Miller said in a report on Friday that in addition to JPMorgan, the companies that "disappointed" in the Fed's stress test results included Goldman Sachs (GS), and Morgan Stanley (MS). Lower minimum Tier 1 common ratios for the big brokers imply "a decreased likelihood for higher capital deployment scenarios in the form of both buybacks and dividends relative to 2012," Miller wrote.
Miller wrote that the following four banks were "best positioned as winners," from the stress tests:
- Fifth Third Bancorp (FITB) of Cincinnati. The bank would lose roughly $300 million under the Federal Reserve's "severely adverse scenario," operating through 2014 with a minimum Tier 1 common equity ratio of 8.6%.
- KeyCorp (KEY) of Cleveland. The bank's losses through 2014 would total $2.4 billion, with a minimum Tier 1 common equity ratio of 8.0%.
- SunTrust (STI) of Atlanta. The bank would lose $4.1 billion through 2014, with a minimum Tier 1 common ratio of 7.3%.
- PNC Financial Services Group (PNC). PNC would lose $1.4 million through 2014 under the Fed's scenario of a severe recession, with a minimum Tier 1 common equity ratio of 8.7%.
"Companies with robust stressed capital levels trading at or below tangible book stand to benefit the most from increased share buybacks and higher dividends," Miller wrote. "The most likely beneficiaries, in our view, are Bank of America and KeyCorp."
Bank of America's shares closed at $12.26 on Thursday. The shares traded for 0.9 times their reported Dec. 31 tangible book value of $13.36.
KeyCorp closed at $9.96 Thursday. The stock traded just above tangible book value, according to Thomson Reuters Bank Insight.-- Written by Philip van Doorn in Jupiter, Fla. >Contact by Email. Follow @PhilipvanDoorn
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV