Sterne Agee Increases First California's Estimates
In a research report published earlier today by Sterne Agee, First California Financial Group (NASDAQ: FCAL) has announced a small acquisition and branch realignment initiative, prompting Sterne Agee to increase its estimates.
“We are raising our FY12E and FY13E to $0.41 (+$0.03) and $0.55 (+$0.11), respectively. There is no change to our $5.50 PT (10x FY13E). We view the recently announced branch consolidation initiative, which is expected to reduce non-interest expense by $1.4 million in FY12 and $2.7 million annually thereafter, as positive steps to improving the structural efficiency of the franchise. Also, loan growth should remain solid in 1H12 relative to 4Q11, noting a $100 million pipeline of loans. We are modeling core profitability gradually growing towards a 0.75% ROA over the next two years,” Sterne Agee said in the report.
Sterne Agee maintains its Buy rating on First California, which closed yesterday at $4.67.
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