trending Market Intelligence /marketintelligence/en/news-insights/trending/xnVeni-8Q5tq4y6tRvXiWQ2 content esgSubNav
In This List

Piper Jaffray updates conviction list; Raymond James rates TriState Capital

Video

S&P Capital IQ Pro | Unrivaled Sector Coverage

Video

S&P Capital IQ Pro | Powering Your Edge

Podcast

Street Talk Episode 81: Amid strong recovery, Banc of California hearing more M&A chatter

Blog

Banking Essentials Newsletter: September Edition


Piper Jaffray updates conviction list; Raymond James rates TriState Capital

Initiation

* Raymond James now covers TriState Capital Holdings Inc.

Daniel Cardenas gave the stock an "outperform" rating and a price target of $28.

Loans have seen a compound annual growth rate of 20% since 2012, Cardenas noted, and its investment management arm brings in almost a third of operating revenue. Both investment management and commercial banking have yet to saturate their markets, and TriState's "scalable" branchless banking model "should lead to increasing operating leverage."

Cardenas also pointed out that the Pittsburgh-based bank's focus on treasury management should improve its deposit mix.

Coverage resumed

* B. Riley FBR's Steve Moss has resumed coverage of Customers Bancorp Inc., with a "buy" rating and a $35 price target.

A recent pullback in the stock means Customers currently "trades at a sharp discount to peers," Moss wrote, arguing the price fails to account for the potential earnings growth and visibility after the BankMobile spinoff.

Moss also projects that the Wyomissing, Pa.-based company will hold a $50 million common equity offering to meet its targets.

Notable reiterations

* Sandler O'Neill & Partners analysts reported on M&A commentary from discussions with various bank management teams.

Southern Missouri Bancorp Inc. is looking at banks with $200 million to $1 billion in assets and could go higher, Andrew Liesch said, citing CEO Greg Steffens. The Poplar Bluff, Mo.-based company is planning to expand to Kansas City, St. Louis and Columbia.

Liesch noted Southern Missouri's targets do not "typically [have] many logical acquirers," and that the bank can therefore afford to stay diligent in terms of pricing.

He kept Southern Missouri's "buy" rating and increased the price target by a dollar to $43.

Peter Ruiz on Dec. 8 reported on Charter Financial Corp.'s interest in Atlanta deals, "given the somewhat sluggish mid-single digit organic growth outlook." Its acquisition targets preferably have $200 million to $600 million in assets.

Ruiz noted, however, the company's currency may be too weak for an acquisition. The analyst added that Charter Financial's management seems willing to consider a sale.

Ruiz has a "buy" rating on West Point, Ga.-based Charter Financial and a $21 price target.

Aaron James Deer kept his "buy" rating on Los Angeles' RBB Bancorp and raised the price target by a dollar to $29.

In a Dec. 8 report, Deer reiterated his views on RBB's acquisitiveness. The company disclosed that it would like a San Francisco deal by mid-2018, and if none is struck, may pursue a de novo effort in the market instead. Competition from larger acquirers in its niche, such as East West Bancorp Inc. and Cathay General Bancorp, has not been an issue, according to management, because of the size of the deals it pursues.

RBB aims to become a $5 billion-to-$8 billion bank, and hopes to reach the lower end of the range within five years.

* Hovde Group's Joseph Fenech maintained his "outperform" rating on Manitowoc, Wis.-based Bank First National Corp.

Fenech said the company may be planning a Nasdaq listing in 2018, as management asked for opinions on the subject during recent meetings with investors. If it does list, the analyst expects the company to be immediately added to the Russell index and possibly draw more attention as an acquisition target.

The price target is $50, and the stock is on Hovde's list of Top Ideas.

Industry reports

* Fenech also released a Dec. 8 report on the November sales of New York City taxi medallions.

There were 13 transactions, with the sale price averaging $257,000. For comparison, it was 28 sales in the prior month, with an average price of $377,000.

But even if prices were to remain subpar in December, "we're unlikely to see a situation similar to [the second quarter," the analyst wrote. Prices then had often been at 50% discounts to carrying values. In addition, "banks are close enough to the finish line" at this point to possibly just "[clear] the decks for 2018."

* And Piper Jaffray's conviction list for Southwest bank stocks continues to be led by Western Alliance Bancorp. Analyst Brett Rabatin thinks M&A is a possibility in 2018 for the Phoenix-based company.

And LegacyTexas Financial Group Inc. and Green Bancorp Inc. climbed the ranks, partly due to attractive bank valuations in the Lone Star State and "more comfort with earnings the next few quarters."