Yuanxi Zhang
Long/short equity, value, special situations

Great Florida Bank: Little-Known Merger Offers Attractive Returns

Recommendation: Long Great Florida Bank (OTCQB:GFLB) at $3.12

Target Price: $3.24

Thesis

Great Florida Bank's merger with Florida Community Bank is closing very soon with the only obstacle being regulatory approvals. As an over-the-counter stock, Great Florida Bank receives little publicity, which leads to a relatively large spread to deal value. While the deal is by no means risk-free and shares have significant downsides should the deal falls through, the chances are that we see the deal close by the end of year. A long position offers 25% annualized return to shareholders.

Background of the Merger

Since Great Florida Bank entered into a Consent Order with the FDIC and the Florida Office of Finance Regulations in April...

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