Activist Investors Buy 8% of MutualFirst in Indiana

PL Capital has taken a $7 million stake in MutualFirst Financial (MFSF) in Muncie, Ind.

Funds controlled by the investor group bought 8% of the outstanding common stock of MutualFirst in a series of purchases from late February through early April, according to a filing with the Securities and Exchange Commission. The group believes the stock is undervalued, the filing says.

PL Capital, which is led by John Palmer and Richard Lashley, typically invests in banks with market capitalizations between $50 million and $3 billion and tries to improve their profitability through shareholder activism.

The $1.4 billion-asset MutualFirst is the parent of MutualBank, which has 31 offices in Indiana. It made $5.8 million last year, according to its latest annual report.

In February, Orrstown Financial Services (ORRF) in Pennsylvania settled a lawsuit brought by PL Capital over its alleged violation of an enforcement action.

Neither PL Capital nor MutualFirst immediately responded to requests for comment.