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Varchild2008 (84.01)

The BANK nobody talks about is the BANK to buy.



March 02, 2009 – Comments (4) | RELATED TICKERS: TCF

The Financial Bank that CNBC, Warren Buffet, Mutual Funds, Hedge Funds, Motley Fool, and so many others have overlooked and haven't talked about is the bank you should buy.

This bank does business primarily in the Midwest:  Michigan, Illinois, Indiana, Wisconsin, Minnesota.

They also do business in Colorado, and Arizona.

This bank's common stock has fallen 10.2 percent year to date.  But, before you freak out.. Consider that:

1) JP MORGAN:    Fell 27.5%
2) U.S. Bankcorp:  Fell 42.8%
3) Wells Fargo:      Fell 59%
4) Bank of America:   Fell over 70%

Can the stock price fall further?  Of course this banks price can fall further.  It is a recession afterall.  But, this bank is unique in that it has avoided completely the Mortgage mess that other banks got themselves into.  It has not been used by the Government as a JP Morgan style Bailout Bank of other abyssmal banks gone bust like Bear Sterns, Washington Mutual.

The economy has hurt the profits/revenue of this paticular bank... So we are not looking at some "Miracle Stock" here.  But, we are simply looking at a bank that is absolutely with 100% confidence a surviver.

And it's a surviver carrying a pretty hefty dividend and yield.  That yield is so high I expect the dividend at some point to be cut in half.  Even with a 50% deduction in dividend payouts... You'll still get paid 12 cents a share at 4% yield....not too shabby?

So.... What's my new found favorite Bank Stock I think it's worth a BUY?


Check it out and do your research before deciding to buy in.  Also, wait for this to come down a lot closer to its 52-week low.

4 Comments – Post Your Own

#1) On March 02, 2009 at 9:24 AM, Gemini846 (34.17) wrote:

I've played in a few of these small banks last year that I knew had good sheets but its still too risky for anything less than long term.

Many of these small cap/mid cap community banks are well capitalized, but they are still prone to some analyst who doesn't even the financials saying they are overvalued and haven't come down enough. "They must be hiding somethign" ya da ya da and it tanks.

If our gov wasn't so set on bailing out the big ones then some of these could rise up and be the next big banks.

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#2) On March 02, 2009 at 9:25 AM, rofgile (98.98) wrote:

Whats the ratio of assets to loans?  How exposed are they to failing loans in Michigan?  Do they own loans that are repackaged from other parts of the country?

I still think its tricky to judge any bank in the US...

There's a nice bank in a different country - Bank of Peru (BAP). 

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#3) On March 02, 2009 at 11:46 AM, Varchild2008 (84.01) wrote:

Plenty of Discussion already available on this from the select few CAPS players who even know this one exists.

Please check out TCB on Motley Fool as a starting point.
Granted, the stock has only 2 stars so.. Again.. I emphasize.. Wait for this to fall a lot..a lot...a lot closer to its 52-week low.

No sense buying a bank stock carrying a 12 P/E.  Right now it looks like it will close above $11 a share... And that's still too high for this thing.

I fully expect the Dividend to be cut by at least 50% here... So take that into consideration before even thinking of opening a position.

But I will tell you this... I suspect a lot of paniced customers are starting to withdraw money out of stressed banks and into banks like TCF.

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#4) On March 02, 2009 at 11:48 AM, Varchild2008 (84.01) wrote:

I base my judgement on the whole withdraw, deposit thing... Based on personal experience... Cause I know someone who already has withdrawn funds from 1 bank and deposited them into TCF.

So extrapolating that to say.. Bank of America customers and other banks... over a long period of time of distress... And if TCF remains a bank with a pretty good Credit level and a fairly low stress level.... Then I don't see anything but increases in overall deposits overtime.. especially as people are not spending.

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