DA Davidson Upgrades Washington Banking (WBCO) to Buy; Q2 Fundamentals Healthy Despite EPS Miss, DTA Recovery In Sight

DA Davidson upgraded Washington Banking (NASDAQ: WBCO) from Neutral to Buy, price target increased from $18.75 of $20.00.

DA analyst said, "Core earnings looked a little skinny this quarter due to what appeared to be conservative provisioning, in our opinion. However, continued credit quality improvement, margin expansion and expectations for resumed loan growth offer reasons to believe the bank has plenty of momentum for the remainder of the year. Additionally, improved visibility on the DTA recovery suggests 2012 TBV will be higher than previously expected...We are adjusting our estimates to include higher NIM offset by higher provisions. The major change is our assumption for DTA recovery in 2012, which also carries quarterly tax implications until full recovery occurs. As a result, we are lowering 2011 EPS estimate from $1.15 to $1.05 and increasing 2012 EPS from $1.35 to $1.75."

For more ratings news on Washington Banking click here and for the rating history of Washington Banking click here.

Shares of Washington Banking closed at $12.97 yesterday.

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