10. Encore Bancshares

Encore Bancshares ( EBTX) of Houston has seen its stock rise 28% over the past year, closing Friday at $14.31.

The company was mentioned as a possible M&A target by Stephens, Inc. analyst Matt Olney, who says that the Houston location makes Encore "more attractive" than many of the other potential bank targets mentioned here.

Encore Bancshares had $1.5 billion in total assets as of Dec. 30. The company reported net earnings available to common shareholders of $1.3 million, or 11 cents a share, for 2011. That number is net of $4.1 million in "accelerated amortization of preferred stock discount" on $34 million in preferred shares that were held by the government for bailout assistance provided through the Troubled Assets Relief Program, or TARP.

Encore repaid the TARP money on Sept. 27.

Fourth-quarter earnings to common shareholders were $1.9 million, or 17 cents a share, compared to a net loss of $1.5 million, or 13 cents a share, when the company wrote-down $5.7 million in assets held for sale. The fourth-quarter return on average assets (ROA) was 0.56% and the return on average equity (ROE) was 5.52%.

SunTrust Robinson Humphrey analyst Jennifer Dembra has a neutral rating on Encore, saying on Jan. 27 that she was "favorably biased on the shares following a strong 4Q11," and considered the company "a likely seller over the next two to three years." Dembra estimates that Encore will earn 87 cents a share in 2012, followed by EPS of 76 cents in 2013.

The shares trade for 1.7 times tangible book value according to HighlineFI, and for 17 times the consensus 2012 EPS estimate of 83 cents.

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

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