Back to top

Value

Center Bancorp Inc. (CNBC) delivered a third-quarter earnings surprise of 8.0%, marking the 6th positive earnings surprise for this regional bank in the last 7 quarters. Shares have been on the rise since the latest earnings announcement, while upward earnings estimate revisions helped it achieve a Zacks #1 Rank (Strong Buy) on October 31. Moreover, a P/B multiple of just 1.3 makes this stock an attractive pick for value investors.

Solid Q3 Results

On October 25, Center Bancorp reported third quarter earnings of 27 cents per share, outpacing the Zacks Consensus Estimate of 25 cents by 8.0% and the year-ago earnings of 22 cents by 22.7%. An improved top line helped the performance, partly offset by higher expenses.

During the quarter, the company wrapped up the acquisition of Saddle River Valley Bank, thereby further consolidating its presence in New Jersey.

The company's net interest income jumped 15.1% year over year to $11.2 million. Furthermore, other income totaled $2.6 million, surging 15.4% and including a bargain gain related to the acquisition of Saddle River. Total other expenses rose 31.9% year over year to $7.5 million.

Credit quality progressively improved at Center Bancorp. Provision for loan losses plummeted drastically from $1.0 million in the prior-year quarter to $0.23 million. Similarly, as of September 30, 2012, nonperforming assets were 0.34% of total loans, down 74 basis points from the prior-year quarter.

Earnings Momentum Improving

Over the past 30 days, the Zacks Consensus Estimate for 2012 increased 4.9% to $1.07 per share as both estimates moved higher. For 2013, the Zacks Consensus Estimate advanced 6.7% to $1.12 over the same time frame as both estimates again moved north.

The estimates reflect year-over-year improvements of about 33.1% for 2012 and 5.2% for 2013.

Attractive Valuation

Along with a P/B multiple of 1.3, Center Bancorp has an attractive forward P/E ratio of 10.3 (a P/E ratio under 15.0 and a P/B ratio below 3.0 generally indicate value). Also, the company has a trailing 12-month ROE of 12.7%, compared with the peer group average of 7.8%. This implies that the company reinvests its earnings more efficiently than its industry peers.

Headquartered in Union County, New Jersey, Center Bancorp is the holding company for Union Center National Bank. The company, with 14 banking locations in Union, Morris and Bergen Counties in New Jersey, provides a wide range of banking services to commercial, industrial, and governmental customers. With a market cap of approximately $180.0 million, Center Bancorp competes with Horizon Bancorp. (HBNC) and United Financial Bancorp, Inc. (UBNK), among others.


Want More of Our Best Recommendations?

Zacks' Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Then each week he hand-selects the most compelling trades and serves them up to you in a new program called Zacks Confidential.

Learn More>>


Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
PLANAR SYST… PLNR 4.34 +4.58%
CENTURY ALU… CENX 22.53 +4.50%
ERBA DIAGNO… ERB 2.89 +3.58%
MALLINCKROD… MNK 71.98 +3.55%
GTT COMMUNI… GTT 12.03 +3.26%