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These 6 Bank Stock Might Gain Substantially on Q3 Earnings

Zacks

A favorable operating backdrop with the Fed’s plans to unwind its giant balance sheet and keep increasing interest rates as well as investors’ optimism over potential tax reforms should continue to support banking stocks. This perception has already made the sector favorite among investors. So stocks delivering solid Q3 earnings performance will attract significant investors’ attention.

In addition to the benefits from rising interest rates, a moderate improvement in lending compared with last year — particularly in the areas of commercial and consumer — might energize interest income for banks. Further, credit quality is anticipated to remain strong, backed by an improving economy and conservative underwriting standards.

Though banks will likely remain under pressure due to lackluster fixed-income trading activities on low volatility during the third quarter, continued momentum in investment banking business and the cost-containment efforts should continue to support the bottom-line numbers.

Here, we present a handful of stocks that are expected to generate solid returns on their Q3 numbers that are expected to be robust on both top and bottom lines.

Selecting the Winning Stocks

We have taken the help of the Zacks Stock Screener to shortlist banking stocks with a Zacks Rank #1 (Strong Buy) or #2 (Buy). Then we shortlisted stocks that are expected to report more than 5% year-over-year growth in EPS and revenues in Q3.

Here are the top six bank stocks that passed the screen:

Southern Pines, NC-based First Bancorp FBNC is a banking products and services provider for individuals and small to medium-sized businesses, mainly in North Carolina and northeastern South Carolina.

Zacks Rank: #2
Market Cap: $849.2 million
Projected Q3 EPS Growth: 25.8%
Projected Q3 Sales Growth: 28.8%

You can see the complete list of today’s Zacks #1 Rank stocks here.

Heritage Commerce Corp HTBK, headquartered in San Jose, CA, is engaged in providing commercial and personal banking services to residents, and the business or professional community in California.

Zacks Rank: #2
Market Cap: $542.6 million
Projected Q3 EPS Growth: 15.8%
Projected Q3 Sales Growth: 5.3%

Howard Bancorp, Inc. HBMD, headquartered in Ellicott City, MD, is a bank holding company for Howard Bank, providing various commercial banking, mortgage banking, and consumer finance products and services to businesses, business owners, professionals, and other consumers in Maryland.

Zacks Rank: #1
Market Cap: $205.1 million
Projected Q3 EPS Growth: 100%
Projected Q3 Sales Growth: 9.1%

Birmingham, AL-based National Commerce Corporation NCOM operates as the bank holding company for National Bank of Commerce, providing various financial services to individuals, businesses, business owners and professionals.

Zacks Rank: #2
Market Cap: $602.2 million
Projected Q3 EPS Growth: 14.8%
Projected Q3 Sales Growth: 34.6%

Pinnacle Financial Partners, Inc. PNFP, headquartered in Nashville, TN, is engaged in providing various banking products and services in the United States. It serves individuals, small-to medium-sized businesses, and professional entities.

Zacks Rank: #2
Market Cap: $5.2 billion
Projected Q3 EPS Growth: 13.6%
Projected Q3 Sales Growth: 43.7%

Triumph Bancorp, Inc. TBK, headquartered in Dallas, TX, is engaged in providing banking and commercial finance products and services to businesses in the United States.

Zacks Rank: #1
Market Cap: $666.5 million
Projected Q3 EPS Growth: 44.7%
Projected Q3 Sales Growth: 29.7%

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