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FIG Partners initiates Berkshire Hills Bancorp, First Connecticut

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FIG Partners initiates Berkshire Hills Bancorp, First Connecticut

Initiations

FIGPartners analyst David Bishop on May 4 initiated coverage of Pittsfield,Mass.-based Berkshire HillsBancorp Inc. with a rating of "market perform," and aprice target of $29.

His 2016and 2017 EPS estimates are $2.23 and $2.31, respectively.

Accordingto Bishop, the company's shares are fairly valued from a price-to-tangible bookvalue perspective relative to peers.

The analystsaid, "The company continues to target double digit commercial loan growthwithin its Central New York/New England footprint and the steady build intangible capital towards the 8% level (near the high end of management's targetrange) leaves the bank well positioned to continue pursuing accretiveacquisitions."

Bishopnoted that commercial-centric investments and acquisitions have raisedBerkshire Hills Bancorp's average loan yield but also likely increased theriskiness of the portfolio, given the underlying assets in the loans. Theanalyst named the 2015 acquisition of Firestone Financial LLC as one of those .


Bishop alsoinitiated coverage of Farmington, Conn.-based with a"market perform" rating, and a target price of $18.50, followingfirst-quarterresults.

Bishop's2016 and 2017 EPS estimates are 95 cents and $1.19, respectively.

The analystprojects First Connecticut Bancorp's tangible book value to grow by about 4.6%on average during the next two years, with a stable dividend and continued useof the bank's repurchase program. Bishop noted the company's dividend increasedto 7 cents per share and projects another penny increase in 2017.

Bishop observedthat management is still conservative in its lending stance, and with cautiousguidance to loan growth considering highly competitive price structuring in themarket, the analyst projects modest loan expansion at $120 million, which isbelow management's guidance of $150 million. But the analyst predicts higherdeposit growth, at $215 million, compared to management's guidance of $175million.


Boenning& Scattergood analyst Scott Beury initiated coverage of with a rating of"neutral."

His 2016and 2017 EPS estimates are 95 cents and $1.06, respectively.

Beuryconsiders Independent Bank a well-run community banking institution, with astrong presence in Michigan. He said the bank has been able to makeconservative efforts toward loan growth, improve its asset quality metrics andtake a prudent approach to managing capital excess.

Even so,the analyst said, "(We) believe the company's modest growth outlookcreates a longer runway for the rapid bottom line expansion necessary towarrant sustained outperformance in the stock."

Accordingto the analyst, the company is poised to take share from competitors because ofa strong core deposit franchise and relatively low loan-to-deposit ratio, whichis at 73% as of March 31.

After itsrecent buybackauthorization, the analyst also expects Independent Bank to continue theprogram through 2016 but on a lesser scale than in 2015.

Reiterations

Raymond James analyst William Wallace on May 4 reiterated a "marketperform" rating for Wheeling, W.Va.-based , following the plannedacquisition of NewAlbany, Ind.-based Your CommunityBankshares Inc.

The analyst raised his 2016 and 2017 operating EPS estimates to $2.27from $2.25 and to $2.50 from $2.35, respectively.

The analystadded that, at closing, WesBanco plans to shrink its balance sheet to under$10 billion.

"Weexpect the company will hold below $10 billion in assets over the next severalquarters as it continues to build out its compliance infrastructure for moreonerous regulatory requirements before eventually looking to make the jumpthrough another $1-2 billion acquisition," said Wallace.