Miller said in a report on Friday that in addition to JPMorgan, the companies that "disappointed" in the Fed's stress test results included Goldman Sachs ( GS), and Morgan Stanley ( MS). Lower minimum Tier 1 common ratios for the big brokers imply "a decreased likelihood for higher capital deployment scenarios in the form of both buybacks and dividends relative to 2012," Miller wrote.

Regional "Winners"


Miller wrote that the following four banks were "best positioned as winners," from the stress tests:
  • Fifth Third Bancorp (FITB) of Cincinnati. The bank would lose roughly $300 million under the Federal Reserve's "severely adverse scenario," operating through 2014 with a minimum Tier 1 common equity ratio of 8.6%.
  • KeyCorp (KEY) of Cleveland. The bank's losses through 2014 would total $2.4 billion, with a minimum Tier 1 common equity ratio of 8.0%.
  • SunTrust (STI) of Atlanta. The bank would lose $4.1 billion through 2014, with a minimum Tier 1 common ratio of 7.3%.
  • PNC Financial Services Group (PNC). PNC would lose $1.4 million through 2014 under the Fed's scenario of a severe recession, with a minimum Tier 1 common equity ratio of 8.7%.

"Companies with robust stressed capital levels trading at or below tangible book stand to benefit the most from increased share buybacks and higher dividends," Miller wrote. "The most likely beneficiaries, in our view, are Bank of America and KeyCorp."

Bank of America's shares closed at $12.26 on Thursday. The shares traded for 0.9 times their reported Dec. 31 tangible book value of $13.36.

KeyCorp closed at $9.96 Thursday. The stock traded just above tangible book value, according to Thomson Reuters Bank Insight.

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

>Contact by Email.

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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