Upgrades
* FIG Partners' Timothy Coffey upgraded Heritage Financial Corp.'s stock rating to "outperform." It was previously "market perform."
The analyst had earlier lifted his EPS growth projections for the Olympia, Wash.-based company, on expectations that it will seek out more opportunities after closing the Puget Sound Bancorp Inc. deal. Heritage had received regulatory approval earlier than anticipated, and Coffey calculates the stock price has risen almost 30% since the deal announcement.
Coffey also raised the price target by $4 to $34.
* UBS' Saul Martinez released a Dec. 11 report quantifying the benefits of the now "very likely" tax reform. Citizens Financial Group Inc., Regions Financial Corp. and M&T Bank Corp. are projected to benefit the most, the analyst said, triggering stock rating upgrades for Regions and M&T to "neutral" from "sell."
Martinez also raised Regions' price target by $3 to $18 and M&T's by $23 to $173.
SunTrust Banks Inc. received an upgrade as well — to "buy" from "neutral" — with the price target lifted to $73 from $62.
Downgrade
* Martinez's report concluded that KeyCorp and U.S. Bancorp would benefit the least from tax reform.
He downgraded U.S. Bancorp's stock rating to "neutral" from "buy," but raised the price target by $2 to $60.
* Keefe Bruyette & Woods now covers Marlin Business Services Corp.
Nicholas Grant on Dec. 11 rated the stock "outperform" and gave it a $26 price target, in light of the company's "Marlin 2.0" initiative and the accompanying "period of significant change" as it focuses on achieving a return on equity of more than 20% by 2020.
Grant expects this push to translate into earnings growth of 20% in 2018, 27% in 2019 and 28% in 2020.
The analyst also noted the "important distinction" of Mount Laurel, N.J.-based Marlin primarily being a commercial finance company that uses its bank subsidiary as a tool, as opposed to being a bank specializing in commercial finance. Its balance sheet gives it "optionality and flexibility" in catering to the historically underserved small- to medium-sized business segment, the analyst wrote, as well as a "significant advantage" over the large banks and fintech firms it competes with in the space.
Industry report
* Piper Jaffray analysts did another study on potential earnings gains through branch closings. Their review considered metropolitan and micropolitan statistical areas, ranked by population density and urban working population, as well as occupancy and equipment expense.
The analysts estimated that potentially redundant branches make up an average 14% of the total networks of Southside Bancshares Inc., Bank of Hawaii Corp., Popular Inc., Hilltop Holdings Inc. and First Financial Bankshares Inc.
Closing those redundant branches could improve earnings by about 5% on average for Popular and Hilltop, among others, they said.
