Capital City Bank Upped to Strong Buy - Analyst Blog

On Nov 6, Zacks Investment Research upgraded Capital City Bank Group Inc. (CCBG) to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

Capital City Bank has been witnessing rising earnings estimates on the back of strong third-quarter 2013 results. The long-term expected earnings growth rate for this stock is 6%.

Capital City Bank reported its third-quarter results on Oct 29 with earnings per share of 9 cents, beating the Zacks Consensus Estimate of 8 cents by 12.5% and the year-ago earnings of 7 cents by 28.6%.

Robust results for the reported quarter were primarily aided by substantial reduction in provision for loan losses. Moreover, Capital City Bank recorded a strong capital position and a marked improvement in its credit quality.

As of Sep 30, 2013, the ratio of nonperforming assets to total assets reduced to 3.77% from 5.10% in the prior-year quarter. The ratio of allowance to total loans decreased 22 basis points year over year to 1.75%.

Reduced net interest income, which declined 8.6% year over year to $19.2 million and rise in non-interest expenses (up 0.7% year over year) were the headwinds.

For Capital City Bank, the Zacks Consensus Estimate for 2013 jumped 3.3% to 31 cents per share over the last 30 days. For 2014, the Zacks Consensus Estimate surged 2.4% to 43 cents per share over the same time frame.

Other Stocks to Consider

Besides Capital City Bank, other Southeast banks that are worth considering include Simmons First National Corp. (SFNC), American National Bankshares Inc. (AMNB) and SY Bancorp Inc. (SYBT). All the 3 companies carry a Zacks Rank #1.