Parents of younger kids will probably relate to the idea of buying clothes with the expectation that they'll "grow into them" relatively soon. You could say that Park Sterling (NASDAQ:PSTB) has followed a similar strategy with its staffing and spending in recent years - absorbing higher costs and generating lower returns than its peers, but laying the foundation to leverage strong lending growth in the coming years.
Park Sterling has shown that it means to grow through both organic and inorganic channels. The company has added capabilities in residential construction lending, trust management, capital markets and other segments, while also hiring banking teams to drive lending growth. At the same time, the company has executed three sizable whole-bank acquisitions to grow its footprint from Georgia to Virginia. Although the shares do not look like significantly undervalued today, current holders and/or more aggressive buyers can at least look to potential for greater than expected loan growth and better cost leverage to drive higher estimates and valuations down the line.
Park Sterling Poised For Strong Growth