Metrocorp Bancshares Inc.
) has surged about 60% year-to-date, due in part to its strong
earnings trend. This regional bank has been consistently delivering
positive earnings surprises for the last nine quarters with an
average beat of 149.6%. Strong fundamentals should help this Zacks
#2 Rank (Buy) maintain its growth trend going forward.
Fabulous Second Quarter
On July 20, Metrocorp reported second quarter 2012 earnings per
share of 16 cents, topping the Zacks Consensus Estimate of 10 cents
by 60.0% and the year-ago earnings of 13 cents by 23.1%. The
upsurge was primarily due to growth in revenue and a lower
provision for loan losses.
Net interest income climbed 3% year over year to $13.6 million.
Non-interest income increased 12.5% to $1.8 million. Moreover, the
net interest margin expanded 6 basis points to 3.82%. Yet, the
company's non-interest expenses escalated 13% to $11.3 million over
the same period.
Credit metrics continued to improve at Metrocorp. The provision for
loan losses was $0.2 million, down 84% from the year-ago quarter
with net charge-offs exhibiting a declining trend. Net charge-offs
amounted to $1.0 million, down from $2.7 million in the prior-year
Surge in Earnings Momentum
For 2012, the Zacks Consensus Estimate has advanced 5.9% to 54
cents per share in the past 30 days, as 2 of 3 estimates moved
higher. For 2013, the Zacks Consensus Estimate jumped 7.9% to 68
cents on 1 upward revision out of 3 estimates.
The Zacks Consensus Estimate for 2012 reflects a year-over-year
growth of about 81.1%, while the expected growth rate for 2013 is
Shares of Metrocorp currently trade at 18.7x 12-month forward
earnings, a 27% premium to the peer group average of 14.7x. Its
price to book ratio of 1.1 is at a 15% discount to the industry
median of 1.3. The company has a trailing 12-month ROE of 5.6%,
compared with the peer group average of 6.6%. Considering the
recent share price fluctuations and consistent growth trends, there
is a strong possibility of considerable upside from these levels.
Chart Resonates Growth Potential
The stock has been continuously outperforming its 200 days moving
average since January 2012, showing steady growth.
Headquartered in Houston, Texas, Metrocorp provides various banking
products and services. The company was founded in 1987 and conducts
business through 19 banking offices, including 13 in the greater
Houston and Dallas metropolitan areas and 6 in the greater San
Diego, Los Angeles and San Francisco metropolitan areas. With a
market cap of about $183.8 million, Metrocorp competes with Texas
Capital BancShares Inc. (
), among others.
METROCORP BANCS (MCBI): Free Stock Analysis
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