Shares of Sterling Financial Corporation (STSA) hit a new 52-week high, touching $30.76 in the first half of the trading session on Nov 12. However, the stock closed the session at $30.52, which reflects a solid year-to-date return of 47.9%. The trading volume for the session was 147,675 shares.
Despite the strong price appreciation, this Zacks Rank #3 (Hold) financial services firm has considerable upside left, given its positive estimate revisions over the last 7 days and expected year-over-year earnings growth of 7.50% for 2013.
Sterling Financial’s impressive price performance benefited from its steady capital deployment activities that included regular payouts, special dividends and strategic acquisitions. Consistent growth in loans and deposits, and improvement in credit quality were the other tailwinds.
As of Sep 30, 2013, Sterling Financial’s total deposits were $6.8 billion up 1.7% year over year. Total loan balances were $7.2 billion versus $6.1 billion as of Sep 30, 2012.
Net charge-offs were $1.2 million, down 80.0% from the prior-year quarter. Sterling Financial’s nonperforming assets were 1.36% of total assets, as against 2.73% as of Sep 30, 2012.
On Oct 24, Sterling Financial declared third-quarter operating earnings of 33 cents per share, lagging the Zacks Consensus Estimate of 40 cents. The disappointing results were due to a fall in the company’s mortgage activities and an increase in merger and acquisition related expenses.
Estimate Revisions Show Potency
In the last 7 days, the Zacks Consensus Estimate for 2013 increased 0.7% to $1.53 per share. For 2014, the Zacks Consensus Estimate advanced 0.7% to $1.54 per share over the same time frame.
Better performing financial organizations include Investors Bancorp Inc. (ISBC), Meridian Interstate Bancorp, Inc. (EBSB) and Mutualfirst Financial Inc. (MFSF). All these stocks carry a Zacks Rank #1 (Strong Buy).