Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Non-Tech : NetBank(NTBK)-formerly Atlanta Internet Bank -- Ignore unavailable to you. Want to Upgrade?

To: AugustWest who wrote (1886)	6/7/1999 9:53:00 PM
From: jjs_ynot	Read Replies (1) \| Respond to of 2414

I hope they do great. I'm sure that they will with you watching the store. This was one I had planned to buy and put away and forget about. Unfortunately, I tried to get too cute for my own good and got locked out fo the big runup.

To: AugustWest who wrote (1886)	6/8/1999 10:59:00 PM
From: Triffin	Read Replies (1) \| Respond to of 2414

AW .. Found this on MF .. More on NetB@nk And the Business Model By Dale Wettlaufer (TMF Ralegh) ALEXANDRIA, VA (June 7, 1999) -- Continuing with where we left off the other day, I include below my estimates of where NetB@nk (Nasdaq: NTBK) is being valued relative to its balance sheet. I say "estimates" because the company recently did two offerings, one for common stock and the other for convertible notes. So I added in what I estimate to be net proceeds from those two offerings and made the appropriate balance sheet entries. At most, the figures will be off only by a couple million dollars if I've mis-estimated the net proceeds to the company. I also didn't know if the notes were sold at par, but assumed they were. So here are those data: NTBK (financials in millions, except per share amounts) Price/Valuation Share Price.....$34 13/16 Market Cap.....$1,002.44 Price/Book.....4.50 Price/ Tangible Book.....4.50 BVPS.....$7.74 Price/Assets.....143.08% Price/Net Loans.....278.66% Price/Deposits.....261.93% Price/Tangible Assets.....143.08% Price/Revenues.....77.26 P/E.....362.41 Discount/Premium to Group EPS.....$0.10 Cash EPS.....$0.10 Diluted Sharecount.....28.80 million Asset Turnover2.....2.38% Asset Turnover.....2.38% ROE2.....0.00% ROE.....2.11% Amortization Adjusted ROE.....0.00% ROA.....0.00% ROA2.....0.000% Net margin2.....21.32% Net Margin.....21.32% Efficiency Ratio.....66.20% Interest Income/AEA.....6.69% Interest Expense/AEA.....3.35% Net Interest Margin.....3.34% Balance Sheet Cash & Nonearning Assets.....$180.5 Cash & Nonearning Last Year.....$4.4 Long Term Debt.....$145.0 Shareholder's Equity.....$222.9 Last Year Equity.....$38.8 Tangible Equity.....$222.9 Last Year Tangible Equity.....$38.8 Tangible Assets.....$700.6 Last Year Tangible Assets.....$388.44 Total Assets.....$700.6 Earning Assets.....$520.2 Last Year Earning Assets.....$384.0 Last Year Assets.....$388.4 Total Liabilities$482.7 Gross Loans.....$364.1 Loan Loss Reserves.....$4.31 Loan Loss Reserves %.....1.18% Leverage Equity/Tangible Assets.....31.82% Average Equity/Average Assets.....24.03% Average Equity/Average Assets (Tangible).....24.03% Assets/Equity.....4.16 Avg. Assets/Avg. Equity (Tangible).....4.16 Loans to Deposits.....95.12% Income Statement Revenues.....$12.98 Interest Income (TTM).....$30.2 Interest Expense (TTM).....$18.2 Net Interest Income.....$12.0 Provision for Loan Losses.....$0.20 Noninterest Income (TTM).....$1.0 Noninterest Expense (TTM).....$8.59 Net Income for Common (TTM).....$2.77 Noninterest income/revenues.....7.57% Noninterest income/NII.....8.20% Amort. Adjusted Net/Revs......21.32% Deposits Deposits.....$382.7 Noninterest bearing deposits.....$10.3 Deposits/Liabilities.....79.28% For comparison, check out some of the numbers on E*Trade's agreed upon purchase price of Telebank Financial from last week. I also annualized Q1 results for the income statement items. It's very interesting to see that the efficiency ratio (noninterest expenses as a percentage of revenues [net interest income before loan loss provisions + noninterest income]) is already in the mid-60% range. That's pretty good and validates the assertion of the company that its Internet platform is a low-cost one, especially since this company is aggressively growing its business. I have to say, however, that I'm not a big fan of 28.5% of the loan portfolio being in home equity loans. That's a little juicy when you consider that the company purchases most of its loans or participates in syndicates. Over the longer-term, I want to see how the company's loan portfolio develops and what sort of asset profile it develops. Apparently, the company will securitize a good deal of its originated loans with servicing rights released, so you've got a mix of income sources and investment strategies here. I posted a couple of thoughts on this subject this weekend on the Boring Board that I'll add to the archive: "Banks can create all sorts of customers they want by offering very high rates on deposit accounts. The way I look at some of the Internet banks, however, is that they are planning to be like big box retailers. Net interest margin is like gross margin -- very low. But they'll turn their assets faster and have a lower average operating cost structure than the big commercial banks. Plus, they'll probably securitize a lot of the loans and hopefully just release the servicing rights or rights to excess net interest income from those loan pools." I think one possible model for the future is a bank that acts as an agent for the customer as much as possible, rather than as a principal. There will always be tons of money out there to lend, but the servicing of the customer, the branding of the product, the convenience, and low cost of the services are what is going to matter. I personally don't want to see a company like this raising equity and debt only to invest it in syndicated loans. I want to see lots of happy customers doing transactions through the site and relying on the company to make their life easier. If it can do that, the company's not that expensive. I need to talk to customers, though, so I'll be trolling around trying to find out what people think about their dealings with the company. EOM------------------------------------------------------------------- Jim in CT ..