Salt Lake City-based M3F Inc. initiated six new positions in the second quarter, including two stakes worth a combined $15.8 million in Fifth Third Bancorp and Wells Fargo & Co., according to the company's Aug. 4 Form 13F filing.
As of June 30, the company held $91.2 million in financial stocks, down from $94.7 million at March 31. M3F was founded in 2009 and focuses on common stock investments in the financial services industry. The principals are Jason Stock and William Waller.
M3F's $8.8 million initiation in Fifth Third became the firm's third-largest position as of June 30. The super-regional bank's shares have lagged so far this year and were actually in the red 2.7% as of June 30, compared to a 4.4% return for the SNL U.S. Bank and Thrift Index and a 9.3% return for the S&P 500.
Likewise, Wells Fargo & Co., M3F's fourth-largest investment at $7.0 million, has also struggled this year, returning 1.9% as of June 30. Wells Fargo is still dealing with the fallout from last year's consumer accounts scandal and recently agreed to pay $80 million in remediation to customers for its faulty collateral protection insurance policies. The Wall Street Journal reported that Wells Fargo is also in talks with the OCC over the auto insurance issue and could face further sanctions.
M3F had previously held a stake in Wells Fargo worth $3.9 million at the end of last year, but sold it off in the first quarter.
M3F exited nine positions during the second quarter which were worth a combined $30.7 million as of March 31. Four of the company's "exits" were due to a company being bought out during the quarter. M3F's largest exit was an $8.7-million stake in Middleburg, Va.-based Middleburg Financial Corp., which was acquired by Reston, Va.-based Access National Bank, a subsidiary of Access National Corp., on April 1.
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