Sunday, February 18, 2007

Who is next for Rabobank ?

Rabobank, the Dutch agri-bank leader, has been acquiring regional/community banks in the US over the last few years, mostly in areas where farming is the primary economic activity.

Two such acquisitions recently, Central Coast Bancorp (Hit #65) and Mid-State Bancshares (Hit #121) were in my portfolio. I think that a few more such buys are on their way, and plan to be prepared to profit from them.

One obvious candidate, as I mentioned in an earlier post, is Heritage Oaks Bancorp (HEOP). While it looks attractive with some insider buying, and a small dividend, its exposure to bubblicious California Central Coast areas represents a downside risk. I do own a small number of shares, and will be buying more at opportune times.

I can now add two more to the potential list of interest for Rabobank.

Pacific Valley Bank (PVBK) operating mostly in Salinas, CA. The stock is thinly traded.

Farmers Capital Bank (FFKT), a Kentucky bank mostly operating in small, rural communities, also looks attractive. There is some insider buying, and the yield is juicy. I have opened a small position recently, and will be looking to add more over time.

Know of any others ?


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