Unconventional Capital Wisdom
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Beneficial Mutual Bancorp: Upcoming 2nd-Step Conversion Offers Dillinger-Esque Returns

"Ok, boys; let's go make a withdrawal." - John Dillinger

If you've ever wondered what it would be like to be the bank heist legend John Dillinger without the repercussions of jail time, then it might be worth-while to consider investing in small mutual thrifts who are contemplating either their first or second step in a mutual-to-stock conversion. Seth Klarman detailed the opportunity in his book Margin of Safety after thrift conversions were popular in the late 80s and early 90s. He described that conversions generally overstate the value of the bank allowing investors to buy "their own money and get preexisting capital in the thrift for free." This is possible because cash raised from the conversion IPO or second...

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