Analysts at Interstate/Johnson Lane are bullish on Metro Financial Corp.
They expect the Sandy Spring, Ga.-based community banking company's stock to jump by as much as 40% in the next 12 to 18 months. The stock currently trades around $10.
"I think Metro is one of the best of the start-up banks," said John Mason, a banking analyst in Atlanta with Interstate. "It has been very, very carefully managed. They have just kept plugging away . . . avoiding loans that seriously impacted some of their competitors."
Savvy Management
Mr. Mason likes Metro's management team, which is headed by Rayburn J. Fisher Jr., the 49-year-old president, and William C. Abraham, 46, the senior vice president of mortgage lending.
Mr. Fisher had the foresight to convert to a bank in 1985 from a thrift charter, Mr. Mason said.
"This company is run essentially by a seasoned savings and loan executive who has been perceptive enough to see the advantage of the banking franchise over the savings and loan franchise," he said.
Mr. Mason thinks Metro has good earnings potential. In 1993 it earned $1.5 million, or 96 cents a share. But in the first quarter the bank stumbled when interest rates jumped sharply Metro reported earnings of $258,000, down from $302,000 the same time a year ago.
Mr. Mason says earnings will pick up in the second half of the year and the bank could earn $1.5 million for the year, and $1.8 million in 1995.
While 1994 earnings are expected to be just under $1 a share, the company's $170 million mortgage serving portfolio could mean an additional $1 pershare, Mr. Mason said.
Mr. Mason doesn't think Metro probably is a takeover candidate at this time.
