UPDATE: CNA Financial Corp, Latrobe, PA (CNAF)

Three years after my November 2014 Timyan Bank Alert review of CNAF, the stock is still ripe for investors cherry picking high dividends.

CNAF is still cheap — priced roughly the same as in 2014, whereas the BKX index is up 47%.

Today, though, I'm less impressed with Commercial Bank & Trust's Management, which is missing opportunities to cultivate value and is putting CNAF at risk of languishing around book value for another three years.

More responsible caretakers of the stock would reduce the bank's bond market bet, and use excess capital to repurchase shares. CNAF could then reach $30 per share and pay increased dividends.

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Disclosure: As of this posting, I own shares of CNAF and may subsequently either dispose of them or purchase more.

Prospective Buyers	As a unionized bank, Commercial Bank & Trust of PA is highly unlikely to sell in the foreseeable future, but that doesn't mean these local players wouldn't find it to be sweet pickings. First Commonwealth, Indiana, PA (FCF) F.N.B Corp, Pittsburgh, PA (FNB) S&T Bancorp, Indiana, PA (STBA)
Financial Snapshot †as of 09/30/2017	Total assets: $429M† Tangible book value per share: $20.70† NPAs to assets: 0.08%† Price to book: 106% Market cap: $62.8M Dividend yield: 4.7% Trailing 12-month ROA: 1.04%† Trailing 12-month ROE: 7.51%†
The Crew	George V. Welty, Chairman Gregg E. Hunter, Vice Chairman, President and CEO Thomas D. Watters, Executive VP and CFO
The Skinny	Sweet Notes I find a lot of things sweet about this stock pick: Insiders own 25% of CNAF  CEO Hunter is CNAF's largest holder with 9.9% CNAF offers a nice safe dividend yielding 4.7% The stock is cheap to book at 106% Commercial Bank & Trust of PA has built a wonderful deposit base and growing, albeit slowly, loan portfolio 32% of the bank's deposits are low-cost transaction accounts Credit quality at the bank is pristine  The bulk of loans are lower-risk 1-4 family mortgages Sour Notes On the other hand, every cherry has a pit, and CNAF could choke on any one of these pitfalls: Commercial Bank & Trust of PA is holding more securities in its portfolio than advisable, subjecting the bank to significant losses if interest rates rise The bank's location in a low growth area of Pennsylvania limits opportunities for loan growth Management has probably squeezed all the earnings growth we're going to see from cost cutting — there's not much more to cut Management's reluctance to buy back shares may spoil CNAF's best opportunity to grow earnings per share
Sources	Commercial Bank & Trust website 2017 Proxy Statement Q3 2017 Quarterly Report 2016 Annual Report SNL Financial Confidential interviews with shareholders and analysts

First Resource Bank, Exton, PA (FRSB)

A Case of Doing Pennsylvania Proud

First Resource is my kind of bank. It offers good old fashioned, treat-your-customer-right community banking, and is unfollowed by any Wall Street analyst.

If you know any Pennsylvanians who'd appreciate an opportunity to double their money by investing locally, spread the word! I'd love to see them move their Wells Fargo or Bank of America accounts to First Resource Bank, buy some FRSB stock, and come along for the ride.

In three years, FRSB should be earning over $1.00 per share, reach book value of $10, and trade at $15.

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Disclosure: As of this posting, I own shares of FRSB and may subsequently either dispose of them or purchase more.

Prospective Buyers	Acquiring First Resource Bank would vault any of these local competitors up to a solid third place in marketshare, behind Bank of America (BAC) and BB&T (BBT). Isn't that what we want — more of America's community banks competing powerfully against the Too Big To Fail banks? Bryn Mawr Bank Corp, Bryn Mawr, PA (BMTC) DNB Financial Corp, Downington, PA (DNBF) Fulton Financial Corpo, Lancaster, PA (FULT)
Financial Snapshot †09/30/2017	Total assets: $249M† Tangible book value per share:    $8.72† NPAs to assets: 2.4% Price to book: 112%† Market cap: $25.7M Dividend yield: 0% Trailing 12-month ROA: 0.7%† Trailing 12-month ROE: 8.5%† TARP: $0M* *Redeemed $2.6M 09/15/2011
Luminaries	James Griffin, Chairman Glenn Marshall, President and CEO Lauren Ranalli, Executive VP, Secretary, and CFO
Gold Stars	Great People - I first learned about First Resource Bank from the proprietor of Honesdale's Hotel Wayne, who is also a top-notch bank investor. He introduced me to Glenn Marshall, who started the bank in 2004, built it from nothing, and manages it with transparency and integrity. Great Market - Both branches of First Resource Bank are in Chester County, which is one of the best banking markets in the State of Pennsylvania. It has the state's highest median household income ($86K) and benefits from both a low unemployment rate (3.4%) and proximity to Philadelphia. Great Banking - First Resource Bank runs lean on equity, is a low-cost provider, and consistently keeps expenses close to 2.5% of assets. I also appreciate that the board and management are heavily invested in FRSB, owning nearly 25% of the stock. Great Opportunity - FRSB has lots of room to grow. Within five miles of the bank's two branches lie $5B in deposits. In the wake of the mergers of National Penn Bank (NPBC) and Susquehanna Bank (SUSQ) into BB&T (BBT), First Resource has an opportunity to pick up talent and customers, as well.
Sources	First Resource Bank website 2016 Annual Report SNL Financial Confidential interviews with management and shareholders

UPDATE: Northeast Community Bancorp, White Plains, NY (NECB)

It's time Management at Northeast Community Bancorp stop hoarding the company's shares.

Since my August 2012 review, NECB has managed to accrue some value and bank operations have improved upon Jose Collazo's ascendance in leadership.

Still, Management has failed to feed the bank's shareholders a square meal now for over 11 years, even though they could easily double NECB's value just by converting the rest of the stock to full public ownership.

As I explain below, even if they don't, NECB is too cheap to ignore.

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Disclosure: As of this posting, I own shares of NECB and may subsequently either dispose of them or purchase more.

Prospective Buyers	Dime Community Bancshares, Brooklyn, NY (DCOM) PCSB Financial Corp, Yorktown Heights, NY (PCSB) Webster Financial Corp, Waterbury, CT (WBS)
Financial Snapshot †as of 09/30/2017 (estimates based on Call Report)	Total assets: $759M† Tangible book value per share:    $9.25† NPAs to assets: 0.67%† Price to book: 108% Market cap: $122M Dividend yield: 1.2% Trailing 12-month ROA: 0.9%† Trailing 12-month ROE: 5.8%†
Mostly Scoundrels †One Luminary	Kenneth Martinek, Chairman and CEO Kenneth H. Thomas, Director Diane B. Cavanaugh, Director Jose Collazo, President and COO†
The Skinny	Given where recent conversions trade in the market, the NECB value proposition is better than ever. Were NECB to fully convert at book value, minority shareholders would obtain $18.83 per share. NECB is trading at about half that value today,  right where it converted in 2006. Even if the bank opts not to fully convert, Northeast Community shareholders can be glad to have stayed at the table. The dinner may be late, but it won't be too shabby compared to what's available in the neighborhood. For example, consider another similarly-sized New York Mutual Holding Company that recently effected a partial conversion like NECB's — PDL Community Bancorp (PDLB). PDLB has a $275M market cap and assets about the same as NECB's at $813M, but were PDL to sell the rest of its shares at book value, its minority shareholders would obtain only $16.20 a share. PDLB is trading at 92% of that value today. Meanwhile, NECB is trading at half PDLB's market cap, while earning twice the money as PDLB.
Sources	Northeast Community Bank website 2017 Proxy Statement 2016 Annual Report SNL Financial Confidential interviews with shareholders and analysts Kenneth H. Thomas business Diane B. Cavanaugh business