Pacific Continental Upgraded By Raymond James, Sets $18 Price Target

Raymond James has upgraded Pacific Continental Corporation (NASDAQ: PCBK) to Outperform from Market Perform on its acquisition of Foundation Bancorp, Inc. (OTCBB:FDNB).Pacific Continental has agreed to buy Foundation Bancorp for $67.1 million, or $13.02 per share. On a pro forma basis, "the combined company would have total assets of $2.4 billion, total loans outstanding of $1.7 billion and total deposits of $2.1 billion as of March 31, 2016."http://www.prnewswire.com/news-releases/pacific-continental-corporation-announces-plan-to-acquire-foundation-bancorp-inc-300258008.html"Pacific Continental is in strong financial condition highlighted by solid organic loan growth, sound credit quality, an attractive core deposit base, and strong capital ratios. The announced acquisition appears to be attractive both strategically and financially for Pacific Continental," analyst Donald Worthington, wrote in a note.Worthington maintained his 2016 EPS estimate of $1.16, while increasing our 2017 EPS view by $0.08 to $1.32, to reflect the impact of the announced acquisition, which is expected to close by the end of third quarter. PCBK shares are currently trading at 13.9x the analyst's 2016E EPS, 12.2x 2017E EPS, and 175 percent of TBVPS (total book value per share). This compares with median valuations of 14.0x 2016E EPS, 12.7x 2017E EPS, and 146 percent of TBVPS for Raymond James' West region coverage universe. "We believe that PCBK shares should trade at a premium P/E multiple compared with the peer group due to the company's above-average and relatively stable NIM, better-than-peer operating efficiency, solid credit quality, attractive core deposit base, strong capital ratios, and healthy dividend yield," Worthington said.At the time of writing, shares of Pacific Continental rose 2.92 percent to $16.63. Worthington has a price target of $18 on the stock.