By: Manisha Sethi Sep. 10, 2018

Banc Funds Co LLC reported its SEC 13F filings for Q1 2018 on May 11. The reported value of its portfolio is $1953.96 million, with the top 10 holdings accounting for 18.52%. Of the top holdings, Mercantile Bank Corp. (MBWM) and Peapack Gladstone Financial Corp. (PGC) account for 2.48% and 2.20% of the investor’s portfolio respectively. Banc Funds Company LLC was founded in 1986 and is based in Chicago, Illinois. Mr. Charles Joseph Moore is the founder and president of the firm. The leading investor in subregional financial services in the US, the firm primarily invests in small banks, life insurance companies, and other financial institutions.

Raltin recently analyzed new buys by the investor from Q1 2014 to Q1 2018 and calculated their internal rate of return (IRR). Findings show that 50 stocks out of 76 new purchases outperform S&P 500 while only 6 underperform the index by more than 20%. The  details of Raltin’s methodology are given here. The table below shows the performance of the new purchases with respect to S&P 500.

S&P outperformance categoryNumber of New Stock PurchasesTotal New Purchases (%)
>20%1621.05
10 to 20%1418.42
0 to 10%2026.32
-10 to 0%1519.74
-20 to -10%67.89
<-20%56.58
Total Stocks76

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Banc Funds bought 12 new scrips this quarter, including Franklin Financial Services, Towne Bank, and Highlands Bancorp Inc. The table below shows all the new buys for Q1 2018, along with their holding value and number of shares.

StocksNumber of sharesHolding Value ($1000)
Franklin Financial Services Corp. (FRAF)133,5594,880
Towne Bank (TOWN)158,1084,522
Centric Financial Corporation (CFCX)372,9923,394
Highlands Bancorp Inc. (HSBK)230,7203,057
SB Financial Group Inc. (SBFG)138,8892,569
Freedom Bank of Virginia (FDVA)179,0592,271
Bridgewater Bancshares Inc. (BWB)100,0001,307
Grand River Commerce Inc. (GNRV)181,8191,089
Greater Hudson Bank (GHDS)189,149965
First Reliance Bancshares (FSRL)84,792627
First Farmers and Merchants Corporation (FFMH)12,500498
Citizens Community Bancorp Inc. (CZWI)23,000322

The table below shows the investor’s portfolio value for the past five quarters starting from Q1 2017. In addition to this, it identifies the top 3 stocks that have significantly outperformed the S&P 500: FB Financial Corporation, Pacific Premier Bancorp Inc. and Towne Bank.

PeriodTotal portfolio value ($Mn)Top holdings (ticker, % of IRR difference from S&P 500)
Q1 20172,320.23
Q4 20162,356.23
Q3 20161,810.54FB Financial Corporation (FBK, 71.04), Pinnacle Financial Partners, Inc. (PNFP, 7.67), Chemical Financial Corp. (CHFC, 2.28)
Q2 20161,714.75
Q1 20161,589.89Pacific Premier Bancorp, Inc. (PPBI, 65.69), Towne Bank (Portsmouth, VA) (TOWN, 54.13), German American Bancorp Inc. (GABC, 32.31)