Shares of LNB Bancorp Inc. (LNBB) scaled a new 52-week high of $17.6 in the very first hour of its trading session on Dec 16. The stock closed at $17.33, reflecting a whopping year-to-date return of 72.9%. The trading volume for the session was 255,643 shares.
Despite the strong price appreciation, this Zacks Rank #2 (Buy) stock still has room left for upside, given the estimate revisions it witnessed over the last 30 days.
Growth Drivers
An acquisition deal with the Pennsylvania-based financial institution, Northwest Bancshares Inc. (NWBI), acted as the key growth driver for LNB Bancorp.
On Dec 15, 2014, LNB Bancorp and Northwest Bancshares Inc. jointly announced the signing of a definitive agreement, wherein the latter would acquire the former in a cash-and-stock transaction. The deal was valued at an aggregate of $183.3 million, based on Northwest Bancshares’ 20-day average closing price as of Dec 12. The acquisition is expected to close in the second quarter of 2015.
The acquisition will be accretive to Northwest’s earnings per share almost immediately, driving the stand-alone earnings per share by almost 17%, commencing in 2016.
With the acquisition, Northwest will gain access to the vital markets of Suburban Cleveland and Akron, and it expects the structure of the deal to reward LNB fairly for this scarcity value and strong performance.
Upon completion of the merger, the combined bank will have $9.0 billion of total assets, $6.7 billion of deposits and 184 branch locations.
Estimate Revisions
Over the last 30 days, the Zacks Consensus Estimate for the upcoming quarter and for full-year 2014 increased by a penny each. Also, the estimate for full-year 2015 witnessed an upward revision by 2 cents.
Some better-ranked stocks in the same sector include Baylake Corp. (BYLK) and Enterprise Financial Services Corp. (EFSC), each sporting a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
To read this article on Zacks.com click here.
Get all Zacks Research Reports and be alerted to fast-breaking buy and sell opportunities every trading day.
Be the first to comment