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Merion Road Capital Management, an investment advisor, released its third-quarter 2024 investor letter. A copy of the letter can be downloaded here. In the third quarter, Merion Road Small Cap Fund returned +5.4% bringing the YTD returns to +11.2%. This compared to a +9.2% return for the Russell 2000 Index in the quarter and an +11.0% return in YTD. The long-only portfolio of Merion Road rose +5.1% during the quarter bringing the YTD returns to +20.5%. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2024.
Merion Road Capital Management highlighted stocks like United Bancorporation of Alabama, Inc. (OTC:UBAB) in the third quarter 2024 investor letter. United Bancorporation of Alabama, Inc. (OTC:UBAB) is a bank holding company for United Bank that provides banking services. The one-month return of United Bancorporation of Alabama, Inc. (OTC:UBAB) was 6.04%, and its shares gained 45.41% of their value over the last 52 weeks. On November 8, 2024, United Bancorporation of Alabama, Inc. (OTC:UBAB) stock closed at $56.20 per share with a market capitalization of $199.607 million.
Merion Road Capital Management stated the following regarding United Bancorporation of Alabama, Inc. (OTC:UBAB) in its Q3 2024 investor letter:
"United Bancorporation of Alabama, Inc. (OTC:UBAB) appreciated modestly despite mixed Q2 results. During the quarter the Treasury announced proposed disposition guidelines for institutions that received ECIP capital. As a reminder, UBAB received $124mm in perpetual preferred equity through the ECIP program that costs no more than 2.0% p.a. and have little to no voting rights. Within the proposed disposition guidelines is a framework for ECIP participates to buyback the security at a price equal to the present value of future interest payments. Based on prevailing rates, the Treasury estimated that this would result in a purchase price between 7% and 28% of the principal amount. This is obviously great news, but is not new.