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Msg  138 of 167  at  6/12/2011 12:39:59 PM  by

liverless

The following message was updated on 6/12/2011 12:39:59 PM.

Community Bankers Trust

  Symbol: BTC
Market Cap:  ~$22M
Tangible Book Value: ~$105M
 
I haven't bought BTC yet but I am considering it.  The stock another lottery ticket, akin to Atlantic Coast Financial (which I also have not bought yet and which has continued to go down since I first mentioned it - as housing turns down again one would expect ACFC to follow).
 
So what's the BTC story? 
 
Another story of high nonperforming assets (about 9.5% of assets), trading at a fraction of book value (about 25% of tangible book right now), certainly lots of potential for the stock to go up if, and its a big IF, they can get through the morass without going belly up.
 
I first read about the story below. It was mentioned by Gator Capital a couple of years ago.  They were pretty wrong about it but that is no reason to disregard the idea entirely.  The stock is about 1/3 now of what they liked it at then.  Even "getting back to even" would be quite the return.  I refer to their synopsis to get a feel for the loan book and operating area.
 
 
Another article on the company is here:
 

A couple charts that help summarize BTC:
 
First, high nonperforming assets (bad), but falling 30-89 day nonperforming assets (good). (Note that the company did not report 30-89 day nonperforming for a couple Q's so that's why there are 2 blanks):
 
 
Second, insiders have been buying shares recently at around the current price (good):
 
 
 Third, its too early to say there is a trend but charge-offs were down from Q4 (good):
 
 
 
And last, their loan and deposit growth, or should I say loan and desposit shrinkage (bad but hey, the stock is trading at 1/4 of book so what do you expect):


 Conclusion?
 
Its hard to know what fair value is for these stocks.  They are trading at such a discount to book that the investment decision is just a stark question of survival.  I haven't really figured out how (if?) you can gain confidence in answering that question.

So the conclusion is... no conclusion yet.  Aside from that if I do invest in this stock I will have one of two outcomes:
 
  1. I will double or triple my money
  2. I will lose all my money

That is a pretty black and white outcome.  But I think its accurate.  I'll do some more digging and see if I can get a better gauge on the risk.


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Msg # Subject Author Recs Date Posted
142 Re: Community Bankers Trust liverless 0 6/24/2011 4:15:24 PM


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