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Strong Buy on American River Bankshares

Zacks Equity Research

On Nov 6, Zacks Investment Research upgraded American River Bankshares (AMRB) to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

American River Bankshares has been witnessing rising earnings estimates following the announcement of robust third-quarter 2013 results. Moreover, this Pacific-based regional bank has a healthy year to date return of 28.5%.

American River Bankshares reported third-quarter 2013 results on Oct 17. Earnings per share of 10 cents surpassed the Zacks Consensus Estimate by 2 cents. Results benefited from decline in expenses and lower provision for credit losses, partially offset by a drop in net interest and non-interest income.

Non-interest expense declined 16.2% from the prior-year quarter to $3.5 million. Asset quality considerably improved. In the said quarter, the company’s provision for loan losses was nil against $0.4 million reported in the comparable period last year. Net charge-offs were $0.1 million, down substantially by 85.7% from $1.0 million in the year-earlier quarter.

On the flip side, non-interest income fell 31.5% to $0.5 million and net interest income decreased 9.6% to $4.4 million on a year-over-year basis.

Additionally, following the earnings release, the Zacks Consensus Estimate for 2013 rose 10.0% to 33 cents per share over the last 30 days. For 2014, over the same time period, the Zacks Consensus Estimate moved north by 9.1% to 36 cents. Positive earnings surprise and favorable estimate revisions stimulated the rank upgrade.

Other Stocks to Consider

While we prefer American River Bankshares, other stocks with a Zacks Rank #1 include Preferred Bank (PFBC), Sierra Bancorp (BSRR) and SVB Financial Group (SIVB).

Read the Full Research Report on AMRB
Read the Full Research Report on PFBC
Read the Full Research Report on BSRR
Read the Full Research Report on SIVB

Zacks Investment Research