This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

MB Financial Set for Margin Improvement

Stocks in this article: MBFI CORS

MB Financial reported a net interest margin of 3.05% for the second quarter, improving from 2.88% the previous quarter, but down from 3.11% a year earlier. Like all banks, MB Financial is seeking to increase its non-interest bearing deposits, and these comprised 18% of total deposits as of June 30, up from 15% a year earlier.

With $1 billion of the Corus deposits originating from local sources, checking and money market accounts with an average rate of 0.97% and with an average account age of 8.5 years, the acquisition bodes very well for MB Financial's net interest margin, a key indicator for quality earnings as the economy moves through the credit cycle.

In a Monday morning conference call, CEO Mitchell Feiger called Corus an "infill branch acquisition," saying the Corus branches fit "extremely well" with MB Financial's network.

The 11 Corus branches increased MB's presence in Chicago's north side, as well as its suburban branch network. MB Financial now has over 80 branches in and around Chicago.

MB Financial has been careful to stress the company's strong capital position in SEC filings and investor presentations, and while its second-quarter annualized ratio of net loan charge-offs to average loans was 1.54% -- a moderate level for a commercial lender in the current environment -- its overall asset quality actually improved in the second quarter. Nonperforming assets, including loans past due 90 days or more or in nonaccrual status, plus repossessed real estate comprised 3.08% as of June 30. That's down slightly from 3.11% the previous quarter but up from 1.13% a year earlier. This ratio is likely to improve greatly following the Corus acquisition, which only included $47 million in loans.

While figures provided by SNL Financial based on Friday's market close couldn't factor in the capital being raised or the Corus acquisition, shares in MB Financial traded at 1.42 times book value Friday -- certainly not overpriced for a well-capitalized bank poised for organic growth.

-- Reported by Philip van Doorn in Jupiter, Fla.

Philip W. van Doorn joined TheStreet.com Ratings., Inc., in February 2007. He is the senior analyst responsible for assigning financial strength ratings to banks and savings and loan institutions. He also comments on industry and regulatory trends. Mr. van Doorn has fifteen years experience, having served as a loan operations officer at Riverside National Bank in Fort Pierce, Florida, and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a Bachelor of Science in business administration from Long Island University.
2 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 18,030.21 +6.04 0.03%
S&P 500 2,081.88 -0.29 -0.01%
NASDAQ 4,773.4720 +8.0480 0.17%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs