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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: MCsweet who wrote (52508)	10/20/2013 7:43:16 PM
From: 56Chevy	1 Recommendation Recommended By MCsweet Read Replies (2) \| Respond to of 78740

Here is another bank with very attractive upside. CBKS is a Southern Florida bank with over $500MM in assets...which is a decent size bank for someone looking to expand. I checked the most recent FFEIC report and the bank has $42.5MM in shareholder equity. Book Value is $8.43 Market Value is $3.50 The bank does not owe TARP. This bank was one of the rare few that didn't require TARP funds and wasn't in trouble back in 2008/09. However the bank was put under a Consent Order in 2012 for low Cap ratios which I discuss below. According to the 2012 Annual Report the number of shares outstanding as of Dec. 2012 was 4,976,521. I wanted to confirm that number since its been 10 long months when that # was put out. I sent the CFO (Mr. Yunus) an email asking what the current O/S is and I received an email back from the CEO Mr. Robert Epling. This is what he said in response to the inquiry with portions of his response I put in bold to highlight what I considered key bonus info: Thank you for your inquiry. The current number of outstanding shares remains at 4,976,521, as it was at year end 2012. As real estate prices in the markets we serve have improved, the non-performing assets of our company has decreased. Our company has stabilized and will show a profit in 2013......and we believe the future will continue to reflect improving profitability. The current book value is approximately $8.43 per share without tax credits. We continue to seek capital through private placement. Thanking you for your support, we welcome your questions. Bob Epling I appreciate this kind of open response from a company. Sometimes getting info from non-reporting companies is like pulling teeth...but Mr. Epling came through brilliantly. Consent Order* Quote:On February 2, 2012, the Bank entered into a Consent Order agreement (the “Order”) with the Federal Deposit Insurance Corporation (“FDIC”) and the Florida Office of Financial Regulation (“OFR”) to enhance certain aspects of the Bank’s operations. This Order places certain limitations and established required benchmarks which the Bank needs to attain within predetermined target dates. The Bank cannot conclude with any degree of certainty that it will be able to meet all requirements contained in the Order. The Order required, among other things, that the Bank maintain an 8% Tier 1 Capital and 12% Total Risk Based Capital ratio and submit a written plan to the FDIC and the OFR to reduce classified assets. As of December 31,2012, the Bank was not in compliance with the increased capital ratios as mandated by the Order (NOTE 14). If the Bank is unable to comply with the increased capital requirements, the Bank may be subject to further regulatory actions by the FDIC and the OFR. The Tier 1 Capital ratio and Total Risk Based Capital ratio were at 6.5 percent and 10.0 percent, respectively, at 12/31/12. These ratios improved to 7.0 percent and 11.3 percent at 6/30/13. The most recent FFEIC financials indicate the bank is extremely close to being considered well capitalized and its my opinion will qualify before the end of 2013. Should that happen the C O will be lifted. Mr. Epling also provided confidence when he says " Our company has stabilized and will show a profit in 2013......and we believe the future will continue to reflect improving profitability. Its one thing when OTC pink ceo's say things like that ..you expect them to whether its true or not...but when a banker says it MCsweet...you can "take it to the bank" (pun intended). In all seriousness...bankers can go to jail for lying about the state of the company easier and faster than the ceo does in any other industry on Wall St. Banks are so highly regulated that If a ceo says he has a dollar in the vault...there better be a dollar in the vault... because if there isn't there will be a legion of state & federal gov't people asking hard questions why its not there. Banks are on a very short leash..and with good reason. But its that short leash that provides investors of banks with confidence. Another reason I like banks is because the assets are allready monetized. The assets aren't cars..or boats ..or widgets...or last years clothing designs...its CASH. Which makes for very little argument as to real value. Here is a link to a snap-shot view of the bank... I like this site. I use it often,,.it has proven to be reliable tool for me when I want a quick general view of a bank: banktracker.investigativereportingworkshop.org ..other questions? ask away.