On Dec 26, Zacks Investment Research upgraded Meridian Bancorp, Inc. (EBSB) to a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
The rank upgrade of this Massachusetts-based financial institution was triggered by the company’s strengthening fundamentals and appreciable top-line growth. Moreover, the company delivered positive earnings surprises in the last 4 quarters with an average beat of 87.5%.
Meridian Bancorp has been witnessing consistent growth in loans and deposits, which helped in enhancing its top line. The company recorded a 10% increase in net revenues in the first nine months of 2014. Also, the company’s total assets grew 18% as of Sep 30, 2014, compared with the Dec 2013 level.
Further, the 68% decline in provisions for loan losses in the first nine months of 2014 compared to the corresponding prior-year period also contributed to the substantially improving performance of the company. However, Meridian Bancorp’s weak expense management was reflected in a 6% rise in expenses in the first nine months of 2014.
In Jul 2014, Meridian Bancorp announced the completion of the conversion of Meridian Financial Services, Inc. (‘MHC’) and the related stock offering, following which the company is now the holding company of East Boston Savings Bank. MHC and Meridian Interstate Bancorp, Inc – the former mid-tier holding company of East Boston Savings Bank – no longer exists.
Meridian Bancorp went fully public on Jul 29, 2014 and commenced trading on the Nasdaq Global Select Market under the ticker symbol “EBSB.” The shares of the company have gained 5.5% since then.
The positive sentiment has been reflected in the earnings estimate revisions. Though the Zacks Consensus Estimate for 2014 remained flat at 27 cents per share over the last 30 days, it increased 46.4% to 41 cents per share for 2015 over the same time period.
Other Stocks to Consider
Other stocks in this space worth considering include HopFed Bancorp Inc. (HFBC), Provident Financial Holdings, Inc. (PROV) and Select Bancorp, Inc. (SLCT). All these stocks hold the same Zacks Rank as Meridian Bancorp.
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