Seeking Alpha

With consumer loan growth slow and margins slim, the conventional wisdom says C&I loans (and...

With consumer loan growth slow and margins slim, the conventional wisdom says C&I loans (and with them better spreads) at banks should be enough to offset. Sterne Agree isn't so sure, sensing accelerating price competition in this area as well. Most susceptible: CMA, SNV, ZION, SIVB, and CYN - with an estimated 9-16% of EPS risk assuming another 50 bps of spread compression.
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Comments (2)
  • opiekelly7
    , contributor
    Comment (1) | Send Message
    One thing that you failed to mention (regarding SNV) is that once their last TARP payment is made, all of their capital will begin to start paying a yield that will offset any slowdown in loan growth and margin pressure. Full disclosure, I sit on a different bank's board but I am long on SNV and think that it could double in a year before being bought out by Regions, Suntrust, or BB&T.
    13 May 2013, 04:44 PM Reply Like
  • Axcess
    , contributor
    Comment (1) | Send Message
    ZION recently was upgraded with a new target north of $28 per share. It was interesting to watch the stock climb more-than 40 cents from Monday's low of $26.02 against a backdrop of the S&P trading in the red and barely crossing into the green today. Note too that Monday's volume was not all that great so it appears that the short resistance is fading away and clearing a path for ZION to rise. On SNV >I agree with Opiekelly7, to the extent that it is a takeover target, though to what extent its share price rises over the next year remains to be seen.
    14 May 2013, 12:13 AM Reply Like
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