JMS Research Upgrades Regional Bank Stocks: Market Pullback Creates Compelling Opportunity
FHN Hot Sheet
Rating Summary:7 Buy, 11 Hold, 2 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 20 | Down: 11 | New: 38
This morning, JMS Research told investors that the recent market pullback has created compelling opportunities in some regional bank stocks. JMS reiterates a BUY ratings on First Horizon (NYSE: FHN) , Sandy Spring (Nasdaq: SASR), and WSFS Financial (Nasdaq: WSFS). Also today, JMS upgraded City Holding Company (Nasdaq: CHCO) and First Financial Bancorp (Nasdaq: FFBC) to BUY from Neutral.
JMS analyst said, "First Horizon, Sandy Spring, and WSFS are inexpensive on a tangible book value basis (135%, 110%, and 115%, respectively) and an earnings power basis (8 times or less). City Holding is attractive at just over 10 times our 2011 estimate (with real earnings), and First Financial, which continues to build an attractive Midwest franchise, trades at 140% of tangible book value. Both City Holding and First Financial, we opine, are the best positioned to undertake an acquisition opportunity."
Other Highlighted Points Include: Asset quality appears to have stabilized for these banks, and is likely to improve in the upcoming quarters.
Capital for these banks is solid. Other than WSFS, which may have to undertake a small offering at a later date to repay TARP, these banks have completed the necessary steps to strengthen their capital positions.
In a rising rate environment, the subject group is asset sensitive. The most notable would be City Holding Company, which would realize an increase in net income of +2.1% and +7.7% should there be an immediate +100 and +200 basis point increase in interest rates.
(NOTE - In afternoon trading, the only stock currently in positive territory is Sandy Spring (SASR))
JMS analyst said, "First Horizon, Sandy Spring, and WSFS are inexpensive on a tangible book value basis (135%, 110%, and 115%, respectively) and an earnings power basis (8 times or less). City Holding is attractive at just over 10 times our 2011 estimate (with real earnings), and First Financial, which continues to build an attractive Midwest franchise, trades at 140% of tangible book value. Both City Holding and First Financial, we opine, are the best positioned to undertake an acquisition opportunity."
Other Highlighted Points Include: Asset quality appears to have stabilized for these banks, and is likely to improve in the upcoming quarters.
Capital for these banks is solid. Other than WSFS, which may have to undertake a small offering at a later date to repay TARP, these banks have completed the necessary steps to strengthen their capital positions.
In a rising rate environment, the subject group is asset sensitive. The most notable would be City Holding Company, which would realize an increase in net income of +2.1% and +7.7% should there be an immediate +100 and +200 basis point increase in interest rates.
(NOTE - In afternoon trading, the only stock currently in positive territory is Sandy Spring (SASR))
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