WHI Westerbank Puerto Rico

terminator · 07-13-2007, 08:05 AM

WHI has been discussed before. Is anyone still following it?

I saw in late June they disclosed a material impairment of at least $80MM on one of their asset-backed loans. It appears the total loan balance of the impaired loan is about $140MM.

On one hand, that could wipe out the earnings for a whole year, but on the other hand the balance sheet shows equity of about $1.2B and 165MM shares, so the book value is about $7.25 (before the fallout from any impaired loans).

It's trading around $2.80 or so now so it seems that the market has decided that not only this one loan is bad but that they are expecting quite a few other bad loans too. (Heck, they'd need about $700MM in totally bad loans to get the book value down to market price.)

Based on the balance sheet it looks like they have plenty of capital to meet the necessary ratios even if there were quite a few other bad loans.

Earnings for the year could get wiped out and dividends could be cut going forward since I think they pay them based on the previous two years of earnings.

Anyway, in the interest of full disclosure I went ahead and bought some. Just curious if anyone else has thoughts on it.

semtex · 07-13-2007, 08:33 AM

I bot it. Bot some bpop too, since bpop got pull down by whi.

terminator · 07-14-2007, 08:53 PM

I hope it works out for us semtex.

I thought I remembered some other people who were buying it a while back (it seemed like a decent price even back then, it seems like a real bargain now to me).

BUM · 07-23-2007, 05:53 AM

I consider myself overwieghted in regional bank stocks. The prices are dirt cheap and many with nice dividends as well.

CCdaCE · 07-24-2007, 01:47 PM

Speaking of regional bank stocks, KRE (an ETF of regional bank stocks) is getting smacked again today.

BUY BUY BUY.

Disclaimer: I own none, but REALLY starting to wish I did.

Thanks for the "heads up" brewer.

-CC

CCdaCE · 07-25-2007, 01:23 PM

Today meathead Cramer says to SHORT KRE.

Amazing.

-CC

terminator · 07-26-2007, 04:47 PM

Well, short term I'd say Cramer was right about KRE. Yikes.

Anyway, I bought some more WHI at 2.30. It seems ridiculously cheap to me. Time will tell.

Dawg54 · 07-26-2007, 06:54 PM

Quote:

Originally Posted by CCdaCE

Today meathead Cramer says to SHORT KRE.

Amazing.

-CC

He didn't like shipping stocks either. Now that they reached all time highs, he jumps on the band wagon. A momentum kind of guy. I'm not saying one should fight momentum, but I like to buy on the cheap.(as long as there is a good future to the company or sector)

CCdaCE · 07-27-2007, 06:33 AM

Quote:

Originally Posted by Dawg52

He didn't like shipping stocks either. Now that they reached all time highs, he jumps on the band wagon. A momentum kind of guy. I'm not saying one should fight momentum, but I like to buy on the cheap.(as long as there is a good future to the company or sector)

Yeah, he was very right for one day so far.

When/if this whole subprime thing unravels a little more, I suspect he'll be right again. But, in a few years those bank stocks are bound to get lofty again. Maybe that'll take a long time, but I've got time. How long is Warren Buffets' holding period? Forever? (usually).

Again, I've not yet pulled the trigger -- I'm all hot air at this point.

-CC

maddythebeagle · 07-27-2007, 08:22 AM

Looks like these PR banks are still falling even with the market up a bit today.....I think that I will wait a bit to see where BPOP drops to add some more....

Texas Proud · 07-27-2007, 02:36 PM

Looks to me to be a recovery play.... not sure if I would want to wait to see when it happens..

Who knows what else is hiding in the weeds and if there will be some lack of confidence to cause a run on the bank and a fire sale...

And it looks like it took another beating today...

semtex · 07-27-2007, 02:48 PM

Market very bad, I guess everybody knows it already.

I cut my WHI position around 2.8 two weeks ago. That's good. Bad thing is I bot more BPOP.

I am buying more TRGL. I fully loaded around 15.5. Now doubling my position.

07-13-2007, 08:05 AM	#1
terminator Recycles dryer sheets Join Date: May 2006 Posts: 213	WHI Westerbank Puerto Rico WHI has been discussed before. Is anyone still following it? I saw in late June they disclosed a material impairment of at least $80MM on one of their asset-backed loans. It appears the total loan balance of the impaired loan is about $140MM. On one hand, that could wipe out the earnings for a whole year, but on the other hand the balance sheet shows equity of about $1.2B and 165MM shares, so the book value is about $7.25 (before the fallout from any impaired loans). It's trading around $2.80 or so now so it seems that the market has decided that not only this one loan is bad but that they are expecting quite a few other bad loans too. (Heck, they'd need about $700MM in totally bad loans to get the book value down to market price.) Based on the balance sheet it looks like they have plenty of capital to meet the necessary ratios even if there were quite a few other bad loans. Earnings for the year could get wiped out and dividends could be cut going forward since I think they pay them based on the previous two years of earnings. Anyway, in the interest of full disclosure I went ahead and bought some. Just curious if anyone else has thoughts on it.

07-23-2007, 05:53 AM	#4
BUM Thinks s/he gets paid by the post Join Date: Feb 2004 Posts: 1,537	I consider myself overwieghted in regional bank stocks. The prices are dirt cheap and many with nice dividends as well. __________________ In a panamax down by the river.

07-24-2007, 01:47 PM	#5
CCdaCE Full time employment: Posting here. Join Date: Apr 2006 Posts: 564	Speaking of regional bank stocks, KRE (an ETF of regional bank stocks) is getting smacked again today. BUY BUY BUY. Disclaimer: I own none, but REALLY starting to wish I did. Thanks for the "heads up" brewer. -CC __________________ "There's those thinkin' more or less, less is more, but if less is more, how you keepin' score? It means for every point you make, your level drops. Kinda like you're startin' from the top..." "Society" - Eddie Vedder

07-25-2007, 01:23 PM	#6
CCdaCE Full time employment: Posting here. Join Date: Apr 2006 Posts: 564	Today meathead Cramer says to SHORT KRE. Amazing. -CC __________________ "There's those thinkin' more or less, less is more, but if less is more, how you keepin' score? It means for every point you make, your level drops. Kinda like you're startin' from the top..." "Society" - Eddie Vedder

07-27-2007, 08:22 AM	#10
maddythebeagle Thinks s/he gets paid by the post Join Date: Jun 2005 Posts: 2,406	Looks like these PR banks are still falling even with the market up a bit today.....I think that I will wait a bit to see where BPOP drops to add some more.... __________________ - Hurry! to the cliffs of insanity!

07-13-2007, 08:33 AM	#2
semtex Recycles dryer sheets Join Date: Jul 2006 Posts: 181	I bot it. Bot some bpop too, since bpop got pull down by whi.

07-14-2007, 08:53 PM	#3
terminator Recycles dryer sheets Join Date: May 2006 Posts: 213	I hope it works out for us semtex. I thought I remembered some other people who were buying it a while back (it seemed like a decent price even back then, it seems like a real bargain now to me).

07-26-2007, 04:47 PM	#7
terminator Recycles dryer sheets Join Date: May 2006 Posts: 213	Well, short term I'd say Cramer was right about KRE. Yikes. Anyway, I bought some more WHI at 2.30. It seems ridiculously cheap to me. Time will tell.

07-27-2007, 02:36 PM	#11
Texas Proud Thinks s/he gets paid by the post Join Date: May 2005 Posts: 3,022	Looks to me to be a recovery play.... not sure if I would want to wait to see when it happens.. Who knows what else is hiding in the weeds and if there will be some lack of confidence to cause a run on the bank and a fire sale... And it looks like it took another beating today...

07-27-2007, 02:48 PM	#12
semtex Recycles dryer sheets Join Date: Jul 2006 Posts: 181	Market very bad, I guess everybody knows it already. I cut my WHI position around 2.8 two weeks ago. That's good. Bad thing is I bot more BPOP. I am buying more TRGL. I fully loaded around 15.5. Now doubling my position.

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