SB One Bancorp Underway With An M&A Growth Strategy In A Large Metro Market

Tiny bank stocks aren’t on most investors’ radar screens and in many cases there are good reasons for that – many small community banks are sleepy businesses that rise and fall with regional/national economic cycles and pay a decent little dividend. For many of these banks, “excitement” is a bad thing, as it often means unexpected credit losses or other trouble.

But there is a group of small banks that are worth watching, and SB One Bancorp (formerly Sussex Bancorp) (SBBX) is one of them. Banks like SB One use their capital, particularly their equity capital, to grow the business by acquiring other small banks, building up their deposit-gathering franchise, stripping out redundant costs to drive operating leverage, and growing their presence in their core lending markets.

With SB One having just completed its first deal earlier this year and now announced its second, I believe the company is on its way toward a multiyear growth-by-acquisition strategy that could see it profitably consolidate some of the northern New Jersey and metro NYC banking market, generating double-digit earnings growth and good returns for investors.

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SB One Bancorp Underway With An M&A Growth Strategy In A Large Metro Market