Ariana Research
Long/short equity, deep value, special situations

Charter Financial: Post-Second Step Convert Trading Below Its Tangible Book Value

Charter Financial Corporation (NASDAQ: CHFN)

Situation Type: Deep Value

Dividend Yield: 1.9%

Executive Summary

I recommend purchasing the common shares of Charter Financial Corporation ("Charter," "CHFN" or the "Company"), a southeastern financial institution which has recently completed its second step conversion from a mutual holding company into a 100% publicly owned thrift/community bank. The Company has a market cap of $237.3MM and assets of $1.1B as of 6/30/13, respectively.

Charter is a recent thrift conversion, a process well known to value investors and often underfollowed by market. Despite a pristine balance sheet and an experienced Management team who have opportunistically acquired banks, the market is drastically overlooking the Company's prospects. Why does this opportunity exist? (1) The Company's ROI

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