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Citizens Republic Bancorp, Inc Message Board

  • jayinbaker jayinbaker Sep 16, 2009 1:31 PM Flag

    FWIW

    Now that kabtb is no longer posting his garbage, erroneous conclusions, and idiotic insinuations, lets get some of the facts straight so that we can all evaluate our independent situations.

    The facts to this matter are complex but relatively simple.

    FACTS:

    1.) The proposal on the table calls for an increase of authorized common to 1, 050,000,000 shares, and an increase of 900,000,000 shares, not I billion.
    “The purposes of this meeting are to seek approval of an increase in the number of authorized shares of common stock from 150,000,000 to 1,050,000,000 shares, to seek approval of a proposal to issue additional shares of common stock”
    There are currently 126,254,560 shares of the 150,000,000 authorized issued as of July 31, 2009.

    2.) The current balances of the 5.75% Feb 2013 $125,000,000 notes are $120,668,000. The current balance of the 7.5% Sept. 2066 $150,000,000 notes are $147,440,000 (as of June 30, 2009) for a total of $268,108,000.

    3.) At a conversion rate of PPS $.80, a total of 335,135,000 shares would be issued to retire the debt, bringing a total issue of 461,389,560. Not 1 billion as some insert. That would leave 588,610,430 authorized shares for future offerings if necessary.

    4.) The net effect is dilutive but not as much as some think. We would have $268,108,000 less debt and 335,135,000 more shares, but the Assets minus Liabilities would leave the Net Worth per share the same. We would effectively be printing our own money to pay off the debt, just like Uncle Sam. But the major effect would substantially increase our well capitalized situation giving us a cushion for expected further write offs and losses, and it would place us in a good position to crawl out our crises and get back to stability.

    5.) However, along with the conversion, it may trigger other negative issues such as the tax loss carry forward, but that is expected.

    6.) This would also substantially benefit us if we attempt to obtain the additional $190,000,000 TARP funds

    7.) Regardless of the past failures, it is a given that the proposal is going to pass. It is therefore important for the holders of the notes to attempt to keep the PPS down as low as possible. If the PPS was $1.00, only 268,108,000 shares would be given them. Why convert @ $1.00 if you could get more shares @ $.75.


    8.) With the current situation, I feel that that the CEO and Board are doing what is necessary to maintain an adequate well capitalized condition. Each of us may look at our investment differently depending on our cost of entry, but overall, it is what is necessary in order to survive the greatest financial crises we’ve ever experienced. If you bought at a much higher price than the current PPS, you may have to wait longer to fulfill your profits. If you bought at a lower price, you will be rewarded sooner.

    Regardless, I sincerely hope for the best of all the longs and adamantly wish that the shorts and doomsayers fall into the sea.

    Jay

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    • Hello Jay,

      Good to see you in crbc.

      I remember you from ctlm days.

      It looks like many value investors, hedge funds and others are interested in crbc.

      Looking at the volume there is tremendous amount of interest. I love stocks with good volume.

      • 1 Reply to invest2bfree
      • Well hello to you too, invest2bfre. Wow! ctlm, that was a long time ago. Made out ok on my first go around but took losses on the second time and got out before they crashed lower. Glad I did.

        Yes, I like crbc, but only for the long term. Have 67,300 @ .692, so currently down but not dissapointed. Too many of the posters/investors expect a get rich quick turnaround for crbc. Don't think it will happen overnight. Looking for late 2010 or early 2011 for any substantial gains.

        Currently only have 60% of stock funds invested and 40% cash. Waiting for pullback which doesn't seem to want to come. Meanwhile spending half my time in Fort Myers/Cape Coral Florida where I bought numerous properties at exceptionally low prices. Banks are just giving them away right now. Hopefully market will recover in next 3-5 years.

        Good luck to you in crbc. It will eventually do well.

        Jay

    • That last one was supposed to include

      http://finance.yahoo.com/q?s=key&.yficrumb=Uwk2NEZ5QjL

      along with the other regional.

    • Good point, but I had to say something to turn away from this messageboard. Didn´t think there would be such easy targets taking so many gratuitous bashes, but I figured if there were it would be like sport. I´m not talking about you or insomoniadude of course.

      FWIW this stock no longer interests me much. I am holding as a short term play but plan to unload and use the capital for something else. I suppose she might actually come out and indicate the common is a valuable thing and limit her dilution so I might hold long if something like that happened, I suppose we have to see what the conversion comes in at, but this is the second issue I lost arguing here. The first was the firing of the former CEO as I thought he was the one to turn it around and it was a kneejerk reaction.

      Two decisions like that going against me and I have to quit posting and move out of this one, it is a bit too small for a financial stock for me anyway. Whether the stock moves up or not, holding onto stocks that do the opposite of what I think is needed is just not my cup of tea anymore.

      While I am not one to think that daily fluctuations matter all that much, they got their plan and the stock went nowhere, if it continues like this maybe they should take note of it. This is a very hot market for beaten down financials, the past two days the beaten up ones have been up big, and the arbitrage guys are into it too. So I am wondering why, if things were so easy as those who pushed this plan through said, this one over the past two days has lagged, and why today it did not spike on their so called wonderful news. Again, the question is only relevant if it does not rally.

      Here is one example this CEO might learn from, it got almost as low as CRBC, back when CRBC first hit its lows. It bought debt out at a discount on the open market, refinanced and sold some assets and avoided TARP all together, it wasn´t all that different.

      http://finance.yahoo.com/q?s=gnw&.yficrumb=Uwk2NEZ5QjL

      Nice action today, after raising over $500M in a secondary, and that one has been rallying since the bottom of the market.


      This one recently has been facing a big debt coming due in September 2010 and the analysts were all over it saying it was in deep, but it has been holding off on rash issues and plans, and while it might do a 10% dilution to reduce debt in any refinancing, maybe, it is not TARPed and by waiting into an improving market it has maximized any proceeds from any dilution and minimized the dilution.


      http://finance.yahoo.com/q?s=cno


      These two are just two run of the mill larger regionals who have gone through a second dilution but they did not do it nearly as extremely as this CEO has proposed.

      http://finance.yahoo.com/q?s=rf&.yficrumb=Uwk2NEZ5QjL


      They raised capital twice, double TARPED. If this one could avoid massive dilution, and avoid a second TARP, then maybe FITB is a better example to look towards, that one sold some assets and led the regionals in its recent run out of the hole.

      Poor CRBC, despite all those extraordinary gains over today and this past months, my herd feels kind of depressed over this one lagging behind. The CEO here should look at those and the others that have rallied recently and ask herself why. Then maybe she may be able to manage this capital plan she has been given more wisely.

    • Nice analysis. I agree completely. The math is off just a tiny bit, but no big deal since it errors on the side of caution. You forgot to incorporate the tender discount of 10% (early tender) and 15% (normal tender).

      Let's assume that this would reduce your share count by probably 10% - 12% (depending on the tender).

      Also, I am sure not everyone will tender (so shares issued may be even lower). I'm not sure what happens if they don't tender, but I have heard some preferred holders say that they do NOT want to tender.

      The prospectus for the tender offer set a maximum of 500 million shares for this conversion. So you are also right about keeping the other shares "in reserve". The new CAP funds come with a built-in "convertible" feature that can be exercised if and when the company needs the conversion (pre-approved). That's why they want a cushion that is already approved by the shareholders. Hopefully, they will never need it.

    • Geez!
      A post that contains facts, opinions, and interpretations of the current events facing this company, without resorting to name calling and wild-eyed speculation.
      What a novel approach.
      Good for you Jay.
      Hope you don't get drowned out by some of mouth breathers that populate this board.
      Best of luck all

      • 1 Reply to blewbyu57
      • Gee, the guy calls the posts of others garbage and other things and you think you can just write that he gives no name calling, now we have a gang of short term daytraders who think they can project their faults onto other.

        Gee, when all the other beaten down fiancial stocks have rallied big these past two days, and stormed out of the gutter these past several months, do you think there may be something wrong with this CEO´s capital plan that could be keeping this one down?

        Nahhhhhh, you got facts, you may misrepresent some of them but as long as you say it enough times you convince yourselves.

        Gee, do you think this CEO could hire independent financial advisers to come up with a more moderate plan and consider alternatives, like so many others do, and gee, maybe they could sell some assets like those that have rallied did, and gee whiz, if they came up with a goal of a 270M share company with conversions at a higher price like all the others did, maybe that could be better for the stock and company including the preffered. Gee, what a novel approach that would be.

        And this guy openly urges the debt to keep the common down like it is a game to see how many shares they could get and how much junkier they could make those shares, and you wonder why this CEO has failed to get enough votes after several days of extended trading, geez.

        Welcome to my 2009 Elmer J. Fudd indicator list, hope to be on the other side of some trades at you, and when they insult me I tend to do much better at it because I have an incentive, and like the laugh.

    • rigamarole@rocketmail.com rigamarole Sep 16, 2009 2:03 PM Flag

      GREAT POST
      Well thought out. Someone else had made the observation that dilution is better then bankruptcy. Take your outstanding shares, hazard a guess on where the market cap should be in a year, and you have your share price. I'd think a bank this size should have a market cap of 1 billion or more. It was 3.5 billion before the collapse.

    • This is Jay´s view of things.

      ¨It is therefore important for the holders of the notes to attempt to keep the PPS down as low as possible. If the PPS was $1.00, only 268,108,000 shares would be given them. Why convert @ $1.00 if you could get more shares @ $.75.¨

      Why don´t you just trash the common Jay so you get more shares that are worth less, and maybe next you can explain to us all why reverse splits are necessary.

      It seems that my initial response to his post has been washed out so Jay may have a gang of ratings people playing censorship, unless it is just the computer I am on.

      But hey, he insulted me, and I am only going to respond to those here. Don´t have much time to waste on you Jay.

      You are one reason this CEO should hire independent financial advisers to consider other options and come up with a more moderate plan. That and the fact that she has failed to get enough votes after several extended days of voting, spending corporate resources cold calling for votes.

      All for day traders like Jay to insult those who post and get their short term trading profits in.

    • Are you Kabby's alter ego? Where did you come from? Your post length is very kabbyish.

    • Told you all I was only going to respond to insults, this one gave one so here goes.

      He called my posts garbage and said

      ¨It is therefore important for the holders of the notes to attempt to keep the PPS down as low as possible. If the PPS was $1.00, only 268,108,000 shares would be given them. Why convert @ $1.00 if you could get more shares @ $.75.¨

      Are you suggesting stock manipulation, jayinbaker, sounds to me maybe you are.

      Just another reason this proposal should not pass, and a reason why this stock has stayed so low, they want to trash the PPS for the debt and preferred to get the lion´s share of the stock, and in so doing are effectively massively diluting for what amounts to peanuts. This is exactly why after several days of extended voting this CEO has failed to get enough votes.

      You´d think they would have the maturity to accept the message, and hire independent financial advisers to come up with a more moderate plan and consider alternatives, or at least come up with a better plan themselves. Of course, jayinbaker won´t even acknowledge that that is the prudent thing to do, and that many other companies do such things in these situations. He´s too busy urging the debtholders to try to keep the common stock trashed.

      Don´t have much time to waste on your garbage analysis, jayinbaker, too busy collecting my profits on all the others I have. I just don´t make these things up jay, I suggest things that others do and they are rocking dude.

    • very well said.

 

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