DA Davidson Maintains Neutral on Umpqua Holdings
DA Davidson remains rated Neutral on Umpqua Holdings (NASDAQ: UMPQ) but raises EPS estimates following the announced acquisition of American Perspective Bank. Price target on shares is $15.
Da Davidson says, "The acquisition of the $259 million California-based institution marks Umpqua's first open bank deal in five years and will stretch their footprint further south within the San Luis Obispo and Santa Barbara MSAs. The all-cash deal of $44.7 million equates to $10 per share or 1.01x APBA's 12/31/11 TBV and is expected by management to be immediately accretive upon closing in mid-2012 with limited impact to TBV. …We are raising our 2012 and 2013 EPS estimates from $0.90 and $1.00 to $0.91 and $1.05, respectively. Our accretion assumption is based on moderate costs savings (but not quite to the UMPQ-assumed level of 35%) and additional spread income on the acquired earning assets."
UMPQ closed at $12.71 a share on Tuesday.
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