Keep in mind that the core earning (pre-tax, pre-provision income) was negative in the past 5 quarters.
The new investment of $55 million strengthened balance sheet tremendously, however, loss continued. As of end of 2Q, 9.8% of loans are past due, the provision for losses stuod at 6.01%. Lots depend on what happens to economy, unemployment, etc. Too much, for any reasonable projection. There is no immediate danger for the bank to go back to emergency room. Further out, we just don't know.
Core earnings is worrisome, it needs to bring down the cost of funding, but then it depends so much on brokered deposits. At the mean time it needs to spend more to keep up with collection and foreclosure. No easy way out.
I am still curious what the new investor saw in Saehan. For my money, investment in Wilshire, Nara and Center bank at around book value seems to make more sense. Needless to say, I won't touch Saehan below $0.37.
My bad (mea culpa), I had one drink too many. The capital raised was $60.6 million.
At the last discussion, the book value was positive. After the capital raised, book value is now $57.8 million, meaning that the previous equity was wiped out. The loss was lessened with the absence of new provision for losses during 2Q. Time will tell if this may be too optimistic. I still expect the book value to drift toward $0.30 per share.
Thanks for analysis. Now what is the postion of HAFC after $120 Mil and 210+30= 240 expected to arrive from Woori? May investors are expressing concern on its survival? Your thoughts? Why FRB should not approve the deal? Any sensible reasoning??