9. Peoples FinancialShares of Peoples Financial ( PFBX) of Biloxi, Miss., closed at $9.05 Monday, declining 11% during 2011. The shares trade for just 0.4 times their reported Sept. 30 tangible book value of $21.64, and for 15 times the consensus 2013 EPS estimate of 60 cents. Based on a semiannual dividend of 10 cents, the shares have a yield of 2.21%. Peoples Financial had $813 million in total assets as of Sept. 30. The company reported third-quarter earnings of $749,000, or 14 cents a share, increasing from $562,000, or 11 cents a share, in the second quarter, and $577,000, or 12 cents a share, during the third quarter of 2011. Third-quarter net interest income was $5.6 million, declining from $5.7 million the previous quarter, but increasing from $5.4 million a year earlier. The net interest margin expanded to 3.07% during the third quarter, from 3.04% in the second quarter, although it narrowed from 3.24% in the third quarter of 2011. Peoples Financial is strongly capitalized, with a tangible common equity ratio of 13.67% as of Sept. 30, according to Thomson Reuters Bank insight, but the low price-to-book value reflects weak earnings performance, with ROA ranging from a negative 0.31% to 0.36% (in the third quarter), according to TR Bank Insight, and a relatively high ratio of nonperforming assets -- including nonaccrual loans and repossessed real estate -- of 7.53%, as of Sept. 30. Christopher Marinac on Oct. 26 upgraded rates Peoples Financial to "Outperform," saying that "over the next 6 to 12 months, we think shares of PFBX are capable of rising 40%+ to $12.00. This is a function of the price-to-tangible book valuation improving from 39% currently
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