CCB banks on turmoil.

• Position: CCB Financial Corp. - Company profile

CCB banks on turmoil

Market turns have always presented the greatest risk - and the greatest opportunity - to investors and speculators alike. That's why some analysts think Durham's CCB Financial Corp. has become a very attractive stock.

Point: Today's S&L crisis could precipitate a real-estate catastrophe, as institutions increasingly seek to gain control of their assets and begin calling loans due. Already, CCB has classified a major real-estate loan as a non-performing asset and alerted shareholders to the problem.

Counterpoint: CCB executives see the demise of America's thrift industry as a buying opportunity. The company could already be engaged in negotiations to acquire one or more S&L in North Carolina. Says Executive Vice President Richard L. Furr, "Our interest is in healthy institutions." But he qualifies that: "It depends on what's your definition of healthy."

Point: The interstate bank merger mania of the 1980s has passed. Despite some attempts to promote second-tier North Carolina bank stocks as attractive buys on their "takeover-target" potential, the fact remains that the big Tar Heel banks have had fun playing Viking while the smaller banks found a safe haven in their shadows.

Counterpoint: The very success of a CCB in consolidating its franchise could well attract a Johnny-come-lately from out of state or someone who's been waiting all this time for prices to cool. "I try to identify those franchises that truly are jewels yet who do not trade at a premium," says Gerry O'Meara at Robinson-Humphrey Co. in Atlanta. "CCB, with their top market share in their home market - they meet our definition of a jewel."

What's it going to be? O'Meara sees a balance of positives in CCB (OTC-CCBF). At a recent price of $37.50, he has it on his buy list, with a limit of $40.

"They currently are valued at 130 percent of book, and they're trading at eight times earnings," O'Meara says. "They have been consistently trading in line with their peers, and we think the company deserves a premium. They're undervalued."

But Anthony Davis at Wheat First Butcher & Singer in Richmond, Va., rates CCB only a hold. While he calls CCB "a great little company" and "a very solid little bank," Davis notes that the current environment for banks is clouded at best. "I think we're going to see even more dramatic regulatory change, and there is a tremendous cyclical real-estate issue to unwind."

CCB is a $2 billion bank-holding company, with operations centered...