On Jun 25, 2013, Zacks Investment Research upgraded S&T Bancorp Inc. (STBA) to Zacks Rank #1 (Strong Buy).
Why the Upgrade?
S&T Bancorp reported impressive first-quarter 2013 results. Earnings for the quarter came in at 41 cents per share, rising 28.1% sequentially.
The boost in earnings was primarily driven by 1.1% sequential growth in total loan portfolio to $3.4 billion, and a gain of $3.1 million related to sale of the merchant card servicing business.
The loan portfolio generates a considerable portion of interest income for the company. Therefore, S&T Bancorp is well positioned to capitalize on the resurgent global economy characterized by increasing overall loan demands.
Moreover, the company’s asset quality has been consistently improving, as evinced by a decline in provision for loan losses to $2.3 million from $4.2 million in the preceding quarter. Nonperforming loans decreased 15.8% sequentially to $46.3 million. Net charge-offs were also down 28.8% sequentially to $2.9 million.
Further, S&T Bancorp is in the process of reshuffling its senior executives. The company’s efforts on this front are expected to result in evolved business strategies and efficient cost management, which will garner profitability.
Notably, the long-term earnings growth forecast for the company is 5.0%. Additionally, over the last 60 days, the Zacks Consensus Estimate for 2013 increased 1.4% to $1.45 per share. For 2014, the Zacks Consensus Estimate advanced 7.9% to $1.50 per share over the same time period.
Other Stocks to Consider
Apart from S&T Bancorp, other banks worth considering include Eagle Bancorp, Inc. (EGBN), Horizon Bancorp (HBNC) and MB Financial Inc. (MBFI) – all of which carry a Zacks Rank #2 (Buy).
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