Chicago-based Banc Funds Co. LLC disclosed 13 new bank and thrift holdings, including six companies that completed an IPO during the fourth quarter of 2017, according to the firm's latest Form 13F filing.

The firm's largest new position, a $13.6 million stake in Columbia, S.C.-based South State Corp. was likely due to South State's acquisition of Charlotte, N.C.-based Park Sterling Corp. on Nov. 30, 2017. Banc Funds had previously held a $16.4 million position in Park Sterling at the end of September last year.

The firm's next five largest new positions all completed an IPO in the fourth quarter: Malvern, Pa.-based Meridian Bank, Southfield, Mich.-based Sterling Bancorp Inc., New York-based Metropolitan Bank Holding Corp., Carmel, Ind.-based Merchants Bancorp and Santa Rosa, Calif-based Luther Burbank Corp. Banc Funds also disclosed a $3.1 million stake in Beaumont, Texas-based CBTX Inc., giving the fund manager a position in all six of the banking industry's fourth-quarter IPOs.

Despite the multiple new investments, Banc Funds' total portfolio shrank by $84.7 million during the fourth quarter to $2.15 billion. The hedge fund increased its investment in Bedminster, N.J.-based Peapack-Gladstone Financial Corp. to $51.6 million as of year-end 2017, making the company its No. 1 position.

Banc Funds also increased its shares in Irvine, Calif.-based First Foundation Inc. by 25.2% quarter over quarter, making First Foundation a top 20 holding by market value at $20.9 million. On Dec. 19, 2017, First Foundation announced plans to acquire Los Angeles-based PBB Bancorp. Banc Funds also initiated a $3.5 million stake in PBB during the fourth quarter.

The hedge fund completely exited 17 positions during the fourth quarter that were worth a combined $82 million as of Sept. 30, 2017. Seven of the exits were targets of completed mergers.

Banc Funds largest non-M&A-related exit was a $5.7 million stake in Los Angeles-based RBB Bancorp.

Banc Funds was founded in 1986 by Charles Moore, and is focused on the financial sector, with most of its holdings in "subregional" depositories.

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