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NEW YORK (
TheStreet) -- Jefferies analyst Emlen Harmon on Monday said that banks with "Midwest footprints have the greatest probability of economic improvement over the next six months, closely followed by the Northeast."
Using a large "stacked" set of
Federal Reserve data, Jefferies found that the "conventional wisdom that economies in the Northeast, Midwest, and Texas have held up better than other broad regions, while the Southeast and West Coast face more difficulties."
Harmon said that the footprints of
Cullen Frost Bankers (CFR) of San Antonio, Texas,
Signature Bank (SBNY) of New York and
Boston Private Financial Holdings (BPFH) "have held up the best through the cycle, while those of"
Western Alliance BanCorp (WAL) of Phoenix,
Bank of Hawaii (BOH) and
SunTrust (STI - Get Report) of Atlanta, "appear to have fared the worst."
Then again, "there are names that appear to buck the regional trend," and a quick look at the firm's stock ratings shows that two of those that "fared the worst" have low enough valuations for Jefferies to recommend the shares to investors.
Here are the
10 regional banks with "Buy" ratings from Jefferies, moving by region east to west:
Signature Bank Shares of Signature Bank of New York, N.Y., closed at $64.19 Friday, returning 7% year-to-date, following a 20% return during 2011.
The shares trade for twice their tangible book value, according to Thomson Reuters Bank Insight, and for 15 times the consensus 2013 earnings estimate of $4.21, among analysts polled by Thomson Reuters. The consensus 2012 EPS estimate is $3.67.
Jefferies analyst Casey Haire has a $73 price target for Signature Bank.
Harmon said on Monday that "despite mixed footprint macro indicators, SBNY has been able to generate double digit loan growth by taking share away from larger bank competition with its high touch service model delivered by its team model," adding that the "growth has largely been driven by commercial real estate (multifamily and office building), while [commercial and industrial, or C&I] lending has lagged."
Interested in more on Signature Bank? See TheStreet Ratings' report card for this stock.