Wintrust Financial Corporation WTFC is scheduled to report its first-quarter 2015 results on Wednesday, Apr 15, 2015, after market close.
Wintrust reported earnings per share of 75 cents in fourth-quarter 2014, missing the Zacks Consensus Estimate by a penny. However, results compared favorably with the prior-year quarter figure of 70 cents. Results exhibited solid top-line growth on the back of improvement across all segments. This was complemented by a rise in net interest income in the quarter.
Will Wintrust miss on earnings this quarter? Let’s see how things have shaped up.
Factors to Influence First-Quarter Results
In the beginning of the quarter, Wintrust completed the acquisition of Delavan Bancshares, Inc. – the parent company of Community Bank CBD. Community Bank runs four banking locations spread in the southeastern region of Wisconsin.
Further in March, Wintrust struck a cash-only deal to buy IL-based North Bank for about $17 million. Notably, during the same month the company entered into a definitive agreement to acquire Community Financial Shares, Inc. for $42.4 million.
While the recent announced deals will not have any impact on the first quarter, we believe, the quarter would include costs related to the acquisition of Delavan. OREO costs, which include all costs related to obtaining, maintaining and selling other real estate owned properties, are expected to trend downwards in the quarter. Apart from acquisition related costs, overall expenses are expected to remain stable.
We believe Wintrust’s non interest income is likely to get support from the mortgage business. Notably, U.S. banks witnessed a spur in refinance applications due to the reduced mortgage rates in the first quarter. Given such a favorable backdrop, the company might exhibit an improvement in mortgage banking revenue, which constitutes a major source of revenue.
Activities of Wintrust during the quarter were inadequate to win analysts’ confidence. As a result, the Zacks Consensus Estimate for the quarter remained stable at 74 cents per share over the last seven days.
Earnings Whispers
Our proven model does not conclusively show that Wintrust is likely to beat the Zacks Consensus Estimate in the first quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy) or at least 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, this is not the case here as elaborated below.
Zacks ESP: The Earnings ESP for Wintrust is -1.35%. This is because the Most Accurate estimate of 73 cents stands below the Zacks Consensus Estimate of 74 cents.
Zacks Rank: Wintrust’s Zacks Rank #2 (Buy) increases the predictive power of ESP. However, we need to have a positive Earnings ESP to be sure of an earnings beat.
Stocks That Warrant a Look
Here are some stocks you may want to consider, as our model shows that these also have the right combination of elements to post an earnings beat this quarter:
The earnings ESP for The Goldman Sachs Group, Inc. GS is +3.16% and it carries a Zacks Rank #3. The company is scheduled to release its first-quarter results on Apr 16.
JPMorgan Chase & Co. JPM has an earnings ESP of +0.72% and carries a Zacks Rank #2. It is expected to report its first-quarter results on Apr 14.
The earnings ESP for Popular, Inc. BPOP is +9.86% and it carries a Zacks Rank #1. The company is scheduled to release its first-quarter results on Apr 27.
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