7 Cheapest Bank Takeout Target Stocks From KBW (Update 2)

1. Eastern Virginia Bancshares

Eastern Virginia Bancshares (EVBS) of Tappahannock closed at $3.84 Friday, returning 91% year-to-date, following a 47% decline during 2011. The 52-week return was 7%.

The shares trade for 41% of tangible book value, and for nine times the consensus 2013 earnings estimate of 43 cents. The consensus 2012 earnings estimate is a net loss of nine cents a share.

The company owes $24 million in TARP money.

Eastern Virginia Bancshares had $1.1 billion in total assets as of March 31 and reported first-quarter net income available to common shareholders of $439,000, or seven cents a share, increasing from 217,000, or four cents a share, in the fourth quarter, and $100,000, or two cents a share, in the first quarter of 2011. The company's operating ROA has ranged from 0.08% to 0.30% over the past five quarters, according to Thomson Reuters Bank Insight. The March 31 nonperforming assets ratio was 3.01%.

Mealor rates Eastern Virginia Bankshares "Market Perform," with a $4.00 price target, and said in April that she was "pleased to see progress in credit quality" as the company continued "to take advantage of securities gains to move problem assets off its books."

While saying "we do not believe EVBS will be forced to raise capital under its written agreement [with regulators]," the analyst said that "capital does still remain thin (5.4% TCE) and EVBS still has $20M in TARP."

Mealor estimates the company will post a net operating loss of nine cents for all of 2012, followed by earnings of 43 cents a share in 2013.

Interested in more on Eastern Virginia Bancshares? See TheStreet Ratings' report card for this stock.

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-- 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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