Small Bank Newsletter

June 2002

 

LNB BANCORP, INC (LNBB 21.30-21.70) is a holding company for Lorain National Bank, a national banking association. The Bank operates 21 locations, two of which are in shopping centers and they own 14 of these locations. They have a network of 29 ATM's in nine communities of Lorain, Elyria, Amherst, Avon Lake, LaGrange, Oberlin, Olmster Township, Verilion and Westlake. They are relocating one old branch at the end of this year or early next year and then will sell the old branch off. They also own Charleston Insurance Agency, Inc. The bank provides a full range of banking services. Total assets at 3/31/2002 were $662 million, loans at $483 million and deposits at $522. Loan growth was strong in first quarter at 8% with commercial loans leading the way. Their trust department has $350 million in assets under management, not bad. Their asset quality is good with reserves at 1.28% of loans and non-performing loans at 0.52%. The bank paid a 2% stock dividend last July so maybe this July we will get another one. Earnings in the latest quarter were strong at $0.49 a share, up 4% from the same period prior. Return on assets was 1.29% at the end of the first quarter and the annualized return on average shareholders' equity was 13.56%. They have over 240 employees and are simply one of the best-run banks for their size in OH. They pay a healthy dividend, $1.00 a share, that's a 4.65% yield, plus stock dividends and stock appreciation. You should be able to make 12%+ on an annualized basis over the next 5 years. Also, if they were to sell, a 50% premium to today's prices would be warranted. They have 4.32 million shares outstanding and a float of only 2.5 million shares, as insiders own alot. Their book value is $14.47 and trading at a P/E of 11 is cheap for an institution of their size. This stock trades plenty, load up now under $22.5. This stock has not made the strong move like many other banks over the past 1½ years, but it will. Remember, Ohio is way over banked. They have no stock buyback in place, but perhaps next year they will buy back 5% of the stock, which would put a floor on the price in our opinion. Located Lorain, OH.

FOLLOW UPS:

1. PEOPLES BANCORP (PEBO) announced a 10% stock dividend to be issued June 28,20 02. Sell if you have any left, fully priced.
2. YARDVILLE NATIONAL (YANB) sell for a 50% return in 8 months, fully priced now.
3. PAMRAPO BANCORP, INC (PBCI) announced a two-for-one stock split to be paid May 29, 2002. Sell, fully valued.
4. HANCOCK HOLDING (HBHC) sell, fully priced for a 70% return.
5. WHITNEY HOLDING (WTNY) sell for a 90% long-term gain. Short-term holders who got in last September, wait until September to get the long-term gain. 5 year + holders, hang on for 10 more points.
6. NORTH CENTRAL BANCSHARES (FFFD) sell for a 40%+ return. Fully priced.
7. NORTH DALLAS BANK (NODB) buy more under $38.
8. SALISBURY BANCORP (SAL) sell for a 25% return. Fully priced.
9. NBT BANCORP (NBTB) sell for a 33% return. Fully price d.
10. ACCESS ANYTIME BANK (AABC) earnings up over 50% in the last quarter from the same prior. Buy more under $9.5.
11. NB&T BANCORP (NBTF) buy more under $21.
12 . COMMERCIAL BANKSHARES (CLBK) sell for a 50% return. Fully priced.
13. GASTON FEDERAL (GBNK) earnings exploding, buy more under $17.5.
14. HUDSON CITY BANCORP (HCBK) sell for a 275%+ return. Fully priced.
15. STATEN ISLAND BANCORP (SIB) s ell for a 150% return. Fully priced.
16. INDEPENDENCE COMMUNITY BANK (ICBC) sell for a 100% return. Fully priced.

While many banks continue to run, this is getting "out of hand" on many issues. While we may be leaving some money on the table, you must sell now on many issues that are approaching over-valued status. We are "shorting" United Community Bank (UCBI) over $58.75 for a hedge for large accounts and for traders. We are also "shorting" Brookline Bancorp (BRKL) over $27 again, as a hedge for large accounts and trading only. Shorting involves unlimited risk and should be done by a professional only. Please take some profits and enjoy your money. Do not chase any stocks above our limits. Once again, we are the top rated newsletter for the last 12 months for any and all newsletters.

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