Seeking Alpha
Profile| Send Message|
( followers)  

As regular readers know, I strongly believe that community banks are in a sorting-out process and that the winners will be among the best investments over the next few years.

Yesterday on Realmoney.com, columnists Robert Moreno and Arne Alsin raised two interesting community bank picks. I was not familiar with either, but both are now on my watch list.

Old National Bancorp (NYSE:ONB)

According to Moreno:

Old National Bancorp (ONB) provides financial and banking services in Indiana, Kentucky and Illinois. It has a market cap of $1 billion and a forward P/E multiple of 2.30. The sector has been performing well over the last eight months and ONB has exhibited steady performance since then and a rising trend in price.

The chart shows a possible double bottom marked by the March and July 2009 lows and a downtrend line drawn off the important highs of the year. In November, price made a higher high and established a minor uptrend over the next several months. The upswing, however, was capped in January by the August 2009 high; this level will be key to confirming a breakout.

Metro Bancorp (Nasdaq:METR)

Metro Bancorp is on Arne Alsin’s Top 10 list for 2010. He notes that METR "is based in central Pennsylvania, and its exposure to problem loans isn’t anything like what you see when you parse the financials of small banks based in areas such as California, Florida and Las Vegas."

DISCLOSURE: No position.

Source: 2 Community Bank Picks: Old National Bancorp, Metro Bancorp