This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
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
TheStreet Open House

6 Banks Actually Growing Their Banking Business

Stocks in this article: COF DFS TCB CVBF WAFD CATY BRKL SFNC

NEW YORK ( TheStreet) -- Now that the bulk of first-quarter earnings season has passed, TheStreethas identified six actively traded banks that grew their net interest income and their net interest margins.

And that's no mean feat in a prolonged low-rate environment.

While so much of the earnings coverage this season has focused rightly on recovering trading revenues for the largest U.S. banks, and also on confusing one-time items, some banks have also managed to grow their actual banking businesses.

Using data provided by HighlineFI, we isolated six actively traded names that grew their first-quarter net interest income sequentially and year-over-year, and to keep things honest, since these numbers could easily go up just from acquisitions, we only included banks that also saw sequential and year-over-year increases in net interest margin, which is the difference between the average yield on loans and investments and the average cost for a bank's deposits and wholesale borrowings.

We limited the list to actively traded names with average trading volume of at least 40,000 shares.

This type of approach excludes a couple of solid earners that grew their net interest income very nicely, but saw their net interest margins decline, along with other credit card lenders:

  • Discover Financial (DFS - Get Report) grew its first-quarter net interest income by 3% sequentially and 10.5% year-over-year, to $$1.3 billion during the first quarter. The company was excluded from our list because its net interest margin declined to 7.63% during the first quarter from 7.95% in the fourth quarter. Discover's first-quarter return on average assets (ROA) was 3.63% and its return on average equity (ROW) was a world-beating 29.57%, according to HighlineFI.
  • Capital One Financial (COF - Get Report) saw its first-quarter net interest income increase by 7% sequentially and 9% year-over-year, to $3.4 billion. The company was excluded from our list because its first-quarter net interest margin of 6.20% declined from 7.26% the previous quarter, reflecting the fact that the deposits gained through the company's ING Direct (USA) acquisition have yet to be deployed through the purchase of HSBC's (HBC) U.S. credit card portfolio, which is expected to be completed during the second quarter. Capital One's first-quarter ROA was 2.28% and its ROE was 17.02%, according to HighlineFI.

Here are the six actively traded bank stocks, for companies that through Tuesday had reported sequential and year-over-year increases in net interest income, as well as in their net interest margins, ordered by ascending year-over-year growth in net interest income:

1 of 7

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link 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

Jim Cramer's protégé, 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
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, 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
Options Profits

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

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
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!

Markets

DOW 17,164.95 -251.90 -1.45%
S&P 500 1,994.99 -26.26 -1.30%
NASDAQ 4,635.24 -48.1670 -1.03%

Partners Compare Online Brokers

Free Reports

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