On Nov 29, First Bancorp (FBNC) touched a 52-week high of $17.39. The momentum was driven by sustained solid results at First Bancorp and an impressive inorganic growth story.
First Bancorp delivered positive earnings surprises in three of the last four quarters with an average beat of 11.8%. In the last reported quarter, First Bancorp posted impressive results delivering a positive earnings surprise of 20.0%. Earnings also fared well year over year. The better-than-expected results were primarily driven by lower level of foreclosed property losses and write-downs reported during 2013.
Improving provision for loan losses on non-covered loans, surging total non-interest income and strong capital position were the other positives for the company.
First Bancorp also completed the previously declared acquisition of the two branches Four Oaks Banks and & Trust Company, which generated additional $16 million of loans and $57 million of deposits for First Bancorp.
These positives led the company to witness rising estimates. The Zacks Consensus Estimate moved north by 9.9% to $1.00 per share over the last 60 days, as most of the estimates were revised upward. For 2014, the Zacks Consensus Estimate soared 19.6% to $1.22 per share over the same time period.
However, valuation for First Bancorp looks stretched. The shares are trading at a discount to the peer group average on a price-to-book basis but on a slight premium on forward price-to-earnings basis. Return on equity is negative compared with positive return of the peer group. Nonetheless, the 1-year return from the stock came in at 53.3%, above the NASDAQ’s return of 34.9%.
First Bancorp presently carries a Zacks Rank #2 (Buy). Some other stocks worth considering in the financial sector include American National Bankshares Inc. (AMNB), First NBC Bank Holding Company (NBCB) and BNC Bancorp (BNCN). While American National and First NBC sport a Zacks Rank #1 (Strong Buy), BNC Bancorp carries the same Zacks Rank as First Bancorp.
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