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):
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:
- I will double or triple my money
- 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.