Third-quarter earnings for super regional banks BB&T (BBT) , M&T Bank (MTB) , PNC Financial (PNC) , SunTrust (STI) and U.S. Bancorp (USB) were positive enough for these stocks to trade higher in October. Next up: the question of whether the Federal Reserve will raise interest rates by the end of the year. The Fed's Open Market Committee meets Tuesday and Wednesday, and again from Dec. 13 to 14. Bank stocks are firm on the belief that higher interest rates will help improve net interest rate margins -- and bank profits.
This notion will be put to the test following the next dose of data from the Federal Deposit Insurance Corporation. The Quarterly Banking Profile for the third quarter is due for release around the end of November or beginning of December.
The FDIC will likely remain concerned about the prolonged period of low interest rates continuing to pressure net interest margins. Investors should be aware of mark-to-market losses on "bonds held for trading," and the fact that some banks have reached for yield with maturity mismatches, opening exposure to higher yields and wider quality spreads.
Here's a scorecard for the five regional banks.
BB&T is in bull market territory, up 30.9% since its Feb. 11 low of $29.95. It has a positive but nearly overbought weekly chart. BB&T reported earnings on Oct. 19 that beat analysts' estimates.
M&T Bank is in bull market territory, up 22.6% since its Feb. 11 low of $100.08, and has a positive weekly chart. M&T reported earnings on Oct. 19 and beat analysts' estimates.
PNC Financial is in bull market territory, up 23.5% since its June 27 low $77.40. It has a positive but overbought weekly chart. PNC reported earnings on Oct. 14 and beat analysts' estimate.
SunTrust is in bull market territory, up 45.6% since its Feb. 11 low of $31.07, and has a neutral weekly chart as momentum is declining. SunTrust reported earnings on Oct. 21 and beat analysts' estimates.
U.S. Bancorp is in bull market territory, up 30.7% since its Feb. 11 low of $37.07. It has a positive and nearly overbought weekly chart. U.S. Bancorp reported earnings on Oct. 19 and matched analysts' estimates.