Ok, I know this is a rough calculation here but trying to value this going forward. We know with 23 M common shares outstanding BANR common equity was $278 M or $12.64/share. Therefore the $150 M in new equity might imply the following:
at $2.70/share - requires additional 55.5 M shares. so BANR would have $278 M + $150 M = $428 M common equity. with 23 M+55.5 M= 78.5 M shares outstanding, book value would come in at $5.45/ share.
at $2.00/share book value comes in at $4.36/share at $4.00/share book value comes in at $7.07/share
Just a quick snapshot of some possible senarios. Obviously we are looking a less upside than the pre capital raise book value of $12.64/share. But clearly the market saw BANR as too close to the well-capitalized thresholds to allow a peer group A type market valuation (1.43 x book per the filing). So after the capital raise, IMO the upside value is lower but becomes more certain. If BANR can achieve a peer group A type valuation as a result there remains decent upside potential.
If the new shares were priced at Friday's closing price of $2.70, a peer group multiple to book would be $5.45 x 1.43 = $7.79/share.
Obviously there are plenty of other factors at play here and no one know the price of the new shares until the deal is done. But once the pricing is done, I would not want to be on the short side. Just my thoughts, but would love to hear any serious responses.
So, I guess we have an answer. banr should walk away with a captial cushion and approx $4.36 in book value. if banr can turn the corner and return to profitability perhaps the market will get to a 1.4 multiple to book ($6) in time. At least the prospectus seemed to indicate NPAs for the 2nd qtr were about unchanged with NPLs slightly lower and REO slightly higher. Some stability would help.
I agree. Once the secondary pricing is set, we might see a brief stay close to that price ($2.7, $2.5, or whatever others), and then it will recover QUICKLY to above $3, or possibly above $4 if the market is in a confirmed upward trend.