This Day On The Street
Continue to site
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

3 Bank Stress Test Winners

NEW YORK ( TheStreet) -- The results of the Federal Reserve's annual bank stress tests are a mixed bag, but Jefferies analyst Ken Usdin on Wednesday highlighted three as "relative winners," based on the regulator's approval of their capital plans.

The 19 large, complex bank holding companies subject to the Fed's Comprehensive Capital Analysis and Review (CCAR) for 2012 were stress-tested under a severe economic scenario. The results had to show that the group of 19's estimated Tier 1 common equity ratios would remain over 5% under the adverse economic scenario to pass Fed muster.

In order to have their capital plans approved, the companies' estimated Tier 1 capital ratios at the end of 2013 would have to be above 5%, "with all proposed capital actions through Q4 2013."

Following JPMorgan Chase's announcement that it would raise its dividend by a nickel to 30 cents and that it had authorized $15 billion in share repurchases, the Fed moved up its schedule by two days, to announce the stress test results at 4:30 Tuesday.

One of the biggest sources of relief to investors was that Bank of America (BAC - Get Report) passed the tests, with an estimated Tier 1 common equity ratio under the adverse economic scenario of 5.7%, increasing to an estimated 5.9% at the end of 2013.

Some analysts thought that Bank of America might fail the stress tests, even though the company did not include any plans for increases to its dividend or for share buybacks in its capital plan.

KBW analyst Jefferson Harralson had said on Monday said that Bank of America's estimated Basel 1 Tier 1 common equity ratio could have wound up at 4.66% according to the Fed's stress test scenario, which could have brought tremendous pressure on the shares.

Usdin on Wednesday pointed out that stress test results for SunTrust (STI) and Fifth Third Bancorp (FITB) "disappointed, as the Fed objected to certain aspects of their plans, adding that "for smaller banks yet to report," he saw Comerica (CMA), Huntington Bancshares (HBAN) and Northern Trust (NTRS) as "best positioned to increase payouts this year."

Please see TheStreet's stress test failure roundup for more on SunTrust and Fifth Third.

The following are the three bank holding companies that Usdin says surprised "to the upside" in their approved capital payouts:
1 of 4

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

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
Stocks Under $10

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

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
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
BAC $14.15 -1.50%
KEY $11.99 -1.60%
PNC $85.81 -1.20%
USB $41.86 -1.50%
AAPL $94.36 -0.87%


Chart of I:DJI
DOW 17,700.78 -50.13 -0.28%
S&P 500 2,057.00 -6.37 -0.31%
NASDAQ 4,747.7240 -15.50 -0.33%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs