Little-known bank activist Lawrence Seidman has become much busier of late, an indication that more of the financial institutions he typically targets may be undervalued. In the past month alone, he has filed two new initial 13Ds, six in the past 11 months.
Never heard of Seidman? That’s not too surprising.
At year-end, Seidman’s Seidman & Associates had an equity portfolio worth about $122.7 million spread over two dozen individual stocks of tiny financial institutions. This is down from $140 million at the end of the third quarter and $161.5 million at the end of the first quarter of 2014, the first three-month period he began filing 13Fs.
The most recent 13D filing took place on April 1, when the Parsippany, New Jersey–based activist hedge fund manager disclosed he owned 5.89 percent of ASB Bancorp, the parent company of Asheville Savings Bank, which has 13 full-service banking centers in North Carolina. It has a market capitalization of $83.5 million.
In his filing, Seidman disclosed that he had bought nearly 40 percent of his stake in the last week of March.
He also argued that the stock is undervalued and that he has had several conversations with senior management about ways to maximize shareholder value.
Sure enough, on March 31, ASB Bancorp announced it would repurchase 5 percent of its shares.
On March 2, Seidman disclosed that he owned 5.72 percent of Sussex Bancorp, a financial services company that operates ten branches, mostly in New Jersey, as well as several regional loan offices. It has a market cap of just $50.7 million.
In the filing, Seidman said he had one meeting and several telephone calls with Anthony Labozzetta, the bank’s president and CEO. Seidman said he supports the firm’s business plan and its 5 percent stock repurchase plan, announced on February 26.
Sounds like the two events could be connected.
Seidman has been buying small, undervalued local banks and thrifts since the early 1980s. He mostly seeks out institutions whose stocks are trading below tangible book value and tries to encourage them to either sell to another institution or at least repurchase their shares.
Since 1995, Seidman has been involved in more than 40 activist situations with small banks, according to regulatory filings.
He has initiated or been a part of roughly one dozen proxy fights, and nearly two dozen bank companies were acquired by another institution after Seidman took a position.
Seidman also has served on the board of directors of at least six of the companies, while associates have sat on several other boards.
In October 2014, for example, Cheviot Financial Corp., which has 12 locations in the Cincinnati area, announced it would appoint to its board J. David Rosenberg, who was recommended by Seidman & Associates.
Seidman is a former Securities and Exchange Commission lawyer. From November 1991 to December 31, 2005, he was president and general counsel to Menlo Acquisition Corp., a now-defunct holding company for an environmental consulting and laboratory company.
