The management of SHBI is very conservative. I believe they are just trying to get a little extra cushion because business has been punk. SHBI has been generous with their dividend policy but with the uncertainty of the economy, I think they would like to raise a little extra capital.
I have not had a chance to examine all the 2009 numbers but they are down substantially from 2008. Return on average assets is .48% for 2009 as compared to 1.13% for 2008. The return on equity was 4.00% for 2009 as compared to 9.22% for 2008. Earnings are down more than 50%. Write offs were much higher than expected. 4th quarter earnings were 20% lower than forcast..
So, what do I think? I think we are seeing a temporary glich which will take about a year to resolve. You will know in advance when things are getting better when insiders start to purchase stock. In 2009, insiders only purchased 300 shares. Not a ringing indorsement for the stock. Check out the charts of TNCC and SUSQ and when insider purchases occured.. Bankers seldom risk their own money unless it's almost a sure thing.
I intend to do a little nibbling and may buy a little today.. I still think we will see $11 per share but WTHDIK..