On Jul 27, 2013, Zacks Investment Research upgraded Enterprise Financial Services Corp. (EFSC - Snapshot Report) to a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
Enterprise Financial has been witnessing rising earnings estimates on the back of strong second-quarter results. Moreover, the long-term earnings growth rate is projected at 8.00%.
On Jul 25, 2013, Enterprise Financial reported second-quarter earnings of 58 cents per share, significantly surpassing the Zacks Consensus Estimate of 38 cents. This also compared favorably with the prior-quarter earnings of 44 cents per share.
The year-over-year improvement was driven by a decline in operating expenses, partially offset by a fall in net interest income and noninterest income. Moreover, asset quality improved while capital ratios were a mixed bag.
Enterprise Financial’s total revenue came in at $36.4 million, down 11.0% year over year. However, total expenses declined 0.2% year over year and stood at $21.4 million.
Moreover, Enterprise Financial’s asset quality showed an improvement in the reported quarter. Non-performing loans to total loans stood at 1.25% as of Jun 30, 2013 compared with 2.08% as of Jun 30, 2012. Net charge-offs as a percentage of annualized average loans were 0.10% as of Jun 30, 2013 compared with 0.28% as of Jun 30, 2012.
Capital ratios were a mixed bag. As of Jun 30, 2013, Tier 1 capital to risk-weighted assets stood at 11.98% compared with 12.51% in the year-ago period. Tier 1 common equity to risk-weighted assets was 8.71% as of Jun 30, 2013 compared with 7.62% as of Jun 30, 2012.
Over the last 30 days, the Zacks Consensus Estimate for 2013 went up by 3.0% to $1.70 per share. For 2014, the Zacks Consensus Estimate advanced 3.6% to $1.44 over the same time frame.
Other Stocks to Consider
Other stocks that are also worth considering include First Interstate Bancsystem Inc. (FIBK - Snapshot Report) , First Merchants Corp. (FRME - Snapshot Report) and Firstbank Corp. . All these stocks sport a Zacks Rank #1 (Strong Buy).