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The Bancorp Downgraded to Strong Sell - Analyst Blog
Zacks Investment Research downgraded
The Bancorp Inc.
) to a Zacks #5 Rank (Strong Sell) on January 2.
Why the Downgrade?
The company has witnessed downward estimate revisions after reporting disappointing third-quarter 2012 results. Consequently, shares of this Mid-Atlantic-regional bank have been on a downtrend since the middle of May 2012. Moreover, given the company's negative earnings surprise in the third quarter of 2012, it has further downside left.
On October 23, 2012, The Bancorp reported third-quarter earnings per share of 11 cents, missing the Zacks Consensus Estimate by a penny.
Earnings were primarily aided by increased net interest income (up 10.0% year over year) and non-interest income (up 68.3% year over year). However, these positives were more than offset by a 23.3% surge in non-interest expense and a 10.4% hike in provision for loan and lease losses.
Though The Bancorp's capital ratios remained strong and exceed all regulatory requirements, credit quality showed deterioration with the allowance for loan losses increasing 17 bps to 1.78% of total loans as of September 30, 2012. Moreover, the ratio of nonperforming loans to total loans stood at 1.63%, up 30 bps as of September 30, 2011.
The Zacks Consensus Estimate for 2012 decreased 4.0% to 48 cents per share over the last 60 days. For 2013, the Zacks Consensus Estimate reduced 15.7% to 75 cents per share over the same time frame.
Other Stocks to Consider
Not all banking stocks are performing as poorly as The Bancorp. The following banking stocks with favorable Zacks Rank are performing well and are worth considering:
1) First Community Bancshares, Inc. (Bluefield) ( FCBC ) carries a Zacks #1 Rank (Strong Buy)
2) IberiaBank Corp. ( IBKC ) holds a Zacks #1 Rank (Strong Buy)
FIRST COMM BCSH (FCBC): Free Stock Analysis Report
IBERIABANK CORP (IBKC): Free Stock Analysis Report
BANCORP BNK/THE (TBBK): Free Stock Analysis Report
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Zacks Investment Research