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For those looking to generate a stream of income, dividend investing may be the way to go. For example, such a strategy could create cash to be used on a rainy day, or for those interested in DRIP strategies (like myself) to pick up more shares in a specified company. In the article I wanted to focus on two very inexpensive regional banks that I think are perfect for the value investor who may be looking to generate some secondary income.

Bank United, Inc. (NYSE:BKU) declared a $0.23/share quarterly dividend on November 26, which demonstrated an increase of 24% over the company's previous distribution. It also announced the date for its regular dividend distribution, which is now set for December 27th to shareholders of record as of December 13th. As a result of the announcement, the company now yields 3.55% ($0.92) on an annual basis, which is then broken down and distributed to shareholders each quarter.

In my opinion there are three positive catalysts to consider when it comes to BKU. From a value perspective shares currently possess a P/E ratio of 12.74 and trades at a 2.28% discount to its 50 DMA and a 4.28% discount to its 200 DMA. The second thing to consider is the fact that the company has surpassed analysts' estimates by an average of 7.075% in each of the last four quarters.

Lastly, and most importantly, the company presents a very nice value proposition when using Graham's Number. BKU's diluted TTM earnings per share at 1.86, and a MRQ book value per share value at 18.55, implies a Graham Number fair value = SQRT (22.5*1.86*18.55) = $27.86. Based on Tuesday's closing price of $23.07, a potential upside of 17.20% exists when applying the equation better known as Graham's Number.

Ohio Valley Banc Corp. (NASDAQ:OVBC) declared a $0.21/share quarterly dividend on November 27, which was in-line with the company's previous distribution. It also announced the date for its regular dividend distribution, which is now set for December 14th to shareholders of record as of December 7th. As a result of the announcement, the company now yields 4.64% ($0.84) on an annual basis, which is then broken down and distributed to shareholders each quarter.

When it comes to OVBC there are three positive catalysts to consider from a long-term perspective. From a value perspective shares currently possess a P/E ratio of 10.70 and trades at a 2.37% discount to its 50 DMA and a 2.00% discount to its 200 DMA. The second thing to consider is the fact that the company has surpassed analysts' estimates by an average of 7.075% in each of the last four quarters.

Lastly, and most importantly, the company presents a very nice value proposition when using Graham's Number. BKU's diluted TTM earnings per share at 1.69, and a MRQ book value per share value at 18.77, implies a Graham Number fair value = SQRT (22.5*1.69*18.77) = $26.71. Based on Tuesday's closing price of $18.10, a potential upside of 33.24% exists when applying the equation better known as Graham's Number.

For potential investors looking to establish a position in either Bank United or Ohio Valley Banc Corp., I'd continue to take a closer look at each company and keep a watchful eye out for such things as an improvement in earnings or dividend growth. As is the case with any of the regional banks, the slightest hint or indication of negative news with regard to overall earnings or product specific performance and a sell-off could very well occur. If potential investors are looking to scoop up shares based on value, I'd do so with a medium to moderate position and add to that position as dividend dates approach.

Source: 2 Regional Banks Presenting Investors With Great Dividend And Value Opportunities