Mutual thrift conversions are at a record high since the late 1990s, with attractive stock opportunities for investors, says Laurie Hunsicker, who covers Northeast banks for Stifel, Nicolaus & Company.
“It’s a win in terms of getting capital,” Hunsicker said. “To the extent that a mutual bank is considering any sort of growth opportunities, the attractiveness of stock as a currency is very important, and obviously that’s not an option if a bank decides to remain mutual.”
With M&A deals and FDIC-assisted transactions still on the radars of many banks, the extra cash helps, Hunsicker says, adding that it’s still all about capital and credit. Demutualized thrifts attract investors with high credit quality, excess capital and conservatively managed balance sheets.
“One thing that’s kind of interesting: We ran a screen of all 1,300 publicly traded banks and thrifts; we decided to screen it in the extreme for the two C’s, capital and credit,” Hunsicker said. “Only three dozen made the cut. Three dozen. And not surprisingly, the majority of those were demutualized or conversions.”
Potash Price Runup Expected Through Second-Half of Decade
August 19, 2011
Target Corporation (TGT) and Novartis AG (NVS) See a Decade of Dividend Growth
May 14, 2013
CMS Energy Corporation (CMS) to Limit Capital Investments Over Next Decade
February 25, 2014
QUALCOMM, Inc. (QCOM) to Collect 4G Royalties for the Next Decade
March 11, 2014
Investors Bancorp, Inc. (ISBC) a Thrift Success Story
December 31, 2014
