Markets

The Zacks Analyst Blog Highlights: UMB Financial, PrivateBancorp, Popular and Wintrust Financial

For Immediate Release

Chicago, IL - June 01, 2016 - Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include UMB Financial Corp. ( UMBF ), PrivateBancorp, Inc. ( PVTB ), Popular, Inc. ( BPOP ) and Wintrust Financial Corp. ( WTFC ).

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free .

Here are highlights from Tuesday's Analyst Blog:

4 Banks to Buy on Yellen's Rate Hike Signal

Rate hike continues to be a topic of much disputation ever since the Federal Reserve hiked the interest rate for the first time in almost a decade last December. As each Fed meeting approaches, the dollar is seen to strengthen, mortgage rates move up and gold falls, only to be later disappointed by the Fed's cautious stance.

However, this time things look quite optimistic. Fed Chair Janet Yellen, in her most recent speech at Harvard University, seemed ready to strike while the iron is hot.

"It's appropriate…for the Fed to gradually and cautiously increase our overnight interest rate over time, and probably in the coming months such a move would be appropriate," Yellen said during a panel discussion at the hallowed university. In support of the hike Yellen also said, "Growth looks to be picking up from the various data we monitor."

Her comments open the door for a possible rate hike at the Fed's next policy meeting during Jun 14-15 or at its gatherings in July or September. The confidence comes on the heels of improving consumer spending, labor markets, housing-market activity, retail sales and industrial production.

Moreover, the modest growth of the U.S. economy in the first quarter reflected its resilience to financial market volatility and a global slowdown. The majority of policy makers are in favor of increasing interest rates as early as June, if economic data continues to be strong.

Therefore, it seems to be the perfect time to keep a tab on stocks that would benefit from an interest rate hike. An interest rate hike will ease some of the pressure on net interest margin (NIM) - a key source of banks' earnings.

Also, banks will earn more from the money that they need to keep at the Fed compared with almost no income from this source in a near-zero rate environment that has prevailed since the last financial meltdown. Moreover, a rising interest rate sends signals of healthy economic growth, which can only mean lesser non-performing assets for the banks.

4 Banking Stocks to Bet On

With the help of the Zacks Stock Screener , we have shortlisted 4 stocks in the banking industry that sport a Zacks Rank #1 (Strong Buy) or #2 (Buy). Interest income form a substantial part of their revenues and therefore, these are well positioned to gain from a rate hike.

UMB Financial Corp. ( UMBF ) is a financial services holding company engaged in providing complete banking, asset management, health spending solutions and related financial services to commercial, institutional and personal customers nationwide. This Zacks Rank #2 company generates at least 40% of its revenue through net interest income (NII).

Notably, according to the company's filings, the company's NII should increase in a rising rate scenario due to an increase in yields on earning assets. According to UMB Financial's projections, a 100-basis-point increase (1 percentage point) in rates will add $6.2 million to its NII.

PrivateBancorp, Inc. ( PVTB ) operates as the holding company for The PrivateBank and Trust Company. The latter provides customized business and personal financial services to middle market companies, business owners, executives, entrepreneurs and families in the U.S. This Zacks Rank #2 company generates more than 80% of its revenue through NII.

The company's margin and NII increased in the first quarter owing to the fourth quarter's rise in short-term interest rates. According to PrivateBancorp's estimates, a 100-basis-point increase (1 percentage point) in rates will raise its NII by 7.2%. Alternatively, a 50-basis-point drop (-0.5 percentage point) will result in a 5.2% decline in NII.

Popular, Inc. ( BPOP ) is a diversified, publicly owned financial holding company subject to the supervision and regulation of the Board of Governors of the Federal Reserve System. The company has operations in Puerto Rico, the United States and the Caribbean and provides various retail and commercial banking products and services primarily to institutional and retail customers through its subsidiaries. This Zacks Rank #2 company earns over 75% of its revenue through NII.

According to the company's filings, a rising rate scenario reflects parallel changes of 200 and 400 basis points during the twelve-month period ending Mar 31, 2017. Under a 200 basis point rising rate scenario, 2016 projected NII will increase by $96 million, while under a 400 basis point rising rate scenario, 2016 projected NII will rise by $188 million.

Wintrust Financial Corp. ( WTFC ) is a bank holding company which provides banking services, trust and investment services, commercial insurance premium financing, short-term accounts receivable financing and certain administrative services. This Zacks Rank #1 company earns more than 70% of its revenue through NII.

According to the company's filings, a 100-basis-point increase (1 percentage point) in rates will result in an 8.9% increase in NII. Alternatively, a 100-basis-point drop will lead to an 8.7% decline in NII.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days . Click to get this free report >>

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free .

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today .

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978. The later formation of the Zacks Rank, a proprietary stock picking system; continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros .

Follow us on Twitter: https://twitter.com/zacksresearch

Join us on Facebook: https://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts

Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.

Media Contact

Zacks Investment Research

800-767-3771 ext. 9339

support@zacks.com

https://www.zacks.com

Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

UMB FINL CORP (UMBF): Free Stock Analysis Report

PRIVATEBANCORP (PVTB): Free Stock Analysis Report

POPULAR INC (BPOP): Free Stock Analysis Report

WINTRUST FINL (WTFC): Free Stock Analysis Report

To read this article on Zacks.com click here.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

UMBF BPOP WTFC

Other Topics

Stocks

Latest Markets Videos

Zacks

Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at www.zacks.com.

Learn More