First Bancshares An Emerging Growth Story Worth Considering

Bank stocks aren't typically thought of as growth stocks, and that is not unfair, given that quality banks like BB&T (NYSE:BBT) and PNC (NYSE:PNC) probably aren't going to see long-term organic earnings growth much above 5% to 6%. If you're willing to go much smaller, though, and take on meaningfully higher execution risk, you can find some more interesting stories, and I think First Bancshares (NASDAQ:FBMS) is one such story. 

Management has executed on a focused growth plan since 2009, using organic expansion and targeted acquisitions to move into desirable markets in Louisiana, Alabama, and Northern Florida. With the company closing in on $2 billion in assets and meaningful potential operating leverage, not to mention future M&A options, I believe First Bancshares could be looking at high-teens earnings growth over the next three to five years, justifying a fair value in the low-to-mid $30s. Do note, though, that this is a small, off-the-radar bank stock and carries above-average risks.

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First Bancshares An Emerging Growth Story Worth Considering