Fri, Mar. 27, 9:17 AM
- Returning to a focus on making loans to smaller and mid-sized companies close to its Rust Belt base, KeyBank (NYSE:KEY) grew commercial and industrial loans on its balance sheet by 12.3% in 2014, outpacing regional bank peers like Fifth Third (NASDAQ:FITB) and PNC Financial (NYSE:PNC), where they grew 4% and 10% respectively.
- The home-turf focus has helped the stock price - up 68% since the start of 2013 vs. 40% for the KBW Bank Index (ETF: KRE).
- “We’ve learned our lessons from the downturn,” says CEO Beth Mooney. "We value good execution over fancy strategies ... We want to be where we matter and can get paid for it ... and a predictable earner."
- Risks? The crash in energy prices could threaten at least part of the Midwest's industrial expansion, but analysts say the risk is less that the loans go bad and more than the bank's strong loan growth slows.
- Source: The WSJ's James Sterngold
Mon, Mar. 23, 12:29 PM
- The Regional Bank Coalition is urging D.C. to remove the $50B threshold at which, under current Dodd-Frank rules, lenders are subject to boosted regulatory standards.
- The fight thus far has centered on whether to raise that bar (something even the Fed appears to support) or scrap it altogether.
- "Regional banks do not create systemic exposure through market making or complex networks of interconnected transactions with other financial firms," says the group.
- Regional Bank Coalition website
- The group: SunTrust (NYSE:STI), Regions Financial (NYSE:RF), Huntington Bancshares (NASDAQ:HBAN), Fifth Third (NASDAQ:FITB), Capital One (NYSE:COF), BMO Financial (NYSE:BMO), Compass (NYSE:BBVA), BB&T (NYSE:BBT), Bank of the West, and AmEx (NYSE:AXP).
- ETFs: KRE, KBE, IAT, KBWB, QABA, KRU, KBWR, KRS
Tue, Mar. 17, 2:22 PM
Wed, Mar. 11, 3:10 PM
- "First Niagara (FNFG +0.9%) clearly bit off more than they could chew, trying to do four large acquisitions over a three-year period of time," says analyst Robert Wagner. Now it's paying the price, writes Patty Tascarella, in terms of lagging profits and pressure on the management team to turn things around.
- If no turnaround, who might be a buyer? It would have to be a sizable player, given FNFG's $38B balance sheet.
- Two Ohio-based banks which already have retail presences in Pittsburgh - where Fifth Third operates 59 branches - could make sense, particularly Fifth Third Bank (NASDAQ:FITB), and maybe Huntington Bancshares (NASDAQ:HBAN).
- BB&T (NYSE:BBT) is in the process of buying eastern-PA's Susquehanna Bancshares, and might want to extend its footprint further west, but it could be another few years before BB&T is ready for another major deal.
- Then there's Cleveland-based KeyCorp (NYSE:KEY) which may want to move into a contiguous market, and New York Community Bancorp (NYSE:NYCB) which is based in the same state as First Niagara.
Fri, Mar. 6, 9:46 AM
- A turnaround from the action earlier this year - financials (XLF +0.9%) are marching higher in early action as the averages slip, as nervous investors buy back in following the stress test results. Also helping are surging interest rates following the strong jobs number.
- Looking at a pretty broad screen of bank names, just two - Goldman Sachs and Zions, both of which barely passed the stress test - are lower. Among the others: Bank of America (BAC +3.7%), JPMorgan (JPM +1.1%), U.S. Bancorp (USB +1.6%), Regions FInancial (RF +2.3%), KeyCorp (KEY +2.7%), PNC Financial (PNC +2.3%), BB&T (BBT +2.4%), Fifth Third (FITB +2.2%), Comerica (CMA +3.8%), BNY Mellon (BK +2.9%).
- Among those starved for higher rates: MetLife (MET +3%), Prudential (PRU +3.3%), Lincoln National (LNC +4.1%), AIG (AIG +1.4%), Hartford (HIG +2%), E*Trade (ETFC +3.9%), Schwab (SCHW +4.4%), Ameritrade (AMTD +4.3%).
- Previously: Futures slip after jobs number as yields and dollar soar (March 6)
- ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, KIE, IAT, IAI, SEF, IYG, IAK, FXO, FNCL, KBWB, QABA, FINU, KCE, KRU, RWW, KBWR, RYF, KBWP, KBWI, PSCF, KBWC, FINZ, KRS
Thu, Mar. 5, 8:28 PM
- The minimum Tier 1 common capital ratio for banks is 5%, according to the Fed, and here's how the 31 lenders stacked up under the central bank's severely adverse scenario vs. a year ago (h/t: WSJ):
- Deutshce Bank (NYSE:DB): 34.7%, not tested a year ago
- DIscover (NYSE:DFS): 13.9% vs. 13.2% a year ago
- Bank of New York Mellon (NYSE:BK): 12.6% vs. 13.1%
- American Express (NYSE:AXP): 12.5% vs. 12.1%
- Northern Trust (NASDAQ:NTRS): 12.3% vs. 11.7%
- State Street (NYSE:STT): 11.8% vs. 13.3%
- Citizens Financial (NYSE:CFG): 10.7% vs. 10.7%
- KeyCorp (NYSE:KEY): 9.9% vs. 9.2%
- Capital One (NYSE:COF): 9.5% vs. 7.8%
- PNC Financial (NYSE:PNC): 9.5% vs. 9%
- Santander Holdings USA (SAN's U.S. unit): 9.4% vs. 7.3%; shares +0.8% after hours
- BMO Financial (BMO's U.S. unit): 9% vs. 7.6%
- Comerica (NYSE:CMA): 9% vs. 8.6%
- Huntington Bancshares (NASDAQ:HBAN): 9% vs. 7.4%
- HSBC North America (NYSE:HSBC): 8.9% vs. 6.6%
- U.S. Bancorp (NYSE:USB): 8.5% vs. 8.2%
- Regions Financial (NYSE:RF): 8.3% vs. 8.9%
- Citigroup (NYSE:C): 8.2% vs. 7.2%
- SunTrust (NYSE:STI): 8.2% vs. 8.8%
- BB&T (NYSE:BBT): 8.1% vs. 8.4%
- MUFG Americas Holdings (NYSE:MTU): 8% vs. 8.1%
- Ally Financial (NYSE:ALLY): 7.9% vs. 6.3%
- Fifth Third Bancorp (NASDAQ:FITB): 7.9% vs. 8.4%
- Wells Fargo (NYSE:WFC): 7.5% vs. 8.2%
- M&T Bank (NYSE:MTB): 7.3% vs. 6.2%
- Bank of America (NYSE:BAC): 7.1% vs. 5.9%; shares +2.1% after hours
- JPMorgan (NYSE:JPM): 6.5% vs. 6.3%
- BBVA Compass (NYSE:BBVA): 6.3% vs. 8.5%
- Goldman Sachs (NYSE:GS): 6.3% vs. 6.9%
- Morgan Stanley (NYSE:MS): 6.2% vs. 6.1%
- Zions Bancorp (NASDAQ:ZION): 5.1% vs. 3.6%; shares -1.7% after hours
- The lenders were also informed today whether their capital return plans would put them below the Fed's 5% threshold, giving them a 6-day window with which to change those requests, if need be. Last year, both BofA and Goldman scaled back their dividend/buyback requests, allowing them to pass the CCAR. This year's CCAR results will be announced on Wednesday.
- 2015 Stress Test Methodology and Results
Tue, Mar. 3, 10:09 AM
- "While it is clear that Fifth Third (FITB -0.6%) faces challenges, they also bring to the table a number of positives that we wouldn't normally expect from a bank trading at a discount to the group," says UBS analyst David Eads, starting the stock with a Buy rating and $22 price target.
- He notes the bank had the lowest core efficiency ratio in his coverage universe last year (lower is better), and was second only to M&T in terms of ROTE. Further, FITB has been able to improve its efficiency ratio over the past two years even though revenue growth has been negative. "[It] makes us more confident in their ability to navigate this difficult environment."
- Meanwhile, KBW throws in the towel on its buy recommendation, downgrading to Market Perform.
- Stress tests results are due on Thursday afternoon, with the CCAR six days later.
Wed, Feb. 18, 2:49 PM
- The financial sector had begun to turn around a dismal start to the year as February brought forth a string of hawkish Fed heads suggesting a June rate hike, but the XLF is lower by 0.8% after just-released FOMC minutes suggest markets and the hawks are getting ahead of themselves. KBE -1.7%, KRE -2%
- The TBTFs: BofA (BAC -2.2%), JPMorgan (JPM -1.4%), Wells Fargo (WFC -1.6%), Ciitgroup (C -0.8%)
- The regionals: Regions Financial (RF -1.6%), KeyCorp (KEY -1.6%), PNC Financial (PNC -1.3%), BB&T (BBT -1.5%), Fifth Third (FITB -1.6%), SunTrust (STI -1.7%), First Niagara (FNFG -2.1%), M&T (MTB -1.9%), U.S. Bancorp (USB -1.3%), First Horizon (FHN -2.7%).
- Online brokerage: Schwab (SCHW -2.3%), E*Trade (ETFC -1.7%), Ameritrade (AMTD -1.1%), Interactive Brokers (IBKR -0.9%).
- Previously: FOMC minutes: June rate hike not a slam dunk yet (Feb. 18)
- ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, IAT, IAI, SEF, IYG, FXO, FNCL, KBWB, QABA, FINU, KCE, KRU, RWW, KBWR, RYF, KBWC, FINZ, KRS
Tue, Feb. 10, 7:30 AM
- Deutsche buys the dip in Citigroup (NYSE:C), upgrading to Buy from Hold with price target lifted to $54 from $51. Admitting that 2015 estimates for the bank are too high, Deutsche says the sizable decline in the stock has already priced this in.
- Alongside this move is a downgrade to Hold from Buy for Fifth Third Bancorp (NASDAQ:FITB).
- C +1.5%, FITB -1.5% premarket
Wed, Feb. 4, 3:38 PM
- "One can only hope January will be the cruelest month for bank investors in 2015 with the S&P 500 Regional Bank Index and Nasdaq Bank Index declining 9.7% and 8.9%, respectively (vs. the S&P's 3.1% drop)," says Sterne Agee.
- If buying the dip, says the team, look for those regional names with fee-income-generating businesses which can hedge against the flatter yield curve. Fitting the mold would be Buy-rated Fifth Third Bancorp (FITB +1.1%) and BB&T (BBT +0.4%), as well as Neutral-rated U.S. Bancorp (USB +1.5%).
- "Those banks with operating-fee businesses (asset management, insurance, mortgage, capital markets) are in a better position to support EPS growth until the rate environment turns."
- Previously: Financials go on sale in January (Jan. 24)
Mon, Jan. 26, 8:00 AM| Comment!
Thu, Jan. 22, 11:44 AM
- "Our more negative outlook stems from our belief that rates will likely stay lower longer than is incorporated into broader management guidance, leading to flat to down revenues for the year," says Paul Miller, cutting Fifth Third Bancorp (FITB +1.2%) to Market Perform from Outperform, with price target reduced to $20 from $25.
- "While some strength in fee income, driven by mortgage and other areas, could offset some of the associated margin and spread income pressure, we also believe higher operating expenses will lead to lower earnings year over year. This provides limited room for multiple expansion."
- Previously: Slimming interest margins at Fifth Third (Jan. 21)
Wed, Jan. 21, 7:33 AM
- Q4 net interest income of $888M vs. $905M one year ago, with NIM of 2.96% down 26 basis points.
- Noninterest income of $653M vs. $703M one year ago, with mortgage banking revenue of $61M down 51%. Originations of $1.7B vs. $2.6B.
- Noninterest expense of $918M vs. $989M one year ago, with salaries, wages, and incentives of $366M vs. $388M. This Q4 also includes a $3M reversal of litigation reserves vs. a $4M charge one year ago.
- Tier 1 common equity ratio of 9.65% up 20 basis points Y/Y. Book value per share of $17.35 vs. $15.85. TBVPS of $14.40 vs. $13.
- Conference call at 9 ET
- Previously: Fifth Third Bancorp EPS of $0.43 (Jan. 21)
- FITB no trades premarket
Wed, Jan. 21, 6:32 AM
Tue, Jan. 20, 5:30 PM
Mon, Jan. 5, 1:25 PM
- "We view Wells Fargo (WFC -2.7%) as a core bank holding, but shares have reached our price target and we believe sentiment is now overwhelmingly positive after leading returns in 2014 (+21%, #1 among the top 50 banks)," says Baird's David George, who earlier downgraded the stock from Outperform to Neutral.
- Put the money in another bank? Not so quick, says George, suggesting the Fed could tighten later and be less aggressive than most expect, disappointing those hoping for higher rates to boost profits. Other than Wells Fargo, George sees sentiment highest in PNC Financial (PNC -2.7%), SunTrust (STI -3.9%), and U.S. Bancorp (USB -2.2%).
- Asset-sensitive names like Comerica (CMA -3.7%) and Zions (ZION -3.4%) lagged in 2014, but estimates still look to high.
- Top ideas would be Fifth Third (FITB -2.7%), Capital One (COF -2.4%), and JPMorgan (JPM -3%), but George is having a tough time finding value in the sector.
- Previously: Longtime Wells Fargo bull rings the register (Jan. 5)
FITB vs. ETF Alternatives
Fifth Third Bancorp along with its subsidiaries provides financial products and services such as checking, savings and money market accounts, and credit products such as credit cards, installment loans, mortgage loans and leases.
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