Life Insurance Company of Alabama Repurchases Massive Block of Stock ($LINSA)

There is something interesting on page 5 of the quarterly statement for Life Insurance Company of Alabama (LICOA) for Q3 2021. 


Notice the "change in treasury stock" since the beginning of the year.  

We knew that on June 14th, a block of 205,221 LINSA (LICOA non-voting) shares had traded for $24 per share, and that the same block traded again on July 22nd for $32 per share. But we did not know who had bought for $24 (a $4.9 million purchase) or $32 ($6.6 million).

However, we now see that LICOA's regulatory financial statements for the third quarter of 2021 disclose a $6,576,662 purchase of treasury stock. That would be $32.05 per share if it was that same block from July. That purchase price was well below book value (approximately 75% of statutory book), and it was for a huge percentage (~20%) of the company, so the result is very accretive to book value. 

LICOA borrowed $6,600,000 from the Federal Home Loan Bank of Atlanta in connection with the share repurchase. Perhaps management has finally figured out that it makes sense to replace outside shareholder capital with cheap debt, especially if shares can be had at a discount to book value.

The minority shareholders who sued the company in the US District Court for the Northern District of
Alabama in 2019 are awaiting a ruling from the court on the company's motion to dismiss their case. Be sure to check out the Concerned Shareholders of Life Insurance Company of Alabama website as well.

LICOA Quarterly Statement Q3 2021 by Nate Tobik on Scribd

Previously, regarding Life Insurance Company of Alabama:

Posted by Oddball Stocks Newsletter

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