On Sep 27, Zacks Investment Research upgraded Meridian Bancorp, Inc. (EBSB) to a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
The rank upgrade of this Massachusetts-based financial institution was driven by strong estimate revisions on the back of its recent conversion to a holding company for another bank and impressive second-quarter 2014 results.
On Jul 28, Meridian Bancorp announced the completion of the conversion of Meridian Financial Services, Inc. (‘MHC’) and the related stock offering, following which the company now stands as the holding company for East Boston Savings Bank. MHC and Meridian Interstate Bancorp, Inc – the former mid-tier holding company of East Boston Savings Bank – no longer exist.
Meridian Bancorp went fully public on Jul 29, 2014, as it commenced trading on the Nasdaq Global Select Market under the ticker symbol “EBSB.”
Further, on Jul 22, Meridian Bancorp released its second-quarter 2014 results. Earnings per share of 25 cents came significantly above the prior-year quarter figure of 14 cents.
Meridian Bancorp witnessed top-line growth, driven by increase in both interest income ('NII') and non-interest income and lower provision for loan losses. Also, the company’s loan and deposit balance increased and its credit quality exhibited improvement. However, the positives were partially offset by higher expenses.
Nevertheless, analysts’ bullish stance on the stock was reflected in the estimate revisions over the past 30 days. For 2014, the Zacks Consensus Estimate advanced nearly 30% to 26 cents per share. Also, it moved north 27.3% to 28 cents per share for 2015.
Other Stocks to Consider
Other stocks in this space worth considering include Great Southern Bancorp Inc. (GSBC), Laporte Bancorp, Inc. (LPSB) and Select Bancorp, Inc. (SLCT). All three stocks hold the same Zacks Rank as Meridian Bancorp.
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