On Oct 5, Zacks Investment Research upgraded Cape Bancorp, Inc. (CBNJ) to a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
Cape Bancorp has been witnessing rising earnings estimates on the back of strong second-quarter 2013 results. Moreover, this well-known business and personal banking products and services provider delivered positive earnings surprises in 3 of the last 4 quarters with an average beat of 48.6%.
Cape Bancorp reported second-quarter results on Jul 23 with earnings per share of 13 cents, beating the Zacks Consensus Estimate of 8 cents by 62.5%. Robust results for the reported quarter were primarily driven by a fall in expenses and reduction in provision for loan losses.
However, a decline in interest and non-interest income partly offset the company’s disciplined expense management. Despite this, the company's strong capital position and a marked improvement in credit quality were the positives.
Further, as of Jun 30, 2013, total net loans were $733.7 million, up 1.6% year over year. Total deposits totaled $795.1 million, depicting a rise of 0.7%.
Following second-quarter 2013 results, the Zacks Consensus Estimate for 2013 rose 19.4% to 43 cents per share over the last 60 days. For 2014, the Zacks Consensus Estimate remained stable at 36 cents per share over the same time frame.
Additionally, on Jul 19, the company’s board of directors authorized a second stock buyback program for the repurchase of approximately 633,877 shares of the company's issued and outstanding common shares. Cape Bancorp’s first stock repurchase program was completed on Jul 16.
We believe that the company’s shareholder friendly approach and positive estimate revision led to the rank upgrade.
Other Stocks to Consider
Apart from Cape Bancorp, other stocks in the same sector that are worth considering include Meta Financial Group, Inc. (CASH), 1st Century Bancshares, Inc. (FCTY) and Tower Financial Corporation (TOFC). All of these have a Zacks Rank #1.