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Wintrust Financial at New 52-Week High

Zacks Equity Research

Shares of Wintrust Financial Corporation (WTFC) touched a new 52-week high of $46.00 during its trading session on Dec 4, reflecting an increase over the previous high of $45.77 reached on Nov 29.  

Wintrust Financial closed the trading on Dec 4 at $45.83, reflecting a solid year-to-date return of 21.1%. The trading volume for the session was 1.0 million shares. Further upside potential exists for this Zacks Rank #2 (Buy) regional midwest bank, as evident from the earnings estimate revisions in the last 60 days and expected earnings growth of 9.0% for the next five years.

Growth Drivers

Wintrust Financial’s third quarter 2013 results were impressive. Since the earnings release on Oct 14, 2013 shares have risen 9.5%. Earnings per share in the quarter were 71 cents, up 7.6% year over year and above the Zacks Consensus Estimate of 65 cents. The result was driven by higher net interest income and improvement in provision for credit losses.
Net revenue was at $196.4 million, up 0.5% year over year. Increase in average earning assets and lower interest expenses have driven Wintrust Financial’s net interest income (:NII) up by 7% year over year. Offsetting the increase in NII was a 13% fall in non-interest income.

Wintrust Financial’s provision for credit losses in the quarter decreased 36% year over year, signaling improving credit quality. Average loans and leases balance at the end of the quarter was up 7% year over year to $13.0 billion and average total deposits were up 6% year over year to $14.6 billion.

In addition to the above, completion of the acquisition of Diamond Bancorp, Inc. in Oct 2013 will work in favor of the company. These acquired assets will enable Wintrust Financial to expand its operations in Chicago.

Expectations regarding Wintrust Financial’s performance in the quarters ahead are high. The company had positive earnings surprise, with an average of 9.0%, in the trailing four quarters. Also, the company has an Earnings ESP of +1.5% for the fourth quarter, +0.4% for 2013 and +1.4% for 2014.

Estimate Revisions Show Potency

Over the last 60 days, the Zacks Consensus Estimate for Wintrust Financial has increased by 4.6% to $2.74 per share for 2013 and rose 4.4% to $2.84 for 2014.

Wintrust Financial currently has a $1.83 billion market capitalization. Some better-ranked stocks in the regional-midwest banks industry include First Interstate Bancsystem Inc. (FIBK), German American Bancorp Inc. (GABC) and Mainsource Financial Group (MSFG). All the three companies carry a Zacks Rank #1 (Strong Buy).

Read the Full Research Report on WTFC
Read the Full Research Report on FIBK
Read the Full Research Report on GABC
Read the Full Research Report on MSFG

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