By: Tim Melvin
The banking industry avoided the attention of activists, for the most part, as the industry was still recovering from the financial crisis and the regulatory outlook was very uncertain.
Buyers were unwilling to step up to the plate, absent some clarity of what the future would like from a regulatory point of view. But according to a recent Harvard Law School forum, that is all about to change.
A post from William Sweet, partner and head of the Financial Institutions Regulation and Enforcement Group at Skadden, Arps, Slate, Meagher & Flom LLP stated that, “with resolution of some of these uncertainties, and some improvement in the bank M&A environment (which is becoming more active among smaller community banking institutions), banking organizations can expect greater attention from activist investors.
This could be a real boon for investors in the smaller community banks and thrifts. In a presentation at the recent Value Investing Congress in Las Vegas, Richard Lashley of activist investing firm PL Capital pointed out that industry fundamentals have almost returned to pre-crisis levels, but the stock prices of the smaller banks are still very cheap when compared to tangible book value. Continue reading "Think Small Banks For Big Profits"
