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Raymond James upgrades UMB Financial; J.J.B. Hilliard upgrades Renasant


Raymond James analyst David Long upgraded Kansas City, Mo.-basedUMB Financial Corp. to"market perform" from "underperform," following the company'searnings release.

The analyst also raised his 2016 and 2017 non-GAAP EPS estimatesto $2.98 from $2.86, and $3.25 from $3.11, respectively, because of higher net interestincome from a wider net interest margin.

He also raised his 2016 and 2017 GAAP EPS estimates to $2.90from $2.70 and $3.23 from $3.11, respectively.

Long noted that the company's strong performance during its SNCreview of energy-related credits did not result in an energy-related reserve build,and a wider net interest margin led to an improved estimate for net interest income.

In addition, the analyst believes that the company's relativelystrong loan growth, conservative underwriting profile, and asset servicing and managementbusinesses imply a premium valuation for the company. However, as UMB Financialis currently trading at a 20%-plus premium to its peers based on the 2016 EPS estimate,he believes that the company shares are appropriately valued.

J.J.B. Hilliard W.L. Lyons LLC analyst Andrew Stapp upgradedTupelo, Miss.-based Renasant "buy" from "long-term buy," and also increased his 12-monthprice target to $38 from $35.

The analyst also raised his 2016 and 2017 operating EPS estimatesto $2.34 and $2.57 from $2.30 and $2.54, respectively.

Stapp noted that the company reported robust legacy loan growth,along with extremely strong growth in non-acquired loans. In addition, the companyreported an increase of $1.9 million in operating noninterest income, sequentially,to $33.4 million, which beat the analyst's estimate of $32.0 million. Stapp notedthat the increase was primarily driven by a $1.3 million increase in "other"noninterest income, which is volatile. Furthermore, the company's nonperformingassets to assets ratio, excluding acquired and covered assets, fell 4 basis pointsto 0.34%, while the net charge-off ratio was unchanged at 0.10%.


Stapp downgraded Louisville, Ky.-based Republic Bancorp Inc. to "neutral" from "long-termbuy," purely on valuation.

However he increased his 12-month price target to $29 from $26.

Meanwhile, the analyst maintained his 2016 operating EPS estimateat $1.84 and increased his 2017 operating EPS estimate to $2.06 from $2.03.

Stapp lowered his rating for the company solely based on valuation.He noted in his research note that the company reported first-quarter GAAP and operatingEPS of 85 cents, which substantially beat his estimate of 73 cents. In addition,he noted that the company's net interest income rose $10.4 million year over yearto $39.4 million, primarily because of a 12.9% rise in average earning assets, andexpanded its net interest margin by 74 basis points to 3.78%. Both metrics alsobeat analyst estimates during the quarter.

Raymond James analyst Michael Rose downgraded Jacksonville, Fla.-basedEverBank Financial Corpto "outperform" from "strong buy," following the company's earningsrelease that met the consensus estimates on an operating basis.

The analyst also lowered his 2016 and 2017 EPS estimates to $1.42and $1.55 from $1.44 and $1.63, respectively, reflecting a lower net interest marginand a reduction in the analyst's projected loan and balance sheet growth projections.

"While we continue to view the risk/reward dynamic positivelygiven its attractive relative valuation and improvement in profitability (ROTCEgoal of 10-13%) from ongoing positive operating leverage, our reduced earnings forecastsand less than the required upside to maintain our prior rating render a less constructivestance to EVER shares, in our view," Rose wrote in his research note.

In addition, the analyst noted that the company reported a 10%increase in period-end loans held for investment on an annual basis, because ofincreases in home equity lines and mortgage warehouse finance. However, the company'sloan growth missed his projections, which, when combined with its outlook to sellmore of its production, resulted in lower estimates.

Keefe Bruyette & Woods Inc. transferred coverage of Pasadena,Calif.-based East West Bancorp analyst Christopher McGratty, who lowered his company rating to "marketperform" from "outperform," and decreased his price target to $41from $44.

However, McGratty raised his 2016 and 2017 EPS estimates to $2.87and $3.05, from to $2.80 and $2.90, respectively.

The analyst noted that the company is highly profitable, nichefocused and shareholder friendly, all of which supports long-term value creation.However, ongoing expense pressures, a regulatory order, and some negative sentimentsabout growth in China, are currently overshadowing these positive characteristics.

"Though the narrative on expenses has improved since January,so too have the company's absolute and relative valuations, and the next significantcatalyst—full regulatory resolution—is likely a 2017 event. This, along with a morebalanced risk-reward, takes us to Market Perform as we transfer coverage,"McGratty wrote in his research note.