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Broadway Financial Corporation Message Board

sambordulac 25 posts  |  Last Activity: Apr 8, 2014 11:25 PM Member since: May 25, 2000
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  • Reply to

    BOFI

    by bottomsupinvestor Mar 27, 2014 1:04 PM
    sambordulac sambordulac Apr 8, 2014 11:25 PM Flag

    Too bad I bailed at a loss.

    Sam

  • Reply to

    Truong re:BVA

    by sambordulac Apr 3, 2014 11:10 PM
    sambordulac sambordulac Apr 6, 2014 9:43 AM Flag

    Hi, Truong,

    There are 6,800 banks in the US, competition is everywhere, maybe a couple of dozen just in Birmingham area. Home Bank could be interested in the area, but I don't think so. HOMB's more focused in CRE lending in high growth region. USBI is too small to play offensive. It should do very well just sticking to its niches and making bolt-on acquisition when it makes sense.

    A bank in my area had merger rumors circulating for years, each time the story made sense. The bank was eventually sold, but without any rumor beforehand. The only thing certain through out these was that this particular bank wanted to sell, nothing more.

    While a merger of USBI with SZBI makes sense, there are other nearby banks starving for loans and fee income. SZBI has both. That makes it an attractive target. SZBI is also short on capital, thus more willing to do a deal. However, SZBI is making money, it has other options.

    Seems to me our best bet is on the management. This goes with USBI and SZBI both. Betting on management has not failed me yet.

    Sam

  • sambordulac by sambordulac Apr 3, 2014 11:10 PM Flag

    Truong,

    I see you have done some digging. Good for you.

    I knew of Baylake. I missed its run up and haven't looked since. Carrollton had issues, the combination may have cured the capital weakness, but operation was weak if I recall.

    I made a quick comparison of BVA against USBI:
    Price to book 0.96 VS 0.72
    Pretax pre-provision as a percentage of asset very weak--3.44% from net interest income & 0.14% from fee income for a total of 3.58%. It's 5.58% & 0.35%, total 5.93%, at USBI.
    Leverage much higher at BVA, it can't stretch the balance sheet, the only thing it can do is to earn a higher return on asset.
    Asset is around $26 million. USBI is larger, more diversified, and has strong capital. It's not constrained by capital, i. e., it can grow asset.

    At the current price of BVA any upside would have to come from expansion of P/B ratio. By the look of currently weak earning stream, this may be two years out. I like Midlothian area more than Alabama, but you'd be better off staying with USBI IMO.

    Sam

  • Reply to

    4Q213 ugly

    by sambordulac Jan 31, 2014 11:37 PM
    sambordulac sambordulac Apr 3, 2014 4:29 PM Flag

    Hi, Truong,

    You may have to hold a bit longer then you'd like.
    A.J. Strickland did not do much beside auditing, which is a disappointment to me. But the bank is on solid ground.

    BVA is in the better area of Richmond. It's not so cheap, but I'll look. What's the appeal there?

    BYBK did not pull up, is it correct spelling?

    Best,

    Sam

  • Reply to

    Bought a few shares

    by sophia.leghorn Mar 20, 2014 1:33 PM
    sambordulac sambordulac Mar 29, 2014 12:50 AM Flag

    Hi, Sophiia,

    It'll be end of April or the beginning of May when CALL report become available.

    What would you buy now?

    Sam

  • Reply to

    Bought a few shares

    by sophia.leghorn Mar 20, 2014 1:33 PM
    sambordulac sambordulac Mar 26, 2014 9:09 AM Flag

    Another point I wanted to make is that lumber demand will be weak for a few more years. Capacity utilization is probably 55% at present, it takes 80+% utilization to push prices up-therefor higher margin. US housing start is on at 1 million unit per year, it needs to get back to the normal 1.5 million range and eventually will.

    Too, USBI can, it it so choose, to buy a smaller bank to expand its foot print and/or increase loan portfolio. Loan demand has been weak except Tuscaloosa.

    Sam

  • Reply to

    Bought a few shares

    by sophia.leghorn Mar 20, 2014 1:33 PM
    sambordulac sambordulac Mar 26, 2014 9:02 AM Flag

    Greetings, Ms. Sophia,

    Impeccable timing! Welcome onboard.

    I had a long post pertaining to your earlier question on 4Q reports. It got lost.
    The short answer is that FFIEC has a PDD data base showing CALL report which is required of all US banks and is posted roughly 30 days after end of each quarter. Some banks such as USBI reports later than that and we get a preliminary glance of its results. Note the figures are for the bank, not the parent holding company. Some adjustment needs to be made for parent level results. In this case rather straightforward.

    Best,

    Sam

  • Reply to

    4Q213 ugly

    by sambordulac Jan 31, 2014 11:37 PM
    sambordulac sambordulac Feb 16, 2014 12:09 AM Flag

    Hi, TC,

    I expect strategic change that may be forth coming. Dr. Strickland's been a director for a while now. I am wondering if it'll spin off the financing arm.

    You will remember that at the time he was nominated a director, Dr Strickland said that the bank has competitive advantage. ( I had a vague idea when I looked at the record for the past 12 years and found that it had a heck of interest margin, something indicates a strong franchise.)

    Through the grapevine, Mr. House is both disciplined and also going after the market.

    4Q13 was indeed rough. Unperturbed, I have doubled my investment in USBI.

    Any news?

    Sam

    PS Also added to SZBI. Mr. Fields did a wonderful job there.

  • Reply to

    Management and Board of Directors changes

    by adowns284 Jan 15, 2014 8:47 AM
    sambordulac sambordulac Feb 14, 2014 11:13 PM Flag

    Daisy Ha owns less than 1% of the bank.

  • Reply to

    Offering

    by dsouth7777 Feb 6, 2014 12:12 PM
    sambordulac sambordulac Feb 14, 2014 11:03 PM Flag

    Hi, Dsouth,

    From what I saw, the ones that were forced to sell all had serious capital deficiency. I won't lump GFED in with them.

    Other banks, especially thrifts, sold out because they did not have prospect of earning a fair return, especially under new regulations. For example, thrifts are now under the supervision of OCC. (used to be under OTS.) OCC doesn't cut them any slack just because they are thrift. Many are forced to sell out.

    Would GFED feel like to sell? I don't know. But if I have to guess, no. A merger would most certainly cost Burke his job. There are many displaced bank CEOs that had to change career. Last I heard, the ex. CEO of SBAZ was selling real estate. Burke is only 51. He's make the case for staying independent no matter what.
    By the sweet heart deals he made for insiders--home loan at near 1% APR, etc.--he's got the ears of the board.

    Many banks took the route of your second proposal, i.e., sell shares at a discount to pay tarp off. As this shortens the struggle, it may be an easy sell to the board, especially if it allows insiders to buy in cheaply. I don't think it's good for shareholders, but its so painful shrinking balance sheet and pay TARP off with retained earnings...Besides, who doesn't want to run a bigger bank?

    I own some shares of SZBI. SZBI has dominant shareholders and resolved to stick it out. SZBI looks to be able to pull it off although it'll be several years before it gets to pay TARP off.
    Another one is GSON. Which is weak but also decided it'll rather suffer than to dilute existing shareholders. They get my vote of confidence.

    In the case of GFED, I am afraid the existing shareholder would get the short end of the stick.

    Sam

  • Reply to

    Earnings are out

    by zincksink Jan 31, 2014 3:20 PM
    sambordulac sambordulac Feb 12, 2014 5:42 PM Flag

    Mr. Sink,

    That was mainly due to the $4 million it raised in 2Q13. It somehow did not hit the balance sheet until 3Q. Neither the reduction of TARP off it total share holders' equity.

    The bank did not want to broadcast how cheaply it floated the shares to insiders. Per my estimate, at roughly $15 per share.

    Sam

  • Reply to

    Offering

    by dsouth7777 Feb 6, 2014 12:12 PM
    sambordulac sambordulac Feb 11, 2014 12:46 AM Flag

    Under "normal" income tax rate, the bank is earning 8.5% return on equity. Given equity is around $15.5, "normal" earnings is roughly $1.30, or $0.95 after TARP dividends.

    Valuation at 10 x PE, may be around $9.5, but why not wait for earnings to improve and valuation approaches $15 before floating new shares? What have I missed?

  • Reply to

    JFBI taken over

    by sambordulac Jan 24, 2014 12:46 AM
    sambordulac sambordulac Feb 7, 2014 10:40 PM Flag

    Hello, Functor,

    Usually a pending sales would give a holder roughly 20% annualized return. Check the date against the upside to see if this is indeed the case, then decide.

    I have never follow that rule as I always find other things to buy.
    Opportunities are not abundant like they used to. So maybe I will start to adhere to my own advice.

    Best,
    Sam

  • sambordulac by sambordulac Jan 31, 2014 11:37 PM Flag

    But it seems to all be contributed by one-time items. No worry.

  • Reply to

    Vote NO!

    by sambordulac Mar 9, 2013 10:35 PM
    sambordulac sambordulac Jan 31, 2014 11:34 PM Flag

    Mr. Zinksink,

    Greetings. Hope all is well in NC.

    Hard to provide a link or copy and paste, so I just use this old thread.

    Never quite figured out the actual number of shares issued, but this explains the jump in share count.
    We will find out from annual report for sure.

    4Q13 results were solid. I am pleased.

    Sam

  • Reply to

    SCZC

    by robat4427 Jan 30, 2014 6:11 PM
    sambordulac sambordulac Jan 31, 2014 12:21 PM Flag

    Mr. Rob,

    It's been that long?
    We all came a long way since that earlier times. First Star Bank was where I cut my teeth, right here in Lehigh Valley.

    Several mortgage lenders start to perk up. I still think its too early to get back in. Price, of course, is a big factor.

    The recovery of poorly run banks has been uneven. Most of the cheap ones reported poor results. I guess the market knew it better than I, they are still depressed.

    Best,
    Sam

  • Reply to

    SCZC

    by robat4427 Jan 30, 2014 6:11 PM
    sambordulac sambordulac Jan 31, 2014 12:04 AM Flag

    Mr. Rob,

    You know I am a fan of LGHT as well. I sold out at $8.5 (before stock dividends) two years ago. That was a little below book at the time.

    The reason for my selling had nothing to do with the bank itself. LGHT was doing fine. It was that I felt I could do better with more levered banks during the time of recovery.

    Two years later, economy found its footing, It's probably time to get back in the better banks.
    By now, operation at LGHT improved immensely. Pretax, pre-provision rose past 2% on asset and now at 2.4%, beating 95% of banks. This was achieved by doing all the right things--hold onto low cost deposits (only slightly behind SCZC), charge adequately for loans, very tight credit standard (NAL & OREO are both zero), keeping overhead extremely low*, etc., etc.
    Now it start to build a second branch at a better location...I can only see good things happens to it.

    Some may be taken aback with it heavily into CRE and C&D loans. I like to point out its stellar credit history and it's solid financial. T-1 stood at 14.34% at year end.

    With it earning 1.44% on asset and it only levered 7 to1, ROE was only 10%. This may change slightly for the better as it levers up a little and also increases loan to asset from 63.35% currently.

    So, how much is it worth? I believe it's worth more than its book value, probably even more than the current quotation. Note LGHT is still very small and there is plenty of room for growth, a nice compliment to the healthy ROE.

    I was looking to buy a few months ago but did not have the money. Now that I have the money, it went away.
    Hope I get another chance to buy it near book value.

    * For a bank with $160M in asset, there are only 19 on its payroll. Other overhead are very low too. It spend only what it had to spend. As a percentage of asset, its overhead is 0.50% lower than its peers. This translates into $0.8M advantage over peers pretax, or $0.5M after tax, annually.

    Off the soap box,
    Sam

  • Reply to

    INBK Reported.

    by bottomsupinvestor Jan 29, 2014 8:05 PM
    sambordulac sambordulac Jan 30, 2014 5:54 PM Flag

    Hi, Mr. Bottom,

    With economy improving (I know, I know, too slow.) I was surprised to see so many banks reported higher NAL this quarter.

    There may be explanations beside weak borrowers, who has been weak for years..
    Severe weather in 4Q may be hard on some folks financially.
    Too, many borrowers are facing higher note payments and the marginal borrowers were further marginalized.
    The last one that I can come up with is house cleaning. After all it's the end of the year. This way they can start with a clean sleigh.

    I am not sure which factor affects who and how much. CLBH reported an ugly quarter too.
    Surely expect a better first quarter.

    Sam

  • sambordulac by sambordulac Jan 25, 2014 8:32 AM Flag

    Per my recollection tangible book value is around $7.6. Only 18 months earlier, when the bank was weighted down by large credit issue, the shares went for $2.
    I sold some in the $2's because I needed the money. The last bit was sold at around $5. I did not see the sell coming. Most likely I could not.

  • Reply to

    Earnings Estimates??? CLBH, GFED, or INBK

    by buffettmunger Jan 15, 2014 3:32 PM
    sambordulac sambordulac Jan 25, 2014 8:27 AM Flag

    Mr. BM,

    I wouldn't beat myself up. Like you said, there are many moving parts.

    I share the same hesitation about dilution, but there should be a distinction between good dilution where each share becomes more valuable than the ones which takes away the value. Unfortunately, too often they belong to the second category.

    When you have a business that has strong "moat" and room for expansion, the general rule to issuing shares (for any purpose) should be never. MeKee Foods, the owner of Li'l Debbie snacks is a good example. McKee is privately owned.
    On the other hand, banks are competing freely and behave more like commodity business. Here, if new capital can be used advantageously, why not? Prudence is required.

    There are other forms of dilution that takes place within the business. EMYB just increased its pension liability to three key employees. If this is not justifiable, shareholders lose.

    Sam

BYFC
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