A Case of Time-Tested and True
Exchange Bank of Milledgeville is a true family bank, a true community bank, and a true opportunity for investors today.
Descendants of its founding family control 22% of EXCH shares, the current CEO is married to the founder's great granddaughter, and most of the bank's loans and deposits are local.
The opportunity is this: investors can buy EXCH today for $39 and reasonably expect it to trade at $100 or better in three years, when the bank will likely be earning $6 per share and have attained book value approaching $70.
Disclosure: As of this posting, I own shares of EXCH and may subsequently either dispose of them or purchase more.
Prospective Buyers | Exchange Bank of Milledgeville would be highly valued by these potential acquirers, but the bank is earning enough to justify remaining independent.
South State Corp, Columbia, SC (SSB)
State Bank Financial, Atlanta, GA (STBZ)
United Community Banks, Blairsville, GA (UCBI) | ||||||||||||||||
Financial Snapshot
†as of 12/31/2017 |
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The Crew
| William R Allen, Chairman Henry Jackson Pope, Jr, President and CEO Roy D (Casey) Washburn III, Senior VP, COO, CFO | ||||||||||||||||
The Skinny
| Milledgeville was Georgia’s capitol from 1802-1868. Two of the three colleges operating in Milledgeville today were founded after the capitol moved to Atlanta — Georgia Military College (1879) and Georgia College & State University (1889). Milledgeville's two biggest banks were founded shortly after — The Merchants and Farmers Bank, now Century Bank and Trust (1898), and Exchange Bank of Milledgeville (1903). Exchange Bank was founded by Otto Conn. It now holds 27% of Milledgeville’s deposits, lagging its long-time competitor Century Bank and Trust by only 6%. In 115 years there have been only eight presidents of Exchange Bank. - - - Milledgeville is still a college town, and a college town is a great place to be a bank. 7,000 students attend Central Georgia Technical College alone. Milledgeville is also a steadily growing town and its two original banks have been growing right along with it. Exchange Bank's book value per share has risen from $35.50 to $50.05 over the past four years. My prediction is that both banks will continue to grow, but since Century Bank and Trust is privately held, I can't share anything of interest for my fellow investor-readers about it. I can say that with 13% equity to assets, Exchange Bank can increase dividends and buy stock back for higher-than-past book value accretion. | ||||||||||||||||
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