NEW YORK (TheStreet) -- National Penn Bancshares (NPBC) shares are up 16.85% to $12.76 in mid-morning trading on Tuesday, after the bank agreed to be bought by BB&T (BBT) - Get BB&T Corporation Report for $1.8 billion.
Winston Salem, NC-based BB&T said that the purchase will "significantly expand BB&T's footprint in the Mid-Atlantic region", and make the company the fourth largest bank in the state of Pennsylvania.
National Penn Bancshares has branches across the mid-Atlantic region in Pennsylvania, New Jersey and Maryland with $9.6 billion in assets and $6.7 billion in deposits.
Earlier this summer, BB&T closed the purchases of Bank of Kentucky Financial and Susquehanna Bancshares.
The company said that the National Penn purchase is expected to close in the middle of next year.
TheDeal has further coverage of the purchase here.
Separately, TheStreet Ratings team rates NATIONAL PENN BANCSHARES INC as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:
"We rate NATIONAL PENN BANCSHARES INC (NPBC) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in net income, increase in stock price during the past year, expanding profit margins and notable return on equity. We feel its strengths outweigh the fact that the company shows weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- NPBC's revenue growth has slightly outpaced the industry average of 3.0%. Since the same quarter one year prior, revenues slightly increased by 5.5%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
- NATIONAL PENN BANCSHARES INC reported flat earnings per share in the most recent quarter. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, NATIONAL PENN BANCSHARES INC increased its bottom line by earning $0.70 versus $0.37 in the prior year. This year, the market expects an improvement in earnings ($0.77 versus $0.70).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Commercial Banks industry average. The net income increased by 4.0% when compared to the same quarter one year prior, going from $26.20 million to $27.24 million.
- Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- The gross profit margin for NATIONAL PENN BANCSHARES INC is currently very high, coming in at 90.43%. Regardless of NPBC's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, NPBC's net profit margin of 27.20% compares favorably to the industry average.
- You can view the full analysis from the report here: NPBC Ratings Report