Compass Point Reiterates a 'Buy' on Provident Financial Holdings; PROVing to be a Winner

August 2, 2012 11:15 AM EDT
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Price: $18.80 -0.79%

Rating Summary:
    0 Buy, 5 Hold, 0 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 30 | Down: 30 | New: 23
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Compass Point reiterates a 'Buy' on Provident Financial Holdings (NASDAQ: PROV) price target of $14.00 (from $13.00).

Analyst, Jason Stewart, said, "PROV reported June quarterly earnings (4Q12) of $0.39 per share versus consensus expectations of $0.26. This strong performance was driven once again by mortgage banking. Mortgage production volumes jumped 26% QoQ and gain on sale margins came in at a cycle peak. Core balance sheet growth remains elusive, however. NIM was boosted by 28bps QoQ as the company held a higher average balance of loans available for sale during the quarter. PROV continues to return capital to shareholders (raised Sept dividend)...With excess capital and strong mortgage banking tailwinds we believe PROV shares remain undervalued."

"We are increasing our CY12 EPS estimate to $01.32 from $0.84...We are also increasing our CY13 EPS estimate to $1.08 from $0.96 as we expect to see sustainably higher volumes in mortgage banking, driven by the three new northen California production offices, offset by lower net interest margins and lower loan growth."

For an analyst ratings summary and ratings history on Provident Financial Holdings click here. For more ratings news on Provident Financial Holdings click here.

Shares of Provident Financial Holdings closed at $12.19 yesterday.

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