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10 Bank Stocks Trading Below Book With Up To 85% Upside (Update 2)

8. Fox Chase Bancorp

Shares of Fox Chase Bancorp (FXCB) of Hatboro, Pa., closed at $12.53, for a flat performance year-to-date, after returning 7% in 2011.

The shares trade for 0.9 times their Dec. 30 tangible book value of $14.41.

The company had $1.0 billion in total assets as of Dec. 30, and reported fourth-quarter net income of $1.0 million, or nine cents a share, increasing from $893,000, or seven cents a share, during the fourth quarter of 2010. Net interest income totaled $8.0 million in the fourth quarter, compared to $7.4 million a year earlier, with the improvement reflecting lower funding costs. This improvement partially offset an increase in the provision for loan losses to $2.8 million during the fourth quarter from $1.4 million a year earlier. The fourth-quarter bottom line was greatly boosted by $1.1 million in gains on the sale of securities.

Sterne Agee analyst Matthew Kelley on Feb. 2 reiterated his "Buy" rating for Fox Chase Bancorp, with a $15 price target, saying that the company was continuing "to make progress in improving core earnings power and credit quality."

Fox Chase's fourth-quarter ROA was 0.41% according to HighlineFI, and the ROA has ranged as high as 0.47% over the past five quarters. Kelley said that he saw "profitability as measured by ROA improving to 0.55% - 0.60% over the next two years," and that the shares, at a closing price of $12.73 on Feb. 1, remained "attractively valued at 86% of our projected year end 2012 TBV estimate of $14.77 per share."

Kelley estimates that the company will earn 45 cents a share in 2012, followed by EPS of 55 cents in 2013.

The shares trade for 30 times the consensus 2012 EPS estimate of 42 cents. The 2013 consensus EPS estimate is 50 cents, making the case that investors will need to be quite patient with Fox Chase Bancorp.

Interested in more on Fox Chase Bancorp? See TheStreet Ratings' report card for this stock.

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