Street Capital Bank my worst forecast of 2017 and worst performing bank

   
     

    If Kirkland Lake Gold was my best forecast for 2017 then Street Capital Bank was the worst.As in the caption above the train is only pulling away from the station.It was trading around $2.00 per share in December 2016 when I bought shares and forecasted a large price improvement after February when it got it's Schedule 1 bank licence.Now it trades at $.98 per share.However parts of my forecast were correct.It is taking on deposits and it has increased it's customer loans by 50%.But revenues and operating income have fallen by about 50% over 2015.Although net income has remained almost constant.It still has a long way to go but it will have a credit card availability this year and interest margins will increase in 2018.
       A Banker's  Dip in 2017
      Often a junior company after a major revenue-creating event will slow down or even move backwards for a period of time.This often happens when a new banking licence is obtained or a patent or even a new major oil field.The reason being that the new company shows more established companies that it is open for business.And this gives them more attention and causes more competitive pressures.Once the new company adjusts to this increased competition it will return to it's natural growth path.And SCB is still adjusting.For example,both revenues and operating income must grow for Street Capital Bank to reach 2015 levels.
  Revenues and operating income are expected to be flat with 2016 levels in 2017.While net income may be a little less than 2016.However loans and deposits and the interest rate margin will be better than 2016.The interest rate margin has improved in the second half of 2017 and again in 2018.      

                Improvements
         As shown in my blog on Linkedin entitled If They Only Knew  SCB had about 130,000 customers at the time of getting their licence.Now I an guessing they have about 150,000 customers and their loans have increased by about 50%.This blog expects only average results for 2017.But they will introduce credit cards in 2018 and have higher interest rate margins.So look for Street Capital Bank to move closer to it's natural growth path.It is mereley an adjustment process.
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