NEW YORK (
(UMBF - Get Report)
shares were poised to open more than 2% lower Wednesday after the Kansas City, Mo.-based bank issued common shares to raise $230 million.
The move lifted UMB's share count by 11%, while lifting tangible common equity as a percentage of total assets to 7.7% from 6.4%, according to a report from Keefe, Bruyette & Woods, which has a "market perform" on the stock.
"We were surprised to see UMBF announce not only a capital raise, but also a raise of this magnitude," the report stated, adding the move "provides ample runway for organic growth to continue." The analysts also see a chance UMB will use the additional capital to make an acquisition.
"We see the shares as fairly valued, but also can understand the bull case scenario on UMBF as every 1pt improvement in the efficiency ratio adds ~$0.20/share to our 2015E," KBW writes. KBW has a $54 price target on the shares, which were set to drop 2.49% to $53.99 about 20 minutes before Wednesday's market open.
Written by Dan Freed in New York