If the federal government passes some sweetheart deal that allows anyone and everyone to refinance their mortgage with the backing of the federal government, then many of the underperforming or non-perfroming debts of CBCR will vanish from its balance sheet--a huge win for investors in the common stock.
If volume moves into the millions, then .35 will be a blink of an eye. I have seen stocks move from .05 to $3 in days and to $20+ in several weeks. I don't think you get the impact of the improvement they made in Mich Commerce. From a loss of $7.3M in the 3rd Q to a loss of $1.1M in the 4th. If such an improvement was to carry over to the 1st Q of 2012, Michigan Commerce will show a $5M profit. It would be in the best interest of a larger bank to buy them out now, while they are still weak, at a discount, then later on and pay a premium.
Good points. In the past CBCR has sold smaller banks directly to buyers. It probably would make sense for a potential buyer to make a tender offer for CBCR. Perhaps they would try to buy the trust pref issues at a discount (although that would be tricky) or assume the debt.
Either way, a Michigan Commerce sale on decent terms would be huge for the equity and debt,
Here is the issue. Many of the smaller banks in Michigan have been bought out by the bigger ones. If an interested party wanted to take out Mich Commerce, it would make more sense to buy out the Parent company as a whole at a cheaper price. Earnings are being delayed for some reason. The reason for the delay could be a capital raise plan or the sale of the company. The CEO and the rest of the management bought up a lot of these cheap shares. A buyout offer at $1.50 range and they make out like bandits.
The Pacific Bancorp buyout is HUGE since CBCR and PCBC are comparable stocks with similar stories and history. I cannot quite figure out the valuation here, but, many banks are sold based upon a percentage or multiple of book value. Using the metric for CBCR could lead to a buyout of $5 or more. That would be sweeeeeet
The names are similar at least. I made a fortune on CBCRO when Etrade did a partial call on CBCRO when Pacific bancorp called a similar issue. That was the brief spike to $4 on CBCRO awhile back, until Etrade caught their mistake.
Maybe some news report will get the common mixed up as well - LOL.
The real value of CBC is not the stock but the business. Just imagine what it would cost to set up that many banks with their customer base and established local businesses. I don't think that you could buy the furniture and computers for the total market cap.