On Dec 3,
First Business Financial Services
) touched a 52-week high of $38.38. The momentum was driven by
the company's solid third-quarter 2013 results and its efforts to
enhance shareholders' value.
First Business Financial delivered positive earnings surprises in
two of the last four quarters with an average beat of 7.22%. In
the last reported quarter, the company posted impressive results
delivering a positive earnings surprise of nearly 11.0%. Earnings
also fared well year over year.
The better-than-expected results were primarily driven by
sustained growth in high quality loans, better asset quality and
successful execution of First Business Financial's initiatives to
enhance its full banking relationship with executives, businesses
and high net-worth individuals.
FIRST BUS FINL (FBIZ): Free Stock Analysis
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First Business Financial's top-line grew 5% year over year in the
third quarter riding on the strength of higher net interest
income that in turn was driven by consistent growth in the loan
and lease portfolio as well as on reduced cost of
While efficiency ratio improved 362 basis points year over year,
net interest margin increased 6 basis points.
The company has been consistently paying cash dividends to its
shareholders, retaining investor confidence as well as attracting
new investors. . Moreover, after a hiatus of 5 years, the board
of directors raised the quarterly cash dividend by 100% in Jun
2013. First Business Financial's dividend of 14 cents per share
currently yields 1.46%.
These positives led the company to witness rising estimates. The
Zacks Consensus Estimate moved north by 3% to $3.39 per share
over the last 60 days, as all the estimates were revised upward.
For 2014, the Zacks Consensus Estimate went up 3.5% to $3.54 per
share over the same period. The expected long-term earnings
growth of First Business Financial is 5%.
Valuation for First Business Financial looks reasonable. The
shares are trading at a discount to the peer group average on a
price-to-book basis but at a slight premium on a forward
price-to-earnings basis, return on equity is also slightly higher
than the return of the peer group. The 1-year return from the
stock was 62.6%, above the Nasdaq's return of 34.1%.
First Business Financial presently carries a Zacks Rank #2 (Buy).
Some other stocks worth considering in the financial sector
First Interstate Bancsystem Inc.
German American Bancorp Inc.
). All these stocks sport a Zacks Rank #1 (Strong Buy).