Great Southern Bancorp Upped to Strong Buy - Analyst Blog

On Jun 26, Zacks Investment Research upgraded Great Southern Bancorp Inc. GSBC to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

Great Southern Bancorp has been witnessing rising earnings estimates on the back of the acquisition of Moline, IL – based Valley Bank and strong first-quarter 2014 results. The long-term expected earnings growth rate for this stock is 9%. Further, Great Southern Bancorp has now delivered positive earnings surprises in the last 4 quarters with an average beat of 27.12%.

On Jun 20, Great Southern Bancorp announced a purchase and assumption agreement with the Federal Deposit Insurance Corporation (FDIC) to purchase certain loans and other assets along with all deposits of Valley Bank. Under the agreement with the FDIC, Great Southern will take over Valley Bank deposits of about $356 million without premium. The deal, which strengthens Great Southern Bancorp's share in Des Moines, is anticipated to be accretive to income and equity beginning in the current quarter and the following quarters.

Great Southern Bancorp reported its first-quarter results on Apr 21 with earnings per share of 63 cents beating the Zacks Consensus Estimate of 51 cents by 23.53% and the year-ago earnings of 60 cents by 5%.

Robust results for the reported quarter were primarily driven by lower expenses. Moreover, lower provision for loan losses and reduced non-performing assets reflected improvement in credit quality. Yet, these positives were partially offset by a lower top line.

The Zacks Consensus Estimate for 2014 increased 1.8% to $2.27 per share, over the last 7 days. For 2015, the Zacks Consensus Estimate advanced 4.7% to $2.22 per share over the same time period.

Other Stocks to Consider

Some other banking stocks worth considering include West Bancorp., Inc. WTBA, Astoria Financial Corporation AF and Anchor Bancorp ANCB.  All 3 banks carry a Zacks Rank #1.