On Aug 24, Zacks Investment Research upgraded Prosperity Bancshares Inc. (PB) to a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
Prosperity Bancshares has been witnessing rising earnings estimates following the announcement of robust second-quarter 2013 results. Moreover, this regional bank has delivered positive earnings surprises in the last 4 quarters, with an average beat of 1.8%.
Prosperity Bancshares reported second-quarter 2013 results on Jul 24. Earnings per share of 89 cents surpassed the Zacks Consensus Estimate by a penny. Results benefited from top-line growth, partially offset by higher operating expenses and a rise in provision for credit losses. Moreover, loan and deposit balances improved in the quarter.
Net interest income rose 41.9% year over year to $118.7 million. Moreover, non-interest income jumped 85.1% to $25.3 million. On the flip side, non-interest expense rose 60.3% from the prior-year quarter to $61.3 million.
Further, asset quality was a mixed bag. Net charge-offs were $1.4 million, down 26.3% from $1.9 million in the year-ago quarter. However, nonperforming assets increased 25.2% to $14.9 million.
Additionally, following the earnings release, the Zacks Consensus Estimate for 2013 increased 2.6% to $3.59 per share over the last 60 days. Similarly, for 2014, the Zacks Consensus Estimate advanced 8.7% to $3.88 per share over the same time period.
Positive earnings surprises and favorable estimate revisions stimulated the rank upgrade.
Other Stocks to Consider
While we prefer Prosperity Bancshares, other stocks carrying a Zacks Rank #1 include Webster Financial Corp. (WBS), BofI Holding, Inc. (BOFI) and Glacier Bancorp Inc. (GBCI).
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