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FIG Partners upgrades Great Southern Bancorp; Raymond James downgrades First of Long Island

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FIG Partners upgrades Great Southern Bancorp; Raymond James downgrades First of Long Island

Upgrade

FIG Partners analyst John Rodis upgraded Springfield, Mo.-basedGreat Southern Bancorp Inc.'srating to "outperform" from "market perform," with the targetprice maintained at $46.

The analyst also maintained the company's 2016 and 2017 EPS estimatesat $3.21 and $3.45, respectively.

Year-to-date, the company's shares have declined 16%, while underperformingits peers, but from an operational perspective, nothing has changed; Great Southern'score fundamentals remain sound and the first-quarter results were in line with expectations, said Rodis.

The analyst also underscored the company's solid capital levels,good core loan growth and stable credit quality.

Downgrades

Raymond James analyst William Wallace IV downgraded Glen Head,N.Y.-based First of Long Island Corp.to "market perform" from "outperform," following first-quarterearnings, which, "exceededexpectations, though with a provision expense well below [his] model," theanalyst wrote in a report.

Wallace increased his 2016 EPS estimates to $2.10 from $2.05but maintained his 2017 EPS estimate of $2.35.

The analyst highlighted the company's spread revenue, with assetgrowth performing better than expected and a margin that was slightly better thanexpected. Wallace also noted that First of Long Island maintained favorable resultsfrom previous quarters, with loan balances growing 2.7% quarter over quarter, abit more than the analyst's 2.5% estimate.

He noted that while the company's organic growth opportunitiesremain strong, given the strong demand of loan growth in its generally stable markets,and that it still remains a "safe-haven name" that will go on to driveabove-peer profitability levels, "we do not see much upside from current levels,"said Wallace.


FIG Partners analyst David Bishop lowered his rating of Bridgehampton,N.Y.-based Bridge Bancorp Inc.to "market perform" from "outperform" and cut his target priceto $33 from $34.

Bishop also lowered his 2016 and 2017 EPS estimates to $2.13and $2.40, respectively. The decrease is attributed to higher , about $5 million more, than previouslymodeled.

The analyst said he continues to forecast ROA moving toward 100basis points. But because of lowered earnings expectations, the analyst now expectscore ROA to run "slightly below this level during 2016 and 2017."

Wallace said Bridge Bancorp could look into its still-in-placeshelf offering as a meansto boost capital. He added, "Management notes that it could also begin to temperthe securities portfolio that has risen about 3% as a percent of earning assetsof late. While de-pressing total income, this runoff could help buoy the net interestmargin in the flat yield curve environment and our revised model contemplates lessoverall asset growth (we model stabilization in the TCE ratio at 6.3%)."

Initiation

Wells Fargo Securities senior analyst Jared Shaw initiated coverageof Banc of California Inc.,with an "outperform" rating and a valuation range of $23-$25.

Shaw's 2016 and 2017 EPS estimates are $1.70 and $2.00, respectively.

The analyst credited the Banc of California's compounded 70%asset growth since 2011 to talent acquisition, created by a shift in competition.

"With profitability ratios already ahead of peers, we believethat fully leveraging the expense base will result in industry leading metrics, supportingour Outperform thesis," noted Shaw.

Notable reiterations

Daniel Cardenas, a Raymond James analyst, reiterated his ratingfor Iowa City, Iowa-based MidWestOneFinancial Group Inc. of "outperform," as well as his targetprice of $32, following first-quarter results.

The analyst lowered 2016 and 2017 EPS estimates to $2.50 from$2.63 and to $2.85 from $2.95, respectively.

Cardenas wrote positively about the company's efforts following its completion, as well as about this quarter's results, butadded that further work is still recommended since expense reductions and fee-basedrevenue contributions are coming in slower than expected.

"Nevertheless, we think the framework is in place for strongerearnings power down the road as we continue to think the company is doing a soundjob of navigating through a challenging operating environment while building profitability,"said Cardenas.


FIG Partners' Bishop reiterated his rating for Riverhead, N.Y.-basedSuffolk Bancorp of "outperform"and lowered his target price to $28 from $29.

Bishop also decreased his 2016 and 2017 EPS estimates to $1.67from $1.68 and to $1.81 from $1.94, respectively.

Amid market and regulatory challenges, the analyst said SuffolkBancorp continues to performstrongly, noting the company's positive showing in terms of loan growth, asset qualityand expense discipline.

According to the analyst, the company is expecting the OCC toimplement minimum capital ratios: Tier 1 leverage of at least 9% (currently at 9.30%at March 31, 2016), Tier 1 risk-based capital of 11% (now at 11.21%) and total risk-basedcapital of 12% (now at 12.38%). Bishop said the company is well-capitalized andadded that after speaking with management, a capital raise through subordinateddebt is in the offing.

The analyst noted, "To maintain capital adequacy, we nowmodel a lower rate of loan growth and assume the company raises $25 million of subordinateddebt to bolster regulatory capital … during the latter part of [the second quarter]."