United Financial has the best net interest margin of the three companies we selected: 3.38% for the third quarter. Supporting the stock is a buyback of 5% of the company's shares, which began in February, with 633,000 shares repurchased through Oct. 16. There were 208,000 shares left to be repurchased. United Financial's shares are attractively priced, selling for below book value and considerably less than their 52-week high of $15.48. The company's stock has fallen 15% this year. United Financial's strong capital, buyback, excellent loan quality, good net interest margin and coming expansion make it a compelling play.
Westfield Financial is scheduled to announce third-quarter results Wednesday. Looking at second-quarter numbers, the company was very strongly capitalized with a total risk-based capital ratio of 37.55% as of June 30. To put that in perspective, the aggregate risk-based capital for all U.S. banks and thrifts was 13.76% as of June 30. Most institutions need to maintain a ratio of 10% to be considered well-capitalized under regulatory guidelines. Westfield has been putting the capital to use with a buyback that began in January 2008. At the end of the second quarter, there were $1.7 million shares remaining that could have been repurchased under the buyback plan. Westfield's credit quality is strong, with a nonperforming-assets ratio of 1.16% as of June 30, and its ratio of net charge-offs to average loans for the second quarter of 0.19%. While both Westfield and United Financial have commercial real-estate loans comprising about 17% of total assets, Westfield also focuses on non-mortgage commercial and industrial lending. Those loans accounted for about 14% of total assets as of June 30, compared with about 6% for United Financial.