Tag Archives: First Financial

Business, Finance, Occupation & Industry

I'm Buying a Lot More of These 3 Stocks

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By Jim Royal, The Motley Fool

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One of my favorite reasons to reinvest in stocks I already own is when an uncertain, but favorable catalyst occurs, but the stock does little. So my Special Situations portfolio is adding $1,000 to each of the following three stocks: Cincinnati Bell , Bridgepoint Education , and First Financial Northwest . Read on to see why.

Cincinnati Bell
I was on Boston’s WRKO radio station earlier this week pitching the virtues of Cincinnati Bell. (You can listen here.) I continued to like the stock for all the reasons I noted in my first buy recommendation last month.

To recap, Cincinnati Bell owns a 69% stake in CyrusOne , which is worth over $1 billion now. It intends to monetize this asset some time following a lock-up period that ends in January. CyrusOne is growing quickly, and revenue could easily climb 20% this year. This is Cincinnati Bell‘s best asset and the rapid deleveraging – I expect debt could be slashed by 70% in the next year or two — should help boost free cash flow markedly.

The market was really upset by management’s decision to reinvest in its wireline business and not pay a dividend. But that huge drop in the share price resets the market‘s expectations for CinBell, even as CyrusOne now has public pricing and a firm valuation. Depending on the timing of deleveraging, I think CinBell has the chance to double in the next two years, perhaps sooner. Listen to the radio broadcast for more.

First Financial Northwest
First Financial is no longer considered a troubled bank. Last week, First Financial announced that its bank had cleared the memorandum of understanding, or MOU, with regulators, and that the company had cleared two conditions of its own MOU with the Feds. However, the company is still subject to conditions under that latter MOU, and must receive federal approval for any buybacks or dividends, meaning they’re effectively off the table for now.

These are all steps in the right direction and, with Joseph Stilwell minding the shop here, I’m confident that the bank will actually begin to take steps to create value for shareholders. Recall that one of Stilwell’s typical exit strategies for his bank investment is by an outright sale. And with the average demutualized thrift going for 1.6 times tangible book value, there’s a lot of upside from First Financial‘s 0.76 multiple. You can read why I first bought the stock here.

Bridgepoint Education
This for-profit educator has been under a lot of pressure in the last year, but accreditors really seem to be working with the company, and I’m confident that Bridgepoint will be able to survive. The company has a market cap of $561 million, but cash and investments of $515 million, so any type of profitable survival is likely to be highly lucrative to shareholders. The company generated $118 million in free cash flow last year, and would be

From: http://www.dailyfinance.com/2013/04/11/im-buying-a-lot-more-of-these-3-stocks/

Business, Finance, Occupation & Industry

First Niagara Financial Stock: 9 Critical Numbers

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By John Maxfield, The Motley Fool

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Given that you clicked on this article, it seems safe to assume you either own stock in First Niagara Financial or are considering buying shares in the near future. If so, then you’ve come to the right place. The table below reveals the nine most critical numbers investors need to know about First Niagara Financial stock before deciding whether to buy, sell, or hold it.

But before getting to that, a brief introduction is in order. First Niagara traces its roots back to 1870 with the founding of Farmers and Mechanics’ Savings Bank. In the intervening years, it’s grown into one of the largest regional banks in the Northeastern United States. While it did so, according to Wikipedia, through “the recruitment of new customers, as opposed to the purchase of other firms’ assets,” the same can’t be said of the bank’s growth in the time since the financial crisis. The Buffalo, New York-based bank has completed multiple acquisitions over the last five years, culminating in the recent and anticlimactic departure of its now-former CEO John Koelmel. At present, First Niagara has $37 billion in assets and 360 branches in four Northeastern states.

As you can see in the table above, First Niagara‘s primary strength is in its management of credit risk — the significance of which cannot be overstated. Its nonperforming loans ratio comes in nearly 100 basis points less than the industry average. Beyond that, it pays out an arguably overly generous portion of its net income via dividends.

On the other hand, the more glaring problem is its subpar net interest margin and lackluster return on equity. Not captured by the numbers are the growing pains that First Financial is unquestionably suffering as a result of its aggressive expansion since the crisis. To fund the growth, the bank has increased its outstanding share count from 102.8 million shares in 2007 to nearly 350 million today. And as a consequence, its earnings per share have been sliced in half, going from $0.82 per share down to $0.40, and its quarterly dividend payout followed suit.

Many investors are scared about investing in big banking stocks after the crash, but the sector has one notable standout. In a sea of mismanaged and dangerous peers, it rises above as “The Only Big Bank Built to Last.” You can uncover the top pick that Warren Buffett loves in The Motley Fool’s new report. It’s free, so click here to access it now.

The article First Niagara Financial Stock: 9 Critical Numbers originally appeared on Fool.com.


John Maxfield has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a …read more

Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

The First Quarter's 10 Best Bank Stocks

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By John Maxfield, The Motley Fool

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With the first quarter of 2013 officially over, it’s time to take a look back at the best performing bank stocks over the three-month time period.

As you can see in the table below, the list was led by little known First Financial Holdings . First Financial primarily operates as the holding company for First Federal Bank, a regional lender with 66 branches located throughout North and South Carolina.

Over the past two years, the holding company has been shedding assets at a considerable clip. In May of 2011, it disposed of its insurance agency subsidiary, First Southeast Insurance Services. Four months later, it completed the sale of its managing general insurance subsidiary, Kimbrell Insurance Group. And one month after that, it sold roughly $200 million in loans to a private investment group. If its performance in the first quarter of this year is any indication, this simplification has struck a chord with investors, as its shares were up more than 60%.

Bank

First-Quarter Performance

Market Cap ($ millions)

First Financial Holdings

60.74%

346

Virginia Commerce Bancorp

56.98%

456

Bank of the Ozarks

33.10%

1,568

Western Alliance Bancorp

31.43%

1,203

Bank Mutual Corp.

29.21%

257

Glacier Bancorp

29.03%

1,366

BofI Holding

29.02%

460

SVB Financial Group

26.75%

3,182

The Bancorp

26.25%

518

SCBT Financial

25.97%

857

Source: Finviz.com. Only banks with a market capitalization over $200 million were included in the analysis.

Another notable mention here is Bank of the Internet , a “nationwide branchless bank” that provides deposit and loan services to its customers principally over the Internet. As its website proclaims, “Because we do not incur the significantly higher fixed operating costs inherent in a branch-based distribution system, we are able to provide a better value to our customers. This means our interest rates on deposit products are generally among the highest available and our loan products feature low rates and fees.”

Using this model, BOFI has been able to nearly triple its asset base over the last five years. And it’s seemingly been able to do so without compromising on the quality of service. Two weeks ago, for example, it was named the 2012 top service provider by Costco Mortgage Services, a division of the membership retailing giant. According to Costco’s director of mortgage services: “We hold our service providers to the high standards that Costco members expect to receive from Costco services programs. We are pleased to award the honor of Top Service Provider to Bank of Internet for providing service above and beyond our already high standards.”

And finally, SVB Financial continues its impressive ascent, ending the quarter up by 27%. Short for Silicon Valley Bank, SVB counts among its clients some of the nation’s most innovative companies and, according to Forbes magazine, it “played an important role in the early days of companies including Cisco Systems, Electronic Arts, and Intuit.” Leveraging this model …read more
Source: FULL ARTICLE at DailyFinance