Shares of S&T Bancorp Inc. (STBA) crafted a new 52-week high, touching $30.23 on Dec 26. The stock of this financial services provider closed the session a notch lower at $30.19, reflecting a solid year-to-date return of 25%. The trading volume for the session was 50,608 shares.
Despite hitting its 52-week high, this Zacks Rank #1 (Strong Buy) stock has plenty of upside left, given strong estimate revisions over the last 60 days and expected year-over-year earnings growth of 14.71%. The company has delivered an average positive earnings surprise of 7.29% in the trailing four quarters.
Growth Drivers
Strong organic growth aiding third-quarter 2014 results, hike in dividend and the acquisition of Integrity Bancshares, Inc. (ITBC) were the primary growth drivers for S&T Bancorp.
Recently, S&T Bancorp and Integrity Bancshares entered into a definitive 80% stock and 20% cash deal under which S&T Bancorp will acquire Integrity for $52.50 per share and at a total value of about $155 million. On a combined basis, S&T Bancorp will have total assets of about $5.8 billion. On completion of the merger, S&T Bancorp will expand into south-central Pennsylvania including Lancaster, York, Dauphin and Cumberland counties. The merger, anticipated to be completed in the first quarter of 2015, is expected to be accretive to earnings per share in 2015, including one-time costs.
In Oct 2014, the board of directors of S&T Bancorp announced a cash dividend of 18 cents per share, up 5.9% from the prior quarter dividend of 17 cents. The new dividend was paid on Nov 28, 2014 to shareholders of record as of Nov 13.
S&T Bancorp came out with earnings of 49 cents per share on Oct 28, beating the Zacks Consensus Estimate by 4.26%. The reported figure also surpassed the prior-year quarter earnings by 19.5%.
Results were aided by a 3.3% year-over-year rise in net revenues, partially offset by a 1.8% rise in non-interest expenses. Further, the quarter witnessed an increase in net loans (up 8.4%) along with higher deposits (up 5.7%).
S&T Bancorp remains focused on improving its credit quality and a reduction in non-performing assets bears testimony to that. The ratio of non-performing assets to total assets was 0.36% at third-quarter end, down from 1.05% as of Sep 30, 2013. The improvement was also reflected in lower provision for loan losses with 57.6% year-over- year decline.
Estimate Revisions Show Potency
Analysts’ bullish stance was reflected in the earnings estimates movement over the last 60 days. The Zacks Consensus Estimate for 2014 has gone up 2.6% to $1.95 per share, while for 2015, the estimate rose 4.5% to $2.10 per share.
Other Northeast banks worth considering include First Connecticut Bancorp, Inc. (FBNK) and Square 1 Financial, Inc. (SQBK), both with a Zacks Rank #1.
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