On Aug 24, Zacks Investment Research upgraded
Prosperity Bancshares Inc.
) to a Zacks Rank #1 (Strong Buy).
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Why the Upgrade?
Prosperity Bancshares has been witnessing rising earnings
estimates following the announcement of robust second-quarter
2013 results. Moreover, this regional bank has delivered positive
earnings surprises in the last 4 quarters, with an average beat
Prosperity Bancshares reported second-quarter 2013 results on Jul
24. Earnings per share of 89 cents surpassed the Zacks Consensus
Estimate by a penny. Results benefited from top-line growth,
partially offset by higher operating expenses and a rise in
provision for credit losses. Moreover, loan and deposit balances
improved in the quarter.
Net interest income rose 41.9% year over year to $118.7 million.
Moreover, non-interest income jumped 85.1% to $25.3 million. On
the flip side, non-interest expense rose 60.3% from the
prior-year quarter to $61.3 million.
Further, asset quality was a mixed bag. Net charge-offs were $1.4
million, down 26.3% from $1.9 million in the year-ago quarter.
However, nonperforming assets increased 25.2% to $14.9 million.
Additionally, following the earnings release, the Zacks Consensus
Estimate for 2013 increased 2.6% to $3.59 per share over the last
60 days. Similarly, for 2014, the Zacks Consensus Estimate
advanced 8.7% to $3.88 per share over the same time period.
Positive earnings surprises and favorable estimate revisions
stimulated the rank upgrade.
Other Stocks to Consider
While we prefer Prosperity Bancshares, other stocks carrying a
Zacks Rank #1 include
Webster Financial Corp.
BofI Holding, Inc.
Glacier Bancorp Inc.