Market Overview

Top Bank Stocks To Buy Following Earnings Season

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Analysts at Keefe, Bruyette & Woods recently released a report recapping the Q1 earnings season for bank stocks. Overall, analysts praised the banks for a solid start to 2015.

Key Takeaways

Of the 208 banks that Keefe, Bruyette & Woods looked at, 52 percent beat consensus earnings estimates in Q1. Analysts see net interest income, fee income and loan growth numbers as “solid,” falling mostly in-line with consensus expectations.

Analysts note that spending was further reined in during the quarter and efficiency ratios improved year-over-year. Overall net interest margin (NIM) compression also fell in-line with expectations.

The Numbers

The 52 percent of banks that beat consensus earnings expectations for the quarter is a slight improvement from the last two quarters of 2014, in which less than half of the banks produced earnings beats.

Small and mid-cap banks performed the best during the quarter, with 54 percent of names producing beats. Despite relatively strong earnings, small and mid-cap banks were the worst-performing bank stocks during Q1, generating a median decline of 1.7 percent.

Analysts note that credit conditions remained mostly stable during Q1. Median net charge off (NCO) ratio for the group fell by 3 bps year-over-year (Y/Y), and 2 bps quarter-over-quarter (Q/Q). The median non-performing asset (NPA) ratio fell 34 bps lower Y/Y and 5 bps Q/Q.

Stock Picks

Keefe, Bruyette & Woods has Outperform ratings on the following bank stocks following Q1 earnings season:

  • Avenue Financial Holdings Inc (NASDAQ: AVNU)
  • Capital City Bank Group Inc (NASDAQ: CCBG)
  • Citizens Financial Group Inc (NYSE: CFG)
  • Capital One Financial Corp (NYSE: COF)
  • Eagle Bancorp Inc (NASDAQ: EGBN)
  • Flagstar Bancorp (NYSE: FBC)
  • First Business Financial Services Inc (NASDAQ: FBIZ)
  • Mercantile Bank Corp (NASDAQ: MBWM)
  • MidSouth Bancorp Inc (NYSE: MSL)
  • M&T Bank Corp (NYSE: MTB)
  • Pacific Premier Bancorp (NASDAQ: PPBI)
  • Signature Bank (NASDAQ: SBNY)
  • SVB Financial Group (NASDAQ: SIVB)
  • Square 1 Financial (NASDAQ: SQBK)
  • SunTrust Banks Inc (NYSE: STI)
  • Zions Bancorporation (NASDAQ: ZION)

Latest Ratings for AVNU

DateFirmActionFromTo
Oct 2015Keefe Bruyette & WoodsMaintainsOutperform
Jul 2015Sandler O'NeillInitiates Coverage onBuy
Jun 2015Stephens & Co.Initiates Coverage onEqual-Weight

View More Analyst Ratings for AVNU
View the Latest Analyst Ratings

 

Related Articles (CCBG + AVNU)

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Posted-In: bank stock picks bank stocksAnalyst Color Earnings Long Ideas News Analyst Ratings Trading Ideas

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