Brass Tacks
Actionable Item
The origin of the first phrase, dating from the late 1800s, is disputed. Some believe it alludes to the brass tacks used under fine upholstery, others that it is Cockney rhyming slang for “hard facts,” and still others that it alludes to tacks hammered into a sales counter to indicate precise measuring points.
January 23, 2024
First Seacoast Bancorp, Inc. (FSEA): This recently demutualized bank is listed on the NASDAQ, but orphaned. FSEA sold assets in order to position themselves to buy back shares on their one year anniversary. This bank will probably sell to the high bidder on their three year anniversary. They lack growth prospects and are undersized as a standalone bank in the public market. Meanwhile, they could do a sale/leaseback on their headquarters to generate more flexibility to buy back more shares. Shares trade at about 53% of tangible book value. Their securities portfolio is only okay. They have a good deposit base. They have a good geographical footprint. They have a decent exposure to 1-4 family loans on their books which is not optimal. They will be more valuable if interest rates come down.
$12 would be a fair exit price to a price-sensitive strategic buyer. But this would be an easy acquisition for a price-insensitive credit union to buy for as much as $20 per share just because they can pay it and don’t care what they pay. In recent days, we’ve seen two more than full prices paid by credit unions mutualizing banks.
This one is no rush, but is a reasonable 10% allocation of your assets at a price of $9 per share or lower with a potential catalyst in two years and exit in the high teens. Meanwhile, it will be of limited entertainment value.
May 5, 2026
A theme for this project is how price-insensitive mutual buyers can be. Exhibit A:
Cambridge Financial and First Seacoast Merge
Cambridge Financial and First Seacoast (FSEA) entered into a definitive merger agreement under which First Seacoast will merge with Cambridge.
The all-cash transaction is valued at ~$81 million. First Seacoast’s stockholders get $17.25 per share in cash.
The merger is subject to regulatory and First Seacoast stockholder approval. Closing is expected by October 2026.