Wunderlich Downgrades Home BancShares

In a report published Friday, Wunderlich analysts downgraded

from Buy to Hold. The price target was maintained at $35. While the company reported robust overall results for 1Q15, the EPS and total revenue were marginally below the consensus. The company's organic loan growth was also slower during the quarter, with lower NIM, which was partly offset by an increase in fee income and lower than expected provision. Home Bancshares completed acquiring national commercial real estate loans worth $289 million on April 1. These loans originated in the company's erstwhile Doral Property Finance business and will not be taken care of the newly launched Centennial Commercial Finance Group. "In connection with this, HOMB is opening a loan production office in New York City with plans to build out a national lending platform focused on CRE and C&I loans that we believe should boost organic loan growth over the next few years," the analysts said. According to Wunderlich, Home Bancshares possesses both the capacity and the desire to acquire assets, especially Florida-based institution within the price range of $500 million and $3 billion. However, the increased competition and expectations of higher M&A pricing are likely to push the company to avoid an acquisition in the near term.