Upgrades
* Hovde Group analyst Kevin Fitzsimmons upgraded First Community Corp. to "outperform" from "market perform" due to valuation, which he thinks is "relatively attractive."
Fitzsimmons wrote that the company experienced healthy loan growth during the 2016 fourth quarter and he expects low-double-digit loan growth in 2017.
He said he liked the company's franchise composition — a steadily growing but less competitive market around metro Columbia, S.C., and its fast-growing new markets in Augusta and Greenville — and believes the company can become a good alternative to super-regional banks.
Fitzsimmons increased his price target to $21 from $20.
* FBR & Co. analyst Christopher Nolan upgraded First NBC Bank Holding Co. to "market perform" from "underperform."
The analyst noted that the company's share price had dropped 40% since Dec. 14, 2016. He thinks First NBC's share price is "volatile" as the company prepares for a recapitalization of approximately $250 million. He believes the company can successfully recapitalize itself while preserving its $253 million deferred tax asset. However, Nolan said the outlook for a recapitalized First NBC remains uncertain.
Nolan also believes the $250 million capital raise, as well as previously announced partial sales of the company's loans, branches and deposits, will result in a smaller earning asset base for the company.
He projected the capital raise to be executed in multiple steps, including further writedowns to tangible book value/share due to executive moves in the company, offering of equity rights, and issuing of holding company preferred equity, among others.
Nolan also projected that lowered corporate taxes would impact the value of the company's deferred tax asset by $106 million. He also thinks tax reforms could affect the company's tax credit-generating business.
The analyst maintained his price target of $5.
Downgrade
* Meanwhile, Sandler O'Neill & Partners analyst Stephen Scouten downgraded Community Trust Bancorp Inc. to "sell" from "hold" due to valuation. He decreased his price target to $44.50 from $46.
Scouten thinks the company's shares are trading too high and that the price is unwarranted given the lack of outsized loan, earnings or tangible-book-value growth. The company trades at around 15.8x his 2018 estimates, as compared to its normal trading range between 13.5x and 14.5x year-out earnings.
He also believes the company's unresolved regulatory issues will negatively impact the company. He said that until these regulatory issues are fully addressed, the shares will remain "somewhat under-owned by investors."
Article amended at 8:53 p.m. ET on Jan. 19, 2017, to indicate that Sandler O'Neill & Partners analyst Stephen Scouten downgraded Community Trust Bancorp Inc. to "sell" from "hold."