Lazarus
3年前
When I made this post the stock was trading at $3.70. I must have bought some then cuz my avg cost per share was $4.23 before my last fills.
So the stock has doubled.
________________
Why own BAC when you can own MFBP???
Bank of America Buys Stakes in 3 Minority-Focused Banks
Quote:
SNIP: "The three investments announced Monday bring Bank of America's total to 10 under the program. Other recipients include M&F Bancorp..."
and this --->
M&F Bank receives $18M in equity investments from 4 largest US banks
Quote:
SNIP: "At the moment, M&F Bancorp, Inc. (“Company”) (OTC Pink: MFBP), parent company of M&F Bank, is the only minority bank to receive equity investments from the four largest banks in the U.S. M&F Bank, a wholly owned subsidiary of M&F Bancorp, Inc., intends to leverage this additional capital to grow its franchise and provide additional products and services to more efficiently serve its customers."
OTC PROFILE HERE
as you can see, market cap is around $15.5 million
HERE IS THEIR 2020 ANNUAL REPORT
Shareholder equity of $23,463,000 eoy.
Earnings of .52 per share on 2,032,031 shares outstanding
Book Value of ~ $11.54 per share.
I've been buying since the low $4's and recently added around $7.50
Their main challenge is prudent deployment of cash.
tsoprano-1
10年前
Chevy,
I was talking to a buddy that has some about the earnings and that if they could keep up the .11 a quarter it would be about a 11 p/e and not much room to go up. I was hoping for an increase in the dividend. All in all, there are probably better situations. I sold a quarter back a ways to get into GGN. I love the low float, but there are drawbacks, such as if someone has a bunch to unload. I will wait till next report is out to figure it out. You make a good case for lightening up, though. Take care.
T
56Chevy
11年前
Proxy Statement (definitive) (def 14a)
Date : 04/29/2014 @ 4:29PM
Source : Edgar (US Regulatory)
Stock : M&f Bancorp, Inc. (QB) (MFBP)
Quote : $4.25 0.0 (0.00%) @ 3:53PM
When and Where is the Annual Meeting?
The Annual Meeting will be held at 6:00 p.m. local time on June 3, 2014 at the M&F Bank Corporate Center Auditorium, 2634 Durham Chapel Hill Boulevard, Durham, North Carolina 27707. Directions are available on the Corporation’s website at www.mfbonline.com, or by calling the Corporation’s toll-free number, 1-800-433-8283.
http://ih.advfn.com/p.php?pid=nmona&article=62012952
GBExpress
11年前
"The high capital levels are no accident and could be there by design. Perhaps MFBP is looking to acquire other bank(s). ??"
I actually had not considered this. I don't think Banks with TARP funds are prohibited from acquiring or merging with other Banks; however, all Banks must have Regulatory approval prior to acquiring or merging with another Bank (with or without TARP). I believe the regulators generally approve the proposed merger or acquisition, but they do delay the process for review.
After many hours of review, I think TARP was needed only for AIG because of the insurance assets that they clearly did not properly analyze the risk for. If TARP did not happen, then there is no doubt that it would have changed the Banking landscape. Bank of America would still be around because people with capital to invest would have saved it, Warren Buffett comes to mind with his $5 billion in preferred equity as well as their stock offering a couple years back. Citi would have needed to sell off its assets (which it did, along with accept TARP funds). WaMu, Wachovia, Lehman, Merril Lynch would still be bankrupt. Regional Banks and Community Banks that maintained higher capital levels would have gotten an opportunity to purchase assets from these gargantuan banks at pennies on the dollar. There would have been spin offs from the large Banks to separate banking activity and they would have to have fought tooth and nail to find investors. But I think it could have happened. Opportunists like Tom Barrack (CLNY) would have bought the assets that were foreclosed on, which he actually did. And hold until the assets were worth more.
It's hard to pick out Banks that will be acquired. I have owned two banks that were subsequently acquired after I owned them and I have had two on my watch list that have been purchased. One Bank that I think can demand a solid premium for it's Banking operation, that I believe WILL be eventually acquired is BBBI. I am going to hold my modest amount of shares until it has sold. The discount isn't where it once was, but the premium that it can command is better than any Bank I have seen so far.
All of this is just my opinion, and I believe there can be differences of opinion (in regards to TARP). I have come to the conclusion that there will be no "right" answer, but we can debate the issue nonetheless.
Good luck to all.
GBExpress
11年前
Chevy,
Thank you for the private message and I apologize for not getting back to you quicker. I don't know how much our mutual friend told you about me but I have an MBA in Banking and Financial Institutions and have worked in the industry since I got out of college, a whole six years ago.
I have had a lot of success in investing in Community Banks over the past couple of years and some of the discounts, like MFBP, are still intriguing. I agree with your premise, that small community Banks are going to have to go into "self preservation mode" and merge or be acquired by a larger Community Bank or a Regional Bank. The reason is that the Compliance costs and low interest rate environment will really put a strain on earnings. Rather than Directors getting a smaller yield on their investment, they will choose to sell to a larger Institution that will give them, in my opinion, at least book value (as long as the acquired bank is profitable). Of course, some Banks can still command almost 2x book, but they must be in really good shape in order to get that premium.
Now the reason for my message. MFBP should repay TARP so that they don't have to pay 2% dividend to the Treasury and here is why: On the annual report there is an "average balance, interest earned or paid..." table. Please refer to that chart. The cost of deposits MFBP pays is .38% -- .15% for savings, .08% for demand deposits and .52% for time deposits and .38% for all interest bearing liabilities. TARP is needed to maintain capital levels and reserves for those deposits; however, the loan to deposit ratio is only 72% as of 12/31/2013, so that indicates to me that the Bank is not in a very high need for liquidity. The industry benchmark is if the loan to deposit ratio is over 80% there may be an issue with liquidity... The tier one capital ratio is currently 11.87%, and the "well capitalized" industry standard is 5% (also found on the annual report). So why does this Bank want such high capital levels? Their assets are improving, the Treasury (I assume) has allowed the Bank to pay a dividend and their ALLL looks like it is covering the potential losses in the loan portfolio. So my point is that there is no need to have such a high tier one capital when the preferred shares are yielding 66% of total earnings.
Historically, a 2% yield is low. But compared to a 1 year CD yielding, say .2%, I think management has an easy decision on which one to borrow. Additionally, if the Bank does need liquidity in the future, the Bank can purchase Fed Funds (up to a certain amount)to shore up liquidity in which this Bank does not need currently.
Thanks,
James
56Chevy
11年前
How To Spot The Opportunity In The Problems For Small Banks
November 11, 2013 12:39 PM
[....]
The individuals running the small banks recognize the need to merge into a larger institution
After five years of operating under what can best be described as difficult conditions, many of the smaller banks want to be acquired and get out from under dealing with credit problems and regulatory burdens.
However, most of them have also seen their stock price drop substantially since the 2007 peaks, and they need to get a fair price for the shares. The officers, directors and leading members of the communities in which they are based often have significant amounts of money tied up in shares of the smaller banks. They are willing to sell, but need to get a price that allows them to trim their losses if not turn an outright profit on their shares.
Right now there dozens, if not hundreds of smaller banks trading below their tangible book value. In past post crisis consolidation waves, such as the S&L crisis in the early 1990s and the Long-Term Capital Management (LTCM) meltdown in 1998, takeover premiums were initially around 1.25 times book value before peaking at somewhere near two times book value at the peak. There is no reason to assume that the multiples will not be very similar this time around although most observers and analysts think that this wave of merger activity will last far longer than earlier period.
Investors that buy the smaller stocks while they are trading at a discount to book value and are able to sell at decent premiums stand to make a significant amount of money. As real estate markets stabilize and credit conditions improve, it is also reasonable to assume that dividend payments will increase and book values will rise over the next couple of years so the total return can be much higher over a longer holding period.
The problems and difficult conditions facing the smaller banks create an opportunity for patient investors who buy these shares and ride the consolidation over the next several years.
<this is a good read...to get more click the link>
http://www.benzinga.com/general/education/13/11/4069123/how-to-spot-the-opportunity-in-the-problems-for-small-banks
*This has been Enterprising Investor & 56Chevys' battle cry strategy for the past 2 years....good to see it in print.
leftope
11年前
Regarding Durham, I live about 30 minutes away. It has the grittiest reputation of towns/cities in the Triangle, but it is undergoing the most positive change. Real estate is cheap and appreciating, their downtown is undergoing revitalization and there's actually a lot to do there compared to 5-10 years ago. Because of the proximity to government/universities/RTP, the job market should continue to be positive. It's viewed as the upcoming, gentrifying place to be.
Raleigh and Charlotte are fine, while Winston-Salem and Greensboro are lagging due to their manufacturing and textile backgrounds.
My concern with MFBP is when they'll be able to redeem the preferred stock. The bank is healthy as-is, but the preferred shares seem to suck up a lot of the earnings power.
56Chevy
11年前
Mechanics and Farmers Bank seeks continued improvement
Jun. 05, 2013
DURHAM — The sun is rising, but it’s not quite up yet, said Kim Saunders, president and CEO of Durham-based Mechanics and Farmers Bank, in a report to shareholders at the bank’s annual meeting on Tuesday.
The past few years have been challenging, Saunders said, citing high unemployment rates in North Carolina where the bank operates, and among African Americans, which the bank predominately serves.
“Despite all of that, I am pleased, and we are blessed to be able to report, (that) the bank, since we opened our doors, (has continued its) century-plus record of profitability,” she said. “While down, (the profitability record) still remains unbroken.”
[....]
http://www.heraldsun.com/business/x1134607624/Mechanics-and-Farmers-Bank-seeks-continued-improvement
56Chevy
11年前
More TARP Banks Switch to Lower-cost Aid Program
*September 7, 2010 5:57 PM
Three more banks that got taxpayer money through the Troubled Asset Relief Program have exchanged their Treasury Department funding and joined the growing Community Development Capital Initiative Program (CDCI).
The three, all of which originally got investments through TARP's Capital Purchase Program, are Mission Valley Bancorp of Sun Valley, Calif.; M&F Bancorp of Durham, N.C. and Carver Bancorp of New York.
According to its Sept. 2, 2010 transaction report, the Treasury has now invested more than $143 million in 11 institutions participating in the community development initiative. All are existing TARP recipients that converted from the Capital Purchase Program (CPP).
The Community Development Capital Initiative allows certain banks and thrifts to exchange their funding, which carried a 5 percent annual dividend rate, for 2% CDCI funding. In some cases, they also can receive additional public aid at the lower rate. Credit unions, which were barred from the original TARP program, may also apply.
[....]
http://bailoutsleuth.com/news/2010/09/according-to-the-september-2/
56Chevy
11年前
M&F Bancorp, Inc. is a CDFI institution
M&F Bancorp, Inc. Receives $11.7 Million from TARP
M&F Bank Continues Community Mission and Lending
June 29, 2009 05:51 PM Eastern Daylight Time
DURHAM, N.C.--(BUSINESS WIRE)--M&F Bancorp, Inc., parent company of Mechanics and Farmers Bank (M&F Bank), today announced that it has received approximately $11.7 million from the Federal government’s Troubled Asset Relief Program (TARP). The TARP funds have been provided on a preferred basis due to M&F Bank’s designation as a Community Development Financial Institution (CDFI).
http://www.businesswire.com/news/home/20090629006190/en/MF-Bancorp-Receives-11.7-Million-TARP#.UwLbUG_TmUk
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