TCBS

TCBS is a tiny (~$430M-asset) post-conversion Texas thrift whose FY2025 net income of $2.84M (+317.8% YoY) looks like a dramatic turnaround, but the multi-year record — +$518K (2021), +$1.75M (2022), -$733K (2023), -$1.30M (2024), +$2.84M (2025) — shows the earnings are lumpy, not durable. The MD&A explains the swings: results 'depend primarily on our net interest income' and provision for credit losses, and management notes it 'sold a block of residential loans in order to restructure the loan portfolio' in 2024, so the low base makes the YoY growth flatter than it reads. Total assets actually shrank 3.1% and operating cash flow fell 29.6%, so this is not a growth story — it's a small community bank normalizing off a bad patch.

The case for owning it is the balance sheet and capital return, not the P&L. At $17.95 the stock trades at roughly 0.96x the $18.62 book value per share ($53.8M equity / 2.89M shares), and management repurchased $3.16M of stock (+100.4% YoY) — about 6% of the ~$52M market cap in a single year — shrinking the share count 5.8% while retained earnings grew 7.5% to $32.4M. Buying stock below book is accretive to book value per share and puts a floor under the price. Leverage of 7.0x liabilities/equity is normal for a bank, and the modest $593K dividend is well covered.