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10 Most Profitable Banks Trading Below Book Value

3. StellarOne
Shares of StellarOne Corp. (STEL) of Charlottesville, Va., closed at $13.23 Monday, returning 18% year-to-date, following a 21% decline during 2011.

The shares trade just below their June 30 tangible book value, and for 14 times the consensus 2013 EPS estimate of 97 cents. The consensus 2012 EPS estimate is 92 cents.

Based on a quarterly payout of six cents, the shares have a dividend yield of 1.81%.

StellarOne's ROA for 12 months ending June 30 0.66%, while the company's ROE was 4.62%.

The company reported second-quarter 2012 net income available to common shareholders of $4.9 million, or 0.21 cents a share, declining from $5.5 million, or 24 cents a share, in the first quarter, but increasing from $3.3 million, or 14 cents a share, in the second quarter of 2011.

The second-quarter results included $824,000, or three cents a share, in severance costs. The second-quarter provision for loan losses was $1.4 million, increasing from $850,000 the previous quarter, but declining sharply from $3.2 million a year earlier.

KBW analyst Catherine Mealor rates StellarOne "Market Perform," with a price target of $13, saying in July after the company reported its second-quarter results that the company's better-than-expected results "came on a stable net interest margin , the result of strong deposit growth and a positive deposit mix shift, which, coupled with liquidity deployment led to 6% average earning assets growth," although "with negative avg loan growth in the qtr, all of this growth came in the form of fairly low-rate, shorter-term securities."

The analyst added that "coming expense saves could add up to $2M/yr to earnings by 2014, but will be offset by the cost of the planned market growth."

Mealor estimates that StellarOne will earn 90 cents for all of 2012, and also in 2013.

STEL Chart STEL data by YCharts

Interested in more on StellarOne Corp.? See TheStreet Ratings' report card for this stock.

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