Middlefield Banc (MBCN), mcap=$164m, price $28.49 vs $27.50

$MBCN pitch:
– Solid bank franchise with good earnings power that has the potential to be swept up in the wave of community bank M&A over the next several years.
– Trades at an undemanding 1.2-1.3x TBV with 12%-13% ROE and a history of solid loan underwriting.
– The bank is one of the final remaining independent community banks in the $1-$2 billion asset range in a rapidly consolidating northern Ohio market.
– Currently, MBCN is acquiring $LBSI – this acquisition will greatly change the profile and governance of the bank.
– Will have Castle Creek among its shareholders and board – investor with a phenomenal track record in community banks with virtually all portfolio companies getting sold eventually.

$MBCN valuation:
– Trades at an undemanding 1.2-1.3x TBV with 12%-13% ROE.
– Peer group trades at 1.6x TBV and community bank acquisitions happening at 1.6x-1.7xTBV.

Exp. gain: +40%-80% to $40-$50/share.

Full MBCN write-up (free guest account required):

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