On A Bank Roll

On A Bank Roll

When Raymond C. Stewart, CEO of Briarcliff Manor, New York-based RASARA Strategies, forecasted that bank stocks were in for a boom last year, he wasnt kidding. His reasoning that interest rate cuts by the Federal Reserve Board combined with Washingtons economic recovery package in the first part of 2002 would pump money into the nations banks was right on the mark. And he was even more prescient when he decided to concentrate on regional banks that were using mergers to expand to get the biggest bang for his buck.

Stewarts Private Screening selections produced a strong 8.38% gain for the 52-week period from Oct. 16, 2001, to Oct. 15, 2002. By comparison, the Dow Jones industrial average fell 12.03%, going from 9,384.20 to 8,255.68, and the Standard Poors 500 index slipped 19.70%, going from 1,097.54 to 881.27 over the same time period.

The top performer among Stewarts picks was Marshall Ilsley (NYSE: MI), a Milwaukee-based bank that enjoyed a 2-for-1 stock split on June 17, 2002, which led to an overall gain of 1.19% since recommendation. Benefiting from interest income and data processing operations, the firm could build on its split-adjusted price of $27.98 in the coming year as the economy picks up.

Another big winner was North Fork Bancorp (NYSE: NFB), a Melville, New York, bank that racked up a 40.50% gain, climbing from $27.04 to $37.99. The banks recent acquisitions and pristine credit rating were the primary reasons for its stellar performance in one of the worst markets in years.

Shares of New York Community Bancorp (Nasdaq: NYCB) went from $27.68 to $29.03, a modest 4.88% increase. The bank held its own in the competitive mortgage market in the New York region. Its strong credit profile helped keep the bank in the black.

Memphis, Tennessee-based National Commerce Financial Corp. (NYSE: NCF) also enjoyed a modest benefit from several key acquisitions. The stock moved from $23.05 to $24.52, posting a 6.38% gain.

And finally, Greater Bay Bancorp (Nasdaq: GBBK), based in Palo alto, California, was the one losing pick among Stewarts selections. After several acquisitions boosted the banks assets in 2001, its fortunes soured and the bank wound up posting a loss of 11.06%, dropping in price from $20.80 a share to $18.50.

Raymond Stewarts Private Screening Performance

Company Exchange: Symbol Total Return* Current Value of
North Fork Bancorp


N.Y. Comm. Bancorp
Nasdaq: NYCB


Greater Bay Bancorp
Nasdaq: GBBK


National Commerce Bank


Marshall & Ilsley


Portfolio Performance


*total return reflects stock appreciation and includes stock splits and dividends
Source: yahoo! finance