Merrill Lynch has a price objective of $11. They write the following:
"PBCT reported Q4 GAAP EPS of $0.18, below our $0.19 estimate and consensus
as stronger fee income and asset growth were not enough to offset continued rate
pressure. Positively, provisions were lower QoQ and credit trends remain benign.
Opex discipline was somewhat helpful. PBCT also continued its share
repurchases, buying back another 4.7M shares for $56M, making it a total of
18.2M shares for the year. That said, rate pressure continued to impact asset
yields, with key segments falling further. PBCT also guided for more severe
margin compression ahead, with NIM in the 3.30-3.40% range for 2013, down
from 3.63% in Q4. Overall, we see little relief in the near-to-medium term as
PBCT continues to be negatively impacted by the challenging rate environment.
"Capital levels remain healthy; dividend stable
Capital levels in Q4 were healthy, with a TCE ratio of 10.2%, down from 11.5% in
Q3. Tangible book value at Q4 was $8.71, down from $8.77 last quarter. During
the quarter PBCT bought back 4.7M shares for ~$56M. For 2012, PBCT bought
back ~18.2M shares for ~$220M. PBCT has 33.4M shares available for
repurchase under Nov 2012’s new share repurchase authorization. Finally, PBCT
kept its $0.16 per share quarterly dividend, with a payout ratio of ~88% in Q4 vs.
87% in Q3. We see PBCT’s dividend as relatively stable, given its healthy capital