This Day On The Street
Continue to site right-arrow
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 Bank Stocks Ready for a 2012 Dividend Boost

10. First Financial Bankshares

First Financial Bankshares (FFIN) of Abilene, Texas, has seen its stock pull back 4% this year, closing Friday at $31.94. Based on a quarterly payout of 24 cents, the shares have a dividend yield of 3.01%.

The company had $3.9 billion in total assets as of Sept. 30. With its acquisition of Sam Houston Corp. on Nov 1, First Financial now has 11 separately chartered bank subsidiaries throughout Texas, with 52 branches.

Third-quarter earnings were $18.1 million, or 58 cents a share, increasing from $16.5 million, or 53 cents a share, during the second quarter, and $16.2 million, or 52 cents a share, during the third quarter of 2010. The third-quarter net interest margin was a very strong 4.62%, although it declined from 4.69% the previous quarter and 4.68% a year earlier

The third-quarter ROA was 1.88% according to SNL, which was the best earnings performance among this group of 10 bank and thrift holding companies. The ROA has been over 1.60% over the past 10 quarters, making First Financial a very steady and strong earnings performer.

First Financial's tangible common equity ratio was 11.05% as of Sept. 30, according to SNL, which was by far the strongest among this group of 10 bank and thrift holding companies.

The company announced on Oct. 26 that it would "activate its existing stock repurchase plan to repurchase up to 750,000 shares of its common stock, which represents approximately 2.4 percent of the Company's outstanding shares, through September 30, 2014."

Sterne Agee analyst Brett Rabatin has a neutral rating on the shares, saying on Oct. 25 that the company "continues to benefit from the relative strength of the Texas economy vis-à-vis the greater U.S. macro-economy, evidenced by higher profitability and better expense management than most of the industry." In support of his neutral rating, the analyst said he saw "limited upside to current premium valuation and view the probability of multiple expansion as too low to be more bullish despite another strong quarter," while adding that he viewed First Financial as "an ideal multi-year holding."

The shares are relatively expenses to forward earnings and tangible book value, especially in the current depressed environment for most bank stocks, but the valuations reflect the steady earnings, payout and buybacks. First Financial trades for 14.3 times the consensus 2012 EPS estimate of $2.19, among analysts polled by FactSet, which is the highest forward P/E among this group of 10 bank and thrift holding company stocks.

The shares trade for 2.3 times tangible book value, according to SNL.

All eight analysts covering First Financial Bankshares have neutral ratings on the stock, again reflecting the premium priced-in because of First Financial's strong and steady performance.

You get what you pay for, and for a long-term investor content to be paid while waiting, First Financial looks like an excellent play for a commitment of several years.

2 of 11

Select the service that is right for you!

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 17,356.87 +288.00 1.69%
S&P 500 2,012.89 +40.15 2.04%
NASDAQ 4,644.3120 +96.4780 2.12%

Brokerage Partners

Rates from

  • 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