7 Highest Rated Small-Cap Bank Stocks

1. Home Bancshares

Home Bancshares (HOMB) of Conway, Ark., closed at $28.59 Thursday, returning 11% year-to-date, following a 19% return during 2011.

Based on a 10-cent quarterly payout, the shares have a dividend yield of 1.40%.

Home Bancshares had $4.1 billion in total assets as of March 31, with 84 branches in Arkansas, Alabama and Florida. The company has been expanding over the past few years through a series of acquisitions, the most recent of which was Vision Bank of Panama City, Fla., which was purchased from Park National Corp. (PRK), and included 17 branches in Alabama and Florida.

The company's ROA has ranged from 1.38% to 1.58% over the past five quarters.

The shares trade for just over twice their tangible book value, and for 13 times the consensus 2013 EPS estimate of $2.26. The consensus 2012 EPS estimate is $2.17.

FIG Partners analyst Brian Martin rates Home Bancshares "Outperform," with a $32 price target, saying in late April that "upside from current levels exists as profitability ramps up at [the company's] Florida/Alabama operations."

Home Bancshares repurchased 205,600 shares during the first quarter, and Martin believes that "excess capital and strong earnings power should allow for increased dividends and additional share repurchase; however, the priority is deploying excess capital into M&A."

The analyst estimates that Home Bancshares will earn $2.18 a share this year, followed by 2013 EPS of $2.29.

Interested in more Home Bancshares? See TheStreet Ratings' report card for this stock.

-- Written by Philip van Doorn in Jupiter, Fla.

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Philip W. van Doorn is a member of TheStreet's banking and finance team, commenting on industry and regulatory trends. He previously served as the senior analyst for TheStreet.com Ratings, responsible for assigning financial strength ratings to banks and savings and loan institutions. Mr. van Doorn previously served as a loan operations officer at Riverside National Bank in Fort Pierce, Fla., and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a bachelor of science in business administration from Long Island University.

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