A Stock Pick for (Almost) Every State

A Stock Pick for (Almost) Every State


2019 is a year to break the mold.  Deliver and obtain more value per effort and minute. So I'm giving myself "literary license" to step out of my review-one-bank-stock-at-a-time format.

This month, I took inventory of my current community bank stock holdings "by State" to let others "in" on my portfolio and research a bit more.

If you've been following me, you know I believe America and Americans would be well served to invest in our community banks. Hopefully this exercise will help everyday investors across the country to see opportunities close to home.


Disclosure: As of this posting, I own shares of all the bank stocks reviewed in the Timyan Bank Alert except $TBBK, $CDAB, $MELR, $CESO and $PUB, and I may subsequently either dispose of them or purchase more. For full disclosure, please note, I personally own many other bank stocks that are not represented in the Timyan Bank Alert portfolio or record.

Timyan's Top Community Bank Stock Pick(s) Per State as of January 2019

Some of these I have reviewed previously. Just click the stock symbol to access its most recent Timyan Bank Alert review.

State
Stock
Why It’s My Favorite in The State
Yield
P/B
P/E
AK
DENI
Denali Bancorporation — stock is cheap and directors own over 20%.
5.7%
104%
12x
AL
United Bancorporation of Alabama – has high returns, low price and does good in local Opportunity Zones.
0.7%
117%
6x
AR
OZK
Bank of the Ozarks — stock is cheap from being overly punished by the market for two bad loans.
3.3%
93%
8x
AZ
MPHX
MetroPhoenix Bank — not great, but the only one I own since State Bank $SBAZ got too expensive.
0%
128%
15x
CA
Northern California National — stock in Chico's hometown bank is undervalued, earns good money, and has high takeover appeal.
1%
125%
12x
CO
Solera National – Marty May expertly runs this one-branch bank and it’s fair to assume Chairman Michael Quagliano will want a return on his investment in 22% of the stock.
0%
110%
15x
CT
BWFG
Bankwell Financial Group — Larry Seidman is the largest investor and he makes things happen for shareholders.
1.7%
129%
13x
DE
TBBK
Bancorp, Inc — I don’t own this or any other Delaware-based bank, but board members Shiv Govinden and John Eggemeyer are savvy bank directors.
0%
121%
8x
FL
FCIT
First Citrus Bank — I love the team Jack Barrett has put together in Tampa and especially love recent results:1.3% ROA and 15% ROE.
0%
132%
11x
GA
CCF Holding Co — my largest holding. I love Leonard Moreland’s turnaround, have high hopes for the amalgamation of the two Heritage Banks and Providence Bank, and trust largest shareholder and Chairman, Ken Lehman.
0%
110%
15x
HI
OHPB
Ohana Pacific Bank in Honolulu — it’s ugly, but cheap. I’m hoping they sell to someone who knows what they’re doing.
0%
87%
13x
IA
MOFG
MidWestOne Financial — it’s selling nearly 30% below their last stock offering. I hope they’ll either get their returns in line with peers or sell the bank.
3%
89%
9x
ID
CDAB
Couer d’Alene Bancorp — earnings like these plus a slight discount to book make it hard to resist this tiny gem.
2.7%
98%
12x
IL
RYFL
Royal Financial — DISCLOSURE: I own 9.99% and have been a director since 2011, but I like Royal’s footprint in the backyards of serial acquirers FMBI and WTFC.
0%
105%
9x
IN
MFSF
MutualFirst Financial — attractive takeover target owned by two activist investors, PL Capital and Ancora Advisors.
2.93%
121%
10x
KS
BVBC
Blue Valley Ban Corp — a tad pricey, but very valuable branch network near Kansas City, with an ace director, Tony Scavuzzo of Castle Creek.

SOLD 01/16/2019
0%
142%
9x
KY
KFFB
Kentucky First Federal — returns are inadequate, so I hope they one day do a full conversion and sell three years later.

*Price to book would be 60% under full conversion scenario
5.8%
111%*
20x
LA
CTUY
Century Next Financial Corp — it’s undervalued and the perfect acquisition candidate for First Guaranty Bancshares.
3%
107%
11x
MA
MELR
Melrose Bancorp — only buy this if you believe activist investors Seidman and Maltese will be successful in pressing for a sale.
3%
105%
28x
MD
Delmar Bancorp — earnings are improving rapidly and Chairman Ken Lehman is heavily invested in turning a profit on his 41% ownership.
1.4%
112%
9x
ME
KTHN
Katahdin Bankshares — it’s cheap and has a branch network that should be appealing to acquirers.
2.6%
96%
9x
MI
EFIN
Eastern Michigan Financial of Crosswell — Michigan has many great publicly traded community banks, but this 127 year old has the cheapest stock.
2.94%
82%
9x
MN
Merchants Financial Group of Winona — my hands down favorite for the State, big enough for the Russell Index and trades for a fraction of its true value.
2.1%
107%
10x
MO
LBCP
Kansas City’s Liberty Bancorp — I’ve owned it since its conversion in 2005, because it has stayed too cheap to sell.
1.1%
115%
9x
MS
CIZN
Citizens of Arkadelphia — nice dividend, but Citizens never earns enough to justify its independence. 
4.7%
125%
14x
MT
EBMT
Eagle Bancorp — pickings are slim for cheap bank stocks in Montana. This is it. 
2%
107%
13x
NC
UWHR
Uwharrie Capital — if this one sells, it’ll pay off. If not, I’ll be stuck holding a cheap bank stock with crummy returns.
0%
103%
20x
ND
BNCC
BNCCORP — could more than double if sold, and many activists and unhappy shareholders are pushing for just that.
0%
101%
13x
NE
FINN
First National of Nebraska — an undervalued, high performing, 150 year old family run bank.
0%
109%
10x
NH
Northway Financial — expertly run by the energetic Bill Woodward for the past 43 years.
2.4%
102%
12x
NJ
PKBK
Parke Bancorp — started in a trailer by one of my favorite bankers, Vito Pantilione. Now it has $1.3B in assets in seven branches making it the envy of acquisitive banks in the area.
3%
135%
11x
NM
None
Unfortunately, there are no community bank stocks in New Mexico that I want to own.
-
-
-
NV
None
Sadly, there are no publicly traded community banks headquartered in Nevada.
-
-
-
NY
GLDT
Gold Coast Bancorp in Islandia — a valuable franchise, 22% management owned, but it doesn’t earn enough to remain independent. I’m hoping it sells.
0%
93%
25x
OH
CBKM
Consumers Bancorp in Minerva — steady insider purchases at higher prices are a clue that this stock will soon be worth more.
3%
108%
9x
OK
CESO
Central Service Corp — a nice 100-year old institution to own a stake in, if you can find shares near a $30 bid price.
0%
46%
8x
OR
CLAT
Clatsop Community Bank — cheap for a reason. It’s ten years old and still doesn’t make enough money to be independent. Original shareholders are still under water. Needs to sell!
2.1%
94%
19x
PA
First Resource Bank, Chester County PA — I'm not alone in rating it the best bank in the wealthiest county in the state (PRN Newswire 10/30/2018)
0%
100%
11x
PA
Embassy Bank — David Lobach built it from scratch, it's been a wonderful stock for ten years, and I expect it to keep performing.
1.2%
130%
10x
PA
Franklin Financial Services — instituted a share buyback and is listing on NASDAQ. I anticipate the stock will be added to the Russell Index in June.
3.4%
123%
10x
RI
WASH
Washington Trust Bancorp — a bit pricey, but the only community bank headquartered in Rhode Island. 
3.6%
212%
13x
SC
SFDL
Security Federal — Chairman Timothy Simmons' 22% ownership stake gives me confidence this bank's value will keep growing.
1.3%
107%
13x
SD
GWB
Great Western — has done a great job building this bank organically and via acquisition.
2.9%
109%
11x
TN
IBTN
Nashville’s Inscorp — it’s the cheapest thing in a great market, but I wish they would improve their deposit mix.
1.2%
117%
12x
TX
CADE
Cadence — the stock has been punished too much for its purchase of State Bank of Georgia.
3.3%
107%
9x
UT
PUB
Peoples Utah Bancorp — Utah's one and only publicly traded community bank, but it is a beauty! I just wish it were cheaper...
1.5%
204%
14x
VA
MNSB
MainStreet Bancshares — this bank is in a great market, growing, and likely to sell sooner or later.
0%
126%
11x
VT
MDVT
Middlebury National Corp — going strong for 188 years and holds 60% of the deposits in its home town.
2.7%
96%
11x
WA
PPBB
Peoples Bancorp — a valuable franchise with superior returns and good prospects for selling.
0%
145%
10x
WI
S.B.C.P Bancorp —  it's in a great market and run by a great banker, Jim Tubbs.
2%
103%
8x
WV
PTBS
Potomac Bancshares — good things usually happen for shareholders in Mike Voinovich's deals and he just raised capital here. 
2%
121%
13x
WY
CRZY
How could I not pick Crazy Woman Creek Bancorp? Especially with Joe Helmer on their board.
1.9%
85%
12x

11 comments :

  1. Thank you for the article and the wealth of information in it. I did have a question, but do you know of any serial acquirers that at looking at the MN, IA, and IL areas? As like you pointed out, MOFG could benefit from a sale, but there are other banks in Iowa that have decent franchises and returns, but could potentially be of interest to someone looking to expand into the state (though I have no idea who would be interested).

    ReplyDelete
    Replies
    1. Thank you for commenting!

      You are correct. There are several banks in Iowa producing solid returns. Among them are: Ames National $ATLO, Hills Bancorporation $HBIA, Meta Financial $CASH, Northwest Bank & Trust $NTWB, Two Rivers Financial $TRVR and West Bancorporation $WTBA.



      Active acquirers in Iowa besides MidWestOne include:
      - Dubuque's Heartland $HTLF, although they have gone out of state much more.
      - Oklahoma's BancFirst $BANF
      - Moline's QCR Holdings $QCRH

      Among MN acquirers are Indiana's Old National $ONB and First Bank & Trust in Brookings.

      
In Illinois, the biggest acquirers have been First Midwest $FMBI and WinTrust $WTFC, but we've also seen FifthThird $FITB, Huntington $HBAN, Old Second $OSBC, ByLine Bank $BY, Busey Bank $BUSE, NorthWest Indiana Bancorp $NWIN, Midland States $MSBI, First Mid-Illinois $FMBH, and Royal Financial $RYFL make Illinois bank acquisitions.

      Delete
  2. Just found this site and love the articles and appreciate the time you put into this. I was about to pull the trigger on Exchange Bank in Milledgeville but noticed that it's not even your favorite bank in Georgia. Have you changed your opinion about it being a $100 stock in the next couple of years? Thanks.

    ReplyDelete
    Replies
    1. Thank you Anonymous! I do still like Exchange. It is very cheap, but hard to buy. CEO Pope is not very friendly to out-of-town shareholders. I think CCFH with their new platform has much more room to grow even though the stock isn't as cheap.

      Delete
  3. Hey Phil,
    Big fan of your work.
    I can't find CESO trading anywhere since 2012. Has it gone private?
    Thanks

    ReplyDelete
    Replies
    1. Hello Aidan!
      Thank you. CESO has a pink sheet bid of $35 and very rarely trades. Many small banks keep lists of willing buyers and sellers and help facilitate trades.

      Delete
  4. For NC, I'm partial to Peoples Bancorp. Not as cheap a TBV play as UWHR, but much better positioned for shareholders should upside M&A occur. Also, even at a ~30% premium (on TBV basis) versus UWHR, I think the M&A upside from current levels are about the same for both given the current base levels. I wrote up PEBK here if you don't know the name: https://goldenbeltinvestments.wordpress.com/2018/12/12/peoples-bancorp-of-north-carolina-pebk/

    ReplyDelete
  5. Thanks for reading and commenting! These kinds of comments are just what I was hoping for when I decided to write this piece.

    There is no question PEBK is a much better bank. And you're right, if PEBK sells, the upside should about equal UWHR's. I picked UWHR because it is so much cheaper and has a 66 year old CEO who has attended the Bank Director "Acquire or be Acquired" conference. Another smart friend of mine likes Blueharbor Bank (BLHK) better. You both make good cases and may be right.

    PS - Thanks for mentioning your blog. I hadn't seen it before. I own many of your picks.

    ReplyDelete
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  8. Phil,

    I like your work very much - thank you.

    Have you ever looked at Burke & Herbert Bank (BHRB) in Alexandria, VA? No activism there but the CEO (descendant of the founding Burke family) is getting up there (in his late 70's I think) and it seems like any one of a half dozen banks would jump at the chance to get in BHRB's footprint.

    It appears super-conservative - almost like Brown Brothers Harriman would be if they went public.

    Despite the $2,900+ price, the stock isn't a secret around DC although not much retail interest there, either.

    Any thoughts?

    Thanks.

    ReplyDelete