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Small Bank Newsl
etter
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November 2002
CAPITOL FEDERAL FINANCIAL (CFFN 22.50) is a federally chartered
mid-tier holding company of Capitol Federal Savings Bank. Total assets
at 8.7 billion, loans at 5.3 billion and deposits at 4.3 billion
on 6/30/2002. We will make this short and sweet this month. They
are the number one player in their market by a mile (remember always
buy the number one company when they all get hit) with 34 locations
and great asset quality. We feel this one has been hit unfairly.
They are not an Astoria Financial (AF). They have around 500,000
shares left in they current repurchase program and look for anot
her,
once this plan is finished. Better yet, maybe they will do another
Dutch Tender or do their second step conversion. They never wanted
to go public this way, but now their capital is much lower, do to
their Dutch Tender already completed. If they do the second step,
look for a $6-8 pop in the stock. Their book value is almost $14
a share and they pay a growing 3.60% cash dividend. They just announced
an increase in their cash dividend again to $0.21 per share. They
have management that continues to do the right thing for shareholders.
Like we said last month, buy all you can under $21.5 and accumulate
under $22.5. Downside limited to 10%, we feel, from these levels
with 40% + upside potential over the next 2-3 years. Their earnings
for the quarter are coming out the first week in November. Look some
some-great news that week. Now our largest holding. Located Topeka,
KS.
FOLLOW UPS:
- 1.NORTH CENTRAL BANCSHARES (FFFD) announced another 6% stock repurchase program
or 100,000 shares.
2. NORTH DALLAS BANK & TRUST (NODB) earnings up again to $0.81 in the
latest quarter. Hold.
3. MFB CORP (MFBC) earnings in the latest quarter up to $0.42, up 16% over
the same per
iod prior. Not bad. But let's see a sale of the Bank, soon, management!
Cheap stock under $22, but management is lost in the woods.
4. INTERVEST BANCSHARES CORP. (IBCA) earnings up 126% in the latest quarter
to $0.41 a shares WOW! Double-digit growth across the board. Hold.
5. FIRST BELL BANCORP (FBBC) earnings blow out again at $0.52 a share with
book value up to $16.27. Asset quality still the best. Loans continue to drop.
Look for a sale within 1-2 years or sooner. Hold. Buy more under $17 only.
6. AMCORE BANK (AMFI) adding 34 more ATMs a good move in 15 communities in
northern Illinois. Earnings for the quarter also up a bit. Buy more under $20.50
only.
7. AMERICAN RIVER HOLDINGS (AMRB) earnings up 8% in the latest quarter to $0.43
a share. Buy more under $17.5 only.
8. CITIZENS SOUTH BANKING (CSBCD) earnings blowout in the latest quarter. Hold.
Second step completed. Look for a sa
le of the Bank in 1-3 years.
9. MERCANTILE BANKSHARES (MRBK) earnings solid for the quarter. Buy more under
$33.5 only. Now our second largest holding.
Many large regional banks lost 30-50% of their value over the past
few months. In fact, many lost this in just one or two weeks early
this month. We have gotten back in on
KEY, AF and BK (all NY banks
we like at the right price for trading mostly) all under $22 only,
and we would unload all in the $26-29 range. This continues to be
a great trading market and the risk reward earlier this month on
many issues was simply the best since October 1998 on many large
regional banks. Smaller banks also got hit on a case by case basis,
but many have come all the way back already. Some examples are CBU,
and AMRB. You only get one chance to buy at great levels, but this
time they gave us two chances to get in on many of them. Thank you!
Remember most of your gains for the year are made in a few days
in this current market, unless you get the takeouts.
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As always, you may call me with any qu
estions on any stock. This
is a free service to our subscribers.
To contact Douglas Hughes via email - dhughes33@charter.net
Personal Account Management: Bank Stock Portfolios.1.25%-1.75% FEE.
$1,000,000 Minimum. Douglas Hughes Hughes Investment Management.1-888-814-7575.
The Small Bank Newsletter is published 12 times a year. (To
Subscribe: 1-888-814-7575).
- Douglas Hughes -- Small Bank Newsletter, Hughes Investment Management
, can and does take positions, in stocks it recommends.All material
Copyright© 1995-2003 by Douglas Hughes. Reproduction of this
publication in whole or in part is strictly forbidden.
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