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Stocks Under $10 with 50-100% upside potential - 14 days FREE!

6 Banks Actually Growing Their Banking Business

6. CVB Financial

Shares of CVB Financial (CVBF) of Ontario, Calif., closed at $11.66 Tuesday, returning 18% year-to-date, following a 19% return during 2011.

Based on a quarterly payout of 8.5 cents, the shares have a dividend yield of 2.92%.

CVB Financial reported first-quarter net interest income of $58.6 million, increasing 6% from the previous quarter and 3% year-over-year. According to HighlineFI, the first-quarter net interest margin -- not adjusted for taxes -- was 3.85%, increasing from 3.65% in the second quarter, and 3.77% in the first quarter of 2011.

First-quarter net earnings were $22.3 million, or 21 cents a share, increasing from $21.7 million, or 21 cents a share the previous quarter, and $16.6 million, or 16 cents a share, a year earlier.

The main factor in the year-over-year earnings improvement has been a reduction in credit-related expenses. The company has not made quarterly provisions for loan losses for four straight quarters. The provision for loan losses during the fourth quarter of 2011 was $7.1 million.

CVB's improved net interest income and margin reflected both improved yields on earning assets and a decline in interest expenses.

The first-quarter return on average assets (ROA) was 1.36%, while the return on average equity was 12.21%, according to HighlineFI. Those are solid numbers in the current banking environment, and represent, by far, the strongest first-quarter performance among the banks listed here.

The shares trade for 1.8 times tangible book value, according to HighlineFI, and for 13 times the consensus 2013 earnings estimate of 91 cents a share, among analysts polled by Thomson Reuters. The consensus 2012 EPS estimate is 86 cents.

FIG Partners analyst Timothy Coffey on Monday upgraded his rating on CVB Financial to "Outperform," from "Market Perform," while raising his price target for the share by two dollars to $13.50, which is 13.5 times the analyst's 2013 EPS estimate of $1.04, and "190% of forward tangible book."

Coffey said "the stock can maintain the 3 year median Price-to-Forward EPS of 13.5x due to substantial improvements in expenses," which include "lowering debt and borrowings as a percentage of interest-bearing liabilities and reducing operating expenses as a percentage of average assets." The analyst added that "expansion of the price multiple is possible with an expansion of earning assets through, among other means, an acquisition," and that CVB Financial's "management is actively discussing options with potential targets, yet none appear imminent.

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

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