26 NOVEMBER / DECEMBER 2019 Michael A. Renninger Principal Renninger & Associates LLC mrenninger@ renningerllc.com Renninger & Associates LLC is a Diamond Associate Member of the Indiana Bankers Association. Securities offered through Ausdal Financial Partners Inc. Member FINRA/SIPC. 5187 Utica Ridge Road, Davenport IA 52807 563-326-2064. Renninger & Associates and Ausdal Financial Partners Inc. are separately owned and operated. Indiana Statistics Click on the hand icon in HB Digital to access statistics through Sept.30, Aug.31 and July 31, or visit: indianabankers.org/bankthrift-stock-update Stock Analysis Review as of Sept. 30, 2019 INDIANA BANK & THRIFT STOCK UPDATE The Size, Pricing and Profitability Reports for Indiana Banks and Thrifts as of Sept. 30, Aug. 31 and July 31 are available by clicking on the icon on this page or by visiting the designated website location. These Reports present the stock price changes for the 32 Indiana banks and thrifts that are traded on the NASDAQ and Over-The-Counter markets over the prior two years, one year and year-to-date, in addition to pricing and performance metrics. Selected banks headquartered outside Indiana, four broad market indices, and five bank and thrift indices are also tracked. The relative relationship of financial institution indices to broad market indices is largely unchanged over the last several months. The year-to-date bank and thrift indices increased an average of 15.39% as of Sept. 30, which closely compares to the average 18.2% change in the year-to-date broad market indices. This is in stark contrast to the one-year and two-year time horizons, where the bank and thrift indices continue to significantly underperform the broad market indices. In addition to broad market concerns (e.g. trade wars and Brexit, the potential for new armed conflict in numerous parts of the world, political uncertainty in the U.S. and abroad, slowing economies abroad and the anticipation of a slowing domestic economy), financial institutions are dealing with the prospect of shrinking net interest margins. The median for Indiana’s NASDAQ-traded bank stock prices has increased 10.87% year-to-date, and Indiana’s OTC bank stocks increased 5.95%. By comparison, the median for selected banks headquartered outside Indiana increased 15.12% yearto-date. Indiana’s OTC banks stocks, however, have outperformed Indiana’s NASDAQ-traded banks and selected banks headquartered outside Indiana over the one-year and two-year time horizons. As of Sept. 30, the median price multiples for Indiana’s NASDAQ-traded bank stocks were 174% of tangible book value and 12.9 times earnings, which is less than the medians for the seven similarly sized out-of-state banks tracked with Indiana operations (i.e. 180% of tangible book value and 14.1 times earnings), but better than the seven large out-of-state banks tracked with Indiana operations (i.e. 168% of tangible book value and 11.1 times earnings). In contrast, Indiana’s OTC bank stocks were trading at 111% of tangible book value and 12.1 times earnings. Over the last two months, First Merchants completed its acquisition of MBT Financial of Monroe, MI, and several transactions have been announced: • Fort Wayne-based 3Rivers Federal Credit Union ($1.1 billion in assets) announced the acquisition of West End Indiana Bancshares of Richmond ($299 million in assets) on Aug. 2; • Indianapolis-based Indiana Members Credit Union ($2 billion in assets) announced the acquisition of Commerce Bank of Evansville ($196 million in assets) on Aug. 13; • Brookville-based FCN Banc Corp. ($456 million in assets) announced the acquisition of DSA Financial Corp. of Lawrenceburg ($132 million in assets). The $18.3 million price (to be paid with 40% to 50% in stock) approximates 120% of book value. The concept of credit unions buying banks is a relatively new phenomenon, and was discussed in greater depth in the September/October 2019 report. HB
RkJQdWJsaXNoZXIy MTg3NDExNQ==