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Citizens Republic Bancorp, Inc Message Board

  • kabtb kabtb Apr 30, 2010 4:02 PM Flag

    Market update for the at risk banks sometimes posted here

    They all tanked, investors who bought into the hype have lost their shirts these past several days and that may be good news for the financials and the midsized regional survivors like CRBC.

    The bad news is that the excess in the run up of the at risk small regionals appears to have contributed to a correction in all the financials. Never say that daytraders running on excess ever help the longs, when they distort the market making total junk fly too high it tends to leave to corrections.

    Of course, there are other regions like soveriegn debt issues, the GS claims and talk of financial regulation that have contributed in this correction. Plus the financials had run up so hard so fast without many corrections we may have been due for one anyway.

    It is not for me to speculate on where the regulators will close next, but there is a lot of talk about it in the press including the WSJ over them having taken bids on the Puerto Rican at risk banks, the press noting that R and G, EUBK and WHI may be the ones to go that way. Several there like BPOP and others have raised large amounts of capital saying they would be bidding into such things, though they are not in particularly good shape themselves in terms of NPA problems.

    So that might be a logical move. There are, of course, a bunch of others that may go instead.

    As far as the big bouncers that many suggested as trades here, they have been completely chewing up those who chased near the top these past several days, again, possibly good news long run for the financials as some of those excess runups were so extreme they were like a distortion that cannot last and tends to hurt the sector performance until they are rationalized down to more reasonable levels.

    Those in DEAR got stomped with a double jump, those in AMFI lost it all last Friday, those in STSA and TIBB got thromped, those in PCBC got slammed and Id say blindsided with an unexpected vulture capital type deal. There are many more that gave all or most of it back.

    Together they may say that it will be awhile before they get to running up wildly again.

    Also, TIBB and STSA were understandable, a vulture type deal with a large investor, or as they are trying to do it, with a handful of large investors and some private secondaries maybe, is about all they could have hoped for since they let their capital ratios deteriorate so much, but PCBC comes as a bit of a surprise since it did not appear that bad in Q4 at least.

    Sure am glad I am in the larger regionals that donçt have those kinds of problems and even when they had a bit of them they did not go like that to deal with them, and in ones like CRBC that seems to already have its capital issues behind them and to be set for any recovery as is. Not bad, too, when you consider the upside that is still here even after fully accounting for any dilution they did to get there.

    Some pumpers may have run around claiming that ones like TIBB and STSA and PCBC had more upside because they were not diluted, but the reality is that they waited too long to raise capital and as a result all they got were vulture type capital deals you only take when desparate, and exisitng shareholders, even if they do get to raise it all and survive, will be left far more diluted and with less upside than here.

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