Logansport Financial: A Contrarian's Gem in the Regional Bank Sector

In a market obsessed with growth at all costs, Logansport Financial Corp. (LOGN) offers a contrarian’s dream: a regional bank delivering a 6.1% dividend yield amid robust earnings growth, stable asset expansion, and a valuation so undervalued it defies logic. With shares trading at a price-to-book ratio of just 0.91–1.18, this Indiana-based community lender is a rare opportunity for investors seeking steady income and asymmetric upside in a volatile market. Here’s why Logansport deserves a closer look—and a place in your portfolio today.

The Dividend: A Steady Beacon in a Volatile World

Logansport’s dividend machine is its crown jewel. The bank has paid $0.45 per share quarterly since 2024, with no breaks or cuts—a full four payments at this rate in 2025 alone. At current prices, this translates to a 6.1% annualized yield, far outpacing the 1.2% average dividend yield of S&P 500 banks. Crucially, the payout is conservative and sustainable: Q1 2025 earnings of $0.61 per diluted share easily cover the $0.45 dividend, leaving room for reinvestment in growth.

Financial Firepower: Growth, Not Gimmicks

Logansport’s dividend isn’t a flash in the pan. The bank has delivered 39% YoY diluted EPS growth in Q1 2025, driven by a 9.3% rise in total assets to $266.2 million and a 28% jump in deposits to $229.5 million. Net interest income hit $1.922 million, up 19% year-over-year, as the bank lent aggressively while trimming short-term borrowings. Even its nonperforming loans (NPLs)—a red flag in banking—are manageable. While NPLs rose to $3.1 million in Q1 2025 (up from $0.5 million in 2024), this reflects prudent loan growth, not deteriorating credit quality. At 1.8% of total loans, NPLs remain below the 2.5% industry average for regional banks, and no real estate owned (REO) assets weigh on the balance sheet.

Valuation: A Contrarian’s Delight

Logansport’s shares are trading at a price-to-book ratio of 0.91–1.18, a stark contrast to the 1.5–2.0 average for regional banks. For context, KB Financial (KB) and First Horizon (FHN) trade at 1.3–1.7x book, while Logansport’s community-focused model—serving Cass County, Indiana, with tailored loans and deposits—arguably justifies a premium, not a discount. This undervaluation creates a compelling asymmetry: even a reversion to a 1.5x book multiple would imply a 60% upside, excluding earnings growth.

Why Contrarians Should Love This Now

• Community Focus = Resilience: Logansport’s small-town ties reduce exposure to macroeconomic swings. Its borrowers are local businesses and homeowners, not volatile corporate clients.
• Dividend Safety: With a coverage ratio of 1.35x (earnings per share vs. dividend), the payout is safer than most peers.
• Low Competition, High Liquidity Potential: Minimal daily volume (typically under 100 shares) means fewer investors are pricing in its value—yet.

Risks? Yes—but Priced In

Critics will note Logansport’s rising NPLs and its OTC listing (vs. Nasdaq or NYSE). But the NPL jump is a blip, not a trend, and its OTC status merely reflects its small size ($266 million in assets) rather than instability. Meanwhile, interest rate sensitivity is real, but the bank’s 2025 net interest margin expansion suggests it’s navigating Fed policy adeptly.

Bottom Line: Buy the Dividend, Bet on the Turnaround

Logansport Financial is a contrarian’s playground: a 6.1% yield, 39% EPS growth, and undervalued assets make it a rare blend of income and appreciation potential. With shares near $29.75—a price unchanged for weeks—now is the time to act before the market catches on.

Action to Take: Buy LOGN now at $29.75 for a 6.1% yield. Set a 12-month price target of $40–$45 based on a 1.5x book multiple, with upside to $50 if earnings beat estimates. Hold for the dividend and the eventual revaluation.

In a world of overhyped tech stocks and volatile markets, Logansport Financial is the quiet, reliable income play contrarians have been waiting for. Don’t let this gem slip away.