The Zacks Investment Research upgraded CVB Financial Corp. (CVBF) to a Zacks Rank #1 (Strong Buy) on May 27.
Why the Upgrade?
On May 15, the Ontario, CA-based bank completed the acquisition of American Security Bank with assets worth $431 million. The latest move will expand the company’s foothold in Southern California and thereby enhance chances for further top-line growth in the quarters to follow.
Moreover, CVB Financial’s first-quarter 2014 results were impressive as well. Earnings of 27 cents per share surpassed the Zacks Consensus Estimate of 23 cents. Further, the company has delivered positive surprises in the trailing four quarters while maintaining an average beat of 11.4%.
The robust first-quarter results were primarily driven by top-line growth attributable to improvement in both net interest income as well as non interest income, partially offset by higher expenses. Further, a decline in allowance for loan losses and a recovery of nearly $1 million were other tailwinds of the quarter.
Further, despite a low loan demand in the reported quarter, CVB Financial’s total loans and leases, net of deferred fees and discount, was $3.40 billion, up 1.0% on a year-over-year basis. Moreover, the company has a healthy loan pipeline which will support revenue growth in the upcoming quarters.
For 2014, the Zacks Consensus Estimate inched up 1.1% to 95 cents per share over the last 30 days. However, for 2015, the Zacks Consensus Estimate declined 1.0% to $1.02 per share over the same time period.
Other Stocks to Consider
Apart from CVB Financial, other West banks worth considering include BofI Holding, Inc. (BOFI), Central Pacific Financial Corp. (CPF) and Western Alliance Bancorp. (WAL). All these stocks sport the same Zacks Rank as CVB Financial.
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