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Analyst Blog

On Nov 12, Zacks Investment Research upgraded Meridian Interstate Bancorp, Inc. (EBSB - Snapshot Report) to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

Meridian Interstate Bancorp has been witnessing rising earnings estimates following the announcement of strong third-quarter results. Moreover, this bank has delivered positive earnings surprises in the last 4 quarters with an average beat of 55.0%.

Meridian Interstate Bancorp reported third-quarter 2013 results on Oct 22. Earnings per share of 24 cents surpassed the Zacks Consensus Estimate by 140.0%. Results benefited from increased revenues and substantial decline in provision for loan losses, partially offset by higher operating expenses.

Net interest income rose 16.2% year over year to $19.1 million. Moreover, non-interest income increased 15.3% to $5.2 million. On the flip side, non-interest expense rose 8.5% from the prior-year quarter to $15.6 million.

Further, asset quality was a mixed bag. Nonperforming assets as a percentage of total loans decreased 44 basis points from the prior-year quarter to 2.04%. Provision for loan losses was $0.1 million, significantly down from $2.3 million in the year-ago quarter.

Additionally, following the earnings release, the Zacks Consensus Estimate for 2013 increased 13.9% to 41 cents per share over the last 30 days. Similarly, for 2014, the Zacks Consensus Estimate advanced 4.2% to 50 cents per share over the same time period.

Positive earnings surprises and favorable estimate revisions stimulated the rank upgrade.

Other Stocks to Consider

While we prefer Meridian Interstate Bancorp, other stocks carrying a Zacks Rank #1 include Investors Bancorp Inc. (ISBC - Snapshot Report), WSFS Financial Corp. (WSFS - Snapshot Report) and Mutualfirst Financial Inc. (MFSF - Snapshot Report).

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