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5 Regional Banks to Watch Heading Into Earnings (Update 2)

Stocks in this article: BAC COF USB FITB STI JPM C WFC BBT PNC

U.S. Bancorp

Shares of U.S. Bancorp closed at $33.93 Thursday, returning 7% during the first quarter, following a 21% return during 2012. The shares trade for 2.7 times tangible book value, according to Thomson Reuters Bank Insight, and for 10.3 times the consensus 2014 earnings estimate of $3.28, among analysts polled by Thomson Reuters. The consensus 2013 EPS estimate is $3.07.

The company on March 14 announced it would raise its quarterly dividend to 23 cents a share from 19.5 cents, and that it had received Federal Reserve approval for up to $2.25 billion in share repurchases through the first quarter of 2014. Based on Thursday's market close, the shares have dividend yield of 2.71%.

U.S. Bancorp will announce its first-quarter results on April 1. Analysts polled by Thomson Reuters expect the company to report earnings of 74 a share, declining from 75 cents in the fourth quarter, but increasing from 67 cents in the first quarter of 2012.

U.S. Bancorp's stock trades at the highest price-to-tangible-book multiple among the 24 components of the KBW Bank Index, although 14 of the index components trade at higher forward price-to-earnings multiples. The company's long-term earnings track record speaks for itself, with returns on average tangible common equity ranging from 14.18% to 23.09% over the past five years, according to Thomson Reuters Bank Insight. When considering that some of the other high performers posted negative returns on equity in 2009, USB's long-term performance is in a class by itself.

Deutsche Bank analyst Matt O'Connor rates U.S. Bancorp a "buy" and estimates first-quarter EPS of 74 cents, in line with the consensus. O'Connor said in a report on March 22, he expects the company's noninterest income "to be down 1.7% un-annualized q/q in 1Q primarily due to lower mortgage banking revenue (we estimate -9%) and seasonally lower deposit service charges/credit and debit card revenues."

USB Chart USB data by YCharts

Interested in more on U.S. Bancorp? See TheStreet Ratings' report card for this stock.

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