Undervalued Regional Bank Stocks With Strong Dividends

I found this screen of cheap, small regional bank stocks, which I think warrants a closer look.  Due to these banks’ small size, their stocks are very illiquid (average trading volumes for some of these companies is fewer than 1,000 shares per day) and they are overlooked by Wall Street. The criteria given for this screen are:

  • EPS growth past year > 6%
  • Dividend yield > 3%
  • Payout ratio < 50%
  • 5-year dividend growth > 0%
  • Price/Tangible Book Value < 2X
  • Deposits/Liabilities > 85%

The screen returns the following 11 stocks:

  • Pulaski Financial Corporation (NASDAQ:PULB):  The shares have traded in a 52-week range of $6.12 to $7.82, and most recently traded at $7.13 per share.  Its market capitalization is $78 million, it earned $0.78 per share last year, and it pays a dividend of $0.38 per share, for a yield of 5.3%.  About the company: Pulaski Financial Corp. is the holding company for Pulaski Bank, a federally chartered savings bank. The Bank attracts deposits from the general public and uses these funds to originate one to four family residential mortgages. Pulaski Bank operates in St. Louis and St. Louis County, Missouri.
  • Commercial National Financial Corp. (NASDAQ:CNAF): The shares have traded in a 52-week range of $16 to $20.75 and most recently traded at $18.50.  Its market capitalization is $55.7 million, it earned $1.93 per share last year, and it pays a dividend of $0.88 per share, for a yield of 4.4%.  About the company:  Commercial National Financial Corporation is the holding company for Commercial Bank & Trust of PA. The Bank offers a variety of banking services, including extending credit, providing deposit services, and offering financial counseling. Commercial National operates in Latrobe, Unity Township, Ligonier, West Newton, Greensburg, Murrysville, and Hempfield Township.
  • National Bankshares Inc. (NASDAQ:NKSH):  The shares have traded in a 52-week range of $21.27 to $32.80 and most recently traded at $25.33.  Its market capitalization is $175.6 million, it earned $2.28 per share last year, and it pays a dividend of $0.96 per share, for a yield of 3.9%.  About the company: National Bankshares, Inc. is a holding company for the National Bank of Blacksburg. The Bank attracts deposits from the general public and use these funds to originate commercial, real estate, and consumer loans. National Bankshares operates in Montgomery, Giles, Carroll,Tazewell, and Grayson counties in Virginia, and Mercer county West Virginia.
  • Auburn National Bancorporation, Inc. (NASDAQ:AUBN): The shares have traded in a 52-week range of $18 to $22 and most recently traded at $19.73 per share.  Its market capitalization is $71.8 million, it earned $1.45 per share last year, and it pays a dividend of $0.80, for a yield of 4.1%.  About the company:  Auburn National Bancorporation, Inc. is the holding company for AuburnBank. The Bank attracts deposits from the general public and originates a variety of loans and invests in fixed income securities. AuburnBank operates primarily in Lee County, Alabama.
  • Alliance Financial Corporation (NASDAQ:ALNC):  The shares have traded in a 52-week range of $27.01 to $33.89 and most recently traded at $29.75.  Its market capitalization is $141.16 million, it earned $2.59 per share last year, and it pays a dividend of $1.20 per share, for a yield of 4.1%.  About the company:  Alliance Financial Corporation is the holding company for Alliance Bank N.A. The Bank provides banking, trust, and investment services through community branch locations in Cortland, Madison, Oneida, Onondaga, and Broome counties, New York.
  • First of Long Island Corp. (NASDAQ:FLIC):   The shares have traded in a 52-week range of $24.01 to $29.61 and most recently traded at $27.71 per share.  Its market capitalization is $242 million, it earned $2.22 per share last year, and it pays a dividend of $0.88 per share, for a yield of 3.3%.  About the company:  The First of Long Island Corporation is the holding company for The First National Bank of Long Island. The Bank is a full-service commercial bank that provides a range of financial services to individual, professional, corporate, institutional, and government customers.
  • German American Bankcorp, Inc. (NASDAQ:GABC):  The shares have traded in a 52-week range of $14.95 to $18.91, and most recently traded at $16.86.  Its market capitalization is $212.28 million, it earned $1.30 per share last year, and it pays a dividend of $0.56 per share, for a yield of 3.4%.  About the company:  German American Bancorp Inc. is a multi-bank holding company. The Banks provide a wide range of retail and commercial banking, mortgage banking, trust and brokerage services, title insurance, and personal and corporate property and casualty insurance products. German American Bancorp operates in southwestern Indiana.
  • Tompkins Trustco, Inc. (AMEX:TMP):  The shares have traded in a 52-week range of $35.93 to $42.50, and most recently traded at $38.65.  Its market capitalization is $420.59 million, it earned $3.13 per share last year, and it pays a dividend of $1.36 per share, for a yield of 3.5%.  About the company:  Tompkins Financial Corporation is the holding company for Tompkins County Trust Company, The Bank of Castile, and The Mahopac National Bank. The Banks operate branches which serve the Genesee Valley region of Western New York, Tompkins County and surrounding areas in Central New York, and Putnam County. Tompkins’ offers personal and business services, including investment management.
  • NBT Bancorp, Inc. (NASDAQ:NBTB):  The shares have traded n a 52-week range of $19.27 to $24.98 and most recently traded at $21.92 per share.  Its market capitalization is $754.9 million, it earned $1.66 per share last year, and it pays a dividend of $0.80, for a yield of 3.7%.  About the company: NBT Bancorp Inc. is a banking holding company. The Company, through its Banking subsidiaries, operates branches in New York and Pennsylvania and provides a full range of retail and commercial banking services,as well as trust and investment services for individuals and businesses.
  • SY Bancorp, Inc. (NASDAQ:SYBT):  The shares have traded in a 52-week range of $22.49 to $25.80 per share, and most recently traded at $23.39.  Its market capitalization is $322.45 million, it earned $1.71 per share, and it paid a dividend of $0.72 per share, for a yield of 3.1%.  About the company:  S.Y. Bancorp, Inc. is a holding company for Stock Yards Bank & Trust Company. The Bank offers a wide range of commercial and personal banking activities, operates a mortgage division, and provides personal and corporate trust services. Stock Yards currently operates several offices in Kentucky and Indiana.
  • LSB Financial Corp. (NASDAQ:LSBI):  The shares have traded in a 52-week range of $8.80 to $16.36 and most recently traded at $15.40 per share.  Its market capitalization is $23.92 million, and it earned $1.15 per share last year.  About the company:  LSB Financial Corp. is the holding company for Lafayette Savings Bank, FSB. The Bank attracts deposits from the general public and uses those funds to originate a variety of commercial and consumer loans. Lafayette Savings operates in Tippacanoe County, Indiana.

Giant Competitors to Watch: Bank of America (NYSE:BAC), Deutsche Bank (NYSE:DB), JPMorgan Chase (NYSE:JPM), HSBC (NYSE:HBC), U.S. Bancorp (NYSE:USB), Financials (NYSE:XLF) and Wells Fargo & Company (NYSE:WFC).

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