Small Bank Newsl etter

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) earning s 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 re gional 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 hav