CCF Holding Co, Jonesboro, GA (CCFH)

A Case of Southern Revival


The Heritage Bank resurrection story warms my heart. Of the 12 banks that were headquartered in Georgia's Clayton and Henry Counties in 2008, Heritage is the only one that survived the Great Recession.

The Heritage Bank franchise lost a huge percentage of its equity at the time, but clearly it did not lose faith! Since then, asset quality, growth, and scarcity value have all risen to such a glorious degree that I can see CCFH stock trading at 150% of book value within the next two years. And if the bank's board decides to sell, the stock could deliver twice book.


Disclosure: As of this posting, I own shares of CCFH and may subsequently either dispose of them or purchase more.


Prospective Buyers

Wrapping Heritage Bank into its fold would fill a real need for any one of these organizations that suffer from lack of marketshare in the area:

Ameris Bancorp, Moultrie, GA (ABCB)
State Bank Financial, Atlanta, GA (STBZ)
United Community Banks, Inc, Blairsville, GA (UCBI)

Financial Snapshot
as of 06/30/2016
Total assets:$415M
Tangible book value per share:$1.08†*
NPAs to assets:2%
Price to book:88%*
Market cap:$37M*
Dividend yield:0%
Trailing 12-month return on assets:5.6%†**
Trailing 12-month return on equity:64.2%
*Tangible book value per share, price to book, and market cap adjusted for exercise of warrants and conversion of preferred shares.
**ROE and ROA numbers are misleading due to the bank's DTA recapture.

Luminaries

David Turner, Chairman
Leonard Moreland, President and CEO
Katherine Zovlonsky, Senior VP and COO

Gold Stars

The Heritage Bank resurrection story in a nutshell:



THEN*
NOW
NPAs to Loans
Over 24%
3%
Texas Ratio
267%
20% and falling
Equity
$7.7M
$38M
Net Loans
$242M
$275M
Deposits
$327M
$362M
* YE 2012, 2013

Sources

  • Confidential interviews with shareholders and analysts