FBR Capital Cuts Price Target on First NBC Bank Holding (FNBC) Following 2Q
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FBR Capital maintained a Market Perform rating on First NBC Bank Holding (NASDAQ: FNBC), and cut the price target to $8.00 (from $13.50), following the company's 2Q earnings report. Shares have traded down 35% since the release and since the Atlanta Fed deemed the company a "Troubled Institution". FBR maintained EPS estimates for 2016 of $2.00 and for 2017 of $2.00.
Analyst Christopher Nolan commented, "We are lowering our 12 month price target for FNBC to $8.00 from $13.50 and reiterating our Market Perform rating. We are also removing our short-term trading target range of $11.50–$12.00. Since FNBC released its delayed 2Q16 10-Q intraday on October 20, its share price has declined 35%. The catalyst for this decline was included in the 10-Q, that the company was formally deemed a "Troubled Institution" by the Atlanta Fed. In our view, given the litany of other issues FNBC has faced in past months, this may be an effort by regulators to prod FNBC’s board to replace management or sell the company. Regardless, we believe the strategic options available to FNBC are narrowing and the possibility of a sale of the company has grown. But, given the DTA, asset quality issues, risk of core deposit attrition, and general opacity of FNBC's business model, we think investors will be cautious in assigning much of a takeout premium to FNBC shares. We estimate in a sale FNBC could be worth $11.50/share."
Shares of First NBC Bank closed at $7.30 yesterday.
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