I ran scenarios that have CRBC's trough tangible common equity (TCE) at between 52 and 59 cents. Assuming a buyout at the very bottom at 1.5 * TCE=0.59, that would be around 88 cents.
I find it interesting that the current trading range of the stock seems to almost perfect overlap the trough TCE and the trough buyout value.
Rangebound 50 to 90 cents seems to be the game for the next two quarters.
Forget 0.50 unless something goes wrong. This stock will bounce up over 0.80 then trade in a range between 0.80 and 1.00 until it gets closer to their 3rd quarter when they say they will be reporting a profit. Then the stock will trade in the 1.20-1.50 price range before deciding if the forward guidance is good enough to take it to 2.00.
I agree with the above comment for a higher trading range. We should never forget that this is a Midwest bank based in an area which has suffered much jobless in the auto industry, and in other industries. The Midwest people are s very ambitious lot, and I believe they will do well over some time. The auto industry, as well as some other large midwest industries are starting to "come back." People need a reason to do better, and this future progess will give it to them, both economically, and physically. Good banks are a necessary need, and will do well, given time. The real estate mess was created by both politicians and bad greedy bankers. I live on the East coast, and it is amazing what one of my bankers told me as to what went on in his bank to promote "home owenership" with lower income folks!!
At least with a regional bank they *can* evaluate their own loans, because they wrote those loans and have the supporting paperwork.
Try evaluating your loan book at BOFA. Half that stuff is securitized, and they don't even know what they own, and probably never will.
So, where are the scary "big loans to builders"?
Land hold 28
Land development 34
altogether only 165 millions - out of 6,216 millions...
Loan Portfolios as per 31.12.2010(in millions):
Land hold 28.3
Land development 34.8
Income producing 1,171.0
Total commercial real estate 2,120.8
Commercial and industrial 1,474.2
Total commercial 3,595.0
Residential mortgage 756.2
Direct consumer 1,045.5
Indirect consumer 819.9
Total consumer 2,621.6
Total portfolio loans 6,216.6
http://www.snl.com/Cache/1500031310.PDF?D=&O=PDF&IID=100175&Y=&T=&FID=1500031310 Page 2
"This marks the first time in four
years that 30-89 day delinquent loans have been less than $100 million."
There are an awful lot of smaller credit card loans, auto loans and home equity loans that bring the average down. The big loans to builders are the scary ones.
Even if the average size is $1 mill, that's still 7000 loans. What you need to see is a histogram of their loans by size and number. Might be a good question to ask management.
I only take issue with the assignment of 110k to each loan. That almost makes sense if its just residential, but make absolutely no sense if you turned it into commercial or development loans which are regularly 10's of millions of dollars each.
The rest is correct... and the fridge stinks. lol
Common book value 1.85
Tangible book value 1.72
Tangible common book value 1.02
http://www.snl.com/Cache/1500031310.PDF?D=&O=PDF&IID=100175&Y=&T=&FID=1500031310, page 15
After cleaning their balance sheet, CRBC is a very sexy bride... Interested parties have to act quickly now, they're running out of time, because after the turnaround, CRBCs price will at least double... Maybe that's (at least one of) the reason(s), that there are lots of bashers "working" here...
I am trying to understand and I seem can not fathom it.
If CRBC has a book value (whatever that is) of 1.85 or 1.72 why is the share price not going up close to it or above it?
Whereas other stocks have share prices way above their book value(s).
Does it mean the book value number really means nothing? I don't get it... huh huh huh :(
from the conference call, the CFO mentioned
"At December 31, 2010, the DTA allowance was $293 million."
at some point this will be added to the equity together with excess provisions. This will push Tangible Common Equity close to $2.