Shares of First Midwest Bancorp Inc. (FMBI) reached a new 52-week high, touching $17.53 at the end of the trading session on Nov 21. However, the stock closed the session at $17.51, reflecting a solid year-to-date return of 32.5%. The trading volume for the session was 233,111 shares.
Despite the strong price appreciation, this Zacks Rank #2 (Buy) Midwest bank has considerable upside left, given its positive estimate revisions over the last 30 days and expected long-term earnings growth of 8.33%.
First Midwest’s performance was primarily driven by robust third-quarter 2013 results comprising an earnings surprise of 62.5%, along with a 75% hike in the quarterly cash dividend.
On Oct 23, First Midwest declared third-quarter earnings of 39 cents per share, which handily beat the Zacks Consensus Estimate of 24 cents. Moreover, net income was $16.0 million, compared with a net loss of $47.8 million in the year-ago quarter.
Earnings benefited from higher non-interest income, lower expenses and a significant decline in provision for loan and covered loan losses. However, decline in net interest income was a headwind.
Further, on Nov 21, First Midwest’s board of directors declared a 75% increase in its quarterly cash dividend to 7 cents per share. Notably, the last payout was the company’s 124th consecutive dividend.
Estimate Revisions Show Potency
In the last 30 days, the Zacks Consensus Estimate for 2013 increased 15.6% to $1.04 per share, based on the upward revision of 7 out of 8 estimates. For 2014, the Zacks Consensus Estimate advanced 1.9% to $1.08 per share over the same time frame.
Some other stocks worth considering in the same sector include First Interstate Bancsystem Inc. (FIBK), German American Bancorp Inc. (GABC) and PrivateBancorp, Inc. (PVTB). All these carry a Zacks Rank #1 (Strong Buy).