Interview with Jim Royal on Thrift Investing
Last week, I had the pleasure of interviewing Jim Royal, on his new book, The Zen of Thrift Conversions.
You can watch the entire interview at the bottom of this page.
I highly recommend his book which you can purchase here. Also, be sure to check out Jim’s site which you can use to track thrifts.
The coolest aspect about thrift investing (in my opinion) is you can become a depositor and then participate in their exclusive IPOs that almost always results in a ~20% one day pop (due to quirks that we discuss).
During the interview, we discuss:
0:45 Jim’s Background
3:27 Why did you write the book?
5:38 What is a thrift?
8:00 How do depositors benefit from their “ownership” of the bank?
10:00 What is the basic math behind the thrift conversion?
11:50 How does a thrift IPO compare to a typical IPO?
12:55 Why do thrift’s IPO if they don’t need money?
14:15 Do thrifts ever go bankrupt?
16:55 How do thrift activists improve alignment?
17:55 Why are thrifts set up for a period of outperformance?
19:55 How can individual investors set up bank accounts to get preferred access to thrift IPOs?
23:30 How to predict which thrifts are likely to IPO in the near term?
24:56 How much do you need to deposit to get a full allocation to the IPO?
28:15 How do you invest your personal capital?
29:05 What is the average take out multiple on a price to tangible book value basis?
30:40 What is the typical first day pop for a thrift IPO?
31:25 How do you find thrift investment opportunities?
34:00 Nine step checklist to evaluate a thrift
36:35 Define tangible book value
42:30 What is your strategy for tracking thrift activists?
46:02 What are your top thrift picks today?
50:22 Why are thrifts great take out candidates?
57:10 Jim’s closing comments.