1. First Defiance Financial
First Defiance Financial
of Defiance, Ohio, closed at $17.01 Friday, returning 18% year-to-date, after a 23% return during 2011.
The shares trade for 0.9 times their reported Sept. 30 tangible book value of $19.29, and for 10 times the consensus 2013 EPS estimate $1.73. The consensus 2014 EPS estimate is $1.64. Based on a quarterly payout of a nickel, the shares have a dividend yield of 1.18%.
First Defiance Financial had $2.1 billion in total assets as of Sept. 30. The company reported third-quarter net income applicable to common shares of $5.4 million, or 54 cents a share, increasing from $3.2 million, or 32 cents a share, in the second quarter, and $3.6 million, or 36 cents a share, in the third quarter of 2011. The main factor in the earnings improvement was a decline in the provision for loan losses to $705,000 in the third quarter, from $4.1 million the previous quarter, and $3.1 million, a year earlier.
The company's third-quarter ROA was 1.06% and its return on average tangible common equity was 11.70%, according to Thomson Reuters Bank insight.
First Defiance continues to operate under a memorandum of understanding (MOU) with the Federal Reserve, requiring regulatory approval before the company pays dividends on common shares.
KBW analyst John Barber said on Nov. 15 that "we believe FDEF has positive momentum following strong Q3 results and that its valuation should increase as earnings visibility improves," and that "the shares remain attractive given its above-peer profitability metrics."
Barber's estimates that First Defiance will earn two dollars a share in 2013, and his price target for the shares is $22.00. The analyst said that "removal of its outstanding MOU and capital return to shareholders also remain near-term catalysts."
Interested in more on First Defiance Financial Corp.? See TheStreet Ratings' report card for this stock.
Written by Philip van Doorn in Jupiter, Fla.