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5 Buy-Rated Bank Stock Takeout Targets From KBW

Stocks in this article: WFC BPFH ORIT OABC BSRR FDEF

3. OmniAmerican Bancorp

Shares of OmniAmerican Bancorp (OABC) of Fort Worth, Texas, closed at $22.74 Friday, returning 45% year-to-date, following a 16% return in 2011.

The shares trade for 1.3 times tangible book value, according to Thomson Financial Bank Insight, and for 27 times the consensus 2013 EPS estimate of 85 cents. The consensus 2014 EPS estimate is $1.10.

OmniAmerican converted to full stock ownership in January 2010, so the company's board of directors will be able to consider selling the company early next year.

The company had $1.3 billion in total assets as of Sept. 30, and reported third-quarter net income of $2.3 million, or 22 cents a share, increasing from $1.4 million, or 14 cents a share, in the second quarter, and $1.0 million, or 10 cents a share, in the third quarter of 2011. The earnings improvement reflected an increase in gains on loan sales to $941,000 in the third quarter from $501,000 the previous quarter, and $380,000 a year earlier. The company also reported 762,000 in gains on the sale of securities during the third quarter.

A bright spot for the third-quarter was that the net interest margin expanded to 3.30% during the third quarter, from 3.15% in the second quarter, although the margin had narrowed from 3.40% a year earlier.

KBW analyst Brady Gailey wrote on Oct. 26 that "OABC reported a strong quarter with 15 bpts of NIM expansion, propped higher by shrinkage in the bond book and paydowns of higher cost borrowings," and said that with the company not buying back any shares during the third quarter, he continued "to believe OABC could be worth around $28/shr in a sale."

Gailey estimates that operating independently, OmniAmerican Bancorp will earn 85 cents a share in 2013, with earnings growing to $1.10 a share in 2014.

The analyst said that "a sale of the company is likely in the near term," and that "we believe OABC's Dallas/Ft Worth geography will be attractive to many."

OABC Chart OABC data by YCharts

Interested in more on OmniAmerican Bancorp? See TheStreet Ratings' report card for this stock.

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