I bought shares of [[CFR]] @ 50.39 (15:30 ET)

I will buy more on a pullback.

I’m fucking kicking myself because I took a look at this last week on Friday, brushed it off, filed the research info in a stack of shit and forgot about it……until today.

CFR is the largest bank holding company in Texas, with over 80 offices in the state. They’ve been in existence for over 140 years, operating solely in the State of Texas.

If there’s one area of the country where bidness is goood, it’s Texas. Reason: an oil & gas based economy, among other things.

The knock on this stock in the past has been it’s slow loan growth due to conservative lending practices. This, for obvious reasons, has actually turned out in their favor.

Q1 earnings were $0.89. I think they will report $0.90 for Q2. Given the current environment for regional banks, this would be a favorable comp to Q2:2007, when they reported $0.89.

Even with the gain in price of almost 12% today, the dividend is still over 3%. They announced an increase in their quarterly dividend from $0.40 to $0.42 in April, and paid it 06/13.

CFR also has one of the highest net interest margins in the business. Non-interest bearing deposits totaled 34% and low interest bearing deposits were 53%.

They pay virtually nothing on their deposits, but people keep doing business with them. “Why?”, I have asked, repeatedly. No toasters, free check re-orders or shit like that. But I think I found their secret….. 

A friend living down there told me that they must have some kind of hiring policy like, “flat-chested women need not apply”. He says, like,  half the women in the bank are racked and stacked! The other half look like about a C-cup….. He says he almost busts up (no pun) laughing whenever he goes into the bank, because the “hiring policy” is so obvious! Where was I?  Oh, yeah….their high net interest margin relative to peers helps to insulate them should credit spreads narrow egregiously.

Loan portfolio: At the end of 2007 they reported a loan portfolio of $7.7 billion, with 47% commercial and industrial; 13% land and construction; 16% commercial mortgage; 9% residential mortgage, 5% consumer loans and 10% “other”. Don’t aks me what “other” is. I don’t know, B. However, if you care to venture a guess, just leave it in the comment section.

Credit quality is very high. Net charge-offs for 2008 are estimated at 0.30%. A pittance. However, expect higher loan loss provisions, due mainly to a rise in loan balances, as management looks to build reserves.

They also have been in acquisiton mode, buying smaller banks in Texas, even an insurance company in December

One final thought: CFR would be a nice takeover candidate.

Secondary final thought: The women in Texas are HOT. 

Disclaimer: This information is not intended to be used as the primary basis of investment decisions. Because of individual investors requirements, it should not be construed as advice designed to meet the particular investment needs of any investor. Consult your financial prior to taking any actions. The information and opinions contained here are those of the author and are not necessarily the same as those of iBankCoin, its principals or its affiliates. Trade at your own risk