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Bank Stock Roundup: Q2 Earnings at the Tail End, FITB, STI & RF Beat Estimates
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We are now on the bck half of Q2 earnings season. While most banks that reported results this week managed to beat estimates, concerns over underlying weakness shadowed the optimism.
Results demonstrated an upswing in loans and improved margins. However, lower treasury yields curbed the benefits to some extent. Also, a rise in deposit balances and manageable expense level supported the results.
Investment banking fees were favorable but fixed income and equity trading slumped during the quarter. Also, decline in mortgage origination volume was on the downside.
On the macro front, the Federal Reserve kept the interest rates unchanged.
1. Fifth Third Bancorp (FITB - Free Report) reported second-quarter 2017 adjusted earnings per share of 46 cents, surpassing the Zacks Consensus Estimate of 42 cents. Results were driven by an increase in net interest income and lower provisions. Also, improved credit quality was a tailwind. However, lower non-interest income was an undermining factor. (Read more: Fifth Third Beats Q2 Earnings Estimates, Revenues Lag)
2. SunTrust Banks, Inc.'s (STI - Free Report) second-quarter 2017 earnings of $1.03 per share outpaced the Zacks Consensus Estimate of 98 cents. Results were primarily driven by an increase in net interest income, partially offset by higher expenses. A decline in provision for credit losses was another positive. (Read more: SunTrust's Q2 Earnings Beat Estimates, Costs Increase)
3. Regions Financial Corporation’s (RF - Free Report) second-quarter 2017 earnings from continuing operations of 25 cents per share surpassed the Zacks Consensus Estimate by a penny. Impressive growth in revenues, aided by easing margin pressure supported earnings. A rise in operating expenses and a decline in non-interest income were the undermining factors. (Read more: Revenues Drive Regions Financial Q2 Earnings, Costs Up)
Price Performance
Here is how the seven major stocks performed:
Company
Last Week
6 months
JPM
0.7%
6.5%
BAC
1.3%
3.9%
WFC
1.0%
-2.0%
C
2.4%
19.0%
COF
-3.6%
-4.0%
USB
0.6%
0.0%
PNC
1.1%
6.1%
In the last five trading sessions, Citigroup Inc. (C - Free Report) and Bank of America Corporation (BAC - Free Report) were the top gainers, with their shares increasing 2.4% and 1.3%, respectively. However, Capital One Financial Corp. (COF - Free Report) declined 3.6%.
Citigroup and JPMorgan Chase & CO. (JPM - Free Report) were the best performers in the last six months, with their shares jumping 19% and 6.5%, respectively. On the other hand, shares of Capital One and Wells Fargo & Company (WFC - Free Report) declined 4% and 2%, respectively.
What’s Next?
In the coming five days, price performance of bank stocks is likely to follow a similar trend, unless there is any unprecedented event.
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Bank Stock Roundup: Q2 Earnings at the Tail End, FITB, STI & RF Beat Estimates
We are now on the bck half of Q2 earnings season. While most banks that reported results this week managed to beat estimates, concerns over underlying weakness shadowed the optimism.
Results demonstrated an upswing in loans and improved margins. However, lower treasury yields curbed the benefits to some extent. Also, a rise in deposit balances and manageable expense level supported the results.
Investment banking fees were favorable but fixed income and equity trading slumped during the quarter. Also, decline in mortgage origination volume was on the downside.
On the macro front, the Federal Reserve kept the interest rates unchanged.
(Read: Bank Stock Roundup for the week ending Jul 21, 2017)
Important Earnings of the Week
1. Fifth Third Bancorp (FITB - Free Report) reported second-quarter 2017 adjusted earnings per share of 46 cents, surpassing the Zacks Consensus Estimate of 42 cents. Results were driven by an increase in net interest income and lower provisions. Also, improved credit quality was a tailwind. However, lower non-interest income was an undermining factor. (Read more: Fifth Third Beats Q2 Earnings Estimates, Revenues Lag)
2. SunTrust Banks, Inc.'s (STI - Free Report) second-quarter 2017 earnings of $1.03 per share outpaced the Zacks Consensus Estimate of 98 cents. Results were primarily driven by an increase in net interest income, partially offset by higher expenses. A decline in provision for credit losses was another positive. (Read more: SunTrust's Q2 Earnings Beat Estimates, Costs Increase)
3. Regions Financial Corporation’s (RF - Free Report) second-quarter 2017 earnings from continuing operations of 25 cents per share surpassed the Zacks Consensus Estimate by a penny. Impressive growth in revenues, aided by easing margin pressure supported earnings. A rise in operating expenses and a decline in non-interest income were the undermining factors. (Read more: Revenues Drive Regions Financial Q2 Earnings, Costs Up)
Price Performance
Here is how the seven major stocks performed:
Company
Last Week
6 months
JPM
0.7%
6.5%
BAC
1.3%
3.9%
WFC
1.0%
-2.0%
C
2.4%
19.0%
COF
-3.6%
-4.0%
USB
0.6%
0.0%
PNC
1.1%
6.1%
In the last five trading sessions, Citigroup Inc. (C - Free Report) and Bank of America Corporation (BAC - Free Report) were the top gainers, with their shares increasing 2.4% and 1.3%, respectively. However, Capital One Financial Corp. (COF - Free Report) declined 3.6%.
Citigroup and JPMorgan Chase & CO. (JPM - Free Report) were the best performers in the last six months, with their shares jumping 19% and 6.5%, respectively. On the other hand, shares of Capital One and Wells Fargo & Company (WFC - Free Report) declined 4% and 2%, respectively.
What’s Next?
In the coming five days, price performance of bank stocks is likely to follow a similar trend, unless there is any unprecedented event.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaries," but that should still leave plenty of money for regular investors who make the right trades early. See Zacks' 3 Best Stocks to Play This Trend >>