This Day On The Street
Continue to site
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

A Sweet Midwest Bank Recovery Play: Street Whispers

The analyst also said that First Midwest's "capital levels remained solid," with a tangible common equity ratio of 8.9%. The company reported a June 30 tangible book value of $9.30 a share, and Rodis said that "if FMBI does choose to do some sort of bulk loan sale we believe the ultimate hit to tangible book value (TBV) will be manageable in the 5% area," based on the assumption that the company "sells $200- 300 million in non-performing loans (which is ~ half the current level of non-accruals + potential problem loans) and takes an additional hit of $0.10-0.20 on the dollar ($1.00)." Rodis believes "the after-tax impact on TBV would be ~ $0.25-0.50 per share," on a bulk loan sale of roughly $250 million.

Rodis rates First Midwest "Outperform," with a $12 price target, and estimates the company will report earnings of 45 cents a share for all of 2012,not factoring in a potential loan sale, followed by 2013 EPS of 85 cents. The shares trade for 1.3 times tangible book value and the analyst said "we believe a lot of the bad news is already built into the stock."

First Midwest's shares closed at $11.59, returning 15% year-to-date, following a 12% decline during 2011.

FMBI Chart FMBI data by YCharts

Rodis said that "longer term we believe the FMBI franchise remains one of the more attractive Chicago-based banks. And from a fundamental perspective we believe a number of the operational changes that have been made over the past year are starting to take hold and as a result we think things are moving in the right direction."

Interested in more on First Midwest Bancorp? See TheStreet Ratings' report card for this stock.


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

>Contact by Email.

Philip W. van Doorn is a member of TheStreet's banking and finance team, commenting on industry and regulatory trends. He previously served as the senior analyst for Ratings, responsible for assigning financial strength ratings to banks and savings and loan institutions. Mr. van Doorn previously served as a loan operations officer at Riverside National Bank in Fort Pierce, Fla., 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

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

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
Stocks Under $10

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

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
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
FMBI $18.48 -0.38%
AAPL $93.74 -1.15%
FB $117.58 0.73%
GOOG $693.01 0.29%
TSLA $240.76 -2.81%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs