M and F Bancorp Inc (ID) (MFBP)

Sold MFPB early but did well. Sold the last shares of CZBS purchased recently >$26

Hopefully you held on since then, the price run has been crazy! This ECIP perpetual preferred investment has been a huge bonus for several of these banks. MFBP, CZBS, UBAB...

Luckily I held some CZBS, but I regret never owning MFBP.

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.

Damn! Looks cheap to me.

This link will give you all the information you guys need.

https://www.mfbonline.com/wp-content/uploads/2020/04/MF-Bancorp-Inc.-Annual-Report-12.31.19-FINAL.pdf

the company will save about 127,000 because they chose to not pay any dividends this year.

This is stuck in perpetual not known about stock "hell"

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

Good god almighty a fellow West Coastie

No... I'm a 'left' coaster myself...so I won't be going.

Welcome to the board maverick one...and good luck.

Marker:
M&f Bancorp, Inc. (Q (MFBP)
$4.80 0.0 (0.00%)
Volume: 1,525

Are you attending? I'm out here on West Coast and will not be there.

so what

I've been acquiring for over a year- thought I would reveal myself.

Some insider buy - not a lot

http://www.snl.com/irweblinkx/ShowFile.aspx?KeyFile=23750218&Format=XML&Output=XML

Thank You free_bee for posting the 10-Q.

A quick look at earnings reveals they're starting 2014 off much better than they did Q1 of 2013 wherein they lost ($49K).

Net income ---------------------------------------------------- $277K

Less preferred stock dividends and accretion------------ ($59K)

Net income (loss) available to common stockholders----- $ 218K

O/S: 2,031,337

$218K divided by 2,031,337 = 0.1073 or .11 cents @ share earnings.

.11 X 4 = .44 projected annualized earnings.

.44 X a standard/modest PE of 10 = $4.44

MV today is $4.75

The bank is definitely heading in the right direction...nothing great yet but this is encouraging. They need to continue to work on lowering their troubled assets..those remain way too high... I'm sure they know!

http://banktracker.investigativereportingworkshop.org/banks/georgia/jonesboro/heritage-bank/

Looked pretty good at first glance. Will look deeper when time permits.

T

received email alert but already sold it
http://www.snl.com/Cache/23640100.pdf?IID=4050540&FID=23640100&O=3&OSID=9

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

Exactly why I am bullish on them.

T

Book Value: $12.02

Price / Book: 36.87%

http://www.snl.com/irweblinkx/stockinfo.aspx?iid=4050540

Marker:
M&f Bancorp, Inc. (Q (MFBP)
$4.43 down -0.01 (-0.23%)
Volume: 195

Leftope, excellent article. I really liked this:
“Although she will be stepping down from control of day-to-day operations, Ms. Saunders will continue to support us in very important ways during this transition,” board chairman James A. Stewart said in a news release. “We believe that the bank is poised to step onto a much bigger platform, and to operate more aggressively and competitively than before.”

Nice to see their focus in the future may be to be a little more aggressive.

T

There is a leadership transition going on right now: www.heraldsun.com/news/showcase/x2025288960/M-F-Bank-president-steps-down-from-day-to-day-role

The bank needs the new leadership - the stock is so neglected because it's been a sleepy underperformer for as long as I can remember. Little to no advertising, and not much name recognition in the community.

I think it's unlikely that they undergo any M&A transactions. It's always been a minority focused bank, and there aren't any others around NC that I can think of.

I do think the price is undervalued, but my view is that they are content to do a decent job of servicing their niche, focusing more on their past than transitioning into the future. Hopefully new leadership changes that.

"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.

Chevy, regarding your private message, one that is rumored to be a buyout candidate as well as a buyer is UBFO. Right in that sweet spot size-wise.

T

Got some aggressive buying going on today. Someone seems to see a bright future for our little undervalued gem. Some good chatter on the MB also guys. Thanks.

T

I have no idea what regulatory limitations, if any, banks classified as CDFI's would encounter in M & A type situations.

Common sense tells me there would be significant regulation hurdles to consider before Bank A could acquire non-cdfi Bank B and still maintain their own CDFI status. Perhaps its no hurdle at all and the standard reg rules for M & A apply. But something tells me its not all that simple ...and its a fair statement to say the simplest thing to do would be for a CDFI bank to look for another CDFI bank when they've got M & A on their minds.

MFBP is a North Carolina chartered bank with $301MM in assets ...and CZBS is a Georgia chartered bank with $387MM in assets. Although these banks aren't neighbors they are both in the southern region of the country and together they would be in the neighborhood of a $688MM dollar bank... which is still small by many standards but large enough they would help each other out significantly. Ideally banks need to be at least $1 Billion in assets to withstand the newest round of compliance costs.

It does no good to guess 'who' might acquire 'who' when it comes to banks...these things rarely ever work out the way you think they might... but its still fun to play matchmaker while we wait.

Both of these banks are selling at a steep discount to book value.

Hi James...consider your hand shook and thank you for sharing your insights in such detail with the board...you're an impressive young guy and a real thinker. Congrats on the MBA and we all wish you well with your career in banking.

In a perfect world our bank wouldn't have any TARP debts to repay...but its far from perfect and the bank eventually will have to face the repayment of its TARP loan. Its worth repeating for anyone else reading this that MFBP doesn't have the standard 5% for 5 years and 9% thereafter TARP terms that most every other banks across the country came under. MFBP has terms at 2% for 8 years which changes things a bit...and that's what you and I are discussing. To let you know where I stand on TARP I'm of the opinion that although TARP was a very unpopular gov't program it was something that had to done to meet a dire need. I'm not sure the average taxpayer really understands just how close to the abyss our banking system really was...and even though TARP went down like a bitter pill it still did its job and ultimately saved the day. My opinion on this was shaped by my friend and partner Enterprising Investor who is also an MBA with a career in banking, mortgage and finance.

GBExpress writes:
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. The high capital levels are no accident and could be there by design. Perhaps MFBP is looking to acquire other bank(s). ??

Chevy, thanks for sharing this. Guy seems to know his business and always good to get a qualified second opinion.

T

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

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.

wow. Excellent insights...and it has that ring of fairness, honesty and accuracy. Very Much appreciated!

There is allot of DD I can gather here in Oregon on the internet but at the end of the day I'm still 2,775 miles away... and there will always be a part of the story the internet just can't reveal the way boots on the ground do. Your report is exactly what I was hoping to get and the timing of it couldn't have been better.

The preferred shares will "suck up a lot of earnings power" for sure...but I'm optimistic this will be a break-out year for MFBP.

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.

Off topic, Chevy, but keep an eye on AYSI. I had come across them during a search for specific criteria and was buying around .30-.35 range and they came out with year end numbers that were spectacular. But, they had said they were not going to do quarterly numbers. Stock has been drifting down since, but I have been emailing a guy at the company and lo and behold they released them today. Swick has done a very good job of putting together a site here at IHub. Take a look. Very under appreciated and undervalued stock. Hoping for some nice action tomorrow.

T

Yeah, they have had some problems with regard to church properties. I would imagine that in depressed times the collection box isn't as full as the good times. But looking at the things you posted they are getting healthier and I expect them to get back on track. And, really, that dividend isn't shabby and pays for me to hang on. Take care.

T

Hi T, I appreciate the encouragement.

I've had a small position for a while now but I've been watching it for an even longer time. I had some DD in my Ihub files on them but decided it was time to create a board.

I too have high hopes for this bank...they carry a terrific BV....my only concern is their location ...the economic recovery in Durham...and the job situation in that part of the country.

Good to see you here.

Chevy, since shortly after getting involved with BNCC, I found this company and have held a position. They aren't hitting their stride yet, but have a 5% or so dividend and great BV. Add whenever it dips. Glad to see someone of your esteem has found it. Hope they can string some good reports together.

T

UBPR Report

FDIC Certificate # 12266 FRB District/ID_RSSD 5 / 332224 MECHANICS & FARMERS BANK ; DURHAM , NC

https://cdr.ffiec.gov/public/Reports/UbprReport.aspx?rptCycleIds=76,72,67,63,58&rptid=283&idrssd=332224&peerGroupType=&supplemental=

HOW HEALTHY IS THIS BANK?

http://banktracker.investigativereportingworkshop.org/banks/north-carolina/durham/mechanics-farmers-bank/

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

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/

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

As of August 13, 2013, there were 2,031,337 shares outstanding.

http://ih.advfn.com/p.php?pid=nmona&article=58798451

Marker:
M&f Bancorp, Inc. (Q (MFBP)
$3.90 up 0.28 (7.73%)
Volume: 1,416