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AUTHOR
DATE
SUBJECT
43
member
6/30/07 12:07PM
Hill's departure
1) No particular reason to expect them to sell, but probably a more receptive group to listen to someone absent Hill.
2) Never underestimate the abilities of acquirers to believe they can manage the... login to read the rest
Just curious what some of the bulls think about his exit.
#1, I don't understand why people think CBH will sell. #2, I think it is an unacquirable franchise. Anyone who acquires them will almost certainly... login to read the rest
Hi Skyhawk,
Sorry I've been off a few weeks. My guess would be perhaps the increase in deposit rates paid flattens, and maybe a little more shift to loans helps. That's off the cuff...no... login to read the rest
Was wondering if you had any thoughts.
I don't understand how management can say they expect the NIM to expand in Q4. A quick look at the balance sheet asset yields and funding costs indicates this... login to read the rest
Skyhawk,
You said, "I think my analysis is simple: if you grow assets at 20%+ but your ROE is only 13-15% and capital levels are already somewhat constrained, you will
need to raise capital. That's it."
I... login to read the rest
David,
I'm not sure if I understood your comment, but I think short rates go to 5.50% and the 10 yr. stays below 5.50%. In general, I think several analysts believe the pressure on bank... login to read the rest
Hi David,
I missed your equity raise analysis while writing up mine for Skyhawk. Let me walk through our differences.
1) You accepted Skyhawks asset growth rate at 25%. That gets you to 67.9B... login to read the rest
Neo,
I am not ignoring your post...I think we hold similar long term views. Obliquely I get to your point about the branch economics by mentioning the payback time on investment in new branches in... login to read the rest
Thanks for the detail, but you didn't address my concern in my last post. CBH's leverage ratio (the way regulators define it) was 6.0% at Q2. The tangible equity to tangible assets ratio was 5.5%... login to read the rest
Skyhawk,
Here are details on my initial approach:
My EBITDA calculation is fairly straightforward: Net income with the following add backs: tax provision, D&A as listed on the cash flow statement, and interest expense *solely... login to read the rest
Legitimate points. I should have been more specific in my belief that the equity issuance via options has been used to fund at least PART of the expansion. I haven't done the math yet on... login to read the rest
Skyhawk,
Your comment on the EBITDA/cash flow analysis reminds me of the discussion of BDC dividend funding by longs and shorts. You are adamant that expansion has not been paid for by after tax cash... login to read the rest
Morgan Stanley has been a big bear on the name, but his most recent report should be required reading for anyone considering an investment.
Basically, he is 1) lowering his NIM and EPS in 2007 because... login to read the rest
I believe the real estate angle is questionable. Eddie Lampert made a brilliant move. It was a good insight for analyzing a struggling company that many others had just left for dead. But with a... login to read the rest
CBH is fun to debate.
Once again, I gave a low rating because the CBH story has already been covered in depth by a number of sources prior to VIC, not because I thought it was... login to read the rest
Met,
This is a fair writeup and agree with others that rating this anything lower than a "4" really seems unfair. CBH is interesting. Its probably likely to get uglier in the near term... login to read the rest
"I do not want to buy something on the very slight chance that it may get bought. I don't think that is value investing. I think that is hoping and praying."
Skyhawk, I thought I was... login to read the rest
Grumpy, there isn't a great deal to add to David's response to you on the facts. But let me comment on some of your points as they relate to my thesis.
Catalyst timing: I... login to read the rest
We disagree on the value of my write up...'nuff said.
I think the EV/EBITDA & cash flow examination were important to 1) demonstrate the expansion is funded without resorting to new debt or more equity, and... login to read the rest
Sorry to be AWOL. Post dental visit yesterday I was a little flat, LOL.
First, I'll call low cost deposits your 'core deposits' as defined as total deposits less all time deposits. Trying to... login to read the rest
I think measuring deposit premium is ONE of several metrics to look at. I look at ROA and it was 0.76% in the last quarter. For the past decade, ROA has been around 1.0% for... login to read the rest
Name me one high performing bank that still managed to retain its high performance after getting acquired. What is the precedent for a holding company to acquire CBH and leave it alone? Most multi-branded bank... login to read the rest
I don't agree with skyhawk who says, "I think analyzing banks on core deposit premiums is questionable (it only matters for banks that will be sold)....or grumpy who said, " CBH is one of the... login to read the rest
"Jim, how do you define "core" deposits. I have always believed that CBH is extremely aggressive with their definition. Typically, I have seen other banks exclude both commercial deposits (presumably because they're... login to read the rest
Grumpy,
To further the discussion, I'd like to respond to your comments:
Can you guarantee that I can buy it 20% cheaper?!?!? It may get cheaper, it may not. If it does, average down like Bill Miller.
>
But
Jim,
Quick question for you. How do you define "core" deposits. I have always believed that CBH is extremely aggressive with their definition. Typically, I have seen other banks exclude both commercial deposits... login to read the rest
I have no problem with write-ups that are covered by the sell-side. In fact, I think too many VIC write-ups are too small to be bought in anything other than a PA and too obscure... login to read the rest
I'm afraid I have to agree with Jayhawk that this write-up adds very little to the CBH story, misses many of the risks, and your reasoning makes the stock more likely to be a... login to read the rest
Skyhawk,
First an actual objective point of discussion. How much premium would CBH have to pay to acquire BBX? How would that create value for CBH shareholders?
I have to ask, are you suggesting that... login to read the rest
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