COLB
I Initiated a position in COLB Yesterday at $18.94 here is what I like.
1) Nonperforming Assets Although Non performing Assets have gone up a little sequentially pretty much like every Bank, it is still coming from a very low level of 0.28% last quarter. And the Allowance is almost three times as much as there NPA as well. So I feel asset quality is decent.
2) Dividend Yield The dividend Yield is 7.60% where I brought it, so you definetely get paid while you wait. Although I truely believe the divy is safe, the one knock I have on this stock pick is I would of liked there payout ratio to be lower.
3) Loan and Deposit Growth Both were slightly up sequentially, so nothing negative here.
4) Synergies and Cost cutting Obviously this company recently did a acquisition, and they are in the process of realizing the synergies, as we seen from the massive improvement in q1 of .65 eps. There is some more synergies still to come as well which will help with costs going foward.
5) Valuation I believe they can do about $2.40-$2.50 This year, with probably a run at $2.65-$2.75 next year. Hence is trading about 7x 2025 estimates Usually Regionals of this size trade at 10-13 times Multiple. Hence I can see upper 20's possibly as high as low 30's as possible FV expectation say a year from now.
6) NIMS Is finally starting to stabilize in fact, in march it was 3.55% which was higher than the quarter of 3.52% so that is a plus. Not predicting it is gonna skyrocket, but I wouldn't be surprised in the 2nd half if it starts to turn a little higher from q1 Levels. Which would be a plus.
Conclusion: I like COLB, because of solid asset quality, good cost cutting and synergies being executed, A excellent Divy, and valuation that is significantly less than it's peers. All is just my opinion, and I could always be wrong though.
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