MB Financial (MBFI) has improved its credit over the last year and enhanced analyst expectations of loan growth, all while still trading at a reasonable valuation relative to peers and maintaing healthy levels of capital, says Brian Martin, Vice President and Research Analyst at FIG Partners.
“The company has done a good job of improving credit over the last year,” Martin said. “They’ve done some remixing within the portfolio and reduced nonperforming assets over the last couple of years, which has taken a little bit steam out of the net loan growth number, but my expectation was that loan growth would be positive for this company.”
Martin says MB Financial continues diversifying its revenue stream, where their fee income was about 30% total in the past quarter, and a recent acquisition is expected to continue bolstering this revenue source. He also says the company has healthy levels of capital, allowing the bank to return some of it to shareholders.
“The diversification of revenue was a catalyst,” Martin said, “and the fact that they’ve got a very low cost of funds to begin with should help their margin, and the opportunity for loan growth are all positive, on top of a share repurchase program that they had announced and just healthy capital levels that will give them flexibility as they move forward.”
Organic Revenue Growth and Improved Return on Invested Capital on Tap for Ryder System, Inc. (R)
August 07, 2015
SCANA Corporation (SCG) to Show Free Cash Flow and Improved Earnings Power by 2017
July 17, 2015
FedEx Corporation (FDX) on Track for Improved Return on Capital and Free Cash Flow
August 06, 2015
Water Services Offers Improved Margins in Slow-Growth Environment
August 27, 2012
Thoratic Corporation (THOR)’s Heart Devices Show Improved Survival for Patients; Market has Long-Term Opportunities
March 15, 2013
