No, don't say that we're going down from here. No way! Fifty five percent in one day is just a beginning!
1. As for the balance sheet, over the weekend the company increased the size of its business by almost 50% - including acquiring $10.4 billion in additional assets and $9.2 billion in additional liabilities. To get that additional business the company spent a bit more than 1/5th of the first $7.7 billion in losses on the loans of UCB (the other 80% being covered by the FDIC) - plus an uncertain amount of the excess losses over $7.7 billion (in the company conference call it was stated to be 5% of the excess, but that seems unlikely knowing FDIC operations - and, moreover, this has not been so reported in writing anywhere.) The company has estimated that its share of the total losses will be about $1.54 billion.
So using the company's best guess, the cost of the transaction will be approx. $9.2 billion plus $1.54 billion = $10.74 billion minus $10.4 billion - that means that the company only took a loss of about $340 million (or $3.50 per share) on its balance sheet as a result of this acquisition.
2. As for earnings, the company added 18.2 million common shares at $9.04 on Friday as well as 11 million shares at $6.35 per share back in July, for a total of 30 million additional shares in 4 months. For the issued stock they got $164.5 million on Friday (now valued at $244.06 million at today's close of $13.41) and $69.85 million in July (now valued at $147.51 million at today's close), respectively. By issuing stock, they created an astounding jump of $157 million in the market capital of the company.
3. Also keep in mind that share dilution will not likely hurt earnings for this company in the next few quarters since it has projected big quarterly losses anyway. The loss per share will be 33% smaller than it would have been since there are now 120 million shares in the company outstanding instead of only 90 million. As a result, the company should beat earnings estimates for this quarter and next.