An avid fan of financial stocks, Matthew Lindenbaum has been busy adjusting positions as of late. In a recent filing with the Securities and Exchange Commission, Lindenbaum’s fund, Basswood Capital, has revealed a decrease in its holding of Metro Bancorp Inc (NASDAQ:METR) from the 1.4 million shares reported in its latest 13F filing to 674,421 shares, which account for roughly 4.76% of the company’s common stock.
With an experience of managing assets of more than 20 years, Matthew Lindenbaum is specializing in the financial sector and is known to have engaged in shareholder activism in Metro Bancorp Inc (NASDAQ:METR). Back in June, Lindenbaum sent a letter to the management of the company, urging them to consider the sale of the company to a larger bank amid increased competition and increased regulatory pressures. Basswood Capital has recently disclosed an activist stake in Astoria Financial Corp (NYSE:AF), increasing its stake to 9.29 million shares or 9.22% of the total number of shares outstanding, guided by Lindenbaum’s belief that Astoria shares are “trading at a significant discount to their fair value.” On the other hand, Sierra Bancorp (NASDAQ:BSRR) is a stock Lindenbaum has chosen to limit his exposure to, trimming his position to 1.07 million shares or 7.85% of the company’s common stock.
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So, is Lindenbaum locking in profits or has Metro Bancorp lost appeal? Actually, neither. The company is actually set to undergo a merger with another bank holding company. First, a bit about Metro Bancorp Inc (NASDAQ:METR). A bank holding company, Metro offers financial services to consumers and small and mid-sized businesses throughout the state of Pennsylvania. The company has an estimated market value of $430 million and pays an annual dividend of $0.21 per share, which translates into a yield of 0.7%. For the past four quarters, the company’s financials have steadily grown to the $35.5 million in revenues and EPS of $0.39 reported for the first three months of 2015.
The stock has skyrocketed on August 4, following reports that the company is set to be bought by F.N.B. Corp (NYSE:FNB). Shareholders shall receive 2.373 shares of F.N.B. Corp for each Metro share they own, which translates into an approximate value of $32.xx per unit. This constitutes a 32% premium over Monday’s closing price of $24.78. This move will provide F.N.B. Corp with a $3.0 billion increase in assets and will help it strengthen its position in its community banking system, with the company already operating the First National Bank of Pennsylvania.
“The combination is a tremendous opportunity for everyone involved with Metro. It will deliver significant value to Metro shareholders and an opportunity for our employees and customers to partner with one of Pennsylvania’s fastest growing and best performing banks. FNB has tremendous financial strength, considerable resources and capabilities and values that are very similar to ours,” said Gary Nalbandian, Metro Bancorp Chairman and CEO.
Hedge fund guru Jim Simons is also set to lock in some great profits from this deal, with his fund, Renaissance Technologies, holding 150,400 shares of Metro Bancorp Inc (NASDAQ:METR) at the end of the first quarter. David E Shaw also holds a stake in the company, albeit an insignificant one, having decreased it to just 8,742 shares.
Disclosure: none.
