Mutual bank conversion stories have been consistently profitable for investors even though the potential scenarios underlying each bank vary widely. I recently reviewed two converts that were starting to look like growth was constricted to deposit in-flows (here and here), but in this article I will highlight a bank that is limited in a way that is more beneficial for its investors.
Playing with book value
After converting in 2010, Athens Bancshares (NASDAQ:AFCB) had ~$50 million in tangible equity when the market valued the company at ~$27 million. Fast forwarding to today, the bank has equity of $40 million and is trading for a slight premium at $42.7 million.
It's obvious from the above paragraph that...
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