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Analyst Blog

Shares of Firstbank Corporation crafted a new 52-week high, touching $17.96 at the end of the trading session on Aug 13. However, the stock closed the session at $17.53, reflecting a solid year-to-date return of 69.4%. The trading volume for the session was 14,418 shares.

Despite the strong price appreciation, this Zacks Rank #1 (Strong Buy) Midwest bank has considerable upside left, given its positive estimate revisions over the last 30 days.

Growth Drivers

Firstbank Corporation’s impressive price performance reflects strong second-quarter 2013 results including positive earnings surprise of 18.8%, marked improvement in its credit quality along with clearance of all of its outstanding Troubled Asset Relief Program (TARP) dues.

On Jul 22, Firstbank Corporation declared second-quarter earnings of 38 cents per share, beating the Zacks Consensus Estimate of 32 cents. Moreover, net income of $3.3 million increased 38.1% year over year.

Non-accrual loans were $11.8 million, down 33.7% from $17.9 million in second-quarter 2012. Further, net charge offs were $1.2 million, decreasing 47.0% from the prior-year quarter.

During the quarter, the company redeemed all of the remaining shares of Series A Preferred Stock worth $17.0 million. This depicts its recovery from the recession and re-instills shareholders’ faith in the stock.

Moreover, Firstbank Corporation has delivered positive earnings surprises in the trailing 4 quarters with an average beat of 29.7%.

Estimate Revisions Show Potency

Over the last 30 days, the Zacks Consensus Estimate for 2013 increased 13.4% to $1.44 per share. For 2014, the Zacks Consensus Estimate advanced 10.3% to $1.39 per share over the same time frame.

Apart from Firstbank Corporation, other banks that are worth considering include First Interstate Bancsystem Inc. (FIBK - Snapshot Report), First Merchants Corporation (FRME - Snapshot Report) and PrivateBancorp, Inc. (PVTB - Snapshot Report). All these 3 companies carry a Zacks Rank #1.

 

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