Back to top

Bull of the Day

Analyts have raised their estimates for Sierra after a solid third quarter earnings report,  sending the stock back to Zacks Rank # 1 (Strong Buy) on October 25, 2013.
 
About the Company
 
Sierra Bancorp (BSRR - Snapshot Report) is the parent of Bank of the Sierra, which it acquired in August 2001. Bank of the Sierra offers a full range of retail and commercial banking services, primarily in the central and southern sections of the San Joaquin Valley. The company has 25 branch offices and more than 400 employees.
 
Excellent Results and Improving Fundamentals
 
Sierra reported its Q3 2013 results on October 21, 2013. Net income for the quarter came in at $3.4 million, up more than 100% from the prior-year quarter.  The increase was primarily the result of a reduction in loan loss provisions, offset partly by a decline in the net interest income.  ROA for the quarter increased to 0.97%, from 0.46% in Q3 2012, while ROE also increased to 7.60% from 3.74%.
 
Earnings per share increased to $0.23 from $0.12 in the prior-year quarter.  The ratio of nonperforming assets to total assets improved to 4.76% at September 30, 2013, from 6.01% as of the end of prior-year quarter.


 
Strong Capital Position; Returning Cash to Shareholders
 
The bank has a very strong capital position with Tier I Capital Ratio at 19.75%, up from 18.70% as of the end of the same quarter last year. They had increased their dividend last quarter.
 
Including dividends paid by Bank of the Sierra prior to the formation of Sierra Bancorp; the company has paid regular cash dividends to shareholders every year since 1987. Earlier this year, the company had reactivated its stock repurchase program with the current authorization at 5% of total outstanding shares.
 
Positive Earnings Estimates Revisions

As a result of improving outlook for the company, analysts have been revising their estimates for the December 2013 quarter and the fiscal year 2013. Zacks consensus estimates for the fourth quarter and the fiscal year 2013 now stand at $0.22 and $0.88 per share, up from $0.17 and $0.78 per share, 30 days ago.
 
Solid Industry Outlook

Small regional banks are in a great position to benefit from rising long-term rates and steepening yield curve. Furthermore, as a result of stringent regulations and increased oversight, most banks now have much better capital and liquidity position compared to the position a few years ago. Financials have been one of the best-performing sectors this year, and the situation is likely to continue in the coming months.

The Bottom Line

BSRR is a Zacks Rank No. 1 (Strong Buy) stock. It also has a longer-term Zacks recommendation of "Outperform." Additionally, a Zacks Industry rank of 14 out of 265 indicates a strong likelihood of continued strength in the short to medium term, compared with other industries.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 DaysClick to get this free report >>
 

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
FELCOR LODG… FCH 10.46 +3.36%
COVENANT TR… CVTI 12.50 +3.22%
OLD DOMINIO… ODFL 63.39 +1.04%
FIRSTSERVIC… FSRV 56.08 +0.63%
DELTA AIR L… DAL 37.89 +0.13%