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Central Valley Community Bancorp Upped to Strong Buy

Zacks Equity Research

On Feb 8, Zacks Investment Research upgraded Central Valley Community Bancorp (CVCY) to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

Central Valley Community Bancorp has been witnessing rising earnings estimates on the back of strong fourth-quarter 2013 results. Further, the regional bank has a year-over-year expected earnings growth rate of 9%. Additionally, thev company has a solid year to date return of almost 3%.

Central Valley Community Bancorp reported fourth-quarter 2013 earnings on Jan 29 with earnings per share of 19 cents, which missed the Zacks Consensus Estimate of 21 cents by 9.5%. However, the reported figure was up 18.8% from 16 cents earned in the prior-year quarter.

The company’s year-over-year earnings improvement came on the back of a strong top-line performance, which marked a rise of 22% from the year-ago quarter. This was aided by a rise in both net interest income and non-interest income. Additionally, the company exhibited strong capital levels. However, higher expenses, which climbed 22% year over year, were a dampener.

Asset quality improved in the quarter. The company did not report any provision for loan losses, versus provisions $0.2 million in the prior-year quarter. Further, allowance for credit losses to total loans was 1.80% as of Dec 31, 2013, down from 2.56% in the year-ago quarter. Additionally, nonperforming assets to total assets was 0.68%, down 1.09% from the year-ago quarter.

Following fourth-quarter 2013 results, the Zacks Consensus Estimate for 2014 moved up 5% to 84 cents per share, over the last 30 days. For 2015, the Zacks Consensus Estimate advanced 6% to 88 cents per share over the same time period.

Other Stocks to Consider

While we prefer Central Valley Community Bancorp, other regional banks with a Zacks Rank #1 include Sierra Bancorp (BSRR), Summit State Bank (SSBI) and Preferred Bank (PFBC).

Zacks Investment Research