Entering text into the input field will update the search result below

William Penn: Priced Below Liquidation Value And Insiders Are Buying

Hemlock Partners profile picture
Hemlock Partners


  • Despite a strong capital position and attractive credit metrics, WMPN trades at just 88% of tangible book value.
  • Management is top-notch and laser-focused on increasing shareholder value.
  • Insiders are scooping up shares.
  • First catalyst - initiation of a recurring dividend - expected in the next 90 days.
Old Fashioned Bank Sign

georgeclerk/E+ via Getty Images


Within our coverage universe, our favorite sector is community banks and thrifts. These traditionally sleepy opportunities often present usually attractive risk-rewards due to inexpensive valuations and a 30 year+ history of bank consolidation.

Our preference is to invest in

This article was written by

Hemlock Partners profile picture
With a value lens, Hemlock Partners ("Hemlock") is dedicated to uncovering the market's best investment opportunities. Our team brings a common-sense approach to a marketplace which often trades on an irrational greed-and-fear cycle. We view this predictable pattern not as a challenge, but an opportunity. Hemlock's Asset-Rich Investment Service is designed specifically for individual investors with a long-term investment horizon. The cornerstone of the service is to acquire solid companies at bargain prices. These golden occurrences arise when a company’s share price trades at a dramatic discount to the firm’s intrinsic value, and even better, below its liquidation value. From time to time, Hemlock will also selectively short a security which appears dramatically mispriced given our proprietary research and expertise. Opinions expressed here are reflective of the Hemlock team as a whole.

Analyst’s Disclosure: I/we have a beneficial long position in the shares of WMPN either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

Comments (47)

Hemlock Partners profile picture
The first of several expected positive announcements from one of our favorite small cap banks

AMC on Jan 19..."William Penn also announced that its Board of Directors has declared a cash dividend of $0.03 per share, payable on February 10, 2022, to common shareholders of record at the close of business on January 31, 2022."

@Hemlock Partners cool, wish it was higher
rgtichy profile picture
@Hemlock Partners - So sitting in April looking back at March, any newer thoughts on how these small banks including William Penn are looking?
Hemlock Partners profile picture
@rgtichy in the small/micro cap world we like to play in, we haven't seen or heard of a material disruption in the business model. Cash has been available to depositors and dividends are being paid to shareholders. We used the dislocation to add to existing positions, but in an attempt to minimize risk, limited our activity to only those banks that displayed some tangible form of confidence (insider buying, share repurchase program) or employ our favorite management teams. Time will tell how this will play out.
Hemlock Partners profile picture
WMPN has authorized a new (sixth) stock repurchase program to acquire up to 1,138,470 shares, or ~10%, of the company's currently outstanding stock.

Since March 2022, the company has repurchased 27% of shares outstanding via five repurchase programs. Most notably, the average purchase price per share of the 5 programs is $11.50, well below TBV ($12.48).

Outstanding capital allocation. One of our favs.
@Hemlock Partners Thanks for the update! Looking forward to March and hope they’ll sell next year. Thoughts about others such as GBNY or FSEA?
Hemlock Partners profile picture
@Billball70 Unfortunately, SA limits publishing on the microcaps, so its tough to share thoughts on these names.

In the comment section of our GBNY article, we recently wrote...

"GBNY released the 2Q 10Q on Aug 3. Relative to 12/31, TBV per share increased 2% to $16.21 and asset quality improved. The stock is down ~9% YTD and trades at 60% of TBV. The bank is eligible to be sold in mid-January 2024 (about 5 months from now). As of 6/30, Stilwell owns 9.97% of shares."

And FSEA, a couple of thoughts / observations:

FSEA has been left for dead. Down ~30% YTD, it trades for just over 50% of TBV despite an overcapitalized balance sheet and attractive credit quality. Unfortunately, this one is in the early innings, first year demutualization anniversary is Jan '24. Catalysts for the stock are a buyback program announcement in 1Q and / or Stilwell increases his small position.
@Hemlock Partners Thanks for posting the above. In both GBNY and FSEA----no worries about either from here---
They bought back 8.4% of their shares this quarter. Clearly their CEO and board are looking out for shareholders.
Added WMPN today.
@DanM3500 Seems to me to be the proverbial baby out with the bath water. I added on Friday
rgtichy profile picture
@Billball70 , @DanM3500 --

This 10% buyback just months after executing a 5% buyback announcement and filling it, is very aggressive... super encouraging, imo.
@rgtichy Agree. And they’re eligible to be sold in March, 2024. And insiders own about 14%.
CEO bought more today after it was down 9%. Hopefully it will be sold when it’s eligible next March. Great entry point.
Hemlock Partners profile picture
@Billball70 good catch - thanks for highlighting!

5k shares @ $10.68
Hemlock Partners profile picture
Trading at just 88% of TBV, WMPN has adopted a stock repurchase program for up to 5% of its outstanding stock.
@Hemlock Partners just saw this article. Another one we overlap in. This management team is qualitatively better than most demutualizations....this one's a hold as they get rid of the excess capital........thanks
Hemlock Partners profile picture
@Searching Thoughtfully great, good to hear! thanks!
GrayhawkAZ profile picture
@Searching Thoughtfully What is your preferred way for mgmt to do this? Share buybacks, I assume?
@GrayhawkAZ Agressive share buybacks below the franchise value of the bank in a sale.
Nice article, but I got to be missing something on how you get to 15 tangible book value in 2 years. If earnings only .08 a quarter and much of that will be paid out in dividends, it really does not add up to me. Stock buybacks below tangible book value can only do a little.
Hemlock Partners profile picture
good question, @DKOPPENHAFER, our article did not restate management's growth initiatives as outlined in their Oct 21 press release. our June 2024 TBV/sh target assumes reasonable execution and prudent share repurchases.
#Hemlock, Based on your recommendations I will open a position here and trust that you guys know your stuff. Thank you.
Hemlock Partners profile picture
@PHILIP MAX we're owners with you, hopefully this works well for all of us.
With the large banks valued on a PE 10 what justifies the PE 40 here? Unless this $180mm bank can pay out $140mm plus to shareholders I don't see where the value is.
Hemlock Partners profile picture
@User 6426931 The bank is overcapitalized, so P/E is not the best metric to use to gauge value. Management can't put their full balance sheet to work, which is why we expect dividends and buybacks (if the stock continues to trade under TBV). The value is that it trades below liquidation value, but is a profitable going concern. Hope that helps, but if not, let us know - happy to elaborate.
craftbrewinfo profile picture
"We're less than 90 days away from the one-year anniversary of WMPN's second-step conversion, which lifts the restrictions on a recurring dividend and share repurchases." Are you stating in less than 90 days this bank will pay a dividend? I am an income investor more so than capital appreciation, which is secondary....
@craftbrewinfo at the one year mark they can pay a dividend. It’s not a guarantee, but as an overcapitalized bank that already paid a $.30 special dividend, it’s a reasonable assumption at some point in the next few quarters they will.
Hemlock Partners profile picture
@craftbrewinfo if we're correct on the dividend announcement, the actual payment is likely in the first half of april
@Hemlock Partners I'm confused, it's always paid a dividend and paid a special dividend in August.

From 10k, "The Company has historically paid an annual cash dividend to stockholders and, for the year ended June 30, 2020, declared an annual cash dividend of $0.13 per share. On July 21, 2021, the Company also declared a one-time special dividend of $0.30 per common share, payable August 18, 2021, to common shareholders of record at the close of business on August 2, 2021"

What dividend restrictions get lifted in March?
I’ve owned this since May. The special dividend was nice and it is a well positioned stock going into 2022.

Follow my other Bank and Value picks on Twitter @ValueInvestor94
craftbrewinfo profile picture
@BrPanthers99 I don't see dividend info here on SA?
In! And ready for a positive announcement in 1Q!
Hemlock Partners profile picture
@eaglez12 Terrific, fingers crossed!
Silence Dogwood profile picture
Interesting article, thank you.
Hemlock Partners profile picture
@Silence Dogwood Thanks for reading and the feedback!
Disagree with this article? Submit your own. To report a factual error in this article, . Your feedback matters to us!

About WMPN

SymbolLast Price% Chg
Market Cap
Yield (TTM)
Rev Growth (YoY)
Short Interest
Prev. Close
Compare to Peers

More on WMPN

Related Stocks

SymbolLast Price% Chg
To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.