UPDATE: D.A. Davidson & Co. Upgrades Home Federal Bancorp to Buy, Raises PT Following Acquisition Agreement with Cascade Bancorp

In a report published Friday, D.A. Davidson & Co. analyst Jeff Rulis upgraded the rating on Home Federal Bancorp HOME from Neutral to Buy, and raised the price target from $17.83 to $18.34. In the report, D.A. Davidson & Co. noted, “HOME shareholders will receive $17.83 per share in a mix of roughly 55% stock of Cascade Bancorp (CACB* – NEUTRAL - $5.64) and 45% cash. The deal is valued at approximately $265.7 million, which equates to 1.54x HOME's 9/30/13 tangible common equity...We are lowering our 2013 estimated EPS from $0.13 to $0.05, primarily due to the termination fee in Q4'13. We are increasing our 2014 EPS estimate from $0.15 to $0.20 due to a stronger loan growth outlook combined with reduced credit costs going forward. We are also introducing a 2015 estimate of $0.20. Upgrading to BUY from Neutral. To better align our price target with that of the acquirer, we are upgrading HOME shares to BUY from Neutral with an $18.34 price target, up from $17.83. Applying the deal consideration, the price target represents 1.67x our CACB price target ($6) in addition to $8.32 in cash per share. We expect the deal to close in the first half of 2014.” Home Federal Bancorp closed on Thursday at $15.30.