On Aug 13, 2013, Zacks Investment Research upgraded Union First Market Bankshares Corporation (UBSH - Snapshot Report) to a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
Union First has been witnessing rising earnings estimates on the back of strong second-quarter results. Moreover, the company has an expected long-term earnings growth rate of 8.0%.
On Jul 22, Union First reported second-quarter earnings of 42 cents per share (excluding the company’s acquisition related expenses), surpassing the Zacks Consensus Estimate of 38 cents. Moreover, it surpassed the prior-quarter earnings of 36 cents. Better-than-expected results were driven by rise in non-interest income, partially offset by decline in net interest income and higher operating expenses. Moreover, improved asset quality and capital ratios were the tailwinds for the quarter.
Union First’s net interest income came in at $38.7 million, down 1.1% from the prior-year quarter. However, non-interest income came in at $11.3 million, up 10.2% year over year. Further, total expenses increased 2.0% year over year to $34.3 million.
Union First’s asset quality showed an improvement. Nonperforming assets stood at $62.2 million as of Jun 30, 2013, down 17.1% from the prior-year quarter. Net charge-offs as a percentage of total outstanding loans were 0.14% as of Jun 30, 2013, down from 0.31% as of Jun 30, 2012.
Capital ratios also showed improvement. As of Jun 30, 2013, Tier 1 risk-based capital ratio was 13.08% compared with 12.99% as of Jun 30, 2012. Leverage ratio stood at 10.45% as of Jun 30, 2013 compared with 10.44% as of Jun 30, 2012.
Over the last 30 days, the Zacks Consensus Estimate for 2013 went up by 4.7% to $1.57 per share. Moreover, for 2014, the Zacks Consensus Estimate increased 2.4% to $1.69 per share over the same time frame.
Other Stocks to Consider
Other stocks that are also worth considering in the same industry include Farmers Capital Bank Corporation (FFKT - Snapshot Report), First Bancorp (FBNC - Snapshot Report) and First M&F Corporation . All these stocks carry a Zacks Rank #1 (Strong Buy).