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Analyst Blog

On Jan 4, 2014, Zacks Investment Research upgraded Cape Bancorp, Inc. (CBNJ - Snapshot Report) to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

Cape Bancorp has been witnessing rising earnings estimates on the back of strong third-quarter 2013 results. Moreover, this well-known business and personal banking products and services provider delivered positive earnings surprises in 3 of the last 4 quarters with an average beat of 50.2%.

Cape Bancorp reported third-quarter results on Oct 24 with earnings per share of 16 cents, beating the Zacks Consensus Estimate of 9 cents by 77.8%. Robust results for the reported quarter were primarily driven by a fall in expenses, rise in non-interest income and reduction in provision for loan losses.

However, a decline in net interest income partly offset the company’s disciplined expense management. Despite this, the company's strong capital position and a marked improvement in its credit quality were the positives.

Further, as of Sep 30, 2013, total net loans were $764.6 million, up 6.4% year over year. Total deposits totaled $828.4 million, depicting a rise of 9.9%.

Following third-quarter 2013 results, the Zacks Consensus Estimate for 2013 rose 25.6% to 54 cents per share over the last 60 days. For 2014, the Zacks Consensus Estimate jumped 52.8% to 55 cents per share over the same time frame.

Additionally, on Dec 23, the company’s board of directors authorized a third stock buyback program for the repurchase of about 602,989 shares of the company's issued and outstanding common shares. Cape Bancorp’s second stock repurchase program was completed on Oct 3.

We believe that the company’s shareholder friendly approach and positive estimate revision led to the rank upgrade.

Other Stocks to Consider

Besides Cape Bancorp, other banks in the same sector that are worth considering include Great Southern Bancorp Inc. (GSBC - Snapshot Report), Washington Federal Inc. (WAFD - Analyst Report) and Mutualfirst Financial Inc. (MFSF - Snapshot Report).  All 3 banks carry a Zacks Rank #1.

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