Monthly Archives: January 2014

BNCCORP’s 2013 Results

‘Tis the season for polar vortices and community bank earnings.  Following Tuesday’s theme, today we receive BNCCORP’s 2013 financial results. (PR)

BNCCORP has a more colorful recent past than Hingham, having been subject to fraud, insurer litigation, and preposterous capital raising plans.  With all that now behind, we find today’s BNCCORP producing strong returns on assets and equity.

As of 12/31/13, BNCCORP had a book value per common share of $14.45, and it produced a return on average assets and equity of  1.07% and 15.15%, respectively, through the year 2013.  For that performance, today’s buyer is willing to pay $13.14 per share, or roughly, .9x BV.

From my seat, the most impressive aspects of 2013′s performance were BNCCORP’s declining non-interest expense (down 10% in Q4 YoY) and strong non-interest income (despite the headwinds in mortgage banking).  The most obvious negatives were their relatively small loan book (351m in total loans at 12/31/13, vs. 436m in securities), and the fact that they haven’t yet redeemed their preferred stock and/or subordinated debt.

Disclosure: I am long shares of BNCC.

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Hingham 2013 Annual Report

Last week the Hingham Institution for Savings (Hingham, MA) released their 2013 financial results. (PR)  Though I have never owned the stock, I have followed it for the better part of seven years, as Hingham consistently produces above average returns on assets and equity, as compared to peer community banks.

Unfortunately, their strong past performance has produced a wide range of admirers, with SNL Financial–for one–naming it the top thrift institution in the East and third overall in the US in 2012. (PR)  With so many admirers, Hingham consistently trades at some significant premium to its book value and tangible book value.

As of 12/31/13, Hingham had a book value per common share of $48.49, and it produced a return on average assets and equity of  1.07% and 13.52%, respectively, through the year 2013.  For that performance, today’s buyer is willing to pay $77.50 per share, or roughly, 1.6x BV.

From my seat, the most impressive aspects of 2013’s performance were Hingham’s large loan portfolio (i.e., as a percent of total assets) and low efficiency ratio (43.26% for 2013, up from 41.54% in 2012).  The most obvious negatives were their relatively high cost of funds (0.93%), low level of demand deposits, and low level of non-interest income.

Disclosure: No position

Secured Note Backed by Dolly

You know, like that dolly…

DollyCall it innovation in finance.  Creativity.  Pluck.  Whatever one calls it, AMERCO (U-Haul) is pleased to offer the following secured notes:

“The notes issued under Series UIC-01B are secured by a first-priority lien on a pool of U-Haul appliance dollies (the “Appliance Dollies”).  For each $100 invested with us in the notes under Series UIC-01B, we will pledge to the trustee, for the benefit of the noteholders, one Appliance Dolly.

The notes issued under Series UIC-02B are secured by a first priority lien on a pool of U-Haul utility dollies (the “Utility Dollies”). For each $45 invested with us in the notes under Series UIC-02B, we will pledge to the trustee, for the benefit of the noteholders, one Utility Dolly.” (Prospectus)

Disclosure: No Position

Yuma Arizona Water Rights

California’s drought puts water on the mind these days, particularly given all the agricultural production there.  There are publicly traded companies with land and water rights in these agricultural areas, but data points are few.

Limoneira discusses some of their water rights in their latest 10-k, noting:

“In connection with our September 6, 2013 acquisition of Associated and its property ownership in Yuma, Arizona and its related membership in the Yuma Mesa Irrigation and Drainage District (“YMIDD”), we have been allocated approximately 11,000 acre feet of water sourced from the Colorado River. During December 2013, Associated entered into an agreement with the YMIDD to participate in a Pilot Fallowing Program in which Associated has agreed to forego its water allocation for approximately 286 acres of land in exchange for $750 per acre through December 31, 2016, unless terminated sooner by YMIDD.”

Disclosure: no position

CBAK Unsecured Loan

Not every day you see a NASDAQ-listed company paying these rates…

“On November 20, 2013, the Company entered into a loan agreement of $11.6 million (RMB 71 million) with Shenzhen Aisibo Trading Company Co., Ltd, an unrelated third party, whereby the loan was unsecured and bearing interest at 0.17% per day. This loan was repaid on December 11, 2013.

On December 17, 2013, the Company entered into a loan agreement with Mr. Jinghui Wang, the sole shareholder of the potential buyer of BAK International whereby Mr. Wang agreed to lend the Company in the aggregate amount of $60.4 million (RMB370 million) which is secured by the Company’s 100% equity interest in BAK International and guaranteed by BAK International and the Company, bearing interest at 20% per annum and repayable by March 31, 2014. Up to the date of these financial statements, the Company has received $60.4 million (RMB370 million) pursuant to this loan agreement and $24.6 million (RMB150 million) from Mr. Wang.” (10-k)

Disclosure: No position