Investment Value Analysis Report on Peoples Financial (PFBX)

Well-known activist investor Joseph Stilwell increased his stake in Peoples Financial Corporation (PFBX) by 1,652 shares through his affiliated fund on January 2, 2026, at a price of $20.50 per share, with a total transaction value of approximately $33,866[1]. This move signals the continued optimism of this activist investor, who is known for value investing and focuses on community bank investments, towards the stock. As a major shareholder with over 10% ownership and a board member, Stilwell’s share purchases merit in-depth analysis of their implications for investment value.

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Joseph Stilwell is the founder and managing partner of Stilwell Value LLC, which operates an activist investment fund with approximately $242 million in assets under management[2]. He graduated from the Wharton School with a degree in Economics in 1983, and is one of the most experienced activist investors on Wall Street.

Stilwell’s investment career is renowned for his focus on community banks. According to public records, he has successfully launched dozens of activist campaigns over the past two decades, primarily targeting poorly managed or operationally inefficient community banks[3]. His investment style is known for being direct and decisive; during a proxy fight for Harvard Illinois Bancorp, he took a photo of the bank’s chairman sleeping at a shareholder meeting to highlight his criticism of management complacency[3].

Stilwell Capital (the investment arm of Stilwell Corporation) adopts a

, using family capital to build enduring value[4]. Its core investment principles include:

Investment Principle	Details
Time Horizon	Long-term holding, no pressure for quick exit
Capital Nature	Patient capital, allowing the company to grow at its natural pace
Strategic Support	Provide strategic support and resources, rather than short-term intervention
Relationship-Oriented	Partnership based on trust and shared goals
Value Creation	Unlock shareholder value through governance improvement and operational optimization

According to SEC Form 4 filings, the Stilwell Group currently holds PFBX shares through the following entities[1][5]:

Entity Name	Number of Shares Held	Status
Stilwell Activist Investments, L.P.	416,547 shares	Direct holding
Stilwell Value Partners VII, L.P.	205,760 shares	Indirect holding
Stilwell Activist Fund, L.P.	67,505 shares	Indirect holding

, representing over 10% of the company’s total outstanding shares, making it one of PFBX’s largest single shareholders[1].

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Peoples Financial Corporation is a bank holding company founded in 1985, headquartered in Biloxi, Mississippi. Its wholly-owned subsidiary, The Peoples Bank, was founded in 1896 and is one of the oldest financial institutions in the region[6].

• Market Capitalization:
  $94.66 million
• Current Stock Price:
  $20.50
• Industry:
  Financial Services - Regional Bank
• Branch Network:
  17 branches
• Total Employees:
  134 (131 full-time)

According to the company’s 2024 Annual Report (Form 10-K)[6]:

Financial Metric	2024	2023	2022	YoY Change
Total Revenue	$33.09M	$26.47M	$23.71M	+25.0%
Net Income	$21.70M	$9.17M	$8.94M	+136.6%
Earnings Per Share (EPS)	$4.66	$1.96	$1.91	+137.8%
Dividend Per Share	$0.44	$0.53	$0.19	-17.0%

• Net income saw explosive growth, primarily driven by a significant adjustment to deferred tax assets
• Loan balances remained stable ($233.6M), with controllable asset quality
• Total delinquent loans amounted to $1.67M, accounting for 0.72% of total loan balances
• Cash and deposits with banks surged to $107.7M (compared to $22.8M in 2023)

Metric	Value	Assessment
Total Assets	$831.85M	Robust
Shareholders’ Equity	$90.00M	Adequate
Capital Adequacy Ratio	~10.8%	Meets regulatory requirements
Liquid Assets Ratio	~65%	Highly conservative
Leverage Ratio	~9.2x	Moderate

The company’s balance sheet demonstrates

and a . Approximately 65% of its assets consist of cash, government bonds, and investment-grade securities. While this limits yield, it also means strong risk resistance in a volatile interest rate environment.

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Valuation Metric	PFBX	Industry Average	Evaluation
P/E (TTM)	20.08x	~15.0x	Relatively high
P/B	0.95x	~1.2x	Discounted
P/S	2.93x	~2.5x	Slightly high
ROE	4.96%	~9.0%	Relatively low
Dividend Yield	~2.1%	~3.0%	Moderate

PFBX is currently trading at a P/B ratio of 0.95x, meaning the stock price is approximately 5% below its book value per share. For a bank with a stable deposit base and ample cash reserves, this discount may reflect market concerns about the following factors:

1. Insufficient Profitability:
   ROE is only 4.96%, significantly lower than the regional bank average of around 9%, indicating room for improvement in capital utilization efficiency
2. Limited Growth Prospects:
   As a small regional bank, its expansion space is constrained
3. Operational Efficiency:
   The ratio of non-interest expenses to revenue is relatively high

Despite the P/B discount, the 20x P/E ratio is relatively high compared to the industry average of 15x, primarily due to the abnormal growth in 2024 net income (which included one-time tax gains). After excluding non-recurring items, the P/E ratio corresponding to the company’s actual profitability may be even higher.

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Stilwell has a

in community bank investments. Take Wheeler Real Estate Investment Trust (WHLR) as an example[3]:

• Served as an independent director starting in 2019
• Drove cost cuts and asset sales through active governance
• Pushed for improvements to the company’s capital structure and dividend policy
• His activist strategy ultimately created significant value for shareholders

According to SEC Form 4 filings, the Stilwell Group holds over 10% of PFBX’s shares, forming a “13(d) group” and requiring regulatory disclosure[1][5]. This level of ownership implies:

• Substantial Influence:
  Can nominate directors and participate in major decision-making
• Signal of Long-Term Commitment:
  A large stake indicates confidence in long-term value
• Information Disclosure Advantage:
  As an insider, has access to more detailed financial and operational information

Increasing his stake in January 2026 when the stock price was at the midpoint of its range ($20.50), rather than waiting for a lower price, indicates that Stilwell deems the current price attractive[1].

Stilwell has nominated Stewart F. Peck as a director candidate for the annual general meeting, competing with the company’s current board of directors[7]. This proactive intervention indicates a certain level of skepticism regarding the existing management or strategic direction.

Argument	Analysis
Activist Investor Participation	As a 10% shareholder and board member, Stilwell’s continued share purchases indicate confidence in long-term value
P/B < 1	The stock price is below book value, providing a margin of safety for a bank with stable deposit operations
Ample Cash Reserves	$107.7M in cash accounts for 114% of market capitalization, providing a significant net cash buffer
Historical Earnings Growth	After excluding tax adjustments, core profitability remains stable

Argument	Analysis
Low ROE	The return on equity of 4.96% is below the industry average, indicating room for improvement in capital utilization efficiency
Relatively High P/E	The 20x P/E ratio is based on the abnormally high 2024 earnings, and earnings have declined in 2025
Limited Growth	Small regional banks face a growth ceiling
Stilwell’s Diversification	Stilwell’s investment portfolio includes over 30 stocks, with PFBX being only one of them

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According to technical analysis data[8]:

Metric	Value	Signal
Current Price	$20.50	-
20-Day Moving Average	$20.42	Neutral
50-Day Moving Average	$20.32	Neutral
90-Day Range	$20.20 - $22.45	Sideways consolidation
Beta Coefficient	0.23	Low volatility/Defensive

• Trend Judgment:
  Sideways consolidation, no clear direction[8]
• MACD:
  No crossover signal, slightly bearish
• KDJ:
  K-value 81.4, D-value 57.5, entering overbought territory
• Support Level:
  $20.42
• Resistance Level:
  $20.58

Technical analysis shows that the stock lacks a clear trend in the near term, with its price fluctuating within a narrow range of $20.20-$22.45.

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• Active participation in governance by a major activist shareholder
• Trading at a discount to book value, providing a margin of safety
• Ample cash reserves, financially stable
• Stable deposit base and customer relationships

• Low ROE, insufficient capital utilization efficiency
• Relatively high valuation (P/E) compared to the industry
• Small scale, limited growth space
• Recent earnings decline (Q3 FY2025 EPS was only $0.14)

• Stilwell may drive improvements in operational efficiency
• Optimization of asset allocation can boost yield
• Regional bank consolidation trend may bring acquisition opportunities
• Improved interest rate environment may boost net interest margin

• Risk of regional economic fluctuations
• Negative impact of interest rate volatility on bond investment portfolios
• Competition from large banks and fintech companies

Assessment Dimension	Rating	Description
Valuation Attractiveness	⭐⭐⭐	P/B discount but relatively high P/E
Fundamentals	⭐⭐⭐	Stable but limited room for earnings improvement
Major Shareholder Endorsement	⭐⭐⭐⭐	Stilwell’s continued share purchases
Technical Analysis	⭐⭐⭐	No clear trend
Overall Rating	Neutral Bullish

Stilwell’s share purchase is more of a

rather than the discovery of new value not yet priced in by the market. His investment decision is based on in-depth understanding of the company and ongoing participation in governance.

For Stilwell, PFBX’s value lies more in

rather than simple valuation discount arbitrage. His dual identity as a director and 10% shareholder gives him the ability to directly influence corporate decisions.

Stilwell’s investment style is oriented towards long-term, permanent capital, which means his investment in PFBX may last for many years, with short-term stock price fluctuations not being his primary concern.

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From the following dimensions, Stilwell’s share purchase does send certain positive signals:

1. Substantial Holdings:
   As the largest shareholder with over 10% ownership, Stilwell has sufficient motivation and influence to drive value creation
2. Continued Share Purchases:
   Increasing his stake at the current price level indicates he deems the stock price attractive
3. Active Participation in Governance:
   Nominating his own director candidate demonstrates his commitment to improving corporate governance

However, from a traditional valuation perspective, the stock is

:

1. P/E 20x
   is higher than the industry average, implying expectations for future earnings growth
2. ROE 4.96%
   is lower than the industry average, reflecting insufficient capital utilization efficiency
3. The
   abnormal 2024 earnings growth
   was mainly driven by one-time tax adjustments, with actual profitability having declined

• For
  long-term investors willing to follow activist investors
  , PFBX can be held as a
  watchlist position
  or with a
  small allocation
  to capture potential returns from governance improvements driven by Stilwell
• For
  deep value investors
  , it is recommended to wait for a clearer
  valuation discount opportunity
  (e.g., P/B ratio falls below 0.8x)
• Stilwell’s participation alone should not be the sole basis for investment decisions; investors still need to focus on improvements in the company’s
  core profitability

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The above chart shows: 1) Evolution of Stilwell’s holdings in PFBX, 2) 90-day stock price trend, 3) Financial performance trend, and 4) Comprehensive summary of investment value arguments.

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[1] TipRanks - “Major Investor Quietly Boosts Stake in Peoples Financial With Fresh Buy-In” (https://www.tipranks.com/news/insider-trading/major-investor-quietly-boosts-stake-in-peoples-financial-with-fresh-buy-in-insider-trading)

[2] HedgeFollow - “Stilwell Value Fund Performance History & Annualized Return” (https://hedgefollow.com/funds/Stilwell+Value/Performance-History)

[3] Alluvial Substack - “Wheeler REIT - An Activism Story: WHLR, WHLRD, WHLRP” (https://alluvial.substack.com/p/wheeler-reit-an-activism-story-whlr-whlrd-whlrp)

[4] Stilwell Corporation - “Stilwell Capital Investment Approach” (https://stilwellcorporation.com/capital)

[5] StockTitan - “Peoples Financial Corp (PFBX) director Stilwell logs stock buy” (https://www.stocktitan.net/sec-filings/PFBX/form-4-peoples-financial-corp-ms-insider-trading-activity-faaadb74bfb6.html)

[6] SEC.gov - “Peoples Financial Corporation 2024 Form 10-K” (https://www.sec.gov/Archives/edgar/data/770460/000155837025003310/pfbx-20241231x10k.htm)

[7] SEC.gov - “Peoples Financial Corporation - Proxy Statement” (https://www.sec.gov/Archives/edgar/data/770460/000155837025001735/pfbx-20250423xpre14a.htm)

[8] Jinling AI Technical Analysis API Data