Southern National Bancorp Of Virginia: Well-Placed For Growth, But Also Well-Valued For Its Potential

Bring a good deposit franchise to large, attractive markets that can support above-average loan growth, and good things can happen. Southern National Bancorp of Virginia (SONA) (or “SONA”) does serve attractive growth markets, including the DC metro area and major Virginia cities like Charlottesville and Richmond, and I like the company’s growing deposit share in communities like Charlottesville and Richmond. The deposit franchise is a work in progress, though, as the company has used M&A to drive improvement, but still has a ways to go.

I think SONA is more or less fairly-valued today, as the stock price already seems to anticipate double-digit growth. M&A is an important wildcard, though, as SONA could deploy more capital into consolidating the Northern Virginia/Southern Maryland banking market and/or acquire smaller community banks in or just outside its core operating area to further boost the quality of its deposit base.

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Southern National Bancorp Of Virginia: Well-Placed For Growth, But Also Well-Valued For Its Potential