This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Regional Banks to Write Home About

Written by Kevin Grewal, Editorial Director at www.SmartStops.net

NEW YORK (TheStreet) --As regional banks unleashed first-quarter earnings, improved performance in the equity and credit markets helped them top expectations.

The world's largest trust bank, The Bank of New York Mellon (BK), exceeded expectations by boasted a profit of $601 million, or 49 cents per share. The primary driver behind this boost in profits came from a rise in assets under custody and fee revenue, two factors indicative of an improving economy and boost in investor confidence.

BNY Mellon's total assets under custody and administration rose to $22.4 trillion, a 15% increase from a year earlier and were attributable to higher-market values and increased business. As for fee revenue, the bank indicated a 13% increase year-over-year, to $696 million for the quarter. BK has gained nearly 17% over the last year and closed at $32.42 on Thursday.

Winston Salem-based BB&T Corp. (BBT) beat Wall Street's expectations by reporting earnings of 27 cents per share, as net interest income and average deposits rose. On the downside, overall income for the regional bank dropped 39% over the past year as it wrote off more bad loans than initially anticipated and saw an increase in net charge offs of 26%.

As for the future, the bank suggests that credit problems are easing and reduced provisions for credit losses by 15% from a year earlier, which could lead to higher profitability in the coming quarters. BBT is up nearly 61% from a year earlier and closed at $34.34 on Thursday.

Another regional bank to reap the benefits of higher revenues from its fee-based business and a slowdown in consumer loan losses was US Bancorp (USB). The Minneapolis-based bank reported nearly a 27% increase in profits and was in line with analyst expectations, releasing earnings of 34 cents per share.

Additionally, the bank has stated that it is generating enough capital to raise its dividend payout, but will refrain from doing so until a sustainable economic recovery is in place. In regards to loan losses, US Bancorp expects losses to remain relatively stable in the next quarter and has set aside $1.3 billion for further losses. USB has gained 46% over the last year to close at $27.37 on Thursday.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,960.57 -123.23 -0.72%
S&P 500 1,978.34 -9.64 -0.48%
NASDAQ 4,449.5640 -22.5440 -0.50%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs