Wintrust Financial Corporation ( WTFC ) recently announced a 122% increase in its annual dividend rate. The announcement came a couple of days after the release of its fourth quarter 2013 results on Jan 21. The sharp hike in the dividend rate had little impact on the company's share price.
The increase has brought the annualized dividend rate to 40 cents from the earlier rate of 18 cents per share. Wintrust Financial adopted a quarterly dividend payment mode instead of semi-annual payments made earlier. The quarterly dividend rate of 10 cents will be paid on Feb 20, 2014 to shareholders of record as of Feb 6.
The hike signals the company's strong cash position which can only warrant shareholder rewards through dividend hikes.
A brief snapshot of Wintrust Financial's recently reported fourth quarter 2013 results is provided below.
Wintrust Financial reported earnings per share of 70 cents in the fourth quarter, up from 61 cents recorded in the year-ago quarter and in line with the Zacks Consensus Estimate. The top-line performance was however weak. Total revenue was down 5% year over year to $1.9 billion. A 7% rise in net interest income was more than offset by a 29% fall in non-interest income.
Provision for credit losses in the quarter was down 81% from the prior-year quarter to $3.9 million. Net charge-offs, as a percentage of loans, excluding covered loans, stood at 0.44% on an annualized basis, down 39 basis points year over year. Net loans increased 7% year over year to $13.1 billion. Further, total deposits rose 2% year over year to $14.7 billion.
In the last 7 days, the Zacks Consensus Estimate for Wintrust Financial increased by 0.3% to $2.87 for 2014 and remained stable at $3.15 for 2015. These estimates reflect year-over-year growth of 4.4% for 2014 and 9.7% for 2015.
Wintrust Financial provides banking and related services in the Chicago metropolitan area and in southeastern Wisconsin. The company currently has $2.1 billion market capitalization and holds a Zacks Rank #2 (Buy).
Other Midwest banks worth considering include First Interstate Bancsystem Inc. ( FIBK ), First Financial Bancorp ( FFBC ) and Independent Bank Corporation ( IBCP ). While First Interstate Bancsystem holds a Zacks Rank #1 (Strong Buy), both First Financial Bancorp and Independent Bank carry a Zacks Rank #2 (Buy).