Gregory Vousvounis
Value, growth at reasonable price, long-term horizon, long only

Simplicity Bancorp: An Overcapitalized Bank Ripe For A Takeover

Investment Thesis

Simplicity Bancorp (NASDAQ:SMPL) formerly known as "Kaiser Federal Financial Group" is the holding company of a small community bank. SMPL is trading at a 13% discount to its BV and while it may not be obvious, it is significantly undervalued relative to its private market value.

Here are the reasons why Simplicity deserves a higher valuation:

    SMPL is trading at $15.79/share which is slightly below its BV of $18. It has a quite overcapitalized balance sheet with equity being 17.26% of assets (compared to an industry norm ~10%) and its 1 ratio being a very high 20%. Return on equity and net interest margin have languished due to the company's overcapitalized balance sheet but it can...
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