This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

10 Bank Stocks Trading Below Book Value

Stocks in this article: C SNV BPOP MI CRBC HCBK TSFG

First Bancorp (FBP) of San Juan, Puerto Rico was trading for just 0.2 times tangible book value on Thursday, when shares closed at $1.06, down 54% year-to-date.

TARP Status: The company owes $400 million in TARP money and has missed three dividend payments on government-held preferred shares since August.

Capital: FirstBancorp was ordered on June 4 by the Federal Reserve to submit a plan within 30 days to raise sufficient capital to maintain Tier 1 leverage, Tier 1 risk-based and total risk-based capital ratios of 8%, 10% and 12%, respectively. These ratios normally need to be at least 5%, 6% and 10% for most banks to be considered well-capitalized.

While FirstBancorp's capital ratios as of March 31 exceeded those required by the Federal Reserves's order, the order states that if the ratios slip below the required amounts, the company will be required to submit a plan for "the sale, merger, or liquidation of the bank" within 45 days, unless additional capital becomes available.

The company announced on June 4 that it was in "advanced discussions" with Treasury officials to convert the $400 million in TARP preferred shares to common shares, and was also planning to raise $500 in common equity.

Earnings: In late April, the company reported a net loss of $107 million, or $1.22 a share, for the first quarter after losing a total of $275 million, or $3.48 a share, in 2009, as charge-offs (loan losses) mainly in FirstBancorp's construction and consumer loan portfolios took their toll.

Asset Quality: Nonperforming assets -- including nonaccrual loans and repossessed real estate loans, less any government-guaranteed balances -- comprised 10.28% of total assets as of March 31 according to SNL. The annualized ratio of net charge-offs to average loans for the first quarter was 3.65%. Loan loss reserves covered 4.09% of total loans as of March 31, staying "ahead of the pace" of charge-offs.

Prospects: The massive dilution on the table from the company's plans to convert the TARP preferred to common and raise additional common equity are reflected in the low valuation. Investors should steer clear until and if First Bancorp's capital initiatives are completed.

2 of 11

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 18,063.61 +9.90 0.05%
S&P 500 2,092.58 +3.81 0.18%
NASDAQ 4,811.8050 +4.9460 0.10%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs