Interesting and cheap, but questions arise.

Haven't grown their loan book since 2016.   Net loans in 2016 were $1.56 billion and $1.59 billion in 2019.  But the business makes money on a decent net spread lending business.   The holdbacks are akin to insurance, which really tempers losses.   Nice feature.  

Big question would be:  Why are they retaining capital instead of paying out MUCH more back to shareholders?   They have more than enough regulatory capital and the ROE of the business has always been sub 10%.    A SUB 10% ROE financial deserves to trade at less than 1x book.  Why not crank up payout ratio and you introduce a new class of owners to the stock as an income vehicle because as it stands, what is the appeal?  no liquidity in the share price, no growth in the loan book, low ROE.

I see they are entering "INSTANT MORTGAGE" for pre sales condos/homes, which at this point in the cycle would set off alarm bells, but if they maintain similar HOLDBACKS, perhaps not as risky as it would seem.   

Am i missing something?   

Thanks.