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Analyst Blog

On Mar 23, Zacks Investment Research upgraded The Bancorp Inc. (TBBK - Snapshot Report) to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

The Bancorp has been witnessing rising earnings estimates based on strong fourth quarter 2012 results. Moreover, this regional bank delivered positive earnings surprises in 2 of the last 4 quarters with an average beat of 2.6%.

The Bancorp reported fourth-quarter results on Jan 23. Earnings came in at 15 cents per share, outpacing the Zacks Consensus Estimate by a penny and also coming ahead of the year-ago earnings of 10 cents. Results were primarily aided by solid top-line growth on the back of higher net interest and non-interest income, partially offset by an increase in expenses.

Net interest income climbed 8.5% year over year to $22.1 million. Further, non-interest income surged 52.6% to $7.4 million. Non-interest expenses grew 22.0% year over year to $23.5 million.

Asset quality remained a mixed bag for The Bancorp.  Allowance for loan losses increased 11.4% from the prior-year quarter to $30.0 million. Likewise, non-performing loans stood at 1.56% of total loans, up 32 basis points year over year.  However, non-performing assets stood at 0.92% of total loans, down 5 basis points year over year

The Zacks Consensus Estimate for 2013 remained stable at 75 cents over the last 60 days.

Other Stocks to Consider

While we prefer The Bancorp, other banks carrying a Zacks Rank #1 include Meta Financial Group, Inc. (CASH - Snapshot Report), Flagstar Bancorp Inc. (FBC - Snapshot Report) and First Defiance Financial Corp. (FDEF - Snapshot Report).
 

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