Happy to be remembered, thank you. Congratulations is in order.
I was taken by surprise. But the buy back is to take place in 3Q, at the mean time, it gets to accumulate more equity.
The $5 million is roughly 0.85% of asset. While is doesn't affect equity of GFED, the Tier-1 would be set back by approx. 0.85%. Apparently no problem, otherwise FDIC & State regulator would not have given their blessings.
I was expecting $0.3 million quarterly improvement if economy holds up, but it won't quite get to the $10 million potential (see my earlier post somewhere) I envisioned. To earn additional $12 million to pay off the rest of TARP, it need to maintain the operation, makes no provision, pays no income tax for the five quarters starting 4Q12. While not improbable, it takes a leap of faith. As you guys know, I lack faith.
It's no big deal whether it can hit the target before that fateful repricing date any way. Also, with higher earning power, the bank may gain more latitude from the regulator to dig more into capital if necessary. This also assumes no big increase in asset, otherwise, it'll need more capital, not less.
It maybe tight, but in a round about way, I surmise that dilution from TARP will not be much of a issue. You guys were right.
Part of the reason, is that I am now more inclined that our economy will experience a nice bounce by 2013 due to (surprise!) housing market.
Economy in MO was considered weak but employment, Springfield included, held up well. I'll take employment anytime. Economy will just follow. Cheers!
I don't expect to see any major impact to book value per common share from the event. They said they will record a $128k charge related to the early repurchase on the $5M in preferred stock, but that isn't a huge issue (may reduce 4-5 cents per share in earnings for Q2).
Shaun Burke stated that if current earnings trends continue they expect to repurchase the remainder of their preferred stock by the end of next year.
good question on future cash flow, hope there are no materially adverse effects from paying down tarp to the eps as well...
Either way... over time, and proof of real efforts like today should get GFED some significant attention. It is hidden from the market currently, but when the market chooses to notice it... it will fly.