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New York Community Bank (NYCB): $3.54
Est. Tangible Book Value Per Share: $6.22 (after dilution from warrants)
Market Cap: $2.74 B
Insiders of regional banks were big buyer of their stock in March 2023 even as the Silicon Valley Bank implosion was taking place. We wrote about First Citizens Bancshares (FCNCA) for the May 2023 Special Situations newsletter as a beneficiary of the crisis and because we felt that the company was trading below our $1,160 tangible book value estimate. We felt that the stock should be trading closer to 1.3 times tangible book value ($1,508) and last Friday the stock eclipsed $1,600 per share.
When I saw the debacle with New York Community Bank (NYCB) earlier this year, I was reminded of the regional banking crisis from last year and was wondering if this situation also presented an opportunity like First Citizens. When I presented the First Citizens idea at ValueX Vail last year, I mentioned that insiders often tend to rush into burning buildings and are usually early. Even if the fire in a burning building doesn’t kill you, you can still die from smoke inhalation. As investors, we can sometimes wait for the smoke to clear before stepping in. We might lose some of the early upside but the odds might be more in our favor.