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10 Bank Stocks in the M&A Crosshairs (Update 2)

7. ViewPoint Financial Group

Shares of ViewPoint Financial Group (VPFG) of Plano, Texas, closed at $14.50 Friday, returning 11% over the previous year.

ViewPoint is another attractive Texas franchise mentioned by several analysts as a possible takeout target.

The company on Dec. 9 announced an agreement to Highlands Bancshares of Dallas, for in an exchange of shares valued at $71 million, bringing on $508 million in assets, with six branches in North Texas.

ViewPoint has not yet announced its fourth-quarter results.

ViewPoint had $3.2 billion in total assets as of Sept. 30, and reported net income of $16.6 million, or 51 cents a share, for the first three quarters of 2011, improving from $11.3 million, or 38 cents a share, a year earlier, mainly from a decline in interest expense. The net interest margin improved to 2.84% during the first three quarters of 2011, from 2.74% a year earlier.

The ROA for the first three quarters of 2011 was 0.77%, according to HighlineFI, and the ROE was 5.40%.

The shares trade for 1.2 times tangible book value, according to HighlineFI, and for 23 times the consensus 2012 EPS estimate of 64 cents.

Sterne Agee analyst Mike Shafir rates ViewPoint a "Buy," with a $15 price target, and said after the Highlands deal was announced that the deal was "reasonable," for a "a commercial franchise (C&I loans 27%) with clean credit metrics and 20% non-interest bearing deposits."

Shafir estimates that ViewPoint will report full-year 2011 EPS of 61 cents, followed by EPS of 60 cents in 2012 and 65 cents in 2013.

Interested in more on ViewPoint Financial Group? See TheStreet Ratings' report card for this stock.

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