Bridge Capital Upgraded to Strong Buy

On Mar 2, Zacks Investment Research upgraded Bridge Capital Holdings (BBNK - Snapshot Report) to Zacks Rank #1 (Strong Buy).

Why the Upgrade?

Bridge Capital has been witnessing rising earnings estimates owing to strong fourth quarter 2012 results. Moreover, this regional bank delivered positive earnings surprises in 3 of the last 4 quarters with an average beat of 19.9%.

Bridge Capital reported fourth-quarter results on Jan 24. Earnings per share came in at 23 cents, surpassing the year-ago earnings by 43.8%. Moreover, the earnings were in line with the Zacks Consensus Estimate. Results were primarily aided by improved net interest income as well as non-interest income, partially offset by a rise in expenses and provision for credit losses

Net interest income jumped 22.0% year over year to $15.8 million. Further, non-interest income surged 42.3% to $1.0 million. Yet, total non-interest expenses hiked 9.9% year over year to $12.2 million.

Credit quality was mixed at Bridge Capital. Provision for credit losses climbed significantly from $0.6 million in the prior-year quarter to $1.5 million. However, as of Dec 31, 2012, nonperforming assets were 0.75% of total assets, down 63 basis points from the prior-year quarter. Moreover, nonperforming loans were 1.10% of total gross loans, down 45 bps from the prior-year quarter.

The Zacks Consensus Estimate for 2013 increased 8.2% to $1.05 per share as 1 out of 2 estimates was revised higher over the last 30 days. For 2014, over the same time frame, the Zacks Consensus Estimate rose by 7.3% to $1.18 per share.

Other Stocks to Consider

Besides Bridge Capital, other stock in the same sector like WesBanco Inc. (WSBC - Snapshot Report), Monarch Financial Holdings, Inc. (MNRK - Snapshot Report) and Bank of Kentucky Financial Corp. (BKYF) carry a Zacks Rank #1 and are worth considering.