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Southwest Bancorp Upped to Strong Buy

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On Aug 3, Zacks Investment Research upgraded Southwest Bancorp Inc. to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

Southwest Bancorp has been witnessing rising earnings estimates on the back of strong second-quarter 2013 results. Moreover, the long-term expected earnings growth for this well-known banking and financial services provider is 7.5%.

Southwest Bancorp reported its second-quarter results on Jul 23 with earnings per share of 22 cents, substantially beating the Zacks Consensus Estimate of 17 cents by 29.4% and the year-ago earnings of 15 cents by 47%. Robust results for the reported quarter were primarily aided by reduced non-interest expenses, decreased income tax expenses and negative provision for loan losses.

Non-interest expense declined 23% from the year-ago period to $12.8 million. This reduction reflected prudent expense management by the company.

Credit quality continues to exhibit an improvement for Southwest Bancorp. Provision for loan losses was negative $0.9 million as compared with $0.03 million in the prior-year quarter. Nonperforming assets were $4.7 million, down 52% year over year.

However, on the downside, net interest income declined 23% year over year to $15.1 million. Net interest margin was 3.07%, down 64 basis points as compared with the year-ago quarter. Non-interest income decreased 3% to $3.5 million.

Following second-quarter 2013 results, the Zacks Consensus Estimate for 2013 increased 14.8% to 70 cents per share on the back of four upward revisions, over the last 30 days. For 2014, the Zacks Consensus Estimate advanced 3.9% to 80 cents per share with three estimates moving north over the same time period.

Other Stocks to Consider

Besides Southwest Bancorp, other stocks in the same industry with a Zacks Rank #1 include Prosperity Bancshares Inc. (PB - Free Report) , while First Financial Bankshares Inc. (FFIN - Free Report) and MidWest One Financial Group, Inc. (MOFG - Free Report) carrying a Zacks Rank #2 (Buy) are also worth considering.

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