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  • Glacier Bancorp: Pullback Not Justified After Impressive Results
     • Yesterday, 6:30 PM GBCI Comment!

    Summary

    • Glacier Bancorp continues to grow its bottom line through acquisitions that strengthen its financial position.
    • Shares are off their 52-week high, but the move is questionable because the bank's performance continues to impress.
    • All signs point to higher earnings, but the market's latest move reminds everyone that a premium valuation comes with premium expectations.
  • Exchange Bank: Hidden, With A Chance Of 60%+ Returns
     • Yesterday, 7:50 AM EXSR 2 Comments

    Summary

    • Exchange Bank is undervalued, based on returns and book value.
    • The story will get even better as the bank continues to grow the loan portfolio.
    • Continued healing and consistent earnings could lead to a profitable announcement for current shareholders.
  • Bad News Is Oversold At First Republic Bank
    Wed, Aug. 13 NYCB, FRC 5 Comments

    Summary

    • Shares of First Republic Bank offer a lot of upside after the recent dive.
    • The bank's earnings miss and heightened regulatory fears are weighing down shares by more than they should.
    • Comparable banks have not seen the same declines, and the recent fall presents a good opportunity to outperform financials with a similar asset balance.
  • It's Getting Harder To Pass On Popular
     • Wed, Aug. 13 OFG, BPOP 4 Comments

    Summary

    • Popular's earnings were destroyed by several one-time charges.
    • In addition to non-recurring charges, the bulk of this quarter's miss was tied to redemption of the bank's TARP preferred shares, typically a positive event.
    • Hidden by a lot of noise is a stable core that could grow significantly over the next few quarters.
  • Pinnacle Financial Now Has To Keep Eating Its Wheaties
     • Sat, Aug. 9 PNFP 2 Comments

    Summary

    • Pinnacle Financial continues to look attractive based on operating margins, but shares may have gotten a little ahead of themselves.
    • Last quarter showed some healthy improvements, but a lot of the gains can be traced to provision expenses that are non-recurring.
    • Growth is what investors are paying for here, but the bank's blistering pace has started to slow down.
  • Update: Waterstone Financial Earnings
    Fri, Aug. 8 WSBF 1 Comment

    Summary

    • Waterstone Financial reported 2Q earnings.
    • In line with my expectations, the bank easily beat last quarter's earnings but that still isn't saying much.
    • Until the bank is freed from its heavy debt load, earnings will continue to look weak compared to the majority of its peers.
  • Update: Bar Harbor Bankshares Earnings
    Fri, Aug. 8 BHB 1 Comment

    Summary

    • Bar Harbor Bankshares reported YOY net income growth of 21.6%.
    • The bank's dividend payout ratio and net income growth confirm my belief that the stock is a long-term buy.
    • In addition to the bank's impressive earnings, continued improvements in nonperforming assets show that management is unwilling to cut any corners.
  • Update: Athens Bancshares Earnings
    Fri, Aug. 8 AFCB Comment!

    Summary

    • Athens Bancshares reports earnings.
    • The results reaffirm my thesis that the bank is limited in the ways that it can grow its bottom line.
    • Although returns will pale in comparison to peers, the bank's buyback program will continue to be the main EPS driver .
  • Cardinal Financial's Price Tag May Be Full, But The Future Looks Bright
     • Thu, Aug. 7 CFNL Comment!

    Summary

    • Cardinal Financial's recent acquisition has filled up the loan portfolio without sacrificing its clean bill of health.
    • The company's mortgage unit has shed non-revenue earning personnel, and is now earning profits.
    • The current price looks fair but the bank could surprise by continuing to consolidate operations and improve efficiencies.
  • Update: Territorial Bancorp Earnings
    Thu, Aug. 7 TBNK 1 Comment

    Summary

    • Territorial Bancorp reported Q2 2014 earnings.
    • In line with my original thesis, strategic share repurchases below book value, coupled with net income growth are driving EPS higher.
    • With only 4 loans 90 days or more past due and not accruing, the bank's clean portfolio maximizes every little bit of the recent NIM improvements.
  • Update: Valley Financial Corporation Earnings
    Thu, Aug. 7 VYFC Comment!

    Summary

    • Valley Financial Corporation reported Q2 EPS of $0.36, beating estimates by $0.05.
    • In line with my expectations, the bank's earning are up due to the absence of the preferred dividend payments and continued portfolio growth.
    • Earnings were up, but several nonrecurring items (both good and bad) clouded the bank's core performance.
  • Horizon Bancorp Has The Materials Needed To Grow But Earnings Will Need To Overcome Significant Headwinds
     • Tue, Aug. 5 HBNC Comment!

    Summary

    • Horizon Bancorp continues to grow at a rapid pace, but this required more shares and the bank is getting no help from the low interest rate environment.
    • As the portfolio has grown, allowances have fallen and all signs are pointing towards a larger provision charge in future periods.
    • Still trading at a sizable premium to tangible book value, shares face strong headwinds that could slow appreciation for an extended period of time.
  • Update: Pulaski Financial Corp. Earnings
    Tue, Aug. 5 PULB 1 Comment

    Summary

    • Pulaski Financial Corp. reported Q3 '14 earnings.
    • In line with my concerns, deposits continued to fall, forcing the bank to turn to more expensive debt to fund portfolio growth.
    • Provisions look light and the allowance balance begs for a higher charge that could net out any benefits from preferred share redemptions.
  • Bank Of Kentucky Financial Corporation's Shares May Be Out Of Gas
     • Mon, Aug. 4 BKYF Comment!

    Summary

    • After rising 49% last year, Bank of Kentucky Financial Corporation appears to be fully valued with core earnings pointing toward lower returns.
    • Asset quality is high and this has been maintained throughout the financial crisis, but reserve releases have boosted earnings and this can't continue indefinitely.
    • Pre-tax income is essentially non-interest revenue that has been supported by non-recurring items and fees that may be challenged in future periods.
  • Update: First Community Bancshares Earnings
    Mon, Aug. 4 FCBC Comment!

    Summary

    • First Community Bancshares reported Q2 '14 earnings.
    • The results confirm previous view that the bank's earnings were set up for significant improvements due to the accounting for its FDIC receivable.
    • In addition to hidden earnings power, the bank continues to grow its loan portfolio and has an acquisition pending that will add $440 million in deposits.
  • Update: FS Bancorp Q2 2014 Earnings
    Mon, Aug. 4 FSBW Comment!

    Summary

    • FS Bancorp reported Q2 '14 earnings.
    • The results confirm previous view that excess capital and undervalued shares would benefit from management's repurchase program.
    • The bank's size continues to allow management to make material changes that all point towards higher future earnings.
  • Update: OFG Bancorp Q2 2014 Earnings
    Fri, Aug. 1 OFG 2 Comments

    Summary

    • OFG Bancorp reported Q2 '14 earnings of $0.38 per share.
    • In-line with my expectations, the bank's core performance continues to improve.
    • The bank continues to trade at a discount to fair value, but this reflects environmental risk that needs to be monitored and included in all investment decisions.
  • What Bank Of America Shareholders Might Be Missing
    Thu, Jul. 31 WFC, BAC 91 Comments

    Summary

    • Assets continue to grow, but so has every shareholder's piece of the pie.
    • Even after Bank of America gets back on track, earnings per share may disappoint current value projections.
    • The opportunity cost of investing in Bank of America is very high.
  • Update: Community Bank Shares Of Indiana Q2 2014 Earnings
    Thu, Jul. 31 CBIN Comment!

    Summary

    • Community Bankshares of Indiana reported Q2 '14 earnings.
    • My opinion that the bank's core earnings power is undervalued has not changed.
    • Continued improvement in asset quality and the absence of one-time charges is in-line with my original thesis; they provide a solid base for growth in future earnings.
  • 3 Things Holding Back M&T Bank, Do They Matter?
    Thu, Jul. 31 MTB 2 Comments

    Summary

    • Upfront compliance costs are holding back current earnings, but saving the bank from future fines.
    • The bank's low cost deposits ensure margins expand faster than the competition when rates start to rise.
    • Unlike a lot of other banks, M&T Bank's investment portfolio has very little interest rate risk.
  • Eastern Virginia Bankshares Still Has A Lot Of Hurdles To Clear
     • Wed, Jul. 30 EVBS Comment!

    Summary

    • Last quarter, Eastern Virginia Bankshares's net income grew 145.9% YOY.
    • Recently announced, the bank has a plan to buyback a large portion of TARP preferred shares that will help cut the large dividend payment that comes with them.
    • Earnings are on their way up, and reported book value shows a discount, but that number is being spared from the dilutive effects of a recent capital raise.
  • Update: Capital Bank Financial Q2 2014 Earnings
    Wed, Jul. 30 CBF Comment!

    Summary

    • Captial Bank Financial reported Q2 '14 earnings.
    • Earnings improved, but were supported by nonrecurring items; that is in-line with my assessment of the bank's weak earning power.
    • I still see the bank as overvalued based on its lack of an adequate allowance account.
  • Update: Sound Financial Bancorp Q2 2014 Earnings
    Tue, Jul. 29 SFBC 3 Comments

    Summary

    • Sound Financial Bancorp reported Q2 '14 earnings.
    • The earnings were positive with deposits growing faster than the loan portfolio, one major growth constraint that I covered recently.
    • This is a high performing regional bank with one of the cleanest balance sheets around, but liquidity is still a concern as it continues to grow at a rapid pace.
  • Update: Bnccorp Q2 2014 Earnings
    Mon, Jul. 28 BNCC 4 Comments

    Summary

    • Bnccorp reported Q2 '14 earnings.
    • The earnings confirm the original thesis that Bnccorp is capable of significant growth despite the downturn in mortgage-related fee income.
    • Improved earnings were anticipated, but the presence of several irregular items means the bank may still be a few quarters away from producing its true earnings picture.
  • Pacific City Financial Corp. Still Has A Lot Of Work To Do
     • Fri, Jul. 25 PFCF 1 Comment

    Summary

    • Still in healing mode, Pacific City Financial Corp. has finally started to repurchase its TARP Preferred Shares.
    • The bank's loan portfolio is up 18% YOY, but declines from mortgage sales mean that the larger portfolio is needed just to stay even .
    • On top of mortgage sale headwinds, this year's earnings will not come with tax benefits that propped up last year's results.
  • Athens Bancshares Can't Buyback Shares Fast Enough, Does That Make It A Buy?
       • Wed, Jul. 16 AFCB 1 Comment

    Summary

    • After converting from a mutual holding company in 2010, Athens Bancshares has been on a buyback spree that helped lift EPS 42% last quarter.
    • The bank has a solid lending history with earnings increasing every year since its 2010 IPO.
    • Now that the discount to book value is gone, management will need to choose between buying shares at a premium or significantly increasing the dividend payout.
  • Recently Converted Waterstone Financial's Shares Cheap For A Reason
       • Wed, Jul. 9 WSBF 2 Comments

    Summary

    • Waterstone Financial's recent conversion will help fill the loan to deposit gap, but long-term liabilities are still draining earnings.
    • Profits will grow when interest expenses fall, but the bank still has a lot of nonperforming assets to resolve.
    • On top of problem assets, the bank's recent earnings still show the company relying on a heavy dose of mortgage fees that continue to decline.
  • BNCCORP Looks To Continue Its Chart-Topping Performance
       • Tue, Jul. 8 BNCC 5 Comments

    Summary

    • BNCCORP looks cheap even after earnings were taken down by declining refinance activity.
    • Loan growth is the key driver going forward but even if loans lag, deposit growth will bring in income from a larger balance of short-term investments.
    • ROE will continue to top charts because of the deposit fuelled asset growth that is leveraging owners equity.
  • Bar Harbor Bankshares: This Dividend Champion Is Hiding In Plain Sight
       • Thu, Jul. 3 BHB 15 Comments

    Summary

    • Bar Harbor Bankshares has a simple formula that has helped net income rise in each of the past nine years.
    • Despite its consistent success, the bank is undervalued based on earnings that are on-track to continue their upward climb.
    • Each extra dollar earned has been helping grow the bank's dividend, and investors have netted more than a 7% annual increase after 12 consecutive raises.
  • Northfield Bancorp Is Returning Much More Than You Think
       • Wed, Jul. 2 NFBK Comment!

    Summary

    • Northfield Bancorp is still stuffed with excess capital, and now we find the bank starting to put it all to work.
    • With just a little more time, Northfield's loan growth will translate into much higher earnings.
    • Management is buying back a ton of shares and slowly building the bank's dividend, but both are just scratching the surface of what the bank can afford.
  • Pulaski Financial Corp.: This 3% Yielder Is One To Watch
       • Tue, Jul. 1 PULB Comment!

    Summary

    • Looking to convert into a National Bank, Pulaski Financial has had no problems adding loans to a very large and profitable portfolio.
    • With one last installment left to complete the repurchase of its TARP preferred shares, the bank has almost completely put the financial crisis in its rear view.
    • A high asset to equity ratio means this bank's asset returns get a higher multiple.
    • After paying off its TARP preferred shares, the bank will be able to build capital at a faster pace and I see a dividend hike on the horizon.
  • Merchants Financial Group: A Lot Of Bang For Your Buck
       • Fri, Jun. 27 ALRS, BMBN, MFGI 2 Comments

    Summary

    • Hidden in the over the counter market, Merchants Financial Group is outearning its peers.
    • Specializing in commercial loans, Merchants has found its niche and has been growing its portfolio by more than 10% a year.
    • The inconsistency of non-interest gains threatens the bank's earning power, but work is being put into building core operations.
    • Even though earnings have impressed, I've found some hidden value that needs to be factored in for a more complete picture of the income Merchants is capable of making.