Territorial Bancorp Upped to Strong Buy - Analyst Blog

Zacks Investment Research upgraded Territorial Bancorp Inc. TBNK to a Zacks Rank #1 (Strong Buy) on May 15, 2014.

Why the Upgrade?

Territorial Bancorp has been witnessing rising earnings estimates on the back of decent first-quarter 2014 results, including steady loan growth and fall in the provision for loan losses. The long-term expected earnings growth rate for this stock is 4.0%. Additionally, this Honolulu, HI-based bank holding company posted positive earning surprises in the trailing four quarters with an average beat of 12.9%.

Territorial Bancorp reported its first-quarter results on May 1 with earnings per share of 37 cents, beating the Zacks Consensus Estimate by 12.1%. Furthermore, earnings were 2.8% higher than the prior-year quarter figure of 36 cents.

Better-than-expected results were primarily driven by strong loan growth, a fall in the provision for loan losses and decline in interest expenses. Yet, these positives were partially offset by rising operating expenses and fall in non-interest income.

Loans grew 3.4% year over year, while deposits declined 2.6%. Non-performing assets as a percent of total assets fell 6 basis points to 0.31%.
    
On the flip side, a 1.7% rise in operating expenses and a 42.5% decline in non-interest income were recorded.

Over the last 60 days, the Zacks Consensus Estimate for 2014 increased 5.9% to $1.43 per share. For 2015, the Zacks Consensus Estimate advanced 4.2% to $1.49 per share over the same time period.

Other Stocks to Consider

Apart from Territorial Bancorp, other Northeast banks worth considering include S&T Bancorp Inc. STBA, Univest Corporation of Pennsylvania UVSP and Bryn Mawr Bank Corp. BMTC. While both S&T Bancorp and Univest sport a Zacks Rank #1 (Strong Buy), Bryn Mawr carries a Zacks Rank #2 (Buy).

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