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State Bank Financial Upped to Strong Buy

Zacks Equity Research

On Dec 28, Zacks Investment Research upgraded State Bank Financial Corporation (STBZ) to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

State Bank Financial has been witnessing rising earnings estimates on the back of strong third-quarter 2013 results. The long-term expected earnings growth rate for this stock is 12%. Further, State Bank Financial has recorded a solid year-to-date return of 10.8%.

State Bank Financial reported its third-quarter results on Oct 24 with earnings per share of 13 cents, beating the Zacks Consensus Estimate of 5 cents by 160% and the year-ago earnings of 10 cents by 30%.

Robust results for the reported quarter were primarily driven by top-line growth which recorded 31.5% increase on a year-over-year basis. Moreover, lower provision for loan losses and reduced non-performing assets reflected improvement in credit quality.

Further, State Bank Financial’s return on average assets and return on average equity stood at 0.67% and 4.04%, respectively, as compared with 0.50% and 3.13% in the prior-year quarter.

Yet, these positives were partially offset by higher non-interest expenses which reflected 16.7% year-over-year increase.

Following third-quarter 2013 results, the Zacks Consensus Estimate for 2013 increased 17.6% to 20 cents per share, over the last 60 days. For 2014, the Zacks Consensus Estimate advanced 6.1% to 87 cents per share over the same time period.

Other Stocks to Consider

Some other Southeast banks worth considering include First Bancorp (FBNC), First NBC Bank Holding Company (NBCB) and Omniamerican Bancorp, Inc. (OABC).  All 3 banks carry a Zacks Rank #1.

Read the Full Research Report on FBNC
Read the Full Research Report on NBCB
Read the Full Research Report on STBZ
Read the Full Research Report on OABC

Zacks Investment Research