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Non-Tech : USAB (http://www.usabancshares.com) v.s. NTBK -- Ignore unavailable to you. Want to Upgrade?

To: usab_long who wrote (30)	10/12/1999 9:55:00 AM
From: usab_long	Read Replies (1) \| Respond to of 49

USAB SPO Pros and Cons reposted from: messages.yahoo.com <<<USAB SPO Pros and Cons by: THB_1966 (33/M/Chicago) 16628 of 16631 USAB only raised 1/3rd of what they were hoping to in the SPO. This is my understanding of the problems, regarding the recent SPO. I don?t normally point out the weaknesses and or mistakes USAB has, but at these levels I don?t think it?s going to matter much. I?m sure the bashers are going to have a field day with this post. The first step to recovery . . . admit your mistakes and move on! Cons w/USAB 1) All the investors/underwriters were looking at them as an Internet IPO! All they had to look at was the potential for all these new accounts, based on what they could see in the prospectus. Nothing very concrete to sink their teeth into, not always an easy sell. 2) Sandler O?Neill specializes in B & M Banks; completely different valuations than Internet valuations. Typically 2 to 3 times book, where an Internet Bank by an Internet Underwriter would have given much higher valuations. Sandler is a very good underwriter for B & M Banks, but they were probably not the best choice for the USAB SPO and USAB is well aware of that. 3) All the investors and underwriters knew USAB needed this money to fund their alliances in the very near future. USAB had their backs to the wall, they could not wait out this SPO opportunity and everybody knew it! Through whatever unfortunate circumstances, USAB had to take whatever they could get to hold them financially through the forth quarter. It?s my understanding it was Tepper?s decision to decrease the amount of shares being offered to 1.4M. So he didn?t give away « the company with such a depressed share price. Classic example of dilution with an SPO, but what was he suppose to do, they needed the cash to fund these alliances. You take your lumps and move on! For the investors who claim Tepper screwed the investors by taking such a low price, think about who he screwed the worst . . . himself, he owns 542,644 shares. Believe me when I say, he did what he thought was right in the eyes of the long-term-investors! 4) Since they only raised $9.45M, they?ll need to raise additional cash sometime again soon. I?m guessing around the end of the year, maybe sooner. Nobody likes additional offerings, but if you want to grow, it?s the pain you have to go through. 5) One of my biggest concerns with USAB a few months ago was it almost looked to good to be true. I made that concern well known to many investors and they got out. Unfortunately, I learned that lesson the hard way and didn?t sell any. I saw the US Bank problem in the SEC doc?s and didn?t make much of it. Hindsight is 20/20, live and learn from your mistakes and you move on. USAB certainly doesn?t seem too good to be true now, they are human and they are capable of making mistakes. That?s why they call it investing, because it does have risk. 6) Quarterly earnings should be out pretty soon, the latest SEC filings said they expect to take a loss for the later part of this year. I have no idea where we stand currently, but without the Internet expense they should have brought in about $600k profit. These are pretty much guesses here, because I don?t know when these charges take effect. 2nd or 3rd quarter, let?s assume they come 3rd quarter . . . with the Internet expense $500k, advertising $1M, misc wine & dine new alliances $800k, Lawsuit expense $200k. Let?s say $2M loss divided by 5.4M shares = 37 cents a share loss for the quarter, anything less than that would be good news. 7) Public perception is extremely important, it appears as if management keeps tripping over their own feet. This is one of my biggest concerns and management is well aware of their public perception. This is not an easy fix and only time will tell if they can make the necessary changes. I believe the current and upcoming announcements will change that fairly quickly. >>>