Community Bank of Bergen County, Maywood, NJ (CMTB)

A Case of Another Late Bloomer


There are times when average looks pretty darn good. As with Ameriserv Financial (ASRV), which I wrote about in January, the Community Bank of Bergen County may be just average, but it is priced way too cheaply and positioned too beautifully to be overlooked as a stock pick.

Disclosure: As of this posting, I own shares of CMTB and may subsequently either dispose of them or purchase more.

Prospective Buyers
The three healthy branches that make up the Community Bank of Bergen County would make an attractive addition to any buyer's bouquet, particularly for institutions like these, which have overlapping branches:
Boiling Springs MHC, Rutherford, NJ (private)
Clifton Bancorp, Clifton, NJ (CSBK)
Oritani Financial, Township of Washington, NJ (ORIT)
Financial Snapshot
(as of 06/30/2014)

Total assets:
$289M
Tangible book value per share:
$14.58
NPAs to assets:
2.51%
Price to book:
50.9%
Market cap:
$12.9M
Dividend yield:
0%
Trailing 12-month return on assets:
0.12%
Trailing 12-month return on equity:
1.53%
TARP:
$0

The Crew
Marianne Byrne, Chairman (Chairwoman)
Peter Michelotti, President and CEO
Raymond Zachmann, Executive VP and CFO
The Skinny
This is a pretty good bank that's getting better. The Community Bank of Bergen County successfully reduced NPAs from 7% in 2011 to today's 2.5%, while holding equity stable at $25M.

CMTB is the rose of Rochelle Park and daisy of Maywood. In its single Rochelle Park branch, CMTB holds $96M in deposits —the largest share of any bank in town. Its branch in Maywood, NJ is the second largest in town, boasting $126M in deposits.

An acquiring bank could make money here. Assuming the requisite efficiencies for a merger, an acquirer could pick up this beauty for 125% of book and dress up its own book value and earnings.  

Any investor can make money here! You won't find many banks like this left in the field today, trading at less than book value despite their freshly tidied loan portfolios. Trading now at 54% of book, CMTB offers plenty of upside for the enterprising investor.
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