UPDATE: Barclays Upgrades Umpqua

In a note released Wednesday, Barclays upgraded shares of Umpqua UMPQ from Underweight to Equal-Weight.

Analysts Matthew J. Keating and Jason M. Goldberg said that while they think UMPQ's 2015 EPS estimate is about eight percent too high, both analysts believe its valuation discount, versus the group, incorporates much of this risk. Both analysts then proceeded to say that with UMPQ's mortgage banking results having hit a near-term bottom in the the first quarter of 2014, a large valuation discount for the group is warranted and increased their price target to $19 from $17.

In regards toward long-term scale benefits, derived from the firm's acquisition of Sterling Financial STSA, both analysts believe these are likely to be meaningful. With the combined company positioned as the Pacific Northwest's largest community banking orientated institution, its future growth appears healthy.

Shares of Umpqua closed Tuesday at $17.50.