First Reliance Bancshares Inc. FSRL shares rallied 20.3% in the last trading session to close at $18.35. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 5.2% gain over the past four weeks.
Shares of FSRL gained yesterday after the company signed a merger agreement with Colony Bankcorp for the latter to acquire 100% of the stock of First Reliance in a stock-and-cash transaction worth $163 million. Per the terms of the deal, each First Reliance shareholder will have the right to elect to receive either $19.75 in cash or 0.94 of a share of Colony’s common stock in exchange for each share of First Reliance common stock, subject to customary proration and allocation procedures such that approximately 20% of First Reliance common stock will be converted to cash consideration and the remaining 80% will be converted to Colony common stock.
The deal is expected to be completed in the fourth quarter of 2026, subject to regulatory approvals, shareholder approval, and other customary closing conditions.
This company is expected to post quarterly earnings of $0.40 per share in its upcoming report, which represents a year-over-year change of +48.2%. Revenues are expected to be $13.14 million, down 5.6% from the year-ago quarter.
Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.
For First Reliance Bancshares, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on FSRL going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
First Reliance Bancshares is a member of the Zacks Banks - Southeast industry. One other stock in the same industry, Third Coast Bancshares, Inc. TCBX, finished the last trading session 0.7% lower at $40.35. TCBX has returned 5.8% over the past month.
Third Coast Bancshares' consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.88. Compared to the company's year-ago EPS, this represents a change of -8.3%. Third Coast Bancshares currently boasts a Zacks Rank of #3 (Hold).
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This article originally published on Zacks Investment Research (zacks.com).