NEW YORK (TheStreet) -- 1st United Bancorp (FUBC) shares are up 9.7% to $8.02 on Thursday after it was announced that the company agreed to acquisition terms with Valley National Bancorp (VLY - Get Report).
1st United common share holders will receive 89 cents per share of common stock subject to adjustments past the $8.09 to $12.13 FUBC stock price range. The deal is valued at $312 million.
The transaction is expected to close in the fourth quarter this fiscal year.
TheStreet Ratings team rates 1ST UNITED BANCORP INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate 1ST UNITED BANCORP INC (FUBC) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth, compelling growth in net income, expanding profit margins and increase in stock price during the past year. We feel these strengths outweigh the fact that the company shows weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 11.5%. Since the same quarter one year prior, revenues slightly increased by 9.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- 1ST UNITED BANCORP INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, 1ST UNITED BANCORP INC increased its bottom line by earning $0.20 versus $0.15 in the prior year. This year, the market expects an improvement in earnings ($0.37 versus $0.20).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Commercial Banks industry. The net income increased by 65.8% when compared to the same quarter one year prior, rising from $1.62 million to $2.69 million.
- The gross profit margin for 1ST UNITED BANCORP INC is currently very high, coming in at 93.49%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 14.68% is above that of the industry average.
- Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.
- You can view the full analysis from the report here: FUBC Ratings Report