First NBC Bank Holding Upped to Strong Buy

On Nov 15, Zacks Investment Research upgraded First NBC Bank Holding Company (NBCB) to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

First NBC Bank has witnessed positive estimate revision on the back of strong third-quarter 2013 results. Moreover, the long-term expected earnings growth rate for this stock is 10%.

First NBC Bank reported its third-quarter results on Nov 7 with earnings per share of 54 cents, beating the Zacks Consensus Estimate of 50 cents by 8%. However, it was below the year-ago earnings of 57 cents by 5.3%.

Robust results for the reported quarter were primarily aided by increase in net interest income and non-interest income. Moreover, First NBC Bank remained well capitalized.

As of Sep 30, 2013, net interest income stood at $21.8 million, increasing 14.9% year over year. Non-interest income surged 57.8% year over year to 2.5 million.

The company’s capital ratios remained strong in the quarter. As of Sep 30, 2013, Tier 1 leverage ratio was 11.82% and Tier 1 risk based capital ratio was 13.89%. Both the ratios are well above the regulatory minimum standards.

However, non interest expenses, which increased by 28.8% year over year to 17.1 million, was the headwind for the quarter.

For First NBC Bank, the Zacks Consensus Estimate for 2013 jumped roughly 1% to $2.13 per share over the last 30 days. For 2014, the Zacks Consensus Estimate surged 5.8% to $2.73 per share over the same time frame.

Other Stocks to Consider

Besides First NBC Bank, other Southeast banks worth considering include First Community Corporation (FCCO), American National Bankshares Inc. (AMNB) and SY Bancorp Inc. (SYBT). All these stocks carry a Zacks Rank #1.

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