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10 Bank Stocks in the M&A Crosshairs (Update 2)

6. First Midwest Bancorp

shares of First Midwest Bancorp (FMBI - Get Report) of Itasca, Ill., closed at $11.16 Friday, declining 10% from a year earlier.

The company was mentioned by FIG Partners analyst John Rodis as ""one of the premier Chicago-based franchises growing both organically and through strategic acquisitions," and an attractive target for potential acquirers.

First Midwest fully repaid $193 million in TARP money, in November.

The company reported 2012 earnings available to common shareholders of $25.4 million, or 35 cents a share, improving from a 2012 net loss to common shareholders of $19.7 million, or 27 cents a share. Once again, the story was improved credit quality, with the provision for loan losses declining to $80.6 million in 2011 from $147.4 million, in 2010.

The 2011 ROA was 0.45% and the 2010 ROE was 3.27%, according to HighlineFI.

The shares trade for 1.2 times tangible book value, according to HighlineFI, and for 15.5 times the consensus 2012 EPS estimate of 72 cents.

Rodis on Jan. 26 lowered his rating on First Midwest to "Market Perform," with a price target of 11, from "Outperform," since the shares had returned 20% since he initiated his coverage on the company in mid-November. The analyst said "the Company is moving in the right direction as it relates to credit" but that its fourth-quarter results "reminds us that the improvement will not be linear and one or two bigger credits can sometimes have a material impact on the results."

Interested in more on First Midwest Bancorp? See TheStreet Ratings' report card for this stock.
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COF $61.57 2.40%
BXS $19.74 4.10%
FMBI $16.34 2.80%
FNFG $9.04 3.40%
MBFI $29.92 2.90%


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