Stephen Rosenman
Long/short equity, deep value, special situations

Below Tangible Book, You Can Bank On Ambitious HomeTrust Bancshares

The market has assigned premium valuations to banks that have been very active in M&A. Top-tier acquirers like Bank of the Ozarks (NASDAQ:OZRK), Home BancShares (NASDAQ:HOMB), Renasant (NASDAQ:RNST), and PacWest (NASDAQ:PACW) are valued at more than 3X TBV. Even mediocre financials receive high valuations. For instance, Old National Bank (NYSE:ONB) trades at a pricey 1.8X TBV, even though it never seems to benefit from any of its acquisitions. Putting high price tags on serial acquirers makes perfect sense: They all possess fortress-like balance sheets and ambitious managements determined to grow their banks. It should, therefore, come as no surprise, the market is willing to pay up for these ravenous banks...

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