(MBFI - Get Report)
of Chicago closed at $17.07 Wednesday, declining just 1% year-to-date, for the best performance among this group of five Chicago-area banks.
The company owes $196 million in TARP money.
FIG Partners analyst Brian Martin rates MB Financial "Outperform," with a $21 price target, saying in late October after the company reported third-quarter net income available to common shareholders of $17.1 million, or 31 cents a share, that "while credit improvement and good cost controls were noted, revenues continued to slide." Martin expects the company to put "some of its excess liquidity to work," by extending "the duration of the bond book somewhat and [increasing] its exposure to municipals."
The analyst said that "importantly, originations are up and the commercial pipeline is increasing," which, along with a modest improvement in fee income and a decline in loan loss provisions would feed estimated EPS of $1.45 for 2012 and $1.70 in 2013. Martin's full-year EPS estimate for 2011 is 54 cents.
Martin said that "to truly end its participation in this credit cycle and reaffirm itself as a market leader, MBFI must repay TARP," and that his forecast "suggests no new capital is required."
The shares trade for 1.2 times their Sept, 30 tangible book value of $13.78, according to SNL, and for 12 times the consensus 2012 EPS estimate of $1.46 cents, among analysts polled by FactSet.
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Written by Philip van Doorn in Jupiter, Fla.
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