Lighthouse Bank (CA) (LGHT.OB) is a Santa Cruz-based community bank that is traded over-the-counter and has 1.9 million shares outstanding and a small market cap of $19 million. On February 11th, they declared a 5% stock dividend, and the date of record is February 22, 2013. This is Lighthouse Bank's second declared stock dividend, the last one coming in 2011 and being a 10% stock dividend. This indicates that Lighthouse Bank's management is feeling more confident in their growth opportunities.
If you're looking to invest in a smaller bank that was established in 2007 and had the wherewithal to grow throughout the recession, this might be the right stock for you.
In 2012, Lighthouse Bank had a year of record setting profits. They posted a yearly income of $1.8 million and 29% in income growth over 2011. In 4Q2012, Lighthouse Bank continued their string of 14 straight quarters of profits, earning $509,000 in the fourth quarter. Their yearly earnings per share were $0.70 in 2011 and $0.91 per share in 2012.
They currently maintain deposits of over $147 million, and their shareholders' equity grew 11% over the past year, to over $20 million in shareholders' equity. Its book value per share of $10.21 is in line with its closing trading price of $10.26 on February 15, 2013.
This is an over-the-counter stock that's traded on the pink sheets, so there are liquidity issues. It's also extremely lightly traded, with an average trading volume of around 350-500 shares per day. Taking a look at the past year's trading on a candlestick chart can make it readily apparent this is not a stock for day-traders or even week-traders, as the price can stay essentially flat for a month or two at a time.
(graph from finance.google.com)
Lighthouse Bank has been growing, although it is still certainly small. It reportedly has 19 employees and one location. It is the 163rd largest bank in California, so it's not going to make a mint overnight. Additionally, while it has posted fourteen consecutive quarters of profits and did grow throughout 2012, its total assets and deposits declined by 2% from 3Q2012 to 4Q2012. Bauer Financial gives Lighthouse Bank a 5-star health rating, their highest rating.
For the investors that are looking for something a bit bigger, it may be worth looking into First Republic Bank (FRC), based out of San Francisco, recently awarded as the Best Private Bank in North America. It has a $4.8 billion market cap and its stock price has risen 13% since the beginning of the year.
For those investors that are interested, Lighthouse Bank states that they did not take any TARP funding, nor have been granted or requested any kind of government assistance. Additionally, they haven't been subjected to any formal or informal regulatory action.
Lighthouse Bank's current price of $10.26 is at the higher edge of their 52-week range of $8.30-$11.05. For an investor that's looking to put some money in a community-minded small cap bank that has grown for 14 consecutive quarters, and isn't worried about liquidity issues, you should consider Lighthouse Bank.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.