• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Doug Kass
    • Bruce Kamich
    • Jim Cramer
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • Trifecta Stocks
  1. Home
  2. / Investing
  3. / Financial Services

Go Small, Go Regional

Small regional banks have been quietly building fundamental and technical strength.
By KATE STALTER Jan 20, 2012 | 01:00 PM EST
Stocks quotes in this article: EGBN, TCBI, OZRK, HOMB, MKTX, GS, GS, JPM, WFC, BAC, MS

Financials have been in the spotlight, as big banks such as Goldman Sachs (GS), JPMorgan Chase (JPM), Wells Fargo (WFC), Bank of America (BAC) and Morgan Stanley (MS) reported in recent sessions.

While these widely traded issues get the lion's share of attention, many smaller regional banks have been quietly building up fundamental and technical strength.

One stealth name is Eagle Bancorp (EGBN), a community bank with which runs 15 branches in Maryland, Virginia and Washington, D.C. The company reports its fourth quarter next Wednesday, after the market closes. Analysts expect income of $0.32 a share and revenue of $28.8 million. The bank is expected to show double-digit earnings growth this year, to $1.34 a share.

The chart initially got my attention, as the price has rallied to four-year highs after emerging from a price consolidation earlier this month.

Another small bank that's performing well is Texas Capital Bancshares (TCBI), which also reports its fourth quarter on Wednesday. Wall Street expects it to earn $0.60 a share with revenue of $82.5 million.  Fundamentally, the company has amassed a solid history of earnings and revenue growth, and it's expected to post strong results this year.

The stock pulled back from a Jan. 10 intraday high of $33.23, but is continuing to hold up nicely above key moving averages. The current consolidation below the Jan. 10 high could result in a new entry point in the coming days or weeks.   

Bank of the Ozarks (OZRK) is a Little Rock, Ark.,-based regional bank with more than 100 branches in the Southeast and Texas. The company reported its fourth quarter on Jan. 17, beating earnings views by $0.02 per share. The stock pulled back slightly after earnings, but it's showing continued strength above its 10-week line. It's currently out of the technical buy range, but is worth watching for its next pullback that could offer a new entry opportunity.

Another small Arkansas bank, Home BancShares (HOMB), also sports fundamentals and technicals that are superior to many of its larger, widely held brethren.  As with some other regionals, Home BancShares is thinly traded, moving only 78,000 shares a day, meaning there's extra volatility risk, something individual investors need to remain aware of.

The company reported earnings Thursday, beating views by $0.02 per share. The stock is continuing to hold up above its 10-week average. Like many financials, even small ones, Home BancShares pays a dividend. Its yield is 1.2%.

Another financial that's been on my radar for some time is MarketAxess Holdings (MKTX). This is not a regional bank but an electronic-trading platform for broker-dealers and other institutions.

On its chart, the stock has been trending higher, above its 10-week line, but hasn't formed a bottoming consolidation since mid-2010. Extended rallies occasionally mean the stock is due for a pullback. Investors going into this stock would need to be very vigilant for action such as heavy-volume declines beneath its 50-day line.

MarketAxess is expected to report earnings in early February, so price and volume action around that time is something to watch.

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

At the time of publication, Stalter had no positions in the stocks mentioned.

TAGS: Investing | U.S. Equity | Financial Services

More from Financial Services

Will Jack Ma Have to Sell Out of Ant and Alibaba?

Alex Frew McMillan
Apr 19, 2021 10:45 AM EDT

Ant and Alibaba are in talks with Chinese regulators about how the companies can proceed, perhaps without their figurehead.

Metromile Could Bounce but Needs to Develop a Base for a Sustained Advance

Bruce Kamich
Apr 19, 2021 9:07 AM EDT

Indications are that sellers of the auto insurance provider's shares have been more aggressive of late.

Is the Market Wrong on Bank of America? Here's What the Charts Say

Bruce Kamich
Apr 16, 2021 2:21 PM EDT

Let's check in again on BAC after its latest earnings.

Paychex Presents a Risk/Reward Dilemma for Chart Readers

Bruce Kamich
Apr 8, 2021 9:47 AM EDT

Let's review the charts and indicators.

MarketAxess Charts Present a Mixed Bag

Bruce Kamich
Apr 6, 2021 8:10 AM EDT

There are bearish and bullish technical signals from the shares of the fixed-income trading platform.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 08:05 AM EDT JAMES "REV SHARK" DEPORRE

    This Weekend on Real Money

    How recency bias and the Pareto Principle impact y...
  • 02:42 PM EDT PAUL PRICE

    Wednesday on Real Money Pro

    Make this stock a 'part' of your portfolio.
  • 04:44 PM EDT PAUL PRICE

    Pretty Incredible + Hard to Believe

  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2021 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login