Interesting trading in FTBK 4/9 with 10x's the daily volume pushing the stock up 15%. What's particularly interesting is that D-Day is fast approaching as their Prompt Corrective Action deadline is 4/15.
Perhaps it's the FDIC's lackadaisical attitude toward enforcement of PCAs that gave it a lift, as fellow troubled bank AmericanWest of Spokane recently got a stay of execution: http://seattle.bizjournals.com/seattle/stories/2010/03/22/daily39.html?ana=yfcpc
Seems like old news to be affecting trading yesterday.
It certainly doesn't appear that there is a white knight swooping in to save the Bank, or, why else would the President insist on taking Spring Vacation at this critical time:
http://industry.bnet.com/financial-services/10008275/good-to-godawful-10-things-ceos-should-never-do-in-a-crisis/
Is the market anticipating a takeover? If it was a good time to take a vacation because a deal is imminent, why hasn't it been announced?
I suspect the FDIC has been unable to locate a buyer for the $3,700,000,000 bank even after requiring apaltry additional 1% writedown:
http://seattletimes.nwsource.com/html/businesstechnology/2011361135_frontier17.html
No local bank has the resources to step up to this one. It's going to need to be a regional that scoops this one up. How big a hit will the FDIC need to take on this? The earliest failures (Westsound, Venture & Horizon) in Washington averaged hits of about 33%. These were clearly bad banks and quickly put out of their misery. More recent failures (American Marine, Evergreen & Rainier) cost regulators about 15%. I'm putting the over/under on Frontier at 20% and I'm taking the over. I believe their size is going to require a bigger than average discount.
In the meantime, interesting trading for a near bankrupt bank.
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