NEW YORK -- Citigroup (C), MetLife (MET), SunTrust Banks (STI) and Ally Financial were the notable failures when the Federal Reserve on Tuesday released the results of its capital stress tests on the 19 largest U.S. banks.
Citigroup was the surprise loser of the stress tests, coming in with a 4.9% capital ratio.
"The results showed that Citi exceeded the stress test requirements without the capital actions Citi proposed," Citigroup said in a statement. "However, the Federal Reserve advised Citi that it objected to Citi's proposed return of capital to shareholders. In light of the Federal Reserve's actions, Citi will submit a revised Capital Plan to the Federal Reserve later this year, as required by the applicable regulations."
A number of banks issued stock buyback announcements after the results of the stress tests were released. Discover Financial Services (DFS) announced that its board had approved a $2 billion share repurchase program.Regions Financial (RF) announced that it had begun a public offering of about $900 million of common stock as part of its plan to buy back $3.5 billion of series A preferred stock issued to the U.S. Treasury Department under the Troubled Asset Relief Program. Financial stocks were mixed in premarket trading on Wednesday. Regions shares were gaining 4.7% to $6.05; Citigroup shares were falling 3.8% to $35.07; and Metlife shares were sliding 3.5% to $38.10.
JPMorgan (JPM) passed the Fed's stress test, announced a 5-cent increase in its quarterly dividend to 30 cents a share, and said its board authorized a new $15 billion buyback program. Shares were down 0.1% to $43.33 after popping in the previous session and in after-hours trading.
Chesapeake Energy (CHK) and partners M3 Midstream and EV Energy Partners (EVEP) plan to build a $900 million pipeline system in eastern Ohio that will process and transport natural gas from the Utica shale. The system is expected to be in operation by the second quarter of next year. Chesapeake shares were down 0.3% to $24.62.
BB&T (BBT) passed the stress test with a capital ratio of 6.4%. It raised its quarterly dividend 25% to 20 cents a share from 16 cents.
Guess (GES), the apparel company, is expected by analysts to post fourth-quarter earnings of $1.05 a share on revenue of $778.8 million.
Specialty retailer Pacific Sunwear (PSUN) posted a fourth-quarter loss of 19 cents share on sales of $234.2 million. Analysts were expecting a loss of 22 cents a share on sales of $245.4 million.
PMC-Sierra (PMCS), the chip company with a storage, optical and mobile networks specialty, said its board has approved a new, $275 million share repurchase program. -- Written by Joseph Woelfel and Andrea Tse
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JPMorgan Shares Jump on Dividend, Buyback
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