PDF ATTACHED: SFST Update 1-25-17 Raising EPS & Target
Close $32.85 / “Outperform” / $40.00 Price Target / HQ=Greenville, SC / $213 Mil. Mkt. Cap
SFST filed a mixed shelf offering worth $50 Million in future securities in debt and/or equity. There is no guarantee of a near-term issuance and we remain quite comfortable with our estimated balance sheet growth from $1.3 Billion today to $1.74 in the next 8 quarters. We still estimate an 8.2% TCE ratio consistently in 2017 and 2018. It important to note that SFST has previously announced a de novo expansion into Raleigh, NC and we understand has plans to add Atlanta, GA and Charlotte, NC (and possibly other NC cities given two recent mergers in the state). While bankers have been identified in Charlotte long ago, SFST has made at least one(1) hire in Atlanta of a commercial banker inside I-285 with experience at Wachovia, RBC, and also a public community bank. SFST is clearly choosing to remain independent and in expansion-mode which is consistent with our analysis that organic growth without M&A should be factored into forward EPS estimates and our stock price outlook. We reiterate our EPS estimates of $2.07 in 2017 and $2.50 in 2018 with a $40 Price Target.