WSB

[mrmarket]

$$$MR. MARKET$$$ Loves WSB
by: mr_market63 (43/M)
Long-Term Sentiment: Strong Buy 06/30/03 10:24 am
Msg: 300 of 359

In summertime I drink much more beer than I do in the wintertime.
That means I have to go to the bank more often. Another person that
needs to go to the bank very often is Dan Snider, that owner of the
Washington Redskins who paid a bazillion dollars for Steve Spurrier,
and he still doesn't have a QB. So anyway, he needed to go to a bank
in Washington. So I bought stock today in WASHINGTON SVGS BANK F S B
(WSB) at an average price of 10.67. I will sell it in 4 to 6 weeks
at 12.36. Here's why I like WSB:

The Washington Savings Bank, F.S.B. ("WSB") is a federally-chartered,
federally-insured stock savings bank which was organized in 1982 as a
Maryland-chartered, privately-insured savings and loan association.
It received federal insurance in 1985 and a federal savings bank
charter in 1986. WSB is a member of the Federal Home Loan Bank system
and its deposits are insured by the Federal Deposit Insurance
Corporation ("FDIC") to the maximum amount provided by law. WSB is
subject to supervision and regulation by the Office of Thrift
Supervision ("OTS").

WSB is your typical bank that makes a ton of money in a low interest
rate environment. WSB has five branches in Maryland located in
Bowie, Waldorf, Crofton, Millersville and Odenton, all of which are
adjacent to the Baltimore-Washington corridor. WSB also has three
mortgage loan origination offices in Maryland - located adjacent to
the Bowie, Waldorf and Odenton branch offices. Additionally, each
Branch Manager is also a qualified loan officer. Corporate
headquarters for the bank is located at 4201 Mitchellville Road,
Bowie, MD 20716. This is really really good demographics and the next
quarter should see earnings way ahead of what they have been doing.

WSB is engaged principally in the business of attracting deposit
accounts from the general public using such funds, together with
other funds, to make first and second mortgages, land acquisition and
development loans, construction loans, consumer loans, and non-
residential mortgage loans, with emphasis on residential lending.
WSB has grown their earnings at a rate of 36% compared to the
industry average of 11%.

WSB's stock is up 113% over the last 12 months yet it only has a P/E
11.33. Previous day's closing price for WSB was significantly above
its 50-day moving average. That's mighty fine momentum at a real
good value. In fact, it's an incredible value.

WSB's price / book is only 1.26 compared to the S&P 500 2.92. It's
Price to Cash flow is 7.0 compared to the S&P 500 16.2.

WSB pays a dividend and management has increased the dividend by 50%,
indicating high confidence in the short term earnings environment.
WSB also split their stock in April. Customer demand and/or pricing
power are generating solid growth in WSB's operations.

WSB's Return on Equity is 18% compared to the S&P 500 8.2%.

Last year, WSB made $0.67/share. This year, they'll probably end up
around $1.00/share. $$$MR. MARKET$$$ thinks that in this interest
rate environment, WSB will start banging out $0.35/quarter so next
year they'll do $1.42. If they hold their P/E at 11.33, that means
the stock will go to $16.09 which is well past my target price.

The record net earnings for the three and nine month periods ended
April 30, 2003, represent an increase of $931,000, or 97%, and
$2,284,000, or 70%, respectively, over the same periods last year.
The operational increases are primarily attributable to a 49%
increase in net interest income for this quarter and a increase of
39%, or $2.7 million, for the first nine months of this fiscal year,
compared to the same period last year. WSB's return on average
assets increased 50% to a strong 2.27%, while return on average
equity increased by 48% to 21.27% over the same nine month period
last year. Total assets grew by 25% at April 30, 2003 over the same
period end last year.

WSB has a relative strength of 89 and an EPS rating of 97. It's been
a stellar market performer.

WSB has a net profit margin of 21.5%.

Of the 4.60 million of shares outstanding, 1.43 million are owned by
insiders so insider holdings account for 31.0% of the company stock.
Thus, management and shareholder interests are one.

WSB's most recent fiscal year end pre-tax profit margin of 26.80% is
higher than the five-year mean of 15.02%. It's also higher than the
five-year industry average of 16.66%. Increasing profit margins
indicate that a company is continuing to control costs and that's a
sign that a company is well-managed.

WSB's most recent fiscal year end return on equity of 14.20% is
higher than its five-year mean of 8.70%. It's also higher than the
five-year industry average of 12.50%. Stable or increasing ROEs
indicate a well-managed company.

I think that WSB is a pretty safe bet. If the stock market doesn't
react to its growing earnings, certainly a larger bank will gobble it
up and digest these earnings into its own.

Anyway...it's gettin hot in here. Time to take off all my clothes.

I am HUGE!!

$$$MR. MARKET$$$

[mrmarket]

Looks like this baby is starting to move now. I'm sure they will be reporting tremendous earnings soon. Earnings earnings earnings....

[JerzeyGuy]

Anyone know what happened today?

[mrmarket]

Anyone know what happened today?

WSB is growing its earnings and its PE is only 9.

[drchrislee]

Anyone know what happened today?

Apparently there was some bad news regarding the health of one of the officers. Typical market overreaction.

[mrmarket]

THE WASHINGTON SAVINGS BANK, F.S.B. Reports Records for the Second Quarter and Six Month Results and Announces a 20% Increased Quarterly Cash Dividend
Wednesday February 18, 11:18 am ET


BOWIE, Md., Feb. 18 /PRNewswire-FirstCall/ -- The Washington Savings Bank, F.S.B. (Amex: WSB - News), a federally-chartered, federally-insured savings bank, with principal executive offices in Bowie, Maryland, today announced record results for both its second quarter and six month period ended January 31, 2004, and increases the quarterly cash dividend to six cents per share which will be paid on March 19, 2004, to stockholders of record as of March 5, 2004.
WSB reported record net earnings of $1,944,000, or $0.24 per diluted share, and a record $3,911,000, or $0.49 per diluted share, for the three and six month periods ended January 31, 2004, respectively. The record net earnings for the current fiscal periods included no gain on the sale of mortgage-backed securities, compared to an pre-tax gain on the sale of mortgage-backed securities of approximately $442,000, or $0.06 per diluted share ($291,000, or $0.04 per diluted share on an after-tax basis), the same quarter last year, and $524,000, or $0.07 per diluted share (344,000, or $0.05 per diluted share on an after-tax basis) for the six months ended January 31, 2003. WSB's net earnings for the six month period ending last year were also affected by granting to the Maryland Environmental Trust, a deed of conservation easement on the real estate held for investment with a carrying value of $506,000 and an appraised value of $2,145,000, which resulted in reducing the income tax expense by approximately $745,000. The positive net effect on net earnings for this transaction was approximately $239,000, or $0.03 per basic share.

The record net earnings for the six month period ended January 31, 2004, represent an increase of $260,000, or 7.1% over the same period last year. The increase in net earnings are primarily attributable to a 52% increase in net interest income which partially offset the 40% decrease in non-interest income, compared to the six month period last year. The increase in net interest income is the result of restructuring the balance sheet to include less mortgage-backed and investment securities and more higher-yielding loans with an emphasis on construction loans. The decrease in non-interest income is the result of the current interest rate environment on mortgage loans, which resulted in a substantial decrease in the amount of gain on sales of loans sold in the secondary market due to a decrease in volume of mortgage loan origination. Also, WSB had no gain on sale of real estate acquired in settlement of loans compared to $73,000 for the six month period last year.

WSB's January 31, 2004 total assets increased by 23% to $409,354,204 over last year's January 31st balance, however, total assets declined 5% since July 31, 2003.

FINANCIAL HIGHLIGHTS
(Unaudited)

Three Months Ended January 31,
2004 2003 % Change
Interest Income $7,508,000 $6,185,000 21 %
Interest Expense $2,828,000 $2,908,000 (3)%
Net Interest Income $4,680,000 $3,277,000 43 %
Non-Interest Income $1,378,000 $2,136,000 (36)%
Non-Interest Expenses $2,795,000 $2,463,000 14 %
Provision for Loan Losses $120,000 $90,000 33 %
Net Earnings $1,944,000 $1,837,000 6 %
Basic Earnings Per Share $0.28 $0.27 ** 4 %
Diluted Earnings Per Share $0.24 $0.24 ** 0 %
Average Shares Outstanding 6,997,064 6,897,071 ** 1 %
Average Diluted Shares
Outstanding 7,947,253 7,619,718 ** 4 %


Six Months Ended January 31,
2004 2003 % Change
Interest Income $14,930,000 $11,827,000 26 %
Interest Expense $5,742,000 $5,789,000 (1)%
Net Interest Income $9,188,000 $6,038,000 52 %
Non-Interest Income $2,634,000 $4,395,000 (40)%
Non-Interest Expenses $5,373,000 $5,436,000 * (1)%
Provision for Loan Losses $180,000 $180,000 0 %
Net Earnings $3,911,000 $3,651,000 7 %
Basic Earnings Per Share $0.56 $0.53 ** 6 %
Diluted Earnings Per Share $0.49 $0.48 ** 2 %
Average Shares Outstanding 6,972,235 6,887,871 ** 1 %
Average Diluted Shares
Outstanding 7,976,210 7,614,500 ** 5 %


As of January 31, and six months then ended
2004 2003 % Change
Total Assets $409,354,000 $331,528,000 23 %
Deposits and Borrowings $362,827,000 $291,641,000 24 %
Total Stockholders' Equity $43,426,000 $36,113,000 20 %
Book Value Per Share $6.10 $5.23 ** 17 %
Return on Average Assets 1.91 % 2.29 % (17)%
Return on Average Equity 18.89 % 21.67 % (13)%
Efficiency Ratio 45.44 52.10


* Includes $506,000 donation of real estate.
** Includes adjustment for the three-for-two stock split, effective April
23, 2003.



earnings....earnings...earnings...the stock price of this company HAS to go up.

[Jaws57]

Looking good here lately. I went back and looked at some of MM's older picks and liked CBK and WSB. I bought them couple of weeks ago looking at their charts. Hopefully they have hit the bottom of the "cup" and working up the right side of a base. I will be looking good if these stocks hit MM's target.

I also bought HZO today at $25.85.

Thanks Mr. Market!!

Jaws57

[billyjoe]

Mr. Market, I also bought WSB after your Feb. 18th post. It's turned into a fine pick doesn't appear to be affected by the crap happening in the market lately. Maybe they'll get bought out and we can all celebrate. Thanks,
billyjoe

[stocks54]

"The Washington Savings Bank, F.S.B. Announces Regulatory Developments"

Does this change anything. In short term there might be some sell off. How about long term?

Regards,

[mrmarket]

"The Washington Savings Bank, F.S.B. Announces Regulatory Developments"

Does this change anything. In short term there might be some sell off. How about long term?

Regards,

If it affects earnings, then it would be wise to sell. I don't think it will affect earnings. I don't think that selling stocks with PE's of 10 or less is a very effective investment strategy.

Over the last 52 Weeks, WSB stock is up 69.44%. The S&P is only up 32% for the same period.

WSB pays a dividend of 2.3%. This is better than cash, better than my savings account. I'm going to stick around and see what happens.