Thursday, November 02, 2006

Hit #121 (Mid-State Bancshares)

Central California bank holding company, Mid-State Bancshares (MDST), most operating in and around Santa Barbara, is being acquired by Dutch agri-banking giant Rabobank for $871 million in cash. The deal values Mid-State shares at $37/share, around 39.8% over my average cost per share of $26.47.

Just like this other hit, Central Coast Bancorp, I discovered Mid-State during a road-trip. The similarity doesn't end there - Central Coast Bancorp was also acquired by Rabobank and handed me a large gain. After watching and waiting for more than a year to get a decent price, I had bought a few shares of Mid-State just a couple of months ago, intending to accumulate further.

In the meantime a few more banks have become attractive recently. One that I have opened a position in is Heritage Oaks Bancorp (HEOP), a smaller bank that operates in the same locations as Mid-State. Heritage also happens to be another pure on-the-road discovery. While Heritage operates in an area that is definitely in a real-estate bubble, the stock has pulled back enough to make it a takeover target, possibly for Rabobank again. I intend to watch and possibly add more soon.

Another LA area bank I had mentioned earlier, Vineyard National Bancorp (VNBC), is now looking very attractive. I intend to buy some shares at the current price.

A Bay Area bank, Greater Bay Bancorp, is also worth buying now. I own a few shares, and will be adding at this price. I had mentioned Greater Bay in this post, with another post dedicated to it, when the company announced that it is looking for a buyer.

Another Bay Area bank, UnionBanCal Corp(UB), has recently become cheap enough to buy in small quantities. Like Greater Bay, this is an attractive target for larger banks. I had mentioned it as being a target, though not cheap enough, in this post.

I am also looking at Bridge Bank (BBNK), a relatively new (since 2000) bank, operating most in Silicon Valley. A takeover is likely not on the cards in the near future, but it should be a good long-term buy and hold investment.

Previous hit - Connetics (#120)


Post a Comment

<< Home