I just went in this stock with 3000 shares for $6.41 a piece. This cant go wrong, its at 18 year low and still profitable. I have been watching bank stocks for a month now and this is definetky the best long term play out there.
Bough 2000 more at $6.02... Thanks... hehe...
People are selling this like there is no tomorrowm at firesale price, comon, this thing is not on fire and is not going under... Ii is profitable and has been so for many, many years...
Save your cash. This is from the earnings call transcript. If you know anything about GAAP, OREO assets must be written down to lower of cost or market. Apparently that is not occurring here:
Scott Siefers – Sandler O’Neill & Partners, L.P.
"And then if I can switch over, John, maybe one or two questions just on the reserve. As you look and think about things, you made the comment that the current reserve appears to be more than enough for the losses you see inherent in the portfolio. What would have to happen to real estate specifically and just more broadly for you to believe that a further reserve boost might be necessary?"
John D. Schwab
"If we decided, Scott, to move some of these properties out of OREO which we’re not planning to do in the near term. If we were to move the stuff into the current economic environment through both sale of these assets there would be additional reserves needed to support that."
In other words, no additional reserve is needed as long as keep your non-performing assets locked up in OREO (other real estate owned). There are hidden losses here.
I think the hit that Michigan and the CRBC market has taken, is somewhat different than the hit CA, FL, and others have. Their recovery process and rate will be just as different. Michigan had no housing subprime or ARM mortgage boom. Their economics and problems are not based on McMansions being forclosed on, it's based on a declining automotive and Mfg sector. The overbuilt housing mess of CA and FL (and NV) will take years to absorb. Michigan is at bottom already, and has been. As a matter of fact, a bankrupt GM would only be good news...clean balance sheet, no debt, R&D spending, new facilities...ect. The only news that can happen to michigan right now, can only be better news than what it's already been at...Any problems with housing there will be shortlived and quick to recover with minimal impact. Patience in years really is not what is needed at CRBC.
I agree on the dividend aspect you make. They were a high paying dividend attracting many investors. Once they cut the dividend is when the spirral down in the stock occurred. Just think, they made money in the last quarter, and the qrt before. They can make money in the Mich market, regardless of other regions McMansion problems. I agree the cut in dividend created a sell-off. I agree the sell-off has created an opportunity to buy now. I disagree that a long time horizon exists to see this stock come around.
One interviewed person in Flint around the time of the shareholders meeting said about the mgmnt taking a pay cut, "At least they got their money where their mouth is." is mis-characterized. They should be pouring their own savings and wealth into inside buying if they truely want to show where their mouth / money is. The CEO's made a bundle in previous salary compared to most firms this size. The *ss managers have had a party while driving this bank into an investor hell.
The only time I'd say "I like the management" is if they invested where they eat. And then maybe I'd start getting some confidence back.
I compared CRBC to other banks that also made a profit in the latest quarter (bpfh, cnb and few others) and I find CRBC to be the most bargain and the one with the lowest forward looking PE (currently 5.25). The other bank stock I like is BPFH, but havent bought any yet.
I actualy like the fact that CRBC havent invested in Florida and California. Banks from these regions are posting bigger loses and a few already raised capital (cnb), I am guessing that they already got more cash because they are proberbly seing more loses ahead.
I was encourage to read on the earnings call transcript that CRBC is anticipanting things to improve going forward. I guess thats why they havent raised more capital now. If they do raise, there will be significant dilution to the stock. CNB raise 320 million selling to investors for 8$ last month, 30% dilution, look at it now... selling for 6.60$
The problem is the suspended dividend. That's going to deter a lot of buying. I think CRBC isn't really going up until they can pay at least some dividend. Dividends are standard for financials. You can't be the one financial without a dividend and expect enough people to buy.
You are right!!!
I've bought heavy into banks the last two months. I expect them to turn around beginning in August; so that by the November election the voters will start feeling better about the world.
If you started buying 2 months ago, you must have lost quite a bit... Am glad to be entering now and only down 0.20$... Nothing to worry about. Am 50% in cash right now after taking some profits. So if this baby falls by another $1 I will be buying more.