S&T Bancorp Upgraded to Strong Buy on Impressive Q2 Earnings - Analyst Blog

On Aug 9, Zacks Investment Research upgraded S&T Bancorp Inc . ( STBA ) to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

The rank upgrade for this Pennsylvania-based north-east bank was driven by strong estimate revisions on the back of impressive second-quarter 2014 results.

On Jul 29, S&T Bancorp released its second-quarter 2014 results. Earnings per share of 49 cents outpaced the Zacks Consensus Estimate of 44 cents, marking the second consecutive quarter of earnings beat. Also, the reported figure was up from the prior-year quarter earnings of 47 cents per share.

Results reflected higher net interest income, increased loan and deposit balances and a strong capital position. Further, credit quality showed partial improvement. However, higher expenses and lower non-interest income were on the downside.

Driven by loan growth, net-interest income increased 6.5% year over year to $36.9 million. Net interest margin was 3.56%, up 5 basis points from the prior year. However, lower mortgage revenue as well as debit and credit card fees led to an 8.5% decline in non-interest income to $11.8 million. Non-interest expense was up 6.3% year over year to $30.2 million.

The quarter marked the eighth consecutive quarter of loan growth with an increase of 11% (annualized) to $3.7 billion. As of Jun 30, 2014, total deposits stood at $3.9 billion, up 6% year over year.

The Zacks Consensus Estimate for 2014 advanced 5.6% to $1.90 per share over the past 30 days. Also, for 2015, it moved north 4.1% to $2.01 per share.

Other Stocks to Consider

Other stocks in this space worth considering include Farmers and Merchants Bancorp Inc. ( FMAO ), Square 1 Financial, Inc. ( SQBK ) and Territorial Bancorp Inc. ( TBNK ). All three stocks hold the same rank as S&T Bancorp.

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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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