UPDATE: DA Davidson Initiates Coverage on First Busey After Recovery

In a report published Monday, D.A. Davidson & Co. analyst Stephen Geyen initiated coverage on First Busey Corporation BUSE with a Neutral rating and a $6.00 price target.

According to the report, “After several difficult years, BUSE has recovered following merger and integration challenges with Main Street Trust in 2007. Profitability should continue to improve with projected ROA increasing to 97bp in 2015 from 84bp in 2013 as the company improves efficiency and is better positioned to organically grow loans and fee income.”

Some highlights from the report included:

- "Management is optimistic that the bank’s investment in the commercial lending group in 2011 and 2012 can drive near upper-single digit loan growth and an improved earning asset mix.”
- "We expect credit costs to continue to trend lower going forward.”
- "Based on an outlook for slightly below peer profitability but better than peer growth, we are applying a near peer P/E multiple of 14.4x to forward earnings to derive a price target of $6.”

BUSE closed Monday at $5.95.