Wunderlich Securities Reiterates Hold Rating on Sierra Bancorp (BSRR)

Wunderlich Securities is out with a research report this morning, where it reiterates its Hold rating on Sierra Bancorp

; it has an $11.00 price target on the stock. The WS analysts cited the company's recent earnings announcement, which was in-line to slightly below estimates. Credit quality improved for the first time in four quarters; however, NPLs remain relatively high at 5.70% of period-end loans. The analysts noted that, while Sierra's capital ratios remain very strong, they remain cautious with respect to credit quality at this point in the cycle. As for valuation, the analysts remarked, “Sierra shares are currently trading at 0.9 times TBV/share, an understandable discount to the median of 1.3 times for Western peers. Our $11 price target is 1.0 times our 2011 TBV/share estimate, which we believe is a fair valuation versus peers given the elevated credit challenges facing the company.”