Stephen Rosenman
Long/short equity, deep value, special situations

Unity Bancorp: A Bank Ripe For The Taking

While the rest of the market is focusing on the food fight for Hillshire Brands (NYSE:HSH), I suggest you look at the small community banks (assets below $1 billion). Because these are microcap stocks, the market has ignored this rapidly consolidating group. Literally, community bank takeovers get announced two to three times a week.

Consider LSB Financial (NASDAQ:LSBI) and TF Financial Corporation (NASDAQ:THRD). Their investors won the acquisition lottery last week: Both LSBI and THRD soared over 40% on takeover announcements. While the acquirers paid sizable premiums even though neither bank generates strong returns. In fact, both companies' earnings were subpar. Simply, the buyers figured the assets were more valuable under a bigger tent....

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