10 Bank Stocks From the South for Smart Long-Term Investors

4. Home BancShares

Home BancShares (HOMB) of Conway, Ark., has seen its stock return 31% year-to-date, through Monday's close at $33.46. The stock returned 19% during 2011.

The shares trades for 2.2 times their reported Sept. 30 tangible book value of $15.01, and for 13.5 times the consensus 2013 EPS estimate of $2.48. Based on a quarterly payout of 12 cents, the shares have a dividend yield of 1.43%.

The company had $3.9 billion in total assets as of Sept. 30, and has expanded rapidly through several opportunistic acquisitions over the past few years, including the $27.9 million purchase in February of Vision Bank of Panama City, Fla., from Park National Corp. (PRK) of Newark, Ohio.

Home Bancshares on Aug. 15 announced a deal to acquire Premier Bank of Tallahassee, Fla., for $1.4 million, in connection with a bankruptcy filing by the target bank's parent, Premier Bank Holding Company. Premier Bank had $272 million in assets as of Sept 30, with six branches. The deal is expected to be completed during the fourth quarter, subject to court approved final sale order, in addition to approval from bank regulators.

Third-quarter earnings were $16.1 million, or 57 cents a share, increasing from $15.5 million, or 51 cents a share, the previous quarter, and $14.3 million, or 48 cents a share, a year earlier.

Third-quarter net interest income was $38.6 million, declining from $39.2 million in the second quarter, but increasing from $35.7 million during the third quarter of 2011. The third-quarter net interest margin was a very strong 4.65%, matching the previous quarter, but declining from 4.75% a year earlier.

The company reported a third-quarter ROA of 1.61% and a return on average tangible common equity of 12.78%.

Martin rates Home Bancshares "Market-Perform," with a price target of $38, and said on Oct. 22 that although he has a neutral rating on the share because of "valuation," he said that "we positive on the company's future prospects and continue to believe shares have upside from current levels a management executes on its growth strategy and profitably deploys its excess capital."

Martin estimates that Home Bancshares will earn $2.38 a share in 2013.

HOMB data by YCharts

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

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