Cardinal Financial Corporation (NASDAQ:CFNL) made a big push into the mortgage origination market in 2012 - but they lost money on the segment in 2013. We believe this is a harbinger of stagnant earnings at the corporation. If we extrapolate away the company's mortgage business, the adjusted earnings at the corporation would fall significantly.
The current share price of the corporation appears to assume the mortgage origination business will remain strong - otherwise, I would argue, the corporation is likely overpriced.
This bank has many other things going for it: (1) strong deposit growth over the last ten years; (2) conservative lending practices have kept nonperforming loans to levels significantly lower than its peers; (3) it recently completed...
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