FFKT drops from $32 to $25---provides a buying opportunity. Loss from Fannie and Freddie stock will be less than $1.50 per share. Trades just above book value and pays over a five percent dividend---earns over $2.00/share. Just a matter of time until FFKT is bought by WSBC at $40/share
I'd be careful about aggressive debt repayment through loan restructuring. This sounds like the cash-strapped homeowner doing some serious financial prioritizing to pay off maxed out credit cards in the face of meeting near-term regular costs of living. Farmers is restructuring $24 mn. in loans and its stock value is floundering. At best it may see incremental cash flow improvements overall in the very long run. Right now I gather it is hard for anyone, even the expert analysts, to figure what kind of financial shape FFKT will be in in the next 6 months, or year or biennium. Some of you writers seem to have strong banking and investment backgrounds so are more privy to the in and outs of how "those in the know" can make fairly reliable predictions of how things will settle regarding this company's financial "house". I would say the "house" is for the most part in too much disarray to get super excited about investing sheerly due to the $6 to $8/share price tag it goes for right now. Investors might be better off to wait for it to go up a few more dollars/share with the knowledge that FFKT's crisis has started to pass. The stock has seen up to $35 and higher historically. I imagine it still could have this potential (long-term) if it is able to see a restored national economy and local business is able to borrow at a more brisk pace. Right now these are two crucial pre-existing conditions that are missing. Restructuring loans makes sense in and of itself; however, this does not lend itself to helping the bank have more profit margins in successive fiscal yearly periods. Restructuring just is directed to getting the regulators off its back and make appropriate legal and accounting correction in its existing asset portfolio.
doctor....pain, Good post. FFKT is indeed a risky play......However the long term rewards could be handsome....If FFKT management is able to cut costs significantly and manage the balance sheet well.....Than they have a good chance to be a sucessful turnaround IMHO....
Bump..for the benefit of our resident touts Issiah and Bowley.
"But it was ever thus, all through my life: whenever I have diverged from custom and principle and uttered a truth, the rule has been that the hearer hadn't strength of mind enough to believe it." ~ Mark Twain
Sara, I recommend a little more patience before buying any more shares in this sleepy little bank. Farmers will shortly announce third quarter earnings, or the lack of them. Given managements demonstrated lack of competence, it will be interesting to see how they spin this disaster.
Some buying opportunity. This is the worst disaster in the bank's history. Their survival is at stake now. The company will be writing off at least $12.9M, reducing tangible net worth to under $100M. The company will be under heightened regulatory scrutiny, if it hasn't happened already. Oh, and by the way, management insiders have been dumping their own stock over the past month.