On May 14, 2014, Zacks Investment Research upgraded Simplicity Bancorp, Inc. to Zacks Rank #1 (Strong Buy).
Why the Upgrade?
Simplicity Bancorp’s better-than-expected results in the third quarter of fiscal 2014 as well as a dividend hike were the primary drivers for the rating upgrade. Moreover, in three of the last four trailing quarters, the company scripted positive earnings surprises, with an average earnings beat of 27.6%.
On May 5, Simplicity Bancorp reported earnings of 17 cents per share, outpacing the Zacks Consensus Estimate by 21.4%. However, this was a penny below the prior-year quarter figure of 18 cents.
Results benefited from nil provision for loan losses, a 12.7% fall in interest expenses and almost unchanged operating expenses. Also, improvement in asset quality and strong capital and profitability ratios were the other tailwinds.
Total nonperforming assets were $14.7 million, down from $16.0 million as of Jun 30, 2013. Further, allowance for loan losses was 0.69% of total loans, down 12 basis points from Jun 30, 2013 level.
On the flip side, a 4.5% decline in net interest income and a 15.4% decrease in non-interest income was recorded.
Further, on May 1, Simplicity Bancorp announced a 12.5% rise in its quarterly dividend to 9 cents per share. The dividend will be paid on May 30 to shareholders of record as on May 15.
During the last 30 days, the Zacks Consensus Estimates for fiscal 2014 and fiscal 2015 have remained stable at 63 cents and 75 cents per share, respectively.
Other Stocks to Consider
Apart from Simplicity Bancorp, other banks worth considering include Anchor Bancorp , Farmers Capital Bank Corporation (FFKT - Snapshot Report) and Capital City Bank Group Inc. (CCBG - Snapshot Report) . All of these stocks sport a Zacks Rank #1.