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TheStreet Open House

Regional Banks Shine at End of Rough Week for Sector

NEW YORK (TheStreet) -- Huntington Bancshares (HBAN) was the winner among large-cap bank stocks Friday, with shares rising 1.6% to close at $9.86.

The broad indices all ended with gains, following European markets higher after Chinese Premier Li Keqiang said at an economic development seminar that his government was prepared to take further measures, "to maintain economic growth at a reasonable range."

Back home, the Bureau of Economic Analysis said personal income and personal spending in February both rose by 0.3%. Those results matched the consensus expectations of economists, according to Zacks.

The University of Michigan's Index of Consumer Sentiment for March fell to a reading of 80 -- its lowest reading in four months -- from 81.6 in February. This was in contrast to the Conference Board's Consumer Confidence Index for March, which on Tuesday came in at 82.3, increasing from 78.3 in February. The Michigan reading for March was revised upward from the previous estimate of 79.9, but came in below the consensus estimate of 80.6.

The BKW Bank Index (I:BKX) rounded out the week with a 0.5% increase to 71.44, with all 24 index components ending with gains, except for Citigroup (C), which was down 0.4% to $47.25, and Bank of America (BAC), which was down 0.2% to close at $16.98.

Please see Citigroup's Business Model Is 'Not Sustainable,' for more negative fallout the rejection of the bank's 2014 capital plan by the Federal Reserve on Wednesday.  The Fed's decision was a surprise to the bank and to analysts, since it was not based on any deficiency in capital but was based on "qualitative" concerns.  Citi's stock was down nearly 6% from a week earlier.

In addition to Huntington, regional banks seeing solid gains on Friday included Comerica (CMA) of Dallas, KeyCorp KEY of Cleveland, Regions Financial RF of Birmingham, Ala., and Zions Bancorporation (ZION) of Salt Lake City.

Following the completion of the Federal Reserve's Comprehensive Capital Analysis and Review (CCAR) for 30 large banks, Huntington of Columbus Ohio on Wednesday announced the regulator had approved its plan to raise its quarterly dividend by a penny to 6 cents a share, and to repurchase up to $250 million in common shares from the second quarter of 2014 through the first quarter of 2015. Huntington's shares were down slightly for the week.

Comerica on Wednesday announced regulatory approval for its 2014 capital plan, which included an increase in the bank's quarterly dividend to 20 cents a share from 19 cents, subject to the approval of the bank's board of directors on April 22. The bank's capital plan also includes up to $236 million in common-share buybacks. Comerica's stock rose 1.3% on Friday to close at $51.09. The shares were down 2.4% for the week.

KeyCorp on Wednesday said the Fed had approved a "potential" increase in the bank's quarterly dividend to 6.5 cents a share from 5.5 cents, and had also approved up to $542 million in common-share buybacks. KeyCorp's stock was up1.1% to $14.14. The stock was down 1.5% for the week.

Regions Financial on Wednesday announced regulatory approval for is 2014 capital plan, including an increase in its quarterly dividend to 5 cents a share from 3 cents, and for common-share repurchases of up to $350 million. The bank's stock rose 1.5% Friday to close at $10.95. The stock was down 1.3% for the week.

Zions failed the first round of the Federal Reserve's annual stress tests last week, and this week had its 2014 capital plan rejected by the regulator. The company will submit a revised capital plan by April 30. Zions Bancorporation saw its stock rise 1.5% to $30.29 on Friday, but the shares were down 3% for the week.

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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