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On Dec 28, Zacks Investment Research upgraded State Bank Financial Corporation (STBZ - Snapshot Report) to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

State Bank Financial has been witnessing rising earnings estimates on the back of strong third-quarter 2013 results. The long-term expected earnings growth rate for this stock is 12%. Further, State Bank Financial has recorded a solid year-to-date return of 10.8%.

State Bank Financial reported its third-quarter results on Oct 24 with earnings per share of 13 cents, beating the Zacks Consensus Estimate of 5 cents by 160% and the year-ago earnings of 10 cents by 30%.

Robust results for the reported quarter were primarily driven by top-line growth which recorded 31.5% increase on a year-over-year basis. Moreover, lower provision for loan losses and reduced non-performing assets reflected improvement in credit quality.

Further, State Bank Financial’s return on average assets and return on average equity stood at 0.67% and 4.04%, respectively, as compared with 0.50% and 3.13% in the prior-year quarter.

Yet, these positives were partially offset by higher non-interest expenses which reflected 16.7% year-over-year increase.

Following third-quarter 2013 results, the Zacks Consensus Estimate for 2013 increased 17.6% to 20 cents per share, over the last 60 days. For 2014, the Zacks Consensus Estimate advanced 6.1% to 87 cents per share over the same time period.

Other Stocks to Consider

Some other Southeast banks worth considering include First Bancorp (FBNC - Snapshot Report), First NBC Bank Holding Company (NBCB - Snapshot Report) and Omniamerican Bancorp, Inc. (OABC).  All 3 banks carry a Zacks Rank #1.

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