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Strategies & Market Trends : BAK - Investing
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To: Covenant who wrote (331)3/1/2012 4:59:11 PM
From: batman100233 Recommendations  Read Replies (2) of 3249
 
just had a nice call with the ceo today. thoughts in no particular order

1) the earnings release was not very clear on the ginnie mae sale. this isn't going to increase tangible book value but rather regulatory capital. i was correct in the comment that unreleased gains are already incuded in tangible book value. amatuer hour mistake in my view.

2) he doesn't believe that the fdic rules these brokered deposits and they should have time to adapt if that's the case. i tend to agree with him although it's a bigger risk than he thinks

3) the occ is a much better regulator than ots. they are making good progress. the unofficial tier 1 capital requirements for banks is 8%. they have more to go on this regard. i would not be surprised if an equity raise is coming if they can't generate enough capital on their own and the opportunities are still there to grow the business.

4) no clear answer on when the regulatory action is going to be removed

5) thinks the program managers are going to continue to gravitate into a few large players. same goes for the banks. thinks the large players are not interested. i think they might miss some of the competitive threat that the program managers buy small bank to integrate the product.

6) i threw out 2b in deposits in three years, he didn't reject it out of hand. higher rates would be helpful. not much fee sharing on rates.

7) they need to do something about the capital. shareholders would want them to sell. i think they raise capital.
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