UPDATE: Raymond James Upgrades First Security Group Following Solid 4Q13 Results

In a report published Monday, Raymond James analyst William J. Wallace IV upgraded the rating on

from Underperform to Market Perform. In the report, Raymond James noted, “[W]e are raising our investment rating to Market Perform from Underperform following 4Q13 results that were highlighted by robust loan growth. Loans jumped 9.1% linked quarter from a marked increase in commercial real estate credits. We believe credit headwinds are abating, and together with strong loan growth and branch consolidation plans, we expect the company will return to profitability on a sustained basis beginning in 3Q14. In turn, we forecast First Security will recapture its $62.3 million deferred tax asset (DTA) valuation allowance in mid-2015, which would add roughly $0.94 per share to tangible book value (TBV). "Ultimately, with recent and continued investments in the franchise, we believe the company is targeting growth to $1.5 billion in assets and an ROA of 1.0%, which would result in annual EPS in the $0.20-0.25 range. We believe these targets could be more of a 2016 or later event and would look for demonstrated progression to these targets before we become more constructive on the story. As such, we view the risk/reward proposition as fairly balanced at current levels.” First Security Group closed on Friday at $2.20.