UPDATE: UBS Starts FCB Financial Holdings (FCB) at Buy

(Updated - August 26, 2014 1:27 PM EDT)

UBS initiated coverage on FCB Financial Holdings (NYSE: FCB) with a Buy rating and a price target of $28.00. Analyst Derek De Vries sees CAGR of 22%.

"We are launching coverage of FCB with a Buy rating and a price target of $28 per share. We expect FCB to deliver 2014-16E loan growth CAGR of 22%, which should lead to a similar level of revenue growth. Additionally, we expect FCB to benefit from significant operating leverage as legacy asset servicing costs fall. We value FCB using a 2016E P/E ratio of 12.8x – which is the average P/E of comparable Florida listed banks, high growth banks, and bank acquisition vehicles. Applying a P/E ratio of 12.8x to our 2016 EPS forecast of $2.15 gives us a price target of $28 per share," said Vries.

"We believe FCB has built a banking platform capable of growing to 3-4x its current size. FCB's senior bankers bring significant experience working at national banks and we believe that experience and customer knowledge will translate into sustainable, superior loan growth going forward. In order to fund that growth we expect FCB to increase its focus on deposit heavy industries and believe FCB can grow to $8-9 bn of deposits without the need for additional acquisitions," he added.

For an analyst ratings summary and ratings history on FCB Financial Holdings click here. For more ratings news on FCB Financial Holdings click here.

Shares of FCB Financial Holdings closed at $22.03 yesterday.

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