Sunday, June 7, 2009

CCBD red flags

--Community Central Bank is a regional bank headquartered in Michigan. As of Q1 2009, its asses in cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 book was $556 mil; its operating income was usually below $50 mil since 2007; its EPS has been negative since Q4 2008 --It is major business is commercial real estates. As of March 2009, CRE loans was $291 bil, ~75% of its loan portfolio and > 50% of it asset. --The company's reserve for problem loans was serioues behind its peers. As of March 2009, regionals banks' allowance for loans over non accrusal loans was ~50%. The measure for CCBD was below 25%. --CCBD has not written off enough its CRE loans compared to its peers. The delinquency rate of its CRE loans was trending upward from 5.4% as of cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 end of 2007 to 8.4% as of March 2009, somehow above cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 average deliquent measure of cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 industry, which rose from 2.7% to 6.4% in cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 same period. Yet its charge off rate for CRE loans rose from 0.1% as of Q4 2007 to less than 1% in Q1 2009 except in Q4 2008(2.5%). Whereas, cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 industry has generallyed wrote off 0.4% to 1.33% in cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 same period. --anocá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365r snag of CCBD is that cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 company have been using cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 decline in liability (corp debentures) to cushion cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 loss in main business. As market hit bottom in Q1 2009, credit market has been improving. This benefit will not take hold and might even backfire if cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 value of its liability soars. --Given cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 deterioating outlook for CRE loans, I suggests investors steer clear of cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 company. Liquidity --The company will face refinancing risk. By cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 end of 2009, $34 mill corporate bonds need to be redeemed. By 2010, anocá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365r $23 mil corp bonds will be due. In addition, by 2010, $39 mil FHLB advance will be due as well. CCBD has $19 mil cash and cash equivalents securities. Its average net cash flow in cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 past few years has been close to zero, barely above $20 mil in any quarter. Finance --CCBD finances from FHLB, public market, and deposits. The QoQ increase in deposits, especially non interest bearing deposits, was $10 mil. --NIM margin has improved 8% from 2.09% in Q1 2008 to 2.17% in Q1 2009

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