What is
The Small Bank Newsletter?

Banks earned more in the last 6 years than they did between 1960 and 1990. Not many investors can turn away from this. Even long-time bank investors are building up their positions in order to take advantage of the double-digit earnings, strong credit quality and Industry Consolidation. In the first half of this year, banks broke records in efficiency ratios, return on assets, percentage of non-performing loans and core deposit. Many of these small, under-followed banks have only 1-8 million shares outstanding -- which should produce strong returns. These small banks also tend to be prime candidates for stock splits and buyouts. The spread is usually ½ point to 2 points, so these stocks are not for traders.

You have two kinds of bank stock investors today: people who like the bank business and those just discovering them because of their performanc e. Banks today are buying back stock, increasing cash dividends and paying stock dividends. This really adds up over the long run in creating value to shareholders. They continue to provide moderate growth and low valuations relative to the broader market. To date, banks have over 250 different fees. This has increased from around 90 fees in 1990 and now account generally for 30% or more of most banks' earnings.

Every month you'll receive new buy/sell and hold recommendations. Mostly these are small banks which are not followed, resulting in big gains -- usually paying 1-4% dividends with limited downside risk. Our average hold time is 3-5 years. Lately it has been much shorter due to the strong market. Each month we personally speak to the management in over 100 banks and find the best values for the greatest returns. Some of our current members inc lude Fidelity Investments, Second National Bank, numerous bank board members and brokers from all major firms.

As always, you may call me with your questions on any stock. The way to make money over the long term in a high-priced market is when there's controversy, such as now.

As always, you may call Douglas Hughes 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-© 2007 by Douglas Hughes. Reproduction of this publication in whole or in part is strictly forbidden.