Top Bank Stocks For 2014

On the fast track

On May 21 the European Medicines Agency [EMA] delivered some very positive news for Gilead Sciences Inc. (GILD) and its oral hepatitis C drug sofosbuvir. The EMA will provide an accelerated review of Gilead’s Marketing Authorization Application [MAA] the once-daily oral nucleotide analogue inhibitor for the treatment of chronic hepatitis C virus [HCV] infection.

Gilead’s MAA submitted to the EMA on April 17, 2013 includes Phase 3 study data that supports the use of sofosbuvir to treat seven of the 11 major HCV genotypes. For patients with type 2 and 3 HCV infections, the data submitted supports the use of sofosbuvir along with ribavirin, another orally delivered drug. Data submitted also supports treatment of treatment naive HCV genotype 1, 4, 5, and 6 patients for use of sofosbuvir in combination with ribavirin and pegylated interferon injections.

According to the WHO, approximately 3% of the world’s seven billion people have HCV, with four to five million in the EU alone. Since sofosbuvir is considered a new medicine of major public health interest, it is being fast tracked through the EU’s regulatory hurdles. According to Gilead’s release, if approved by the EMA’s Committee for Medicinal Products for Human Use, the drug could be available in all 27 member states of the EU in the first half of 2014

Top Bank Stocks For 2014: M&T Bank Corporation (MTB)

M&T Bank Corporation operates as the holding company for M&T Bank and M&T Bank, National Association that provide commercial and retail banking services to individuals, corporations and other businesses, and institutions. It offers business loans and leases; business credit cards; deposit products, such as demand, savings, and time accounts; and financial services, including cash management, payroll and direct deposit, merchant credit card, and letters of credit. The company also provides residential real estate loans; multifamily commercial real estate loans; commercial real estate loans; one-to-four family residential mortgage loans; investment and trading securities; short-term and long-term borrowed funds; brokered certificates of deposit and interest rate swap agreements related thereto; and branch deposits. In addition, it offers foreign exchange, as well as asset management services. Further, the company provides consumer loans, and commercial loans and leases; cred it life, and accident and health reinsurance; and securities brokerage, investment advisory, and insurance agency services. As of December 31, 2009, it had 738 banking offices in New York State, Pennsylvania, Maryland, Delaware, New Jersey, Virginia, West Virginia, and the District of Columbia; a commercial banking office in Ontario, Canada; and an office in George Town, Cayman Islands. The company was founded in 1969 and is headquartered in Buffalo, New York.

Advisors’ Opinion:

  • [By Mike Deane]

    M&T Bank (MTB) announced its fourth quarter and full year earnings before the bell on Friday, with quarterly GAAP earnings falling from last year’s Q4 while full year earnings rose 11%.

    MTB Earnings in Brief

    M&T Bank reported quarterly net income of $245.72 million, which was down from last year’s Q4 net income of $296.19 million. The company’s diluted EPS came in at $1.79 for the quarter, down from the $2.23 per diluted common share reported in last year’s Q4 results. MTB missed analysts’ estimates of $1.92 EPS. For the full year, MTB reported EPS of $8.38, marking an 11% increase from last year’s EPS of $7.54

    CFO Commentary

    Rene F. Jones, CFO and executive VP, had the following comments about the company’s earnings: “While expenses were elevated by investments in our infrastructure during 2013, M&T achieved a net operating return on average tangible common shareholders’ equity of 18.17% for the full year.  Our core capital position strengthened, as the Tier 1 common ratio grew to 9.25% at the 2013 year-end, up 17 basis points from September 30 and 168 basis points higher than at December 31, 2012.  We are also pleased with the continued improvement in credit quality.  M&T’s liquidity and risk profile was enhanced during the year through several actions, including replacing less liquid investment securities with Ginnie Mae securities and the securitization of loans held in the loan portfolio.  During the final two quarters of 2013 we invested heavily in several key areas, including risk management, capital planning and stress testing, regulatory compliance, and other operational and technology initiatives.  Those investments will better position M&T for the future.”

    No Dividend Change

    MTB did not announce a change to its quarterly dividend, and has not raised its dividend since 2007. It should be noted that MTB did not cut its dividend

  • [By Paul Ausick]

    Sterne Agee’s top pick among regional banks is M&T Bank Corp. (NYSE: MTB). Sterne Agee cut its 2014 earnings per share (EPS) estimate on the Buy-rated bank from $8.20 to $7.90 and the 2015 estimate has been cut from $9.50 to $9.00. The bank’s fundamentals are strong and it continues to experience good organic lending growth. The consensus estimate on M&T shares from Thomson Reuters is around $121.20 yielding an implied gain of 6% based on Friday’s closing price of $114.34. The forward multiple is 13.86 based on the consensus estimate for 2014 EPS of $8.25. Based on the Sterne Agee estimate of $7.90, the forward P/E ratio is around 15.4. M&T’s 52-week range is $95.68 to $119.54.

Top Bank Stocks For 2014: Westpac Banking Corp (WEBNF)

Westpac Banking Corporation is a banking company. It operates through three divisions: Australian Financial Services (AFS), Westpac Institutional Bank (WIB) and Westpac New Zealand. AFS consists of Westpac’s retail and business banking operations in Australia, and includes Westpac Retail & Business Banking (Westpac RBB), St.George Banking Group and BT Financial Group Australia (BFTG). Westpac RBB is responsible for sales and service for consumer, small-to-medium enterprise customers and commercial customers under the Westpac brands. St.George is responsible for sales, and service for its consumer, business and corporate customers in Australia under brands, such as St.George and BankSA. BTFG is Westpac’s Australian wealth management division. In January 2014, the Company completed the acquisition of Lloyds Banking Group Plc’s Australian asset finance business, Capital Finance Australia Limited, and its Australian corporate loan portfolio, BOS International (Australia) Lt d. Advisors’ Opinion:

  • [By MARKETWATCH]

    LOS ANGELES (MarketWatch) — Australian stocks started Monday trade higher, with the S&P/ASX 200 (AU:XJO) up 0.8% at 5,206.40 after a strong finish for Wall Street at the end of last week. Resource shares got a lift from gains for commodities prices since the previous trading session, with strong advances for gold and copper and a more than 2% rise for New York-traded crude-oil futures. Among the leading gainers, Rio Tinto Ltd. (AU:RIO) (RIO) added 1.2%, Oil Search Ltd. (AU:OSH) (OISHF) climbed 1.3%, and gold miners Newcrest Mining Ltd. (AU:NCM) (NCMGF) and Evolution Mining Ltd. (AU:EVN) (CAHPF) improved by 3.9% and 6.4%, respectively. The heavily weighted banking sector also enjoyed solid gains, with Commonwealth Bank of Australia (AU:CBA) (CBAUF) up 1%, Westpac Banking Corp. (AU:WBC) (WEBNF) trading 1.3% higher, and National Australia Bank Ltd. (AU:NAB) (NAUBF) rising 1.1% as the U.K.’s Sunday Times reported the lender is considering a £2 billion ($3.3 billion) float of its British operations, which the report said had dragged on NAB’s results in recent years.

  • [By MARKETWATCH]

    LOS ANGELES (MarketWatch) — Australia stocks rose early Thursday, with miners leading the way higher after a positive production report from Rio Tinto Ltd. (AU:RIO) (RIO) , while overall sentiment got a lift from U.S. gains overnight. The S&P/ASX 200 (AU:XJO) improved by 0.6% to 5,274.30, with shares of Rio Tinto rising 2.2% after reporting record high iron-ore shipments for 2013 and a sold gain for copper output. Rio’s peers also advanced, with BHP Billiton Ltd. (AU:BHP) (BHP) up 1.7%, Fortescue Metals Group Ltd. (AU:FMG) (FSUMF) ahead by 3.2%, and Oz Minerals Ltd. (AU:OZL) (OZMLF) adding 2.4%. Among the gold producers, Newcrest Mining Ltd. (AU:NCM) (NCMGF) surged 7.2% as J.P. Morgan raised its rating on the shares to overweight from neutral. Banks weren’t as lucky, however, with Australia & New Zealand Banking Group (AU:ANZ) (ANEWF) down 0.3%, while Westpac Banking Corp. (AU:WBC) (WEBNF) and Commonwealth Bank of Australia (AU:CBA) (CBAUF) lost 0.7% each as Citibank downgraded the trio t

  • [By MARKETWATCH]

    LOS ANGELES (MarketWatch) — Australian stocks inched lower in early Friday trade, with the S&P/ASX 200 (AU:XJO) down 0.1% at 5,322.00, with weakness in miners outweighing mild strength in financials. Shares of BHP Billiton Ltd. (AU:BHP) (BHP) and Rio Tinto Ltd. (AU:RIO) (RIO) fell 1.4% apiece, while Fortescue Metals Group Ltd. (AU:FMG) (FSUMF) lost 2.2% and gold miner Evolution Mining Ltd. (AU:EVN) (CAHPF) lost 0.8%, after copper prices fell to two-week lows and Chinese steel futures also lost ground, according to Reuters. The sector could react to Chinese trade data due out later in the day, as China remains a top market for Australian commodities. Stock in Alumina Ltd. (AU:AWC) (AWCMF) retreated 2.6% after its U.S. partner Alcoa Inc. (AA) posted a quarterly loss. On the upside, the big four banks all traded higher, with Commonwealth Bank of Australia (AU:CBA) (CBAUF) up 0.1%, National Australia Bank Ltd. (AU:NAB) (NAUBF) rising 0.2%, Westpac Banking Corp. (AU:WBC) (WEBN

  • [By MARKETWATCH]

    LOS ANGELES (MarketWatch) — Australian stocks edged lower Thursday, as a mostly soft lead from the U.S. markets helped weigh on the S&P/ASX 200 (AU:XJO) , which lost 0.2% to 5,306.40. Mining stocks moved mostly lower as a rising dollar depressed some key commodity prices overnight, with Oz Minerals Ltd. (AU:OZL) (OZMLF) down 1%, Fortescue Metals Group Ltd. (AU:FMG) (FSUMF) off 1.5%, and Newcrest Mining Ltd. (AU:NCM) (NCMGF) 1.1% lower. The big four banks all started lower as well, with Australia & New Zealand Banking Group (AU:ANZ) (ANEWF) and Commonwealth Bank of Australia (AU:CBA) (CBAUF) down 0.2% each, while National Australia Bank Ltd. (AU:NAB) (NAUBF) lost 0.4%, and Westpac Banking Corp. (AU:WBC) (WEBNF) fell 0.5%. Retailers were mixed ahead of retail-sales data due out later in the day, as Harvey Norman Holdings Ltd. (AU:HVN) (HNORY) fell 0.5% and Myer Holdings Ltd. (AU:MYR) lost 0.7%, while David Jones Ltd.

Top Bank Stocks For 2014: National Bank Holdings Corp (NBHC)

National Bank Holdings Corporation (NBH), incorporated in June 2009, is a bank holding company. Through Bank Midwest, N.A. (Bank Midwest), NBH’s primary business is to offer a range of traditional banking products and financial services to both its commercial and consumer customers, located in Kansas, Missouri and Colorado. The Company offers an array of lending products to cater to the customers’ needs, including, but not limited to, small business loans, equipment loans, term loans, asset-backed loans, letters of credit, commercial lines of credit, residential mortgage loans, home equity and consumer loans. It also offers traditional depository products, including commercial and consumer checking accounts, non-interest-bearing demand accounts, money market deposit accounts, savings accounts and time deposit accounts and cash management services. As of December 31, 2011, it operated a network of 103 full-service banking centers, with the majority of those banking cent ers located in the Kansas City region and Colorado. On October 21, 2011, the Company acquired selected assets and assumed selected liabilities of Community Banks of Colorado, a state chartered bank based in Greenwood Village, Colorado, from the FDIC, which included 36 full-service banking centers in Colorado and four in California.

Lending Activities

NBH’s loan portfolio includes commercial and industrial loans, consumer loans, commercial real estate loans, residential real estate loans and agricultural loans. As of December 31, 2011, approximately 61.5% of the Company’s total portfolio was variable rate loans, approximately 38.5% of the total loan portfolio was fixed rate loans and less than 1.6% of its total loan portfolio was unsecured. As of December 31, 2011, of the loans it had originated, approximately 35.1% were variable rate loans and approximately 64.9% were fixed rate loans.

The Company originates commercial and indust rial loans and leases, including working capital loans, equi! pment loans and other commercial loans and leases. As of December 31, 2011, approximately 98.2% of its commercial and industrial loans were secured. As of December 31, 2011, it had $372.0 million in commercial and industrial loans and leases outstanding, comprising approximately 16.3% of its total loan portfolio. During the year ended December 31, 2011, it originated and closed $26.7 million of commercial and industrial loans, which was approximately 18.8% of total loans originated for portfolio investment during that period.

The Company offers a range of consumer loans, including loans to banking center customers for consumer and business purposes, to meet customer demand and to increase the yield on its loan portfolio. As of December 31, 2011, it had $74.3 million in consumer loans outstanding, comprising 3.3% of its total loan portfolio. Its real estate loans consist of commercial real estate loans and residential real estate loans. Commercial real estate loa ns (CRE) loans, consist of loans to finance the purchase of commercial real estate, loans to finance inventory and working capital that are secured by commercial real estate and construction and development loans. Its CRE loans include loans on 1-4 family construction properties, commercial properties such as office buildings, strip malls, or free standing commercial properties, multi-family and investor properties and raw land development loans.

Residential real estate loans consist of loans secured by the primary or secondary residence of the borrower. These loans consist of closed loans, which are typically amortizing over a 10 to 30 year term. It also offers open-ended home equity loans, which loans are secured by secondary financing on residential real estate. As of December 31, 2011, it had a total of $522.4 million in outstanding residential real estate loans, comprising 22.9% of its total loan portfolio. Agricultural loans consist of loans to farmers and other agricultural businesses to finance agricultural produ! ction.

Source of Fund

NBH’s offers a range of deposit products to the customers, including checking accounts, savings accounts, money market accounts and other deposit accounts, including fixed-rate, fixed maturity retail time deposits ranging in terms from 30 days to five years, individual retirement accounts, and non-retail time deposits consisting of jumbo certificates greater than or equal to $100,000. As of December 31, 2011, the Company’s deposit portfolio was comprised of 13.4% non-interest bearing deposits and 55.0% time deposits. Its deposits are primarily obtained from areas surrounding its banking centers.

Financial Products and Services

In addition to traditional banking activities, the Company provides other financial services to the customers. It includes Internet banking, wire transfers, automated clearing house services, electronic bill payment, lock box services, remote deposit capture services, courier servic es, merchant processing services, cash vault, controlled disbursements, positive pay and cash management services (including account reconciliation, collections and sweep accounts).

The Company competes with UMB, Commerce, US Bank, Bank of America, Valley View, Capitol Federal, Central Bancompany, CCB Financial Corp, Enterprise Financial Services Corp, Wells Fargo, FirstBank, JPMorgan Chase, U.S. Bank, Bank of the West, KeyBank, Alpine Bank, Compass Bank, Vectra Bank, First National Bank of Colorado and Zions Bank.

Advisors’ Opinion:

  • [By Shauna O’Brien]

    On Tuesday, Goldman Sachs reported that it has downgraded National Bank Holdings Corp (NBHC) to “Sell.”

    The firm has cut its rating on NBHC from “Neutral” to “Sell,” and has given the company a $21 price target. This price target suggests that the stock will remain flat at its current price of $20.94.

    An analyst from the firm commented: “While we believe that NBHC can grow EPS longer term as it leverages its $400mn of excess capital (above 10% tier 1 leverage), with shares trading at 1.1x TBV, we see limited upside in the near-term without any strategic M&A.”

    Looking ahead, the firm has maintained its FY2013 EPS estimate of 26 cents. For FY2014 and FY2015, estimates have been maintained at 57 cents and $1.88.

    National Bank Holdings shares were mostly flat during pre-market trading Tuesday. The stock is up 10% YTD.

Top Bank Stocks For 2014: Flagstar Bancorp Inc (FBC)

Flagstar Bancorp, Inc. incorporated on October 28, 1993, is a savings and loan holding company. The Company’s business is primarily conducted through its principal subsidiary, Flagstar Bank, FSB (the Bank), a federally chartered stock savings bank. At December 31, 2012, its total assets were $ $14.1 billion. The Bank’s wholly owned subsidiary is Flagstar Capital Markets Corporation (FCMC). The Company operates in two segments: Community Banking and Mortgage Banking. The Community Banking segment offers a line of financial products and services to individuals, small and middle market businesses, and mortgage lenders. Its Mortgage Banking segment originates, acquires, sells and services residential first mortgage loans on one-to-four family residences. The Bank’s Other segment include corporate treasury, tax benefits not assigned to specific operating segments, and miscellaneous other expenses of a corporate nature.

Community Banking

Communit y Banking segment includes Branch Banking, Commercial and Business Banking, Government Banking, and Warehouse Lending. Community Banking segment originates loans and deposits to consumer, business and mortgage lending customers through its Branch Banking, Business and Commercial Banking, Government Banking, and Warehouse Lending groups. Products offered include checking accounts, savings accounts, money market accounts, certificates of deposit, consumer loans, commercial loans and warehouse lines of credit. Other financial services available to consumer and commercial customers include lines of credit, revolving credit, customized treasury management solutions, equipment leasing, inventory and accounts receivable lending and capital markets services such as interest rate risk protection products. At December 31, 2012, Branch Banking included 111 banking centers located throughout Michigan. As of December 31, 2012, the commercial loans held-for-investment totaled $0.7 billion , and consisted of commercial real estate, commercial and in! dustrial and commercial lease financing. At December 31, 2012, its commercial real estate loans held-for-investment totaled $640.3 million.

Commercial and industrial held-for-investment loan facilities include lines of credit to its small or middle market businesses for use in normal business operations to finance working capital needs, equipment purchases and expansion projects. At December 31, 2012 its commercial and industrial held-for-investment loans totaled $90.6 million. Its commercial lease financing held-for-investment loan portfolio is comprised of equipment leased to customers in a direct financing lease. At December 31, 2012 its commercial lease financing held-for-investment loans totaled $6.3 million. The Company offers warehouse lines of credit to other mortgage lenders. As of December 31, 2012, there were 311 warehouse lines of credit to other mortgage lenders with an average size of $7.5 million.

Mortgage Banking

The Co mpany’s Mortgage Banking segment originates, acquires, sells and services one-to-four family residential first mortgage loans. Mortgage loans are originated through home lending centers, national call centers, the Internet, unaffiliated banks and mortgage brokerage companies. Also, the Mortgage Banking segment services mortgage loans for others and sells MSRs into the secondary market.

In a home lending center transaction, loans are originated through a network of its loan origination centers, as well as referrals from its Banking segment and the national call center. At December 31, 2012, the Company maintained 31 loan origination centers. In a broker transaction, an unaffiliated bank or mortgage brokerage company completes the loan paperwork, but the loans are underwritten on a loan-level basis to its underwriting standards and it supplies the funding for the loan at closing thereby becoming the lender of record. As of December 31, 2012, the Company had acti ve broker relationships with over 1,700 banks, credit unions! , and mor! tgage brokerage companies. In a correspondent transaction, an unaffiliated bank or mortgage company completes the loan paperwork and also supplies the funding for the loan at closing. As of December 31, 2012, the Bank had active correspondent relationships with over 1,300 companies, including banks, credit unions, and mortgage companies.

Advisors’ Opinion:

  • [By Jessica Alling]

    Outside the Dow, insurer MBIA (NYSE: MBI  ) is up 11.3% after settling a legal case with lender Flagstar Bancorp (NYSE: FBC  ) over two mortgage-backed securities transactions. MBIA alleged that Flagstar misrepresented the securities, resulting in the insurer’s payout of $165 million on the policies. Flagstar has agreed to pay MBIA $110 million to settle the case. This legal dispute is similar to the current battle between MBIA and Bank of America. The insurer recently lost its bid for a pretrial ruling on the case, driving the stock lower.

  • [By Brian Pacampara]

    What: Shares of mortgage insurer MBIA (NYSE: MBI) climbed 10% today after settling its lawsuit against Flagstar Bancorp (NYSE: FBC), in which it accused the bank of misrepresenting the loan quality underlying $1.1 billion in mortgage-backed securities.  

Top Bank Stocks For 2014: Australia and New Zealand Banking Group Ltd (ANZ)

Australia and New Zealand Banking Group Limited (ANZ) provides a range of banking and financial products and services to retail, small business, corporate and institutional clients. The Company conducts its operations in Australia, New Zealand and the Asia Pacific region. It also operates in a range of other countries, including the United Kingdom and the United States. The Company operates on a divisional structure with Australia, International and Institutional Banking (IIB), New Zealand, and Global Wealth and Private Banking. As of September 30, 2012, the Company had 1,337 branches and other points of representation worldwide, excluding automatic teller machines (ATMs). In September 2012, it sold its remaining shareholding in Visa Inc. Advisors’ Opinion:

  • [By Adam Haigh]

    Komatsu Ltd. tumbled 8 percent in Tokyo after the world’s second-largest maker of construction equipment cut its full-year profit forecast by 26 percent. Industrial & Commercial Bank of China Ltd. gained 1.4 percent in Hong Kong, pacing an advance among Chinese lenders, after China’s central bank added funds to the financial system for the first time in two weeks. Australia & New Zealand Banking Group Ltd. (ANZ) climbed 1.4 percent to a record in Sydney after posting its highest profit and raising its dividend more than forecast.

  • [By Adam Haigh]

    Australia & New Zealand Banking Group Ltd. (ANZ) sank 3 percent after Australia’s third-largest bank by market value forecast interest margins will keep dropping. Hyundai Merchant Marine Co. jumped 6.9 percent in Seoul after North Korea and South Korea agreed to reopen the Gaeseong industrial complex. Chinese stock exchange officials are investigating a spike in the Shanghai Composite Index, which soared from a loss of as much as 1 percent to a gain of 5.6 percent in two minutes. Everbright Securities Co. said it experienced a trading error.

  • [By Weiyi Lim]

    The funds lured a net $25.9 billion in the period, Wei Liang Chang, a foreign-exchange strategist at Australia & New Zealand Banking Group Ltd. (ANZ), said by phone from Singapore today, citing data from EPFR Global. Developed markets posted $24.3 billion of inflows, while emerging-nation funds drew $1.6 billion, according to Chang.

Top Bank Stocks For 2014: ASB Bancorp Inc (ASBB)

ASB Bancorp, Inc. (ASB Bancorp), incorporated in May 2011, focuses to become the holding company for Asheville Savings Bank, S.S.B. (Asheville Savings Bank). ASB Bancorp, Inc.’s business activity will be the ownership of the Asheville Savings Bank. Asheville Savings Bank is a chartered savings bank. It operates as a community-oriented financial institution offering traditional financial services to consumers and businesses in its market area. It attracts deposits from the general public and use those funds to originate one-to four-family residential mortgage loans and commercial real estate loans, and home equity loans and lines of credit, consumer loans, construction and land development loans, and commercial and industrial loans. It conducts its lending and deposit activities with individuals and small businesses in its primary market area. Its market area is Asheville, North Carolina and the rest of Buncombe County where it has eight branch offices, as well as Henders on, Madison, McDowell and Transylvania Counties where it has five branch offices.

Lending Activities

Asheville Savings Bank loan portfolio include real estate mortgage loans, including one- to four-family residential mortgage loans and commercial mortgage loans, and revolving mortgage loans, which consist of home equity loans and lines of credit, consumer loans, construction and land development loans, and commercial and industrial loans. As of March 31, 2011, it had $177.8 million in one- to four-family residential loans, which represented 36.7% of its total loan portfolio. Its origination of residential mortgage loans enables borrowers to purchase or refinance existing homes located in its primary market area. It offers a mix of adjustable rate mortgage loans and fixed-rate mortgage loans with terms of up to 30 years.

Asheville Savings Bank offers fixed- and adjustable-rate mortgage loans secured by non-residential real estate and mu lti-family properties. As of March 31, 2011, commercial mort! gage loans totaled $162.7 million, or 33.5% of its total loan portfolio. Its commercial mortgage loans are secured by commercial, industrial and manufacturing, small to moderately-sized office and retail properties, hotels, multi-family properties and hospitals and churches located in its primary market area. As of March 31, 2011, $35.6 million or 21.9% of its commercial real estate loans were secured by owner-occupied properties. It originates fixed-rate and adjustable-rate commercial mortgage loans, generally with terms of three to five years and payments based on an amortization schedule of up to 25 years. It has originated construction and land development loans for commercial properties, such as retail shops and office units, and multi-family properties, and construction and land development loans for one-to four-family homes. As of March 31, 2011, commercial construction and land development loans totaled $27.8 million, which represented 5.7% of its total loan portfoli o, and residential construction and land development loans totaled $7.9 million, which represented 1.6% of its total loan portfolio. As of March 31, 2011, it had speculative residential construction loans of $3.1 million and speculative commercial construction loans of $9.6 million.

Asheville Savings Bank offers revolving mortgage loans, which consist of home equity loans and lines of credit, and various consumer loans, including automobile loans and loans secured by deposits. As of March 31, 2011, revolving mortgage loans totaled $52 million, or 10.7% of its total loan portfolio, and consumer loans totaled $41.1 million, or 8.5% of its total loan portfolio. Its revolving mortgage loans consist of both home equity loans with fixed-rate amortizing term loans with terms of up to 15 years and adjustable rate lines of credit with interest rates indexed to the prime rate.

Asheville Savings Bank offers commercial and industrial loans to small businesses located in its primary market area. As of March 31, 2011, co! mmercial ! and industrial loans totaled $15.8 million, which represented 3.2% of its total loan portfolio. Its commercial and industrial loan portfolio consists of loans, which are secured by equipment, accounts receivable and inventory, but also includes a smaller amount of unsecured loans for purposes of financing expansion or providing working capital for general business purposes.

Investment Activities

As of March 31, 2011, Asheville Savings Bank’s investment portfolio consisted of the United States government and agency securities, mortgage-backed securities and securities issued by government sponsored enterprises, and municipal securities. As of March 31, 2011, its securities portfolio represented 27.2% of total assets. As of March 31, 2011, $198.6 million of its securities portfolio was classified as available for sale and $5.7 million of its securities portfolio was classified as held to maturity. Securities classified as held to maturity are United States government sponsored securities, mortgage-backed securities and state and local government securities. As of March 31, 2011, it had four million dollars of other investments, at cost, which consisted of Federal Home Loan Bank of Atlanta.

Sources of Funds

Deposits, borrowings and loan repayments are the sources of Asheville Savings Bank funds for lending and other investment purposes. It uses advances from the Federal Home Loan Bank of Atlanta to supplement its investable funds. The Federal Home Loan Bank functions as a central reserve bank providing credit for member financial institutions. Advances are made under several different programs, each having its own interest rate and range of maturities. It also utilizes securities sold under agreements to repurchase and overnight repurchase agreements to supplement its supply of investable funds and to meet deposit withdrawal requirements.

Subsidiaries

Asheville Saving s Bank has two subsidiaries, Appalachian Financial Services,! Inc., wh! ich was formed to engage in investment activities, and Wenoca, Inc., which serves as Asheville Savings Bank’s trustee regarding deeds of trust. Both subsidiaries are organized as North Carolina corporations.

Advisors’ Opinion:

  • [By Tim Melvin]

    ASB Bancorp (ASBB) is the holding company for Ashville in western North Carolina. The bank has 13 branches and total assets of around $733 million. Nonperforming assets are just 2.1% of total assets and the bank is massively over-reserved for future losses, with loan reserves at 6 times nonperforming loans. The bank bought back 544,494 shares of common stock at an average price of $16.79 per share in 2013. The board just authorized a new 5% buyback in January 2014. The stock is trading around 80% of book value, so management is buying the shares on the cheap — and that should bode well for shareholders in the future.

Top Bank Stocks For 2014: HomeTrust Bancshares Inc (HTBI)

HomeTrust Bancshares, Inc. is a bank holding company. The Company operates through HomeTrust Bank (the Bank). The Bank is a federally chartered mutual savings bank with 20 retail offices located in North Carolina. The business of the Bank is conducted through its seven operating divisions: HomeTrust Bank, Cherryville Federal Bank, Home Savings Bank of Eden, Industrial Federal Bank of Lexington, Shelby Savings Bank, Tryon Federal Bank and Rutherford County Bank. Its wholly owned subsidiary, Western North Carolina Service Corporation (WNCSC), owns office buildings in Asheville and Hendersonville, North Carolina that are leased to the Bank and several other tenants. Effective July 31, 2013, it announced the completion of its acquisition of BankGreenville Financial Corporation, the holding company for BankGreenville.

Lending activities

The Bank’s loan portfolio is organized into two segments (retail consumer loans and commercial loans) and into four classes within each segment. Its loan portfolio also includes one to four family loans, commercial real estate loans, home equity lines of credit, commercial loans and consumer loans. The Bank underwrites its retail consumer loans using automated credit scoring and analysis tools. These credit scoring tools take into account factors, such as payment history, credit utilization, length of credit history, types of credit in use and recent credit inquiries. One to four family and construction and land/lot loans are to individuals and are typically secured by one-to-four family residential property, undeveloped land, and partially developed land in anticipation of pending construction of a personal residence. Consumer loans include loans secured by deposit accounts or personal property, such as automobiles, boats, and motorcycles, as well as unsecured consumer debt.

The Bank’s commercial loans are centrally underwritten based primarily on the customer’s ability to generate the required cash flow to service the debt in a! ccordance with the contractual terms and conditions of the loan agreement. Real estate owned consists of real estate acquired as a result of customers’ loan defaults.

Investment activities

The Company’s investment securities consist of United States Government Agencies, Residential Mortgage-backed Securities of United States Government and Agencies. It also includes Government-Sponsored Enterprises. Securities available for sale were $26.7 million, as of March 31, 2012.

Sources of funds

The Company offers a variety of deposit accounts for individuals, businesses and nonprofit organizations. Deposits are its primary source of funds for lending and investing activities.

Advisors’ Opinion:

  • [By Tim Melvin]

    Home Trust Bancshares (HTBI) is another example of a cheap, well-financed community bank that has the potential for strong performance over the next couple of years. While the bank’s nonperforming assets are a little above average at 3.87% of total assets, HTBI has plenty of excess capital. The equity-to-assets ratio is more than 20 as of the end of the third quarter, and HTBI has been using its capital to buy back HTBI shares below book value.

Top Bank Stocks For 2014: Canadian Imperial Bank of Commerce(CM)

Canadian Imperial Bank of Commerce provides various financial products, services, and advice to individual, small business, commercial, corporate, and institutional clients in Canada and internationally. The company offers retail markets services comprising personal banking, business banking, and wealth management services, as well as investment management services to retail and institutional clients. It also provides wholesale banking services, including credit, capital markets, investment banking, merchant banking, and research products and services to government, institutional, corporate, and retail clients. The company provides its services through its branch network, automated bank machines, mobile banking, and online banking site. As of June 3, 2011, it operated approximately 1,100 branches and 4,000 automated bank machines in Canada. The company was founded in 1867 and is headquartered in Toronto, Canada.

Advisors’ Opinion:

  • [By Will Ashworth]

    NTIOF Rating: 7

    Canadian Imperial Bank of Commerce (CM)

    Dividend Yield: 4.4%

    According to a report by TD Securities, Canadian Imperial Bank of Commerce (CM) generates 80% of its total loans in Canada, higher than any other major Canadian bank.

  • [By Dan Caplinger]

    It’s easy for U.S. investors to paint Canadian banks with a single brush-stroke, as the differences in the banking system helped keep Bank of Montreal and its peers safer during the financial crisis five years ago. As Canada’s housing market has kept rising even after the housing bust south of its border, however, investors have gotten increasingly concerned about the potential health of its banks, especially the largest ones. With downgrades for Canadian Imperial Bank of Commerce (NYSE: CM  ) , Toronto-Dominion (NYSE: TD  ) , and Bank of Montreal among a total of six banks in January, Moody’s identified higher debt levels among Canadian consumers as driving potential risk for the economy.

  • [By Rich Duprey]

    Canadian Imperial Bank of Commerce  (NYSE: CM  )  announced this morning its second-quarter dividend of $0.96 per share, a 2% increase over the $0.94-per-share payout it made last quarter.

  • [By Katia Dmitrieva]

    Canadian Imperial (CM) said it’s being shut out in the new agreement. The deal “appears to have been intentionally structured in a way that attempts to nullify CIBC’s right of first refusal and any ability to match,” the bank said yesterday in a statement. “Given the structuring of the document and our contractual rights, we are exploring our options.”