For the smallest banks, even solid earnings, strong asset quality, and successful acquisitions do not translate into higher stock prices.

Take Umpqua Holdings Corp., the $317 million-asset parent of South Umpqua Bank in Roseburg, Ore.

The bank's first-quarter earnings soared 35% to $1.2 million, it signed a deal to buy a retail brokerage firm in Portland, and it moved to install 16 automated teller machines inside Kmart Corp. stores throughout Oregon.

The result: Shares of South Umpqua were trading midafternoon Friday 31% below their 52-week high of $14.75.

"No matter what I do, the stock doesn't go up," said Raymond P. Davis, president and chief executive officer of South Umpqua. "I can't find an audience."

Mr. Davis is not alone.

The stocks of publicly traded banks under $500 million of assets have yet to rebound from last summer's selloff in financial stocks amid the turmoil on Wall Street.

As of Thursday, these stocks were down 17.3% over the past 52 weeks, while banks with more than $10 billion of assets have risen by 5.91%, according to SNL Securities of Charlottesville, Va.

(Shares of the biggest banks are the only ones in positive territory over the last 52 weeks. The stock price of banks with assets between $500 million and $1 billion is down 14%; between $1 billion and $5 billion, down 9%; and between $5 billion and to $10 billion, down 2%, according to SNL Securities.)

Analyst and industry sources largely attribute the lackluster performance of small bank stocks to the cooling merger market and investor demand for liquidity.

"The investment community is impatient," said Christopher T. Kelley, an analyst at Morgan Keegan & Co. in Memphis. "They don't want to wait three years for a great return."

"People just don't care about community banks anymore," said Cary Morris, an analyst at Scott & Stringfellow in Richmond, Va.

Such disappointing stock returns have left bank executives scratching their heads.

"It just doesn't make sense to us," said Chad Galloway, chief financial officer at United Security Bancorp, a $495 million-asset bank in Spokane, Wash., that was trading late Friday at 33% off its 52-week high.

"Our earnings continue to be strong, and we've put together two successful mergers in the last year."

"I'm baffled myself," said John M. Bond Jr., president and chief executive officer of Columbia (Md.) Bancorp, whose bank reported a 17% jump in first-quarter earnings over the same period last year.

Shares of the $441.5 million-asset bank have dropped 26% from the 52- week high of $18.50.

Steve Didion, an analyst at Hoefer & Arnett in San Francisco, is optimistic that investors will return to small bank stocks.

"At some point investors have to realize how cheap these stocks are," Mr. Didion said.

"It's a great time to be buying these banks," Mr. Morris said. "There are some real values out there."

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