Shares of Firstbank Corporation (FBMI) crafted a new 52-week high, touching $17.96 at the end of the trading session on Aug 13. However, the stock closed the session at $17.53, reflecting a solid year-to-date return of 69.4%. The trading volume for the session was 14,418 shares.
Despite the strong price appreciation, this Zacks Rank #1 (Strong Buy) Midwest bank has considerable upside left, given its positive estimate revisions over the last 30 days.
Growth Drivers
Firstbank Corporation’s impressive price performance reflects strong second-quarter 2013 results including positive earnings surprise of 18.8%, marked improvement in its credit quality along with clearance of all of its outstanding Troubled Asset Relief Program (TARP) dues.
On Jul 22, Firstbank Corporation declared second-quarter earnings of 38 cents per share, beating the Zacks Consensus Estimate of 32 cents. Moreover, net income of $3.3 million increased 38.1% year over year.
Non-accrual loans were $11.8 million, down 33.7% from $17.9 million in second-quarter 2012. Further, net charge offs were $1.2 million, decreasing 47.0% from the prior-year quarter.
During the quarter, the company redeemed all of the remaining shares of Series A Preferred Stock worth $17.0 million. This depicts its recovery from the recession and re-instills shareholders’ faith in the stock.
Moreover, Firstbank Corporation has delivered positive earnings surprises in the trailing 4 quarters with an average beat of 29.7%.
Estimate Revisions Show Potency
Over the last 30 days, the Zacks Consensus Estimate for 2013 increased 13.4% to $1.44 per share. For 2014, the Zacks Consensus Estimate advanced 10.3% to $1.39 per share over the same time frame.
Apart from Firstbank Corporation, other banks that are worth considering include First Interstate Bancsystem Inc. (FIBK), First Merchants Corporation (FRME) and PrivateBancorp, Inc. (PVTB). All these 3 companies carry a Zacks Rank #1.
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