Square 1 Financial Upped to Strong Buy on Solid Q2 Results - Analyst Blog

On Aug 9, Zacks Investment Research upgraded Square 1 Financial, Inc. ( SQBK ) to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

Square 1 Financial has been witnessing rising earnings estimates on the back of strong second-quarter 2014 results, steady organic growth and superior capital position. In the trailing four quarters, the company posted an average annual earning surprise of 42.1%.

Square 1 Financial reported its second-quarter results on Jul 25 with earnings per share coming in at 27 cents. The number beat the Zacks Consensus Estimate by 42.1% and came in well above the prior-year quarter figure of 21 cents.

Results were primarily driven by a fall in expenses and provision for loan losses, which were partially offset by a fall in revenues. Asset quality, capital position and profitability ratios improved during the quarter.

Total non-interest expenses and provision for loan losses declined 45.1% and 51.5%, respectively.

Total deposits and net loans increased 26.0% and 27.3%, respectively, indicating organic growth on the company's front.

On the flip side, interest income and non-interest income recorded declines of 28.5% and 45.1%, respectively.

For 2014, the Zacks Consensus Estimate increased 16.7% to $1.05 per share over the last 30 days. For 2015, the Zacks Consensus Estimate grew 21.1% to $1.15 per share over the same time period.

Other Stocks to Consider

Apart from Square 1 Financial, other Northeast banks worth considering include Farmers and Merchants Bancorp Inc. ( FMAO ), S&T Bancorp Inc. ( STBA ) and Territorial Bancorp Inc. ( TBNK ). All these stocks sport a Zacks Rank #1.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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