This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

10 Buy-Rated Bank Stocks With Highest Dividend Yields

Stocks in this article: BAC C NYCB PBCT VLY FMER FNB UBSI TRST PRK UVSP WBCO PVFC CRBC VCBI

9. FirstMerit


Shares of FirstMerit (FMER - Get Report) of Akron, Ohio, closed at $15.13 Thursday, returning 8% year-to-date, after a decline of 2% during 2012. The shares trade for 1.4 times tangible book value and for 10.6 times the consensus 2014 EPS estimate of $1.42. The consensus 2013 EPS estimate is $1.28.

Based on a quarterly payout of $0.16, the shares have a dividend yield of 4.23%.

FirstMerit is rated a B-minus (Good) by TheStreet Ratings.

The company had $14.9 billion in total assets as of Dec. 31 and reported 2012 net income applicable to common shares of $134.1 million, or $1.22 a share, increasing from $119.6 million, or $1.10 a share, in 2011. FirstMerit's 2012 ROA was 0.91%, improving from 0.82% the previous year.

The company in September agreed to acquire Citizens Republic Bancorp (CRBC) of Flint, Mich., in an all-stock deal valued at $912 million. Citizens Republic has $9.6 billion in total assets and owes $300 million in federal bailout funds received through the Troubled Assets Relief Program, or TARP.

FirstMerit said in its annual 10-K filing on Thursday that upon completion of the merger, it would purchase Citizens Republic's TARP preferred shares without itself becoming subject to TARP's restrictions, while also paying the government deferred dividends totaling $48.5 million. The merger is expected to be completed in the second quarter.

Oppenheimer analyst Terry McEvoy rates FirstMerit "outperform," with a 12-18 month price target of $18. The analyst said in a report on Jan. 22 that the Citizens Republic deal was "looking better by the quarter," because of improved credit quality.

McEvoy said that nonperforming assets at Citizens Republic declined by 21% in the fourth quarter from the third quarter, and that net loan charge-offs were down 50% from a year earlier. The analyst said that FirstMerit's original estimate of a $378 credit mark against loans to be acquired from Citizens Republic was "conservative," and that "given the decline in nonperforming assets and stable delinquency trends over the last two quarters, we see the final loan mark coming in below the original figure or higher levels of purchase accounting accretion (positive to net interest income and EPS) after the deal closes."

"In either case, this reduces the tangible book value dilution earn-back time, which was a large contributor to the stock's underperformance following the deal announcement," McEvoy wrote.

The analyst estimates that FirstMerit will earn $1.35 a share in 2013 and 2014, while maintaining the quarterly dividend of $0.16.

FMER Chart FMER data by YCharts

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

3 of 11

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,672.60 -141.38 -0.79%
S&P 500 2,051.82 -11.33 -0.55%
NASDAQ 4,757.8790 +7.4820 0.16%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs