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Sierra Bancorp Upped to Strong Buy

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On Aug 14, Zacks Investment Research upgraded Sierra Bancorp (BSRR - Free Report) to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

Sierra Bancorp has been witnessing rising earnings estimates on the back of strong second-quarter 2013 results. Moreover, this bank holding company has delivered an average earnings beat of 18.7% in the last 4 quarters. The expected earnings growth rate for this stock for 2013 is 33.6%.

The company reported second-quarter results on Jul 22 with earnings per share of 27 cents, beating the Zacks Consensus Estimate by 92.9%. Further, it beat the prior-year quarter earnings of 18 cents by 50.0%. Robust results for the reported quarter were primarily aided by a substantial reduction in provision for loan losses. This was partly offset by lower non-interest as well as net interest income.

Credit quality continues to exhibit an improvement for Sierra Bancorp. The provision for loan losses was $0.8 million compared with $1.1 million in the prior-year quarter. Net charge-offs fell 78.1% to $1.5 million in the quarter.

However, on the downside, net interest income fell 2.2% year over year to $12.3 million. Net interest margin was 4.04%, down 21 basis points from the year-ago quarter. Non-interest income declined 2.4% year over year to $4.0 million. Non-interest expense rose 2.2% from the year-ago period to $10.7 million.

Following second-quarter 2013 results, the Zacks Consensus Estimate for 2013 increased 23.8% to 78 cents per share on the back of upward revisions in both estimates over the last 30 days. For 2014, the Zacks Consensus Estimate advanced 13.7% to 83 cents per share, with both the estimates moving north over the same time period.

Other Stocks to Consider

Apart from Sierra Bancorp, other stocks with a Zacks Rank #1 include Banner Corporation (BANR - Free Report) , Washington Federal Inc. (WAFD - Free Report) and WSFS Financial Corp. (WSFS - Free Report) .

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