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Small Bank Newsletter
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November 2003
INTERVEST BANCSHARES CORP. (IBCA 13) is a nationally chartered
Bank, headquartered in NYC, with 5 full – service offices in
Clearwater and Pinellas County, Florida. This bank was featured before,
in our past newsletter several years ago, but was sold in the Internet
craze of 1998 and again, it was featured to buy at $7 in January
of 2001. (But now it’s the same price with all the growth they
have had). Now is the time to get a big position under $13.10 (the
stock trades all day long between $12.85 and $13.15, buy it slowly)
before year-end, as a sale of the bank is now closer. Once the cheap
warrants expire, there will be no more big selling and no shares
to buy. Load up now. This bank has almost doubled in size since two
years ago in assets, deposits and loans. Loan growth is very strong
still and even though they have 2 problem loans in the latest quarter,
they are well reserved and backed by real estate with no losses expected.
These guys know how to run a bank with their deposit base at over
$150 million on the 3rd floor. WOW! That’s right, I’ll
say it again, $150+ million in deposits on the third floor of a building
and an efficiency ratio of 29%. That’s how to run a bank. Earnings
for the quarter were $0.52 per share for the latest quarter with
many more shares also now outstanding. They are located in all the
right markets and a Bank of this size can continue to steal market
share from the big boys as many other small banks merge. Their growth
opportunities going forward are still great. Management is smart
and owns most of the stock. We can look forward to strong stock appreciation
over the next several years, as strong earnings will drive the price
much higher, we feel. (about 17% per year). They have a book value
of $12.61 a share and should earn $2.25+ a share in 2004. With a
P/E of 6 it is hard to find a value like this in this market. This
Bank trades plenty and is liquid. (earnings up almost 100% from 2
years ago). They have just over 5 million shares outstanding. Look
for management to make this bank a mini powerhouse over the next
several years. Accumulate under $13.15. Buy all you can under $12.50.
Downside should be limited to around 10% if we get a hard correction
in this sector. Worth at least $28+ a share 3- 4 years out in a deal.
Long-term investors only.
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FOLLOW UPS:
- 1. NBC CAPITAL CORP (NBY) earnings down a little to $0.38 a share in
the last quarter. Increased their cash dividend by 9.1% to $0.24 a
share. Buy more under $24. Look for a sale within one year.
2. HIBERNIA (HIB) reported a very solid quarter. Hold.
3. CHEMUNG FINANCIAL (CHMG) more bad loans, however the bank retired
a lot more shares and they still had an OK quarter. A sale is coming
with so many of their peers at bubble prices, someone will take them,
friendly or not. Management wake up and take someone else’s great
currency since you can’t get your stock in line with others in
your market. Perhaps Tompkins Trust will take them. They know how to
run a bank and have the currency to do it.
4. CAROLINA BANK (CLBH) assets grew 24% and loans grew 21%, wow! Earnings
up 97% in the latest quarter. Hold.
5. ROME BANCORP (ROME) as we said they would, they lost money in the
last quarter. Sell as fast as you can.
6. HOMF FEDERAL (HOMF) earnings of $0.62 a share in the last quarter,
very nice. Now our 4th largest holding. Hold.
7. HARLEYSVILLE SAVINGS FINANCIAL (HARL) increased their cash dividend
by 11.1% to $0.20 a share and earned $1.98 in the last year. Book value
over $18 a share now. Hold.
8. WHITNEY HOLDINGS (WTNY) great quarter, now our largest holdings.
Hold and buy more under $33.
9. FLATBUSH FEDERAL AND RAINIER PACIFIC FINANCIAL - Two new
issues that opened at bubble prices. Stay away or sell if you had
any
of these
deals.
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As always, you may call me with any questions 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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