Last Friday, bank regulators closed 5 more banks in the states of Florida,
Georgia and Michigan – raising the total number of bank failures to 39 for this
year. This is actually good news because last year at this time, regulators had
closed a total of 69 banks.
However, states like Florida, Georgia and Michigan remain mired in the
housing collapse thanks to an oversupply of houses and/or the economic downturn.
Hence, buying small cap thrift or community bank stocks in such states do not
make sense from a risk point of view.
On the other hand, New England has been more insulated both from the housing
market collapse and the worst of the economic downturn. And while New England
may not be the most competitive place in terms of taxes and government
regulations and its population is not growing as much as the population of sun
belt states, escaping the brunt of the housing crunch means that its thrifts and
community banks are probably less likely to be in the news for experiencing bank
Hence, here are a few examples of small cap New England thrifts and community
bank stocks that may warrant a closer look by small cap bank investors:
- New Hampshire Thrift Bancshares (NASDAQ: NHTB) is a savings and
loan holding company whose subsidiary, Lake Sunapee Bank, fsb (Bank), has twenty
eight branches in Grafton, Hillsborough, Sullivan and Merrimack Counties in west
central New Hampshire as well as in Rutland and Windsor Counties in Vermont that
provide loans to small and mid-sized businesses and individuals. NHTB earned
$2,024,984, or $0.33 per common share, for the first quarter compared to
$1,721,496, or $0.28 per common share, for the same quarter last year. NHTB pays
a dividend of $0.52 for a dividend yield of 3.90%.
- Berkshire Hills Bancorp (NASDAQ: BHLB) is holding company
for Berkshire Bank and for the Berkshire Insurance Group, an insurance agency in
Western Massachusetts. BHLB has a total of 45 branches serving communities in
Western Massachusetts, Northeastern New York and in Southern Vermont. BHLB
recently reported a 25% increase in first quarter earnings. Moreover, BHLB also
recently closed right below its 52 week high and pays a dividend of $0.64 for a
dividend yield of 2.90%.
- Brookline Bancorp (NASDAQ: BRKL) has eighteen
banking locations in Brookline and the greater Boston metropolitan area that
provides a variety of financial services (including mortgage loans on
Massachusetts residential and commercial real estate and commercial loans to
small and mid-sized businesses). BRKL recently agreed to acquire Bancorp Rhode
Island for a $234 million cash and stock deal that will increase their number
of branches to 43. BRKL also pays a dividend of $0.34 for a dividend yield of
- Hingham Institution for Savings (NASDAQ: HIFS) has eight offices
in Boston and southeastern Massachusetts where it provides financial services
(savings, checking, term certificate accounts, residential and commercial
mortgage loans) to both individuals and small businesses. HIFS recently reported
a 24% increase in earnings and has just closed at its 52 week high of $52.90.
Moreover, HIFS recently upped its dividend to $0.96 for a dividend yield of
However, I must admit that I am not a fan of banking stocks nor local thrifts
or community banking stocks due to some bad investment experiences with them nor
do I live in the New England region. Nevertheless, I can see the case for
finding and investing in small cap New England thrifts or community bank stocks
such as NHTB, BHLB, BRKL and HIFS as that part of the country will
likely continue having fewer bank failures.