) -- An annual ranking of thrift holding companies features a number of thinly-traded names, but digging a bit further into the data reveals plenty of respectable value plays.

Malaga Financial


of Palos Verdes Estates, Calif., came in as the top performer in

SNL Financial's

yearly evaluation, which uses weighted scores derived from the metrics in the chart below to compare the largest 100 publicly traded thrifts.


defines a thrift as a holding company whose main subsidiary is either a savings bank or savings and loan association, and inclusion on the list is based on total assets for the year ended March 31.

SNL Financial's Top 10 Thrift Holding Companies


has recently covered several names among SNL's Top 10 thrift holding companies, including

New York Community Bancorp

( NYB) as one of the

Five Best Bank Stocks Since The Flash Crash

and in the

Best In Class series

. New York Community is emerging from the credit crisis as a strong regional player, and even with shares up 14% through Monday's closing price of $16.08, the stock's dividend yield was 6.22%.

Also in the Top 10 is

Hudson City Bancorp


, another of the better bank performers since the flash crash. Based on Monday's close at $13.24, the stock was down 1% year-to-date, but the dividend yield was 4.53% and the shares seem ridiculously under-valued at 1.2 times tangible book value.

Dime Community Bancshares


was featured in


Six Bank Stocks with Solid Dividends

. The shares returned 8% year-to-date through Monday's close at $12.41, and the dividend yield was 4.51%.

Ten Most Actively-Traded Thrift Holding Companies Among Largest 100

Since a number of the most actively traded thrifts listed in the table above have been covered in other recent stories on


, including


(BBX) - Get Report


People's United Financial

(PBCT) - Get Report

, we've decided to focus on five of the more actively-traded thrift names outside the top ten volume leaders on SNL's list and found one outstanding bargain and a couple of value plays.

Flagstar Bancorp

(FBC) - Get Report

of Troy, Mich. was ranked #99 among the largest 100 publicly traded thrift holding companies by

SNL Financial

. Shares closed Monday at $4.34, down 28% year-to-date. The stock underwent a 1-for-10 reverse-split on May 28.


The company owes $267 million to the government for bailout assistance received through the Troubled Assets Relief Program, or TARP. Flagstar raised roughly $577 million in common equity during the first quarter, leaving its main subsidiary,

Flagstar Bank, FSB

, with a Tier 1 leverage ratio of 9.39% and a total risk-based capital ratio of 17.98%. These ratios far exceed the 5% and 10% required for most banks and thrifts to be considered

well capitalized


Although at first glance it might appear that further dilution from common equity raises is off the table for now, the problem for Flagstar's investors is that the thrift's asset quality and core earnings were still declining during the first quarter.


For the year ended March 31, 2010, Flagstar's core return on average assets (ROAA) was -3.34% and its core return on average equity (ROAE) was -62.06%, clearly showing the deterioration of shareholder capital. The company posted a net loss of $72 million during the first quarter mainly from loan loss provisions, but also because the thrift's net interest margin -- the difference between its average yield on loans and securities and its average cost of funds -- declined to 1.42%.

The low net interest margin reflects the thrift's poor asset quality and comes at a time when the aggregate net interest margin for all U.S. banks and thrifts expanded as funding costs declined to 3.83%, according to the Federal Deposit Insurance Corp.

Asset Quality:

Nonperforming assets -- including loans past 90 days, nonaccrual loans, restructured loans and repossessed real estate -- comprised 17.99% of total assets as of March 31, according to


. This is a crippling figure. The company is surviving because of its ability to raise significant additional common equity.


With Flagstar Bancorp yet to show signs of turning the corner on loan quality, the company appears to be a risky play, although Keefe Bruyette & Woods analyst Bose George has a neutral rating on the shares, saying in a recent note that "the new capital should allow the company to manage through credit losses on its legacy portfolio and support future growth."

Washington Federal

( WFSL) of Seattle placed #47 in


thrift rankings. Shares closed at $17.15 Monday, down 11% this year.

Although the company has had some asset quality problems from its construction loan portfolio, those loans are running-off and Washington Federal was able to leverage its strong capital base to expand through the FDIC-assisted acquisition of the failed

Horizon Bank

of Bellingham, Wash. in January.


Washington Federal was very well capitalized going into the credit crisis but still participated in TARP, redeeming the $200 million in preferred shares held by the government on May 27. The company still has plenty of excess capital it could deploy in additional acquisitions of failed institutions.


A major factor in Washington Federal's low ranking by

TheStreet Recommends


was that the company's core earnings suffered over the past year as it made large provisions for loan losses. Still, it did post a profit of $82.1 million for the three months ended March 31, mainly because of a huge gain on the Horizon Bank deal, and a tax benefit.

Asset Quality:

Washington Federal's nonperforming assets ratio was 3.42% as of March 31. The ratio of net charge-offs (loan losses, less recoveries) to average loans for the year ended March 31 was 2.04%, which was a moderate level, considering the company's capital strength and positive earnings.


Sterne Agee analyst Brett Rabatin rates Washington Federal a buy with a $22 price target, calling the company a "safe-haven play from a credit risk perspective." Shares are cheap at 1.2 times tangible book value.

Astoria Financial


of Lake Success, N.Y. came in at #48 on


list. Shares closed at $14.90 Monday, up 22% year-to-date, and were yielding 3.49% on a quarterly dividend of 13 cents.


Astoria didn't participate in TARP and main subsidiary

Astoria Federal Savings & Loan Association

was well capitalized as of March 31, with a Tier 1 leverage ratio of 6.94% and a total risk-based capital ratio of 13.11%. Sterne Agee analyst Matthew Kelley noted that coming regulatory changes, as well as Astoria's desire to expand, could lead to a common equity offering.


SNL's relatively low ranking reflects a weak core ROAA of 0.17% and ROAE of 2.89% for the year ended March 31. That being said, Astoria has been quite stable over the long term, with a low-risk profile, and has remained profitable through the credit crisis. The weak earnings reflect narrow net interest margins. The margin was 2.56% for the first quarter, which was an improvement over 2.32% a year earlier.

Asset Quality:

While credit quality deteriorated somewhat during the crisis, loan losses were relatively light. The net charge-off ratio for the year ended March 31 was 0.83%.


Kelley has a neutral rating on the shares. Based on the company's earnings performance, Astoria appears to be a lackluster investment choice. However, the shares represent a decent value play with relatively low risk. The stock's price-to-tangible book ratio was just 1.4 times as of Monday's market close, and before the crisis the shares traded much higher, for 2 times book at the end of 2007 and 2.7 times book at the end of 2006. So the dilution risk of a common equity offering, which Kelley estimates could be $300 million, is already baked into the price.

Looking at earnings projections, shares were trading for 21 times the current average 2010 profit estimate of analysts polled by

Thomson Reuters

. Moving out to Wall Street's 2012 earnings view of $1.38 a share, the price-to-earnings ratio drops to 10.8. So it may take some time for new investors to realize significant gains on the shares, but they will receive a decent dividend payout while waiting.

NewAlliance Bancshares

( NAL) of New Haven, Conn. was ranked #21 among the largest 100 publicly traded thrift holding companies by

SNL Financial

. Shares closed at $11.75 Monday, down 1% year-to-date. With a quarterly dividend payout of 7 cents a share, shares were yielding 2.38%.


The company didn't participate in TARP and was strongly capitalized with a Tier 1 leverage ratio of 11.34% and a total risk-based capital ratio of 21.03%. Management has said it is seeking to deploy excess capital through expansion either through acquisitions of other institutions or expansion of its branch network.


According to


, New Alliance's core ROAA for the year ended March 31 was 0.65% and the core ROAE was 3.87%. These numbers aren't stellar, but are in line with the company's earnings performance over the past five years.

Asset Quality:


nonperforming assets ratio was 0.86% as of March 31, which is a very low level of nonperforming assets in the current environment. Net charge-offs for the year ended March 31 were minimal.


While NewAlliance is another low-risk play, as shares were selling for just 1.4 times book value as of Monday's close, the company's mediocre earnings performance over the long haul makes for a rather sleepy appearance. This may change if management follows through on its expansion plans. Christopher Nolan of Maxim Group has a neutral rating on the shares. He also says the company is unlikely to increase its dividend in the near term, "given the current payout ratio of 50%

of earnings."

United Western Bancorp

( UWBK) of Denver, Colo. was ranked #97 among the largest 100 publicly traded thrifts by


. Shares closed at $1.05 Monday, down 62% during 2010.

Capital and Liquidity:

The company is not a TARP participant. Main subsidiary

United Western Bank

reported a Tier 1 leverage ratio of 6.63% and a total risk-based capital ratio of 9.18% as of March 31. That second ratio needs to be at least 10% for most banks and thrifts to be considered

well capitalized

by regulators.

For United Western Bank, capital ratio requirements are increasing, as informal memorandums of understanding with the Office of Thrift Supervision require the thrift subsidiary to achieve a minimum total risk-based capital ratio of 12% by June 30.

The holding company disclosed in its first-quarter 10-Q filing that it was in default of its revolving credit agreement with

JPMorgan Chase

(JPM) - Get Report

because of its capital ratios, level of nonperforming assets and nonpayment of $1.5 million due to on March 31.

United Western Bancorp owed JPMorgan $17 million under the revolving credit line as of March 31, and the parties entered a forbearance agreement that ran through May 15, but the company declined comment on any extension of the agreement. Sterne Agee analyst Edward Timmons told


that the agreement was likely extended.


United Western's low ranking by


was based in part on a ROAA of -1.81% and a ROAE of -31.03 for the year ended March 31, as the company took charges on its securities investments and worked through loan losses.

Asset Quality:

SNL's nonperforming assets ratio was 3.85% as of March 31, and the net charge-off ratio for the year ended March 31 was 1.58%.


Timmons has a neutral rating on the shares. Because of the company's large losses during 2009 and the first quarter of 2010, it is somewhat surprising to see management focusing on anything other than raising capital, but United Western Bank's June 15 agreement to acquire Legent Clearing, which regulators could still nix, shows a certain level of confidence in the thrift's prospects.

Timmons estimated a fair value for the company's shares at $1.25 on May 5. By that estimate, shares are fairly valued here, but United Western is only suitable for investors with a large appetite for risk.


Written by Philip van Doorn in Jupiter, Fla.

Philip W. van Doorn is a member of TheStreet's banking and finance team, commenting on industry and regulatory trends. He previously served as the senior analyst for Ratings, responsible for assigning financial strength ratings to banks and savings and loan institutions. Mr. van Doorn previously served as a loan operations officer at Riverside National Bank in Fort Pierce, Fla., and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a bachelor of science in business administration from Long Island University.