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Keefe, Bruyette & Woods: Winners And Losers From Fed Stress Test

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Keefe, Bruyette & Woods analysts released a report Friday morning giving their take on the Dodd-Frank Act Stress Test (DFAST) results released on Thursday. Analysts picked the top winners and losers from the group of banks.

Analysts used three metrics from the report to gauge the relative performance of the banks: 1 estimated loan losses, 2. Pre-tax return on average assets (ROAA) and 3. Minimum Tier 1 common capital ratio.

It's important to note that the report focused on only the 11 of the 31 banks under coverage by Keefe, Bruyette & Woods.

Winners

Only two banks came in above the median in all three categories: Huntington Bancshares Inc (NASDAQ: HBAN) and PNC Financial Services Group Inc (NYSE: PNC). Analysts see these two banks as the clear winners from the group.

Losers

Three banks has results lower than the median in all three categories: Fifth Third Bancorp (NASDAQ: FITB), JPMorgan Chase & Co. (NYSE: JPM) and Wells Fargo & Co (NYSE: WFC). Analysts found Wells Fargo's results particularly disappointing, as both the bank's minimum Tier 1 capital ratio and its pre-tax ROAA came in lower than last year's levels.

The Rest

Of the remaining six banks that these analysts cover, they view the results of BB&T Corp (NYSE: BBT), KeyCorp (NYSE: KEY), SunTrust Banks Inc (NYSE: STI) and U.S. Bancorp (NYSE: USB) as relatively strong and the results of Bank of America Corp (NYSE: BAC) and Regions Financial Corp (NYSE: RF) as relatively weak.
Analysts note that even though Bank of America's overall results were weak, the market could see the bank's Tier 1 ratio of 7.1 percent as a positive, given the large improvement over last year's 5.9 percent ratio.

Disclosure: The author owns shares of Bank of America and Wells Fargo.

Latest Ratings for HBAN

DateFirmActionFromTo
Feb 2021Morgan StanleyMaintainsEqual-Weight
Jan 2021Raymond JamesMaintainsOutperform
Jan 2021Morgan StanleyMaintainsEqual-Weight

View More Analyst Ratings for HBAN
View the Latest Analyst Ratings

 

Related Articles (HBAN + PNC)

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Posted-In: Bruyette & Woods KeefeAnalyst Color Federal Reserve Analyst Ratings

Latest Ratings

StockFirmActionPT
TDOCDA DavidsonMaintains275.0
ITRIOppenheimerMaintains127.0
CLHOppenheimerMaintains95.0
TDOCOppenheimerMaintains270.0
CHEOppenheimerMaintains580.0
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