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Umpqua Holdings Upped to Strong Buy - Analyst Blog

Posted: 6/19/2013 5:31:00 PM
Referenced Stocks: CPF;METR;TCBK;UMPQ

On Jun 18, Zacks Investment Research upgraded Umpqua Holdings Corporation ( UMPQ ) to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

Umpqua Holdings has been witnessing rising earnings estimates owing to the announcement of an acquisition, hike in its quarterly cash dividend and the payment of a special dividend. Moreover, this regional bank has a long-term earnings growth forecast of 11.5%.

On Jun 4, Umpqua Holdings announced a deal to acquire Financial Pacific Holding Corp. for $158 million in cash. The transaction will likely be complete in July. Upon completion, the company anticipates operating earnings per share accretion of 14% in the first full year and immediate accretion of about 35 basis points to net interest margin.

Additionally, in May 2013, Umpqua Holdings announced a 50% hike in its quarterly cash dividend. The cash dividend of 15 cents per share will be paid on Jul 15 to shareholders of record on Jun 28. Additionally, the company announced a special dividend of 5 cents, which was paid on Jun 14 to shareholders of record on May 31.

The Zacks Consensus Estimate for 2013 increased 4.5% to 92 cents per share, as a majority of estimates was revised upwards over the last 30 days. For 2014, the Zacks Consensus Estimate rose by 12.1% to $1.02 per share over the same period.

Other Stocks to Consider

Other stocks in the banking sector that are worth a look include Central Pacific Financial Corp. ( CPF ), Metro Bancorp, Inc. ( METR ) and TriCo Bancshares ( TCBK ) - all of which carry a Zacks Rank #1.

CENTRAL PAC FIN (CPF): Free Stock Analysis Report

METRO BANCORP (METR): Free Stock Analysis Report

TRICO BANCSHRS (TCBK): Free Stock Analysis Report

UMPQUA HLDGS CP (UMPQ): Free Stock Analysis Report

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Zacks Investment Research