Hovde Group upgrades TowneBank to 'outperform' following Old Point deal

TowneBank

04/04/2025 11:05

** Hovde Group upgrades rating on shares of regional lender TowneBank TOWN.O to "outperform" from "market perform" following announcement of a $203 million deal for rival Old Point Financial OPOF.O

** The deal will expand TOWN's presence in Hampton Roads and boost the bank's 2026 EPS by about 10%

** TOWN's risk-averse lending profile, combined with its growing footprint within Hampton Roads, positions the bank well to navigate an uncertain economic environment - Hovde Group

** Brokerage expects Hampton Roads area to benefit from increasing military spending over time

** Hovde cuts PT on TowneBank by $1 to $38, despite increase in EPS expectations, to account for uncertain economic backdrop that is currently weighing on the banking sector

** Two of four brokerages rate the stock "buy" or higher and two "hold"; median PT is $39.50 - data compiled by LSEG

** As of last close, TOWN shares down 9.4% YTD

(Reporting by Arasu Kannagi Basil in Bengaluru)

((ArasuKannagi.Basil@thomsonreuters.com;))