Tag - SBSI

The mortgage industry meltdown has distracted investor attention from high quality lenders, such as SCBT Financial Corp. (Nasdaq:SCBT) and Southside Bancshares (Nasdaq:SBSI), which continue to perform well. Both companies have conservative loan portfolios and double-digit earnings growth.

SCBT Financial has been providing commercial banking services in the Carolinas for over 73 years. The company owns South Carolina Bank and Trust, South Carolina Bank and Trust of the Piedmont, and The Scottish Bank. It operates through 50 financial centers across the Carolinas.  

Location influences regional bank growth rates and SCBT is well-located in a fast-growing region of the Mid-Atlantic. A recent study ranked Raleigh-Cary and Wilmington in North Carolina and Charleston, S.C., among the top 10 cities nationwide for employment growth.

Mortgage loan defaults have not been an issue for SCBT since the company never participated in subprime lending. In the 2008 second quarter, non-performers represented only 0.33% of its total loans. Because of its high asset quality, SCBT is able to capitalize on current growth opportunities that are contributing to record net income.

SCBT’s earnings rose 12.3% in the first six months of 2008, to $12.1 million from $10.8 million in the same period one year ago. Per-share earnings rose modestly to $1.18 versus $1.17 one year earlier, limited by dilution from The Scottish Bank acquisition. Earning assets expanded 20.8% year over year to $2.51 billion from $2.08 billion, and deposits (a source of future loan growth) increased 16.1% year over year to $2.0 billion from $1.7 billion. Analysts think SCBT will produce 12% growth next year and 11% annual growth over the next five years. My $42 target price for SCBT is 12% above Tuesday’s . . .

The Russell 2000 (NYSE:IWM) is maintaining strong gains on news of lower-than-expected March inflation earnings from major banks. At 2:19 p.m. ET, the small-cap index had added 14.99 points, or 2.17%, to 707.05. The Dow Jones Industrial Average was up 163.74 points, or 1.32%, to 12,526.21.

Stocks small and large are rallying on news before the opening that consumer prices rose 0.3% in March, below the projected 0.4%. The same report by the U.S. Labor Department also showed that core prices, which exclude the costs of food and energy, added 0.2%, as expected.

“Typically, when the economy goes into recession we see inflationary pressures ease, but there is a significant lag,” said Arun Raha, vice president of economic research and consulting for the North American operations of reinsurance company Swiss Re, in an email. “Today’s CPI numbers reinforce that trend. Inflationary pressures . . .

Gencor Industries, Inc. (Nasdaq:GENC), Aehr Test Systems (Nasdaq:AEHR) and Stepan Co. (NYSE:SCL) were among the new 52-week highs established during Tuesday's trading among companies with market capitalizations or values under $750 million.

Southside Bancshares, Inc. (Nasdaq:SBSI), Clayton Williams Energy, Inc. (Nasdaq:CWEI) and WSI Industries, Inc. (Nasdaq:WSCI) were also among the 52-week small-cap highs.

Here are today's 52-week small-cap highs: