"If they establish a dividend (and keep it) or over a longer period of time show themselves to be quite the good bankers then you can pay up for the stock. "

If you wait for this to happen you will buy in at the top. I thought the point of investing was to buy in BEFORE all the good news is confirmed.

They just made 0.41 two quarters in a row. How many quarters do you want? Lets say spreads do get squeezed, and they can only make 0.30 per quarter or $1.20 a year. At a PE of 10 you are still looking at a 33% undervalued stock. With
every negative factored in. 33% undervalued is the downside.

And ... if things do change, can a small internet bank adapt more quickly than the branch banks? Have they adapted reasonably well so far?

My take: It trades at $9 because small volume stocks take forever to get noticed. The big players - can't play here. But the snowball effect when it does move is awesome. As the market cap increases, it passes though a larger number of filters, generating ever more interest.

Did you see the 8% drop right before earnings? The market makers knew exactly where this was headed, and they shook the tree for some weak hands (with stops - which they CAN SEE) to get some shares to sell. And they will continue to play that game - its their job. Maybe they even post here.