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10 Bank Stocks Beating Analysts' Price Targets

Stocks in this article: BAC C JPM WFC CFFN SBNY PNFP TCBI OZRK BUSE HTBK NFBK GBNK EFSC

10. First Busey Corp.

Shares of First Busey Corp. (BUSE) of Champaign, Ill., closed at $4.93 Monday, rising 8% year-to-date. The shares closed 10% higher than the consensus 12-month price target as of Dec. 31, 2010, among analysts polled by FactSet.

Based on a quarterly payout of four cents, the shares have a dividend yield of 3.25%.

The company had $3.4 billion in total assets as of Sept. 30, with 49 branches in Central Illinois and in Florida.

First Busey reported third-quarter net income available to common shareholders of $7.6 million, or eight cents a share, increasing from $4.7 million, or seven cents a share, in the third quarter of 2010. A 6% year-over-year decline in net interest income to $27.7 million, was more than offset by a decline in the third-quarter provision for loan losses to $5 million, from $9.5 million a year earlier.

The third-quarter net interest margin -- the difference between a bank's average yield on loans and investments and its average cost for deposits and borrowings -- was 3.57%, narrowing from 3.64% a year earlier. The operating return on average assets (ROA) was 0.89% during the third quarter, according to SNL Financial.

The company in August fully redeemed $100 million in preferred shares held by the U.S. Treasury for bailout assistance provided through the Troubled Assets Relief Program, or TARP, in March 2009.

FIG Partners analyst Brian Martin on Oct. 28 reiterated his neutral rating of "Market Perform" on First Busey, with a price target of $5.50, saying the company was continuing "to post solid profits underscored by sound, underlying fundamentals." Martin added that he expected the company to "remain on the hunt for external growth opportunities."

Sandler O'Neill analyst Andrew Liesch on Thursday resumed coverage of First Busey with a hold rating and $5.25 price target, saying that the bank's loan portfolio should stabilize soon. "We still suspect loan maturities, paydowns and charge-offs will outweigh new originations in 4Q11, though the pace of the decline is likely to slow," he said.

The shares trade for 13.5 times the consensus 2012 earnings estimate of 35 cents among analysts polled by FactSet, and for 1.4 times tangible book value, according to SNL Financial.

All four analysts covering First Busey have neutral ratings.

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