Sterne Agee Reiterates Neutral Rating on MB Financial

In a report published Monday, Sterne Agee Group reiterated its Neutral rating on MB Financial (NASDAQ: MBFI).

Sterne Agee noted, “Although MBFI remains Neutral-rated, the shares are more attractive based on the current valuation of 11x 2013E EPS, 1.2x TBVPS, and a yield of 2.0%. The purchase of Celtic Leasing supports our 2013E and 2014E EPS, which are modestly above consensus EPS estimates. Management indicated that the cash purchase of Celtic Leasing will be ‘modestly accretive to MBFI's 2013 earnings' which we believe supports our 2013E EPS of $1.75 and 2014E EPS of $1.85 vs. consensus of $1.69 and $1.78, respectively. We estimate that the purchase of Celtic will benefit EPS by $0.03-$0.05 in 2013E, assuming incremental leasing growth of $40-$50 million yielding 5.0-6.0%, modestly higher spread income on Celtic's leasing volume that was previously funded by MBFI, and fees from originations and residual gains.”

MB Financial closed on Friday at $19.55.

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