Polonia Bank; small, undervalued and five activist investors involved

I recently wrote an article at Seeking Alpha detailing Polonia Bancorp (PBCP).  Polonia is a small Pennsylvania bank with five activist bank investors on their shareholder register.

Here is an excerpt from the post:

The acquisition valuation model is simple, but it gives a good estimate of what an acquiring bank might see in a small and unprofitable bank. It's also likely that this is what the five activist hedge funds see in Polonia bank as well.
Polonia's proxy statement shows that Stilwell Value Partners, Homestead Parners, Maltese Capital Holdings, PL Capital, and Lawrence Seidman collectively own 38.4% of the company. All of these funds are known to invest in mutual conversion IPO's and then actively "encourage" management to sell the bank to a larger bank.
The company's management owns 11% of the bank, and executive management is nearly retirement age. Many bank executives look at a sale as a way to fund their retirement. They worked hard for years and now it's time to sell and play golf.
Investors have an opportunity to invest along side well known bank activist hedge funds that will do the heavy lifting required to convince a bank's management to sell.
You can read the full write-up here. 

On a related note some of you might be wondering why I've decided to write about banks on Seeking Alpha instead of on Oddball Stocks.  The reason for this is I don't want Oddball Stocks to become a banking blog.  I've decided to write a majority of my bank related posts on either the CompleteBankData Blog, or on Seeking Alpha, with a few posts mixed in here and there.

If you're looking to drink from the firehose of bank write-ups I'm going to be starting a new project soon on the CompleteBankData Blog.  I will be covering every bank in the KBW Regional Bank Index by writing up and valuing one bank a day.

Disclosure: Long Polonia

1 comment:

  1. Hey Nate,

    I posted a comment under the SA article. Please let me know what are your thoughts.

    Best,
    Yuanxi

    ReplyDelete