
The shares were traded at $4-$5 range only a few months ago. That was about 2/3 of book value. It steadily moved ahead until reaching book value of $6.73 only last week. Apparently, the market expected something good. There were only two events worth mentioning--acquisition of Mirae asset and 2Q report. The first was definitely long term positive. The second was not so hot. Stripping off some revaluations, earnings were only $0.01. Still, this is not bad considering the environment we are in. So shares moved up and now bounced around a bit.
I guess I am not alone in losing my bearing. We all focused on non-accruals and past dues in the hope of finding some clue as to how much pain we'd suffer before things turn around. It would have been much, much easier if we don't have Mirae's loans in the mix. But without break it out we don't know how much bad loans are subject to FDIC's loss sharing, thereby how much is WIBC's share. Maybe 10Q would clarify that. (Isn't it supposed be out already?) With that, I am not surprised that WIBC would act choppy. But then, what do I know?
sam is right, i believe, that the run up in stock price before the 2Q report explains the pull back after good but uncertain results. they increased reserves for commercial properties and still have excellent capital ratios. big uncertainty is how bad will commercial property get. i dont see see how they have any material risk with the acquisition piece.