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Banking Sector Outperforms on 'Fed Day'

Stocks in this article: RF CMA BK ^BKX

But this year's stress test scenario incorporates some new twists, and the group of banks being tested has grown to 30 from 18, so investors will certainly be eager to see the results.

The second part of the stress test process will be more important for investors. The Fed on March 26 will announce the results of its annual Comprehensive Capital Analysis and Review (CCAR), which incorporates the banks' plans to deploy excess capital through dividends, share buybacks and/or acquisitions into the same "severely adverse" scenario. Most of the big banks next Thursday will be expected to follow the Fed's announcement with their own announcements.

Please see the following articles for more on what to expect following the stress tests:

Discover, Fifth Third Are Well-Positioned for Higher Payouts After Stress Tests

Banks' Excess Capital Is 'Absolutely a Reality'

Citigroup, Stress Tests and Shareholder Gravy

Why You Should Celebrate Bank Stress Tests


Philip W. van Doorn is a member of TheStreet's banking and finance team, commenting on industry and regulatory trends. He previously served as the senior analyst for TheStreet.com Ratings, responsible for assigning financial strength ratings to banks and savings and loan institutions. Mr. van Doorn previously served as a loan operations officer at Riverside National Bank in Fort Pierce, Fla., and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a bachelor of science in business administration from Long Island University.
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