Author Topic: BKUTK/BKUT - Bank of Utica  (Read 4846 times)


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BKUTK/BKUT - Bank of Utica
« on: October 15, 2013, 02:49:34 PM »
anyone else own this?

sources (I am not the author of any of the below)

So Bank of Utica is a family controlled community bank with a huge equity cushion as a % of capital and trades at 2/3 of book. I pretty much agree with everything in the above writeups and it is easy to see why this is so cheap: no liquidity and no catalyst (it has taken me a bit to build a small position).

the business model is unlike any other bank (at least i haven't found similar). they are in the 99th percentile in terms of keeping expenses low (1 branch few employees) and similarly in the 99th percentile of deposits/employee. they use their deposits to fund an investment operation that keeps the majority of assets in foreign debt securities and a very large portion for a bank (8%) in equities.

They are terrible at lending and lending opportunities in Utica are slim to none. I expect there to be more losses in the loan book soon, but thankfully it is small.

I looked up the county tax records and the sinnotts appear to live very humbly, do not overpay themselves and give a portion of earnings to shareholders.

i am proud to be a part owner of this business and think that i'll easily make 10+%/year in perpetuity (7% ROE/66% Price/book) as long as management remains ethical and whatever securities they are investing in do not blow up on me ( a possibility ).


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Re: BKUTK/BKUT - Bank of Utica
« Reply #1 on: October 15, 2013, 04:56:23 PM »
I own it.  I thought it seemed cheap, but I am super scared of banking, so it is a very small part of assets.  Non accrual loans are like 10% of loans if I remember right, but like you said loans are a very small part of assets.

Are there other banks like this that have loans as such a small part of their business?
When stocks are high, money rates rising, and business prosperous, at least half a given fund should be placed in short-term bonds. - Philip Carret


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Re: BKUTK/BKUT - Bank of Utica
« Reply #2 on: October 15, 2013, 08:13:53 PM »
Very familiar with the name, looked at them a few times and never pulled the trigger.  The risk is the hidden one, you're investing in a bond fund run by the CEO, most of the bonds are corporates and foreign sovereigns.  He's done well, and in a rate shift environment the portfolio would move much slower than the loans.

Other banks? How about WVFC, they're located near me, extremely conservative in their lending, most of their portfolio is in securities.  I'm planning on attending the annual meeting in two weeks.

Matt raises a good point, NPA/Loans is high 8% or so, looks like it was a single commercial loan that went bad.

Here are other banks in the US with a loan to deposit ratio below 40% that are traded, happy hunting!:
The ultimate edge for bank investors:


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Re: BKUTK/BKUT - Bank of Utica
« Reply #3 on: December 12, 2015, 12:40:43 PM »
Equity (ex Equities ) in the end of 2013 was at 87,287 million $. Net income for 2014 (ex dividend income, ex-security gains, ex other comprehensive income) was at 8,08 million $.

That is a return on equity of 9,26% on the core business. That numbers are pretty impressive because nearly the full portfolio is in investment grade bonds.

So i think the business has really an advantage in an commodity business. I checked the interest rates offered by the Bank of Utica and the competition and they are ahead of the competition. So they can produce an good return for them self and best interest rates for their customers and this with low risk.

Maybe they will have some headwinds with the business model in a period of rising rates. But i think the one branch bank model with over one billion $ in assets is an big advantage.

The big question for me is what is in that equity portfolio?

Of their 180,480 million $ of equity; there are 77,204 million $ in equity securities (as of 30th September 2015).

Could it be that they bought stock in other banks (with more loans) in the last years? That could be a great move for the future. What if they have a big portfolio of m&t, wells fargo and others on the side.
But of course that is speculation, i don t know what they hold.

With the stock price at 399$ for the non-voting stock the company is priced at a bit unter 100 million Dollars.

For that u get a profitable business with little risk and a cost-advantage and a big equity portfolio for free.


I don t know the rules in the USA exactly. But i think with an equity portfolio of over 100 million$ you have to make your stock portfolio public (13F).
That could be a cataylst. What if i m right (and think, they are bankers) and they have an big portfolio of US banks ? 8)

This would be a Daily Journal Corp (without Munger) but far under book and a profitable and growing core business.

Bkutk is at 55% of it s last book value with over 3% dividend yield.

« Last Edit: December 17, 2015, 11:34:45 AM by Ulrich »


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Re: BKUTK/BKUT - Bank of Utica
« Reply #4 on: March 04, 2016, 02:14:26 PM »
391$ per non-voting stock. Really becomes deep value at 52% of tangible book.

Does someone know it there are other bigger stockholders than the sinnots, i only see one fund invested. But the stock is just too thinly traded in my eyes.

I tried a write up for myself (sorry for my english):


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Re: BKUTK/BKUT - Bank of Utica
« Reply #5 on: March 04, 2016, 07:43:19 PM »
There is no need to apologize for your English, it is much better than my German.

In my opinion, the problem of Bank of Utica from a shareholder perspective is wholly contained within this picture.  Barry looks quite young (Apparently Sinnott's go bald early and in return get to live a long time), so if you are waiting for a management change, I think anything before 2075 is unlikely.   The bank is being run for Sinnotts and their family's role in the community.  If increasing family wealth was a higher priority for them than upholding community standing and tradition, then I believe the family would have already bought some shares back by now.  Not only would a share buy back be instantly accretive, but it would remove those pesky out of town shareholders from the rolls as well. The combination of those two benefits seems so obvious that you have to believe it has been considered and summarily dismissed as not worthy of further consideration.

Your best hope is that a banking regulatory change will eventually make them return to making loans rather than investments in order to keep their banking charter and the company will instead of making loans decide to return capital.  You do get paid a growing dividend while you wait, but unless you can outlive everybody in the picture, you might never see a big payday.


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Re: BKUTK/BKUT - Bank of Utica
« Reply #6 on: March 05, 2016, 01:06:14 AM »
On the bright side, that desk/wood-paneling/computer screams shareholder-friendliness.


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Re: BKUTK/BKUT - Bank of Utica
« Reply #7 on: April 02, 2018, 08:36:49 PM »
Anyone get the latest annual report.  What do people think will happen with the mark to market accounting?