The purchase price - subject to adjustment - is over $23/share.
Nice call, Jim!
Vince
3 Likes
Thanks, Vince!
I expect bank deals may heat up a bit here this year. And in the next few weeks we’ll start to hear what thrifts may be converting in 2024 .
Best!
Jim
4 Likes
Any news re possible conversions?
Hey, Vince,
I’ve seen just one announcement so far this year, and it’s relatively small. Mutual Savings and Loan in Metairie, LA is looking to convert. Usually January is the big time of year for the announcement, but it’s possible to see some throughout the year, too.
Jim
2 Likes
I’ve been watching FFNW and see that prices haven’t changed much in the 2 mos since the deal was announced. Stock is at 20.72 and will go out at 23.00 or more sometime this year. It goes ex-div’d in a few days, but assuming you will collect the full $0.52, you receive 23.52 for your 20.72 - a 13.5% return in 10 months time - not too bad.
Seems like a good place to park cash.
Vince
2 Likes
Going ex-dividend tomorrow - act now or forfeit $0.13/sh forever!
Yes, it doesn’t seem like such a bad deal. And it’s in cash, which you don’t always get in these bank deals. Yes, always the possibility that the deal breaks, and if so, you have substantial downside from here. And some changes in capital could also alter the deal. And now at least 6.5 months before they’ll close it. Annualized it works out pretty nicely – if it works out.
Jim
1 Like
Proxy statement is now out for this deal. Low point of estimated proceeds is 23.09/share.
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Vince, thanks for bringing this to my attention.
Jim
1 Like
I may be a little paranoid here, but the stock has not remained above 21 for long periods of time. It’s basically there now, which means that the 10%-ish premium could be happening in less than 6 months, assuming a Sept 30 close.
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Vince, the original PR said they were estimating it to close in Q4. Their current estimates of the proceeds to investors make an assumption of Sept 30. It may be made in one or more payments.
So 3.5 months for a ~10% return looks pretty good on an annualized basis, if you can get it. And yeah, it really has been staying around $21 for much of the year.
I’m curious how exactly a payout will proceed, if they’ll leave the equity trading after a first large payout.
Jim
2 Likes
Jim,
I am not good at reading the tea leaves, but given the date has been moved forward and a range of value provided has not materially changed, is this deal more likely to happen at the prices anticipated than when it was announced? The disclaimers are still there, but for example, if there was any indications that regulators were leaning against the deal, wouldn’t that disclosure be advisable? After all, there are law firms circling the deal, ready to pounce, suggesting that the 50+% premium being paid is insufficient, lol.
Vince
1 Like
Yeah, I don’t see any good reason that this deal won’t close. They’re getting a good multiple in absolute terms and, of course, the price is much higher than the stock was trading prior to the announcement. I think the uncertainty here is on the ultimate proceeds that investors will receive given the structure of this deal. And there’s the timing element here, too, so some unknown and uncertain costs.
Jim
1 Like
Thanks, Jim,
If the deal is likely going through and the price is the main uncertainty, I think folks are being a little gun shy. I can see the fear of the stock retreating to pre-deal levels affecting the price significantly, but not the difference between 22.50 and 23.50 - 22.50 being below the company’s current best guess low point. And the timing is closer than ever. I added just a few shares yesterday.
Stock has broken above 22 and closed at 22.30 - an 8% return since mid-March if you include the dividend. 25% annualized.
Thanks, Jim!
2 Likes
Yeah, I was surprised to see the recent jump.
We’ve seen a really nice move on NBBK recently, too. It started at $10 in late December after the IPO, and it sno $17+.
Jim
I have been on this ride as well and am happy. Is there any documentation that tells me when it will close and how the final sale price will be calculated.
I saw a jump when the stock holders agreed to the sale, just not sure what is left to finalize.
I was thinking of selling when it was over $ 22.5 since there isn’t too much left on the table and the today it drops below $22 which makes me think adding a little to pick up the last 5 or 6% in the next couple of months might be a good place to hide some funds.
I guess it all depends on the details, price and date, and how likely they are? Does anyone know?
Randy
Long time fan of this board and Special Situations in its day!
1 Like
Randy,
Beats me - if anything, they suggest the deal will be done by 9/30, not 12/31 and recent earnings were good and increasing relative to 2023, suggesting that the $23 + price was not in jeopardy.
Vince
1 Like
Now at 21.25 ish. I was tempted before, but I added under 21.25. I see a few analysts dropping coverage or downgrading the stock to neutral weight. I don’t know if I am the smart money or the dumb money here, but I see a 9% return possible in 2-3 months. Another dividend in early September.
Vince
1 Like
Yes, we should expect the final payout (or two) by the end of the year. It’s an odd setup because of the asset sales and transfer.
Jim
2 Likes