Bank stock investing is not for the investor who likes things neat,
tidy, and easy. Although the basic operation of banking is simple in
theory (borrow at one rate, lend at a higher rate, and what's left over
after expenses is profit), the accounting rules muddy the waters
considerably.
Even among those banks with relatively simpler
operations, community banks that don't engage in extensive trading,
leasing, or multi-state operations, you can find curious disconnects
between value and operations. Florida's CenterState Banks (NASDAQ: CSFL)
seems to be a case in point. While I think this bank offers good
leverage to a recovery in Florida and has the potential to outperform
with its covered loans, the company's high operating expenses and
historical returns on assets and equity suggest that much of that value
is already in the stock.
Please follow this link to the full article:
CenterState Bank An Odd Mix Of Performance Potential And Iffy Valuation
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