Ameris Bancorp (ABCB), Sandy Spring Bancorp Inc. (SASR): Three Financials Showing Profits YTD

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The Fed is waiting to see economic growth one quarter above 2.5%, unemployment below 7% and inflation at target before it begins tapering its quarterly easing program. Expectations are to start tapering at year end. With the rise in interest rates, the tailwind for banks from the refinancing boom may soon fade. In this article I will cover three small and mid-cap bank-holding companies that could benefit from new regulations seeking healthier competition in the banking system.

Ameris Bancorp (NASDAQ:ABCB)

Focusing on New Loan Markets

PrivateBancorp Inc (NASDAQ:PVTB) has a headquarters in Chicago and currently operates 36 offices in 10 states. As the bank holding company for The Private Bank and Trust Company, PrivateBancorp Inc (NASDAQ:PVTB) offers business and personal financial services to middle-market companies and business owners, executives, entrepreneurs, and families. The firm’s stock has seen a solid start to 2013 with an increase of 45% YTD.

PrivateBancorp Inc (NASDAQ:PVTB) has had little trouble expanding its core business, and boosted its performance into positive territory last year. Net income has increased 36% from 4Q 2012 and 77% in 2012. Net interest income has held stable for the last five quarters despite the persistently low rate environment due to new loan markets. While total loans grew 9% YoY, non-interest income increased 11% YoY thanks to more mortgage banking and syndication fees. Moreover, there are some encouraging stats from the company, such as an improvement in asset quality, that pushed credit cost lower last quarter.

In the meantime, its valuation at 20.60 times earnings looks pretty attractive, ranking lower than 54% of the companies in the industry. I would recommend a buy; you will probably not regret it. When it comes to earnings surprises, its last ten surprises have been consistently positive.

Possible M&A

Sandy Spring Bancorp Inc. (NASDAQ:SASR), operates 49 offices in central Maryland and northern Virginia, oriented to community banking, insurance, and investment management services to individuals and businesses. It also offers residential and commercial real estate loans, leases and consumer loans consisting of home equity loans personal lines of credit.

Sandy Spring Bancorp Inc. (NASDAQ:SASR) deserves some long term optimism once you look at its net income. For 1Q 2013 the company showed a healthy 25% improvement over last year’s 1Q. Besides this, total assets have been close to crossing the $4 billion mark at the end of the last two quarters.

Over the past two quarters, management has executed a strategy to modify approximately $160 million of FHLB (Federal Home Loan Banks) advances to drive down borrowing costs. The full effect of that is being realized in this year’s first quarter.

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