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Community Bank Hits 52-Week High

Zacks Equity Research

Shares of Community Bank System Inc. (CBU) achieved a new 52-week high, touching $37.55 in the second half of the trading session on Nov 21, 2013. The stock closed the session at $37.51, registering a solid year-to-date return of 35.9%. The trading volume for the session was 0.14 million shares, higher than the average of 0.12 million over the last 3 months.

Despite the strong price appreciation, this Zacks Rank #3 (Hold) stock has plenty of upside left, given its estimate revisions over the last 30 days and expected long-term earnings growth of 9.9%.

Growth Drivers

Impressive third-quarter 2013 results comprising a positive earnings surprise of 3.9%, along with underlying strength in its balance sheet driven by restructuring initiatives were the primary growth drivers for Community Bank.

On Oct 21, Community Bank reported third-quarter results. The company’s earnings 54 cents per share outpaced the Zacks Consensus Estimate of 52 cents. Results benefited from top-line growth, partially offset by higher expenses.

Additionally, in July, Community Bank announced a deal to acquire 8 branch-banking locations from Bank of America, N.A, banking subsidiary of Bank of America Corporation (BAC). The deal, which is expected to close by the end of this year, will add nearly $340 million in deposits to the company’s balance sheet.

Estimate Revisions

Over the last 30 days, 3 out of 4 estimates for 2013 have been revised upward, lifting the Zacks Consensus Estimate by 1% to $2.08 per share. Similarly, for 2014, 3 out of 4 estimates moved north over the same time frame, causing the Zacks Consensus Estimate to rise by 1.4% to $2.14 per share.

Some better-ranked stocks in the finance sector include CNB Financial Corp. (CCNE) and Arrow Financial Corporation (AROW). Both these carry a Zacks Rank #1 (Strong Buy).

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