Value418

Yes, I am still fairly bullish on SRBK. If you figure they are still at a ~25% discount to tangible book value and the thrift takeouts average maybe a 30% premium to tangible book, they look interesting if they somehow swung the deal on Day 1 of eligibility (which would be in September). However, in some ways I am okay if they do not sell Day 1. They fulfilled their last 10% share repurchase authorization in less than a year, have a strong start on their second 10% authorization and plenty of excess still to go through a few more if they want to. While they are starting to loan a little more, these deals never stand out on their profitability in the early days. The nature of the thrift conversion process makes them inherently far over-capitalized while issuing shares at a fixed/arbitary share price ($10/share). So, even if profitability stays muted, they are buying back a lot of stock at a significant discount to tangible book, which is accretive to TVBS (~7%/year at the current run-rate), so you get another lever to value creation while you wait. Insiders are well-invested, come from a PE background and are still buying shares for themselves. I do think it would be an attractive target at some point. I started as a bank analyst and you learn (often the hard way) that banks are only as good as their footprint at the end of the day. While these guys aren't in Texas, they are in a decent part of NJ that would be an interesting add-on for a number of players out there. Where I get frustrated on these deals, and smaller banks in general, is when they talk about a plan towards improving profitability and capital allocation, but do not follow through (i.e. untouched buyback authorizations, etc.) or they have a terrible footprint that makes them feel like they are pushing a rock uphill. So far, I have not had those concerns with these guys and they seem surprisingly adept compared to most management teams at this size bank.

27.5% Fairfax 19% SRBK 10.5% AJG 7% ELV 7% FITB 7% HCA 6% CNQ 6% NNI 3% TPL 3% TRRVF Cash

Perfect. Thank you much!

Do you mind sharing the podcast you listened to? Thank you.

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GIL

Starting tor read about these guys. Seems to be a fair amount of the business in Brazil, which is going to be challenged, right?

Performance out of Lincoln, NE?