This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

10 Western Bank Stocks for the Long Term

NEW YORK (TheStreet) -- For investors who can commit for at least two years, TheStreet has identified 10 bank stock recovery plays among Western banks... with another one that's in-play.

Following on the heels of our look at 10 Midwest Bank Stocks Poised for the Recovery, we have followed the same approach to highlight the 10 actively traded banks in Western states with shares priced the lowest against projected 2012 earnings.

Operating a bank in the Western U.S. has its challenges. According to the U.S. Bureau of Labor Statistics, California was tied with Michigan for the second-highest unemployment rate among all states, at 12.4%, only exceeded by Nevada, which had an unemployment rate of 14.3%.

Using data supplied by SNL Financial for the publicly traded bank and thrift holding companies headquartered in 11 Western states - excluding those traded on the Pink Sheets -- we narrowed down the list to the 10 names with the lowest forward P/E based on 2012 earnings estimates with three-month average daily trading volume of at least 50,000 shares.

Although it would have made the list, we have excluded Center Financial (CLFC), which agreed in December to merge with its Los Angeles Competitor Nara Bancorp (NARA). While the deal was announced as a merger of equals, Nara Bancorp's CEO Alvin Kang will serve as CEO for the combined company, which has yet to be named. We've excluded Center Financial from the list for two reasons: First, the shares are already trading above the effective offering price of $7.16 a share. Second, Central Financial's CEO Jae Whan Yoo was fired on Friday, with the company only saying that Yoo wouldn't be paid any severance.

A call to Center Financial requesting information on Yoo's the firing was not returned. In a press release, Center Financial's chairman Jin Chul Jhun said "we wish J.W. well in his future endeavors." Richard Cupp was named to serve as Center Financials interim CEO until the completion of the merger with Nara - expected in the second half of 2011.

Also on Friday, Timothy Coffey of FIG Partners downgraded Center Financial to "market perform" from "outperform," saying that his firm believed"the lowered price target will reflect the heightened level of uncertainty resulting from the turnover in CLFC's management."

Four of these banks are current participants in the Troubled Assets Relief Program, and some are considerably riskier than others. With all the capital raising activity through the credit crisis, long-term investors in many of these names have borne significant dilution. For new investors, this danger may have passed, but it is important to consider profitability and a company's level of tangible common equity, which excludes TARP money.

Here they are the ten banks in descending order by forward P/E based on the 2012 consensus earnings estimates among analysts polled by Thomson Reuters.

Terms

For each of the 10 banks discussed on the following pages, we'll be looking at capital strength, earnings quality and asset quality. For an explanation of those terms you can click on the box below.

1 of 11

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,039.49 +60.36 0.36%
S&P 500 1,992.37 +5.86 0.30%
NASDAQ 4,532.1040 +5.6220 0.12%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs