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Sandler, FIG Partners upgrade Ameris Bancorp following deal news

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Sandler, FIG Partners upgrade Ameris Bancorp following deal news

Upgrades

Stephens Inc. analyst Matt Olney upgraded Lafayette, La.-based IBERIABANK Corp.'s stock rating to "overweight" from "equal-weight" and increased the price target to $85 from $78.

Olney believes that IBERIABANK is redirecting its strategy toward capital return to shareholders through increased dividends and common share buyback activity.

He expects a total payout ratio of more than 60%, if the bank executes its 2019 share buyback program fully. On a year-over-year basis, the earnings per share growth is expected to be 10% in 2019, and 4% in 2020.

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Olney upgraded Kansas City, Mo.-based UMB Financial Corp.'s stock rating to "overweight" from "equal-weight" and increased the price target to $75 from $70.

The analyst wrote that the company screens favorably due to its historical credit quality, capital return to stockholders, fee income and liquidity. The company has responded to the revenue challenges that it has within its various fee income businesses, by investing in multiple fee businesses. The analyst thinks that UMB's financial results will stabilize and show improvement.

On a year-over-year basis, the EPS growth is expected to be 3% in 2019, and 5% in 2020.

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The analyst upgraded Mount Pleasant, Texas-based Guaranty Bancshares Inc.'s stock rating to "overweight" from "equal-weight" and increased the price target to $34 from $31.

According to Olney, the company's profitability continues to increase, as it is expected to move toward its return on assets goal of 1.20% by late 2019.

On a year-over-year basis, the EPS growth is expected to be 23% in 2019, backed by the cost saves from the recent acquisition of Katy, Texas-based Westbound Bank.

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Lana Chan of BMO Capital Markets upgraded San Rafael, Calif.-based Westamerica Bancorp.'s stock rating to "market perform" from "underperform" and raised the price target to $52 from $47.

The analyst wrote that the company might not face significant credit issues during market deterioration, because its outstanding loans have shrunk to $1.2 billion, from $3 billion in 2009. Also, the company has good capital and loan loss reserves.

The analyst wrote that Westamerica may even be strong enough to begin making acquisitions during a downturn.

Chan's EPS estimates for Westamerica are $2.93 for 2019 and $3.15 for 2020.

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Casey Whitman of Sandler O'Neill & Partners upgraded Moultrie, Ga.-based Ameris Bancorp's stock rating to "buy" from "hold" and lowered the price target to $41 from $48, following the company's deal announcement for Atlanta-based Fidelity Southern Corp.

In Whitman's view, the deal makes sense for Ameris, strategically and financially. The analyst also wrote that the deal adds significant franchise value to the company.

Analyzing Ameris in light of the next credit cycle, the analyst wrote that the company's average loan size is pretty small, at $207,000, and the company has worked to diversify its portfolio.

Whitman lowered the 2019 EPS estimate to $4.08, because the "acquisition should be modestly dilutive before the cost saves are fully realized." The analyst set a 2020 EPS estimate of $4.79.

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FIG Partners analyst Christopher Marinac upgraded Ameris' stock rating to "outperform" with a new price target of $42.50, after the Fidelity Southern deal news.

Marinac wrote that the acquisition is a "superb addition of low-cost, highly core deposits with deep and irreplaceable footprint in the [Atlanta metropolitan statistical area]."

The analyst wrote that Ameris has significant opportunities to generate future deposits, loans, and new revenue from Fidelity Southern customers.

Marinac's EPS estimates for Ameris are $4.18 for 2019 and $4.82 for 2020.