This Day On The Street
Continue to site right-arrow
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

5 Banks 'Potentially At Risk' From Stress Tests

NEW YORK ( TheStreet) -- A separate round of bank stress tests for medium-sized banks could cause some pain for investors, according to Sterne Agee analyst Todd Hagerman.

The Federal Reserve has already been conducting annual stress tests for bank holding companies with total assets of more than $50 billion. The Fed, along with the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency, will require banks with over $10 billion in total assets to stress test themselves, "in a broad range of scenarios from an individual business-line to enterprise-wide perspective," according to Hagerman, who highlighted five banks "that are potentially more at risk" for regulatory actions, that could include dividend cuts for two of the names.

The banks will be expected to hand in their stress test results to their primary regulators by Jan. 5, 2013.

Sterne Agee confined its analysis to banks with between $8 billion and $50 billion in total assets, since the Federal Reserve's stress tests already covered bank holding companies with over $50 billion in assets.

Hagerman said that "banks closer to $50 billion with high payout ratios, low profitability levels, low capital levels, outsized concentrations (especially in commercial and construction)," high ratios of problem loans to total capital and reserves, "and high loan/deposit ratios are more at risk for regulatory action from the stress test than those closer to the $10 billion threshold."

In Sterne Agee's analysis, the firm "included equal weightings on all metrics except for capital," for which a double weighting was applied, using the ratio of tangible common equity to total assets.

Here are the five banks subject to the new regulatory round of stress tests that Hagerman considers "potentially more at risk," counting up by Sterne Agee's stress test risk ranking:

1 of 6

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
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

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
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!
AF $12.79 0.00%
SNV $27.79 0.00%
TCB $15.60 0.00%
VLY $9.39 0.00%
AAPL $124.24 0.00%


DOW 17,678.23 -40.31 -0.23%
S&P 500 2,056.15 -4.90 -0.24%
NASDAQ 4,863.3620 -13.1570 -0.27%

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