Most publicly-traded banks saw share gains in 2014

Share prices of publicly traded banks in NorthWestern Financial Review's circulation area for the most part saw slow but steady improvement in 2014..A sampling of 117 bank holding companies in the region showed that 82 of them, or 70 percent, gained in price between Dec. 31, 2013, and Dec. 31, 2014. And 50 of the banks saw share prices rise by 10 percent or more, which would have beat the Dow Jones Industrial Average. Just 34 stocks lost ground. (One was unchanged)..Indiana has 26 publicly traded banks, the most of any state in the region, and also seemed to show the most robust growth. Of the 19 Indiana stocks that gained during the year, 13 of them saw double digit rises, while six showed gains of more than 20 percent..The top performer in Indiana last year was Community Bank Shares of Indiana Inc., of New Albany. The operator of Your Community Bank, which is spread throughout the greater Louisville, Ky., area, posted a gain of 40.06 percent for the year. During the past three years Community Bank stock has rallied 316.54 percent..Close on Community Bank's heels came Ameriana Bancorp, of New Castle, Ind. It rose 39.62 percent. And AMB Financial Corp., of Munster, Ind., in the Chicagoland region, rose 30.14 percent..The best performer in the entire list is from Michigan. University Bancorp Inc., of Ann Arbor, climbed 87.5 percent in 2014, to close at $6.75 per share (during two years it has risen 169 percent)..Still in Michigan, but at the other end of the spectrum, lies the list's worst performer, FNBH Bancorp Inc. The operator of the First National Bank of Howell saw its shares plunge 59.60 percent..Low-value, thinly traded stocks such as FNBH can experience wide swings in their share prices. In Ottawa, Ill., for instance, Centrue Financial Corp., gave up 54 percent of its share value in 2014 and closed at 46 cents per share. During the past two years it has gained 31 percent, while it has shed 82 percent of its value over a five-year time span..For the most part, banks saw steady share price gains in 2014. As already noted, 50 of the surveyed banks posted gains of 10 percent or more. And those results might have been even better had banks not already notched up some healthy gains in 2013, especially in the last quarter of that year.."A lot had very good stock performance [in late 2013]," said Andrew Liesch, a securities analyst with Sandler O'Neill Partners, who specializes in banks. The stock market likes to anticipate what lies ahead, and in this instance Liesch said that for banks "a lot of them traded on 2015 earnings even before 2014 began.".Private Bancorp Inc., for instance, was already enjoying a banner year for investors as it rose 31.3 percent in the first nine months of 2013. Then in the final quarter of the year the Chicago bank surged another 31.1 percent, giving it a gain of 72.2 percent for the year. By that standard, 2014 was a breather year of sorts for Private Bank, as it rose 15.45 percent..Other notable gainers during the fourth quarter of 2013 include Flagstar Bancorp Inc., of Troy, Mich., up 29.77 percent, and HMN Financial Inc., of Rochester, Minn., up 34.7 percent. Flagstar fell 19.83 percent in 2014, while HMN was able to tack on another 17.31 percent in the just-ended year..Leisch said that what the market anticipated in late 2013, and what happened in 2014, was that charge-offs would be manageable and earnings would be good. So share prices and price-to-earnings ratios expanded, and banks grew into those expectations..What lies ahead for 2015? It's widely expected that the Federal Reserve will raise interest rates. How nimbly banks react will certainly impact their bottom line, but strategists queried by The Wall Street Journal in early January seemed to take that eventuality into stride. They forecast an 8.2 percent rise in the Standard & Poor's 500 index, against an 11.4 percent increase in 2014..Of course, that's on a national scale. As analyst Leisch noted about drivers of profits and stock prices, "so much is local, especially in community banks."