First Citizens Banc Corp. FCZA is slated to report first-quarter 2015 results on Apr 24, before the market opens.
Last quarter, First Citizens Banc’s earnings lagged the Zacks Consensus Estimate. A fall in non-interest revenues was, however, partly offset by higher net interest income and effective cost control.
Will First Citizens Banc be able to overcome industry challenges? Or will it disappoint this earnings season as well? Let’s see how things have shaped up for this announcement.
Factors Impacting Q1
Based in Ohio, First Citizens Banc generates majority of its revenues from interest and fees on loans. With recovery in the U.S. economy, demand for loans, especially real estate lending, sees growth. Given the company’s main focus toward similar loan portfolios, we expect that growth in the same will lead to an increase in net interest income in the upcoming release.
However, low interest rate environment is anticipated to somewhat dampen the rise. Further, as loan portfolio grows, First Citizens Banc will be required to make a larger provision for problem loans. Hence, we predict provision for loan losses to trend upward in the quarter.
As for operating expenses, we believe First Citizens Banc’s re-branding efforts will push the marketing costs higher in the quarter. Notably, in Apr 2014, the company had frozen its pension plan. Hence, in absence of pension expenses, compensation costs will trend lower. Overall, we believe that a rise in operating expenses will somewhat dent the bottom-line growth.
First Citizens Banc’s activities during the quarter failed to win analysts’ confidence. Consequently, the Zacks Consensus Estimate for the quarter remained stable at 29 cents per share over the last 7 days.
Earnings Whispers
Our proven model does not conclusively show that First Citizens Banc is likely to beat the Zacks Consensus Estimate in the first quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy) or at least #2 (Buy) or #3 (Hold) for this to happen. Unfortunately, this is not the case here as elaborated below.
Zacks ESP: The Earnings ESP for First Citizens Banc is 0.00%. This is because the Most Accurate estimate of 29 cents per share stands at par with the Zacks Consensus Estimate.
Zacks Rank: First Citizens Banc’s Zacks Rank #3 increases the predictive power of ESP. However, we also need to have a positive ESP to be confident of an earnings surprise call.
Stocks That Warrant a Look
Here are some other financial stocks you may want to consider instead, as our model shows that these have the right combination of elements to post an earnings beat this quarter:
The Earnings ESP for The Bank of New York Mellon Corporation BK is +1.70% and it has a Zacks Rank #3. The company is slated to release results on Apr 22.
BankUnited, Inc. BKU, with an Earnings ESP of +2.27% and a Zacks Rank #3, will report results on Apr 23.
State Street Corporation STT has an Earnings ESP of +1.91% and a Zacks Rank #3. It is scheduled to report results on Apr 24.
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