Friday, April 20, 2012

SYBT VLY HBAN SUSQ HBNC FNLC XIN/5 Year TIPS Sold at a Minus 1.08% Yield

It is virtually impossible for me to see how Spain's banks can avoid a government bailout. With bad real estate loans piling up from the bursting of a housing bubble and a 23% unemployment rate, nonperforming loans have to increase from the already troublesome levels. (see generally articles at BloombergWSJ and Reuters) If the truth was really known about the full extent of their bad loans, I suspect that most of the Spanish banks would now be declared hopelessly insolvent.

Spain's IBEX 35 Index fell below 7000 yesterday and is now  below where it stood in March 2009.  On 4/2/12, that index closed at 8040.82, and at 6,908.1 yesterday. The two year high was hit in February 2011 at 11,068.1. 

The LT Huntington Bankshares moved into my profit column after reporting net income of $153.3 million, or 17 cents per share, for the first quarter, beating the consensus estimate of 14 cents. 

The LT Susquehanna Bancshares increased its quarterly dividend from 3 cents to 5 cents per share.

Motley Fool corrected the article about Xinyuan and republished it with the corrections that I pointed out. Xinyuan Real Estate

The treasury sold 5 year TIPs yesterday at a negative -1.08% yield.

The Philadelphia Fed's manufacturing survey fell to 8.5 from 12.5 in March.  philadelphiafed.pdf

Astoria Financial, a bank formerly owned as part of the regional bank strategy, reduced its quarterly dividend from 13 cents to 4 cents. Sold 101 AF at $14.89 Sold 50 AF at $14.09

1. S.Y. Bancorp (own 50 shares: Regional Bank Basket Strategy): S.Y. Bancorp reported net income of $6.502 million for the 1st quarter or 47 cents per share, up from 40 cents in the year ago quarter. The consensus estimate generated by six analysts was for 43 cents. 

As of 3/31/2012, the net interest margin was 4.07%; the efficiency ratio was 52.32%; the total risk based capital ratio was 14.39%; the Tier 1 risk-based capital ratio was 13.13%; the annualized return on average assets was 1.29%; NPLs stood at 1.9% of total loans; the allowance for loan losses to NPLs was 107.35%; and the ratio of tangible common equity to tangible assets was at 9.37%. 

SYBT was a recent addition to the regional bank basket strategy.  Bought 50 SYBT at $21.84 (3/6/12 Post)

S.Y. Bancorp closed yesterday at $22.33.

2. Valley National Bank (own 250 sharesRegional Bank Basket Strategy)Valley National Bancorp declared a 5% stock dividend payable May 25 to shareholders of record May 11. This bank has declared a stock dividend for 21 straight years. I do not regard that as important. I am far more interested in dividend increases.  It is material that the dividend increase is applied to a higher share count. VLY's history of dividend increases since 1986 can be found at its website. Valley National Bank In early 1987, the quarterly rate was $.0398 per share. That rate has been increased every year to the current rate of $.1725.

3. Horizon Bancorp (HBNC) (own 50 shares: Regional Bank Basket Strategy): Horizon Bancorp reported first quarter earnings of 88 cents per diluted share, up from 49 cents for the first quarter of 2011. The consensus estimate generated by 4 analysts was for 60 cents. 

Tangible book value per share rose to $21.35 from $18.11 as of 3/11/11.

As of 3/31/2012, the net interest margin was 3.87%; NPLs to total loans stood at 2.11%; the return on average assets was at 1.23%; the total capital to risk weighted assets ratio was 13.03%; and the tier 1 capital to average assets ratio was 8.54%.

HBNC was a recent addition to the regional bank basket. Bought 60 HBNC at $17.55 (3/29/12 Post). 

The earnings were released about one hour before the market close last Wednesday. The stock immediately popped, rising 5.35% or $.97 to close at $19.09.  Volume increased to 61,706 from an average of 12,604.

Horizon Bancorp shares rose another $2.11 in trading yesterday to close at $21.2.

4. First Bancorp (own 50+ shares: Regional Bank Basket Strategy): The First Bancorp, a small bank operating in Maine, reported net income of $2.9 million for the first quarter or 28 cents per share, down 1 cent per share from the first quarter of 2011.

As of 3/31/2012, the net interest margin was 3.22%; the GAAP efficiency ratio was 51.6%; the return on average assets was .84%; NPLs to total loans increased to 2.81% (up from 2.51% as of 3/31/2011); and the tangible book value per share was $11.34. The capital ratios remain above the levels for well capitalized banks:

FNLC Capital Ratios and Dividend Policy

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