5 Bank Earnings Winners From Jefferies

NEW YORK ( TheStreet) -- Jefferies analyst Ken Usdin on Friday highlighted five regional bank "winners" based on first-quarter earnings reports this week.

The analyst said that in addition to beating consensus earnings estimates, the group of five banks "have also put up decent loan growth and kept net interest margin relatively stable," which isn't easy in the prolonged low-rate environment.

Usdin said the only "definitive miss" this week was First Horizon National ( FHN) of Memphis, Tenn., which on Thursday reported first-quarter net income available to common shareholders of $30.5 million, or 12 cents a share, missing the consensus EPS estimate of 13 cents, among analysts polled by Thomson Reuters, which the analyst blamed on higher-than-expected mortgage putback expenses, along with net interest margin pressure.

The analyst said that "as expected," industry "loan growth has moderated in the first quarter, driven by a seasonal slowdown in commercial and industrial lending and continued real estate-related run-off, adding that "management teams continue to sound upbeat about growth prospects for the remainder of the year."

Heading into next week, Usdin thinks that Signature Bank ( SBNY) and SVB Financial Group ( SIVB) "could fare better on loan growth," while Regions Financial ( RF) and Zions Bancorporation ( ZION), "could be a bit more challenged."

Usdin also said that among banks that haven't yet reported, SunTrust ( STI) "is most exposed" to new mortgage repurchase claims.

The following are the five regional bank earnings winners for this week, from Jefferies:

PNC Financial Services Group
Shares of PNC Financial Services ( PNC) of Pittsburgh closed at $64.60 Thursday, returning 13% year-to-date.

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The shares trade for 1.4 times tangible book value, according to HighlineFI, and for nine times the consensus 2013 earnings estimate of $6.88 a share, among analysts polled by Thomson Reuters. The consensus 2012 EPS estimate is $6.15.

Based on a quarterly payout of 40 cents, the shares have a dividend yield of 2.48%.

PNC on Wednesday reported first-quarter earnings of $811 million, or $1.44 a share, compared to $493 million, or 85 cent a share, during the fourth quarter of 2011. The bank reported a profit of $832 million, or $1.57 a share, during the first quarter of 2011.

The first-quarter results came in a penny ahead of the consensus estimate.

Following the industry trend, PNC's mortgage revenue increased 18% year-over-year, to $230 million.

Following PNC's earnings announcement, Usdin reiterated his "Buy" rating for PNC, while raising his price target for the shares by two dollars to $72, and increasing is 2012 EPS estimate to $6.90 from $5.85, and his 2013 EPS estimate to $6.60 from $6.45, saying that the "outsized jump in '12 is based on the switch to exclude merger and integration charges ($0.46)."

Aside from the merger expense accounting from PNC's acquisition of RBC Bank (USA), Usdin said his estimate increases were "primarily the result of higher net interest margin and lower provision for loan losses assumptions," with some offset from increasing expenses.

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

Huntington Bancshares
Huntington Bancshares ( HBAN) of Columbus, Ohio, has seen its stock return 18% year-to-date, closing Thursday at $6.45.

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The shares trade for 1.2 times tangible book value, according to HighlineFI, and for 10 times the consensus 2013 EPS estimate of 66 cents. The consensus 2012 EPS estimate is 63 cents.

Based on a quarterly payout of four cents, the shares have a dividend yield of 2.48%.

Huntington on Wednesday reported a 21% year-over-year increase in first-quarter profit, to $153.3 million, or 17 cents a share, beating the consensus EPS estimate of 14 cents.

Earnings increased from $126.9 million, or 14 cents a share, during the fourth quarter, and $126.4 million, or 14 cents a share, during the first quarter of 2011.

The company's noninterest income increased 24% from the fourth quarter and 21% year over year to $285.3 million, reflecting $23 million in gains on auto loan securitizations and $46.4 million in mortgage banking income.

Usdin rates Huntington a "Buy," and after the company reported its first-quarter results raised his price target for the shares by 50 cents to $7.50, while raising his full-year 2012 and 2013 EPS estimates both by a nickel, to $65.

The analyst said his revision "bake-in modest benefits from recent acquisitions and a better legacy net interest income run-rate."

Interested in more on Huntington Bancshares? See TheStreet Ratings' report card for this stock.

Comerica
Shares of Comerica ( CMA) of Dallas closed at $31.63 Thursday, returning 23% year-to-date.

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The shares trade just below times tangible book value, according to HighlineFI, and for 12 times the consensus 2013 EPS estimate of $2.72. The consensus 2012 EPS estimate is $2.50.

Comerica on Tuesday reported first-quarter net income of $130 million, or 66 cents a share, soundly beating the consensus estimate of 55 cents.

In comparison, the company earned $96 million, or 48 cents a share, during the fourth quarter, and $103 million, or 57 cents a share, during the first quarter of 2011. The fourth-quarter results included $37 million in restructuring charges associated with the purchase of Sterling Bancshares last July.

The year-over-year earnings improvement reflected a 21% increase in net interest income, to $443 million in the first quarter, partially reflecting the Sterling acquisition, and a decline in the provision for loan losses to $23 million in the first quarter from $49 million a year earlier.

Following Comerica's earnings announcement, Usdin reiterated his "Hold" rating on the shares, but increased his price target by three dollars to $34, while raising his 2012 EPS estimate to $2.60 from $2.35, and his 2013 EPS estimate to $2.75 from $2.55.

The analyst said "we appreciate the earnings ramp CMA should get from higher interest rates (at some point), but current/next year valuations seem relatively fair at this time."

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

M&T Bank
Shares of M&T Bank ( MTB) of Buffalo closed at $86.95 Thursday, returning 15% year-to-date.

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The shares trade for 2.3 times tangible book value, according to HighlineFI, and for 12 times the consensus 2013 EPS estimate of $7.48. The consensus 2012 EPS estimate is $6.71

Based on a quarterly payout of 70 cents, the shares have a dividend yield of 3.22%.

M&T Bank on Monday reported first-quarter net income available to common shareholders of $188.2 million, or $1.50 a share, beating the consensus EPS estimate of $1.48.

The bank reported a 24% increase in mortgage banking revenue, to $56.2 million.

Usdin rates M&T a "Hold," and on Monday raised his price target for the shares by a dollar to $89, while raising his 2012 EPS estimate by 10 cents to $6.80 and his 2013 estimate by 10 cents to $7.20, saying "questions on capital levels continue to be a modest overhang, but MTB has a clear path to strong core earnings generation, in our view, which should help justify its premium to the group."

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

First Republic Bank
Shares of First Republic Bank ( FRC) of San Francisco closed at $33.27 Thursday, returning 9% year-to-date.

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The shares trade for 1.8 times their reported March 31 tangible book value of $18.91, and for 12 times the consensus 2013 EPS estimate of $2.73. The consensus 2012 EPS estimate is $2.65.

The company on Wednesday initiated a 10-cent quarterly dividend, beginning in the third quarter of 2012.

First Republic Bank on Wednesday reported first-quarter net income of $91.8 million, or 67 cents a share, beating the consensus EPS estimate of 65 cents. In comparison, the bank earned $88.9 million, or 67 cents a share the previous quarter, and $90.7 million, or 68 cents a share, a year earlier.

Jefferies analyst Casey Haire rates First Republic Bank a "Hold," and on Wednesday reiterated his rating, while saying the first quarter was a "solid quarter overall with loan growth overcoming seasonal challenges (up 5%), NIM expansion (up 9bp), and capital return announcement ($0.10 quarterly dividend beginning 3Q12)."

Haire estimates that First Republic will earn $2.80 a share this year, followed by 2013 EPS of $2.75.

Interested in more on First Republic Bank? See TheStreet Ratings' report card for this stock.

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

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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.