CA - Moon Capital - Merchants Bancorp: The Bank You've Never Heard Of

2024-02-08 08:10:00 ET

Summary

• We recently purchased shares of Merchants Bancorp.
• MBIN has compounded its tangible book value 30% annually for the last five years.
• MBIN, at our purchase price of five times earnings, carries one of the lowest multiples in the entire sector.
• We expect future earnings increases should approximate the company's growth in underlying book value.

The following segment was excerpted from this fund letter.

Merchants Bancorp ( MBIN )

We recently purchased shares of Merchants Bancorp, one of the best run banks you've never heard of. The company has compounded its tangible book value 30% annually for the last five years - compared to 7% for First Horizon, 9% for JP Morgan and only 4.5% for the S&P 500. MBIN consistently earns a 25%+ return on tangible equity, operates with one of the best efficiency ratios in banking yet, at our purchase price of five times earnings, it carried one of the lowest multiples in the entire sector....

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