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Raymond James downgrades The Bancorp


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Raymond James downgrades The Bancorp


* Raymond James analyst William Wallace IV downgraded The Bancorp Inc. from "strong buy" to "market perform" due to credit losses continuing in the 2016 fourth quarter, for which Wallace estimated a consolidated net loss of $16.5 million.

He believes the Wilmington, Del.-based company might need to raise more capital to reach its Tier 1 leverage ratio target of 8.5% to 9%. In the fourth quarter of 2016, Wallace said the company's Tier 1 leverage ratio fell from 7.4% to 7.1%. "Given the increased likelihood of a capital raise following another quarter of significant credit marks, we do not believe having a positive bias on shares is appropriate," he wrote.

Wallace noted the company currently trades at 1.0x 2016 third-quarter tangible book value of $6.01, 15.0x the 2017 EPS estimate and 7.8x the 2018 EPS estimate.

* FIG Partners analyst Timothy Coffey downgraded Eugene, Ore.-based Pacific Continental Corp. from "outperform" to "market perform."

The analyst said the company's reported 2016 fourth-quarter EPS of 30 cents is up from his estimate of 21 cents and from the consensus, ex-FIG Partners, estimate of 26 cents. He attributed this earnings beat to a stronger-than-expected spread income. Coffey also estimated the company's core EPS to be at 33 cents.

The analyst also lowered his price target to $25.50 from $28.50 in connection to the company's pending merger with Tacoma, Wash.-based Columbia Banking System Inc., which is set to close mid-2017. Coffey believes the new price target accounts for Columbia Banking's lower stock price since the deal announcement.


* J.J.B. Hilliard W.L. Lyons LLC analyst Andrew Stapp upgraded Jasper, Ind.-based German American Bancorp Inc. to "neutral" from "underperform", citing valuation. He also lowered his price target to $47 from $49.

The analyst said the company reported 2016 fourth-quarter operating EPS of 64 cents, which was a cent lower than his estimate but a cent higher than Street estimate. Also, the company's net income increased to $24.9 million. Its operating noninterest income came in at $7.8 million, up from Stapp's estimate of $7.5 million, but 1.5% lower than the previous quarter. On the other hand, operating noninterest expenses increased 3.8% linked-quarter to $19.4 million, while end-of-period loans fell 0.6% linked-quarter.

* Merion Capital Group analyst Joe Gladue upgraded Bryn Mawr, Pa.-based Bryn Mawr Bank Corp. from "neutral" to "outperform" due to valuation. He also increased his price target to $46 from $43.

Gladue thinks the company's pending merger with Royal Bancshares of Pennsylvania Inc. is a good fit geographically as it will strengthen the company's reach in the new markets. He also thinks the company can consolidate branches and cut costs.

With the two companies having similar loan portfolios, the analyst thinks Bryn Mawr can further improve profitability of acquired operations and also cut expenses.


* At Raymond James, analyst William Wallace IV initiated coverage of Howard Bancorp Inc. at "strong buy," with the price target set at $20.

Wallace believes the company can drive strong organic loan growth through 2018, as well as a stronger operating leverage and profitability. He also noted that the company is well-positioned in attractive markets that can further offer growth. Wallace projected the company's strong credit metric to continue.

The analyst set the price target at $20.