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10 Most Profitable Banks Trading Below Book Value

6. Westfield Financial
Shares of Westfield Financial (WFD) of Westfield, Mass., closed at $7.39 Monday, returning 4% year-to-date, following a 15% decline during 2011.

The shares trade for 0.9 times tangible book value, and for 30 times the consensus 2013 EPS estimate of 25 cents. The consensus 2012 EPS estimate is 23 cents.

Westfield Financial pays a regular quarter dividend of six cents a share, and has also been paying a special dividend, twice a year. Based on the regular payout, the shares have dividend yield of 3.25%. Based on the total payout of 49 cents a share over the past year, the shares have a dividend yield of 6.63%.

For the 12-month period ended June 30, Westfield Financial's ROA was 0.49%, while the company's ROE was 2.93%.

Westfield Financial on Aug. 29 announced that its board of directors had authorized a program to purchase up to 5% of its outstanding common stock, or 1,278,560 shares, after completing its previous repurchase plan a few days earlier.

The company reported second-quarter net income of $974 thousand, or four cents a share, declining from $2.3 million, or nine cents a share, the previous quarter, and $2.9 million, or 11 cents a share, a year earlier. Second-quarter earnings were hit because the company "redeemed certain [bank-owned life insurance] policies because of a sudden downgrade in the credit ratings of the insurance carrier and the carrier's decision to close out its individual life policies to new sales."

Westfield made an additional income tax provision of $160,000 during the second quarter and recorded a charge to noninterest income of $102,000, "for transferring the policies to a different carrier."

Sterne Agee analyst Mike Shafir has a neutral rating on Westfield Financial, and said that "strong loan growth highlighted" the company's second-quarter, "and the company continued to repurchase shares below tangible book value."

The analyst hinted that the strongly capitalized company could be looking for an acquisition, saying that "near term, we believe buybacks, organic loan growth, and dividends will continue to be the primary capital deployment tools, however, we feel Westfield will continue to explore opportunistic acquisitions to increase profitability."

WFD Chart WFD data by YCharts

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