3 Banking Stocks Pushing Industry Growth

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Two out of the three major indices are trading lower today with the Dow Jones Industrial Average ( ^DJI) trading down 78.22 points (-0.4%) at 17,774 as of Tuesday, Dec. 9, 2014, 3:25 PM ET. The NYSE advances/declines ratio sits at 1,227 issues advancing vs. 1,763 declining with 144 unchanged.

The Banking industry as a whole closed the day up 0.4% versus the S&P 500, which was down 0.2%. Top gainers within the Banking industry included First Financial Service ( FFKY), up 2.2%, Elmira Savings Bank Elmira NY ( ESBK), up 4.3%, Louisiana Bancorp ( LABC), up 4.3%, Cordia Bancorp ( BVA), up 4.1% and Carolina Bank Holdings ( CLBH), up 1.9%.

TheStreet Ratings Group would like to highlight 3 stocks pushing the industry higher today:

Carolina Bank Holdings ( CLBH) is one of the companies that pushed the Banking industry higher today. Carolina Bank Holdings was up $0.18 (1.9%) to $9.68 on average volume. Throughout the day, 2,086 shares of Carolina Bank Holdings exchanged hands as compared to its average daily volume of 2,300 shares. The stock ranged in a price between $9.40-$9.70 after having opened the day at $9.40 as compared to the previous trading day's close of $9.50.

Carolina Bank Holdings, Inc. operates as a bank holding company for Carolina Bank that provides commercial and consumer banking services to individuals, and small to medium-sized businesses in the Piedmont Triad region of North Carolina. Carolina Bank Holdings has a market cap of $32.6 million and is part of the financial sector. Shares are down 6.1% year-to-date as of the close of trading on Monday. Currently there are no analysts who rate Carolina Bank Holdings a buy, no analysts rate it a sell, and none rate it a hold.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreet Ratings rates Carolina Bank Holdings as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth and expanding profit margins. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from TheStreet Ratings analysis on CLBH go as follows:

  • CLBH's revenue growth has slightly outpaced the industry average of 1.3%. Since the same quarter one year prior, revenues slightly increased by 2.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • The gross profit margin for CAROLINA BANK HOLDINGS INC is currently very high, coming in at 88.45%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, CLBH's net profit margin of 10.88% significantly trails the industry average.
  • CAROLINA BANK HOLDINGS INC' earnings per share from the most recent quarter came in slightly below the year earlier quarter. The company has suffered a declining pattern earnings per share over the past two years. During the past fiscal year, CAROLINA BANK HOLDINGS INC reported lower earnings of $0.87 versus $1.84 in the prior year.
  • The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Commercial Banks industry average. The net income has decreased by 1.1% when compared to the same quarter one year ago, dropping from $1.02 million to $1.01 million.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Commercial Banks industry and the overall market on the basis of return on equity, CAROLINA BANK HOLDINGS INC underperformed against that of the industry average and is significantly less than that of the S&P 500.

You can view the full analysis from the report here: Carolina Bank Holdings Ratings Report

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

At the close, Louisiana Bancorp ( LABC) was up $0.95 (4.3%) to $22.95 on average volume. Throughout the day, 1,010 shares of Louisiana Bancorp exchanged hands as compared to its average daily volume of 900 shares. The stock ranged in a price between $22.95-$22.95 after having opened the day at $22.95 as compared to the previous trading day's close of $22.00.

Louisiana Bancorp, Inc. operates as the holding company for Bank of New Orleans that provides commercial banking services to individuals and businesses primarily in Southern Louisiana. Louisiana Bancorp has a market cap of $66.3 million and is part of the financial sector. Shares are up 30.2% year-to-date as of the close of trading on Monday. Currently there are no analysts who rate Louisiana Bancorp a buy, no analysts rate it a sell, and none rate it a hold.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreet Ratings rates Louisiana Bancorp as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins, solid stock price performance, growth in earnings per share and increase in net income. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from TheStreet Ratings analysis on LABC go as follows:

  • The revenue growth greatly exceeded the industry average of 23.5%. Since the same quarter one year prior, revenues rose by 11.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 50.00% and other important driving factors, this stock has surged by 35.32% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, LABC should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • LOUISIANA BANCORP INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. During the past fiscal year, LOUISIANA BANCORP INC increased its bottom line by earning $1.03 versus $0.90 in the prior year.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Thrifts & Mortgage Finance industry. The net income increased by 52.6% when compared to the same quarter one year prior, rising from $0.58 million to $0.88 million.
  • The gross profit margin for LOUISIANA BANCORP INC is currently very high, coming in at 83.37%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 22.15% is above that of the industry average.

You can view the full analysis from the report here: Louisiana Bancorp Ratings Report

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

First Financial Service ( FFKY) was another company that pushed the Banking industry higher today. First Financial Service was up $0.08 (2.2%) to $3.72 on light volume. Throughout the day, 1,397 shares of First Financial Service exchanged hands as compared to its average daily volume of 4,300 shares. The stock ranged in a price between $3.65-$3.74 after having opened the day at $3.65 as compared to the previous trading day's close of $3.64.

First Financial Service Corporation operates as the bank holding company for First Federal Savings Bank of Elizabethtown that provides various personal and corporate banking services, and personal investment financial counseling services. First Financial Service has a market cap of $19.8 million and is part of the financial sector. Shares are down 21.8% year-to-date as of the close of trading on Monday. Currently there are no analysts who rate First Financial Service a buy, no analysts rate it a sell, and 1 rates it a hold.

TheStreet Ratings rates First Financial Service as a sell. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, weak operating cash flow and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on FFKY go as follows:

  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Commercial Banks industry. The net income has significantly decreased by 65.6% when compared to the same quarter one year ago, falling from $1.47 million to $0.51 million.
  • Net operating cash flow has significantly decreased to -$0.45 million or 109.08% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • The share price of FIRST FINANCIAL SERVICE CORP has not done very well: it is down 21.28% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Commercial Banks industry and the overall market, FIRST FINANCIAL SERVICE CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • FIRST FINANCIAL SERVICE CORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past 2 years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, FIRST FINANCIAL SERVICE CORP continued to lose money by earning -$0.06 versus -$1.98 in the prior year.

You can view the full analysis from the report here: First Financial Service Ratings Report

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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