Tomorrow I am heading off to Phoenix for one of my favorite conferences of the year. The Bank Director Acquire or be Acquired conference brings together bankers, investment bankers, consultants and other key figures in the community banking industry to discuss M&A trends and other developments in the industry. This year I expect we will hear a lot of talk about fintech and cybersecurity issues, in addition to chatter about the ongoing urge to merge in the industry. All told, there will be over 1,000 bankers and executives from companies that serve the banking sector in attendance, so it is a fantastic opportunity to learn more about the sector and uncover new ideas.
Al Dominick of Bank Director noted that there would be around 100 executives from fintech companies at the conference this year. That is not surprising to me, as I have said for some time that may of the fintech companies are starting to figure out that their best choice may be to merge or partner with an existing financial institution. This applies especially to payments and high-tech lenders, as the bank have a huge advantage over them -- in the form of deposit funding and FDIC Insurance. I will be tracking the hallway buzz on this subject carefully, as I think there is an investable opportunity in mobile payments and nonbank lenders developing in 2017.
Before I head out to the desert to hang to with bankers, I thought I would take a quick look at what bankers were doing with their cash as the market rallied post-election. Bankers are in the best position to understand how they will fare in the brave new world of a Trump presidency and GOP-controlled Congress. Those that are buying shares of their bank, even as prices began to improve, are casting a huge vote of confidence in strong earnings improvement that leads to higher stock prices over the next few years.
I have owned shares of Westbury Bancorp (WBB) for several years now, and the stock has been pretty good to me. Westbury was a mutual conversion back in 2013, and management has done an excellent job of growing the bank since the deal was done. Assets have grown from $529 million to $733 million over the past three years, while focusing on basic banking.
I met several executives of the bank last year in Phoenix, and I was impressed with their approach to the business. WBB's loan underwriting is among the best in the business -- with nonperforming assets at just 0.10% of total assets. It has a balanced loan portfolio with a mix of single-family mortgages, commercial real estate loans and multifamily projects in its region. It is expanding -- and just opened a new loan production office in Madison, Wisconsin, which is near its Westbury, WI, home. Since the election, several executives, including both the CEO and CFO, have opened their checkbooks and added to their stake in the bank they run.
I have also owned shares of AmeriServ Financial (ASRV) for some time, with pleasant results to date. It has a loan portfolio that is a little more tilted towards commercial, but ASRV has also done a fantastic job of underwriting loans. Nonperforming assets are just 0.17% of total assets right now, which is well below the national average. It has about $1.2 billion of assets, so AmeriServ has crossed what many think is the industry survival line. Management just announced that they had established a buyback program that authorizes the repurchase of 5% of the outstanding shares of the bank. It also pays a dividend that provides a yield of 1.54%, so management is fairly shareholder friendly.
When announcing the buyback this week, CEO Jeffrey Stopko told shareholders, "The announcement of this new common stock repurchase program reflects our belief that the current ASRV stock price does not fully reflect the value of some of the key strategic initiatives that we accomplished in 2016, which included: the payoff of $21 million of Small Business Lending Fund preferred stock, an increase in our common stock cash dividend and continued solid growth in our community banking business." He not only is using the bank's money to buy the stock, he opened his own checkbook recently and increased his holding in the bank. With the stock trading at just 89% of tangible book value, outside investors might want to do the same.
The Acquire Conference kicks off at the unfriendly hour of 8:00 a.m. MT Sunday morning. I will be there for the bell and will report back Monday on some of my findings from the initial sessions of my favorite banking-industry annual event.