Analyst upgrades PacWest, citing bank acquisition
BOSTON (AP) — An analyst for Wunderlich Securities on Wednesday upgraded shares of PacWest Bancorp, saying its pending acquisition of a smaller bank, First California, will create a big Southern California financial institution and grow profit.
THE OPINION: Analyst Kevin Reynolds on Wednesday raised his rating of PacWest shares to "Buy" from "Hold," and lifted his price target for the stock to $29 from $25.
THE BACKGROUND: PacWest, which is based in Los Angeles, on Nov. 6 said that it was buying First California Financial Group for about $231 million. The deal is expected to close early next year.
PacWest's Pacific Western Bank has 66 branches in Southern California, while First California has 15 in the region.
The combination would create "a leading commercial bank in Southern California," Reynolds said. The bigger company should be able to ramp up earnings because of cost cuts stemming the deal, he added, making PacWest's current stock price attractive for long-term investors.
THE STOCK: Shares of PacWest Bancorp rose 33 cents, or 1.5 percent, to $22.74 in afternoon trading. The stock is up about 19 percent this year, and has traded in a 52-week range of $16.44 to $25.50.