BB&T: Financial Winner

NEW YORK ( TheStreet) -- BB&T ( BBT) was the winner among the largest U.S. banking names on Wednesday with shares rising 3% to close at $31.88.

The broad indexes pulled back after the U.S. Commerce Department reported that manufactured durable goods orders in February increased 2.2 percent to $211.8 billion, which was a big improvement from January's 3.7% decline, but was behind the consensus forecast of a 2.9% increase, among economists polled by Thomson Reuters. The Commerce Department said that shipments of durable goods declined 0.4 percent during February.

Financial stocks strengthened late in the day, with the KBW Bank Index ( I:BKX) ending up over 1% to close at 50.13.

BB&T's shares have now returned 27% year-to-date, following a decline of 2% during 2011.

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The shares trade for 1.9 times the company's reported Dec. 30 tangible book value of $16.73, and for 11 times the consensus 2012 earnings estimate of $2.89, among analysts polled by Thomson Reuters. The consensus 2012 EPS estimate is $2.51.

Following the completion of the Federal Reserve's 2012 bank holding company stress tests, BB&T on March 13 increased its quarterly dividend by four cents to 20 cents, and also said the regulator hadn't objected to "plans to redeem $3.2 billion of trust preferred securities beginning in 2012 without issuing any replacement capital." The shares now have a dividend yield of 2.51%.

Also on March 13, BB&T modified its deal to acquire BankAtlantic Bancorp's ( BBX) thrift subsidiary, agreeing to pay a premium of up to $316 million to acquire 78 South Florida branches, along $3.3 billion in deposits, while also agreeing to "assume BankAtlantic Bancorp's obligations with respect to its outstanding trust preferred securities, with an aggregate principal balance of approximately $285 million." The company is scheduled to announce its first-quarter results on April 19. The consensus first-

quarter EPS estimate is 56 cents, increasing from 55 cents in the fourth quarter and 32 cents during the first quarter of 2011.

Interested in more on BB&T? See TheStreet Ratings' report card for this stock.

Shares of PNC Financial Services Group ( PNC) of Pittsburgh rose 2.5% to close at $64.70.

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PNC's shares have now returned 13% year-to-date, following a 3% declined ruing 2011.

The shares trade for 9.5 times the consensus 2013 EPS estimate of $6.79.

The company on PNC on March 13 said that the Federal Reserve had "accepted its capital plan and did not object to the capital actions, which included recommendations to increase the quarterly common stock dividend in the second quarter of 2012 and a modest share repurchase program under PNC's existing common stock repurchase authorization."

PNC is currently paying a quarterly dividend of 35 cents a share, for a dividend yield of 2.16%.

The company is scheduled to report its first-quarter results on April 18, and is expected by analysts to post earnings of $1.41 a share, increasing from 85 cents the previous quarter, when earnings of $493 million reflected "$240 million of residential mortgage foreclosure-related expenses primarily as a result of ongoing governmental matters, a noncash charge of $198 million related to redemption of trust preferred securities, and an increase in personnel expense of $103 million primarily driven by higher stock market prices and higher business production."

During the first quarter of 2011, PNC earned $1.57 a share.

Morgan Stanley analyst Betsy Graseck on Sunday raised her price target for PNC by two dollars to $65, although she left her first-quarter EPS estimate unchanged at $1.45. The analyst raised her full year EPS estimate for 2012 by a dime to $6.47, "due to higher mortgage banking fees." Her 2013 EPS estimate is $6.57.

Interested in more on PNC Financial Services Group? See TheStreet Ratings' report card for this stock.

Shares of First Niagara Financial Group ( FNFG), rose 2% to close at $10.05.

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The shares have now returned 17% year-to-date, following a 35% decline during 2011.

First Niagara expects to complete its HSBC ( HBC) branch acquisition on May 18, after which the company will double in size, with roughly 200 branches and 1,200 employees.

Jefferies analyst Casey Haire rates First Niagara a "Buy," with an $11 price target, and said on March 7 that "a big premium amortization hit" from the HSBC deal "will likely deliver ugly 1Q12 results," estimating the company will post operatingearnings of 18 cents a share.

Haire expects Niagara's net interest margin "will rebound in 2Q12 when HSBC deal closes and boost EPS run-rates back into the mid-$0.20's." The analyst expects the company to earn 95 cents a share this year, followed by 2013 EPS of $1.10.

First Niagara's shares trade for nine times the consensus 2013 EPS estimate of $1.09.

Interested in more on First Niagara Financial Group? TheStreet Ratings' report card for this stock.

Wednesday's loser among the largest U.S. banks was Morgan Stanley ( MS), with shares pulling back over 2% to close at $20.24.

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The shares have now returned 34% year-to-date, following a 44% decline during 2011.

Credit Suisse analyst Howard Chen last Friday reiterated his "Outperform" rating for Morgan Stanley, with a $26 price target, and while he expects the company to post operating earnings of 40 cents a share for the first quarter, he expects a bottom-line net loss of 41 cents a share, "entirely to the incorporation of $2.2 Bn in debit valuation adjustment losses."

Chen also said that "franchise restoration, healthier market conditions and the absence of new negatives from here could drive share price outperformance" for the shares.

Morgan Stanley trades for nine times the consensus 2013 EPS estimate of $2.34. The consensus 2012 EPS estimate is $1.92.

Interested in more on Morgan Stanley? See TheStreet Ratings' report card for this stock.

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-- Written by Philip van Doorn in Jupiter, Fla.

To contact the writer, click here: Philip van Doorn.

To follow the writer on Twitter, go to http://twitter.com/PhilipvanDoorn.
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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