On May 28, Zacks Investment Research upgraded Customers Bancorp, Inc. (CUBI - Free Report) to a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
The rank upgrade of this Pennsylvania-based bank was driven by strong estimate revisions on the back of impressive first-quarter 2014 results as well as the recent declaration of a special stock dividend.
On May 15, Customers Bancorp declared a special stock dividend of 10% for all its shareholders. This dividend will be paid on Jun 30 to shareholders of record as of May 27.
On Apr 21, Customers Bancorp released its first-quarter 2014 results. The company reported earnings per share of 32 cents, outpacing the Zacks Consensus Estimate by 3.6%. However, the figure was down 15.8% year over year.
With this, the company has delivered positive earnings surprises in the trailing 4 quarters with an average beat of 9.3%.
Results benefited from top-line growth, partially offset by higher operating expenses and increased provision for credit losses.
Total revenue (net of interest expenses) stood at $37.1 million, up 35.3% year over year. The rise was primarily driven by increase in both net interest income and non-interest income. However, operating expenses increased 28.5% to $21.2 million.
Customers Bancorp’s balance sheet reflected growth in both loans and deposits. Loans grew significantly to $2.8 billion as of Mar 31, 2014 while deposits were up 42.2% to $3.6 billion.
The Zacks Consensus Estimate for 2014 advanced 8.7% to $1.50 per share over the past 60 days. Also, for 2015, it moved north 4.7% to $1.78 per share.
Other Stocks to Consider
Other stocks in the finance sector worth considering include Capital City Bank Group Inc. (CCBG - Free Report) , Middleburg Financial Corp. and Midsouth Bancorp Inc. (MSL - Free Report) . All three stocks hold the same rank as Customers Bancorp.