UPDATE: Compass Point Initiates Valley Financial at Buy on Outlook

Compass Point initiated coverage on Valley Financial

with a Buy rating and an $11 price target. Compass Point said, "The Roanoke, VA based bank, with $785MM in assets and eight branches, has a solid franchise due to its core deposit mix (66% of total funding) and strong regulatory capital levels (13.5% Tier 1 ratio as of 3Q12). … [W]e believe the stock should eventually trade to the $11 level based on our expectation that the company will earn its cost of capital (9.0%) in FY14 even after factoring in a $7.0MM equity raise." Valley Financial closed at $9.20 on Thursday.