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East West Bancorp Upped to Strong Buy

Zacks Equity Research

On Aug 31, Zacks Investment Research upgraded East West Bancorp, Inc. (EWBC) to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

East West Bancorp has been witnessing rising earnings estimates on the back of strong second-quarter 2013 results. Moreover, this well-known personal and commercial banking services provider delivered positive earnings surprises in 3 of the last 4 quarters with an average beat of 2.1%. The long-term expected earnings growth rate for this stock is 9%.

East West Bancorp reported its second-quarter results on Jul 17 with earnings per share of 52 cents, beating the Zacks Consensus Estimate of 51 cents by 1.96% and the year-ago earnings of 47 cents by 10.6%. Notably, the second quarter marked the ninth consecutive quarter of earnings growth for East West Bancorp.

The company maintained a strong capital position with solid loans and deposit balances during the quarter. Moreover, return on average common equity was recorded at 12.59%, up 13 basis points year over year. Provision for loan losses substantially declined 50% year over year to $8.3 million.

Moreover, expenses decreased 7.1% to $94.4 million, as compared with the prior-year period. Lower compensation and employee benefits and reduced loan related expenses primarily drove the decline.

Following second-quarter 2013 results, the Zacks Consensus Estimate for 2013 increased 2.9% to $2.10 per share on the back of all 9 upward revisions, over the last 60 days. For 2014, the Zacks Consensus Estimate advanced 5.7% to $2.23 per share with 9 of the 10 estimates moving north over the same time period.

Other Stocks to Consider

Besides East West Bancorp, other banks in the West with a Zacks Rank #1 include Glacier Bancorp Inc. (GBCI), Umpqua Holdings Corporation (UMPQ) and Preferred Bank (PFBC).

Read the Full Research Report on PFBC

Read the Full Research Report on EWBC

Read the Full Research Report on UMPQ

Read the Full Research Report on GBCI

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