On Sep 14, 2013, Zacks Investment Research upgraded Community Bank System Inc. (CBU) to a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
Community Bank has been witnessing rising earnings estimates following the announcement of second-quarter 2013 results. Further, the company’s expected long-term earnings growth rate is 9.90%.
Community Bank reported second-quarter 2013 results on Jul 23. Earnings per share came in at 52 cents, beating the Zacks Consensus Estimate of 50 cents. Better-than- expected results were primarily driven by top-line improvement, partially offset by higher operating expenses.
While net interest income increased 1.1% from the year-ago quarter to $58.4 million, non-interest income increased 14.4% to $27.1 million. However operating expenses rose 10.1% from the previous-year quarter to $54.4 million.
The quarter also witnessed rise in loans and deposits, which aided organic growth. Total loans were $3.9 billion, up 10.5% year over year. Total deposits were $5.7 billion, up 15.5% from year-ago quarter.
Further, Community Bank’s credit quality improved and was healthier than most of its peers in the reported quarter. Net charge-offs declined to $0.8 million from $2.1 million in the year-ago quarter. Nonperforming loans as a percentage of total loans were 0.62% versus 0.90% as of Jun 30, 2012.
Moreover, during the last 60 days, the Zacks Consensus Estimate for 2013 increased 3.0% to $2.06 per share. For 2014, the Zacks Consensus Estimate advanced 4.4% to $2.12 per share over the same time period.
Other Stocks to Consider
Apart from Community Bank, other banks worth considering include Eagle Bancorp, Inc. (EGBN), Metro Bancorp, Inc. (METR) and S&T Bancorp Inc. (STBA). All these stocks carry the same Zacks Rank as Community Bank.