FBIZ: Fourth Quarter EPS on Target; Raising 2013 EPS Estimate by a Nickel - Analyst Blog
11 Februar 2013 - 5:07PM
Zacks
FBIZ: Fourth Quarter EPS on Target; Raising 2013 EPS
Estimate by a Nickel
By Ann Hefforn, CFA
First Business
Financial Services, Inc. (NasdaqGM:FBIZ) posted net
income of $2.5 million up 6% from the $2.4 million earned in the
year-ago quarter.
Diluted earnings per
share fell 5% to $0.86 (matching our estimate) from $0.90 in last
year’s fourth quarter due to an increased number of average shares
outstanding. In December 2012, FBIZ sold 1.265 million common
shares, raising $29.1 million, which it used to retire subordinated
debt.
Compared to the year-ago
quarter, fourth quarter results were boosted by a 6% gain in net
interest income due to 3% growth in average interest-earning assets
and an 8 basis-point rise in the net interest margin, as well as a
41% jump in noninterest income and a 10% drop in the loan loss
provision.
This was partly offset by
a 19% increase in total noninterest expense, largely reflecting 31%
higher compensation costs due to the hiring of additional business
development officers and the start-up of First Business Factors,
and a 13% increase in average diluted shares outstanding.
For the year, FBIZ earned
$8.9 million, or $3.29 per diluted share, up 16% from the $7.7
million, or $2.94 per diluted share in 2011, which excludes a $0.7
million, or $0.29 per diluted share, one-time tax benefit related
to a change in regulation for net operating loss carryforwards by
the state of Wisconsin.
We are raising our 2013
diluted EPS estimate by a nickel to $3.05 from $3.00. This increase
primarily reflects changes to our estimates for net interest
income, the loan loss provision, and effective income tax rate.
We note that the ABA
Banking Journal ranked FBIZ 15th among all publicly
traded banks with $1-10 billion in total assets (of which there are
about 250 companies in the US), based upon ROE in 2011, which was
12.8% for FBIZ. It is the first time FBIZ has made this list, and
speaks to the tremendous improvement in operating performance the
Company has made over the last few years.
First Business Financial
Services, Inc. (FBIZ or the Company) is a bank holding company
headquartered in Madison, Wisconsin, with $1.2 billion in total
assets at December 31, 2012. FBIZ specializes in business lending
for small-medium-sized companies with sales ranging from $2-50
million. As an adjunct to these services, FBIZ also offers banking
services to business owners, executives, professionals, and high
net worth individuals, though this is a less significant part of
its business.
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