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Sandler O'Neill upgrades MidSouth Bancorp, Regions Financial, First Bancorp


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Sandler O'Neill upgrades MidSouth Bancorp, Regions Financial, First Bancorp


Stephen Scouten from Sandler O'Neill & Partners upgraded Birmingham, Ala.-based Regions Financial Corp.'s stock rating to "buy" from "hold" and gave it a price target of $17.00 per share.

Scouten wrote that the company has room to slowly grow loans in the coming years, maintain its net interest margin in the current range, grow fees from the fourth quarter of 2018 and deliver positive year-over-year operating leverage.

He also wrote that Regions would be an attractive M&A target in the Southeast.

Scouten's EPS estimates for Regions are $1.55 for 2019, $1.65 for 2020 and $1.80 for 2021.


Scouten also upgraded Lafayette, La.-based MidSouth Bancorp Inc.'s stock rating to "buy" from "hold" and raised its price target to $13.00 from $12.50.

He wrote that MidSouth Bancorp seems positioned to stabilize and grow later in 2019. He also sees continued progress in balance sheet cleanup and structural and procedural remediation within the bank. MidSouth Bancorp's clearest path to a higher valuation is an acquisition, Scouten said, and he sees that happening in 2020.

Scouten's EPS estimates for MidSouth Bancorp are 36 cents for 2019 and 60 cents for 2020.


The analyst also upgraded Southern Pines, N.C.-based First Bancorp's stock rating to "buy" from "hold" with a price target of $39.00.

Scouten wrote that the company's low-cost deposits and fixed-rate heavy loan book should allow for solid performance in any interest rate environment. He also wrote that the company's strong returns allow for more capital returns.

According to the analyst, First Bancorp benefits from, among other things, scarcity value in solid geographical markets, low-cost deposits and capital flexibility with a $25 million outstanding buyback in place.

His EPS estimates for First Bancorp are $3.10 for 2019 and $3.25 for 2020.