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Farmers Capital Bank Upped to Strong Buy

Zacks Equity Research

On May 22, Zacks Investment Research upgraded Farmers Capital Bank Corporation (FFKT) to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

Farmers Capital Bank has been witnessing rising earnings estimates on the back of strong first-quarter 2013 results. Moreover, this well-known banking and financial services provider delivered positive earnings surprises in the last 4 quarters with an average beat of 208.4%. The long-term expected earnings growth rate for this stock is 5%.    

Farmers Capital Bank reported its first-quarter results on Apr 17 with earnings per share of 44 cents, substantially beating the Zacks Consensus Estimate of 20 cents and the year-ago earnings of 38 cents by 15.8%. Robust results for the reported quarter were primarily aided by higher net interest income, reduced non-interest expenses and benefit from loan losses.

Net interest income jumped 3% year over year to $13.6 million. Net interest margin was 3.44%, up 30 basis points as compared with the year-ago quarter. Benefit from loan losses stood at $0.6 million as compared with the provision of $1.0 million in the prior-year quarter.

Non-interest expense dipped 0.7% from the year-ago period to $14.5 million. However, on the downside, non-interest income decreased 10% to $5.4 million.

Credit quality continues to exhibit an improvement. Nonperforming loans were $54.6 million, waning 30.9% year over year. Nonperforming assets were $103.7 million, down 14.1% year over year.

Following first-quarter 2013 results for Farmers Capital Bank, the Zacks Consensus Estimate for 2013 increased 26.7% to $1.09 per share over the last 60 days. For 2014, the Zacks Consensus Estimate advanced 24.1% to 98 cents per share.

Other Stocks to Consider

Besides Farmers Capital Bank, other stocks in the same sector with a Zacks Rank #1 include Ameris Bancorp (ABCB), American National Bankshares Inc. (AMNB) and First M&F Corporation (FMFC).

Read the Full Research Report on FMFC

Read the Full Research Report on AMNB

Read the Full Research Report on ABCB

Read the Full Research Report on FFKT

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