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Bank Stock Roundup: Q2 Earnings at the Tail End, FITB, STI & RF Beat Estimates

We are now on the bck half of Q2 earnings season. While most banks that reported results this week managed to beat estimates, concerns over underlying weakness shadowed the optimism.

Results demonstrated an upswing in loans and improved margins. However, lower treasury yields curbed the benefits to some extent. Also, a rise in deposit balances and manageable expense level supported the results.

Investment banking fees were favorable but fixed income and equity trading slumped during the quarter. Also, decline in mortgage origination volume was on the downside.

On the macro front, the Federal Reserve kept the interest rates unchanged.



(Read: Bank Stock Roundup for the week ending Jul 21, 2017)

Important Earnings of the Week

1. Fifth Third Bancorp FITB reported second-quarter 2017 adjusted earnings per share of 46 cents, surpassing the Zacks Consensus Estimate of 42 cents. Results were driven by an increase in net interest income and lower provisions. Also, improved credit quality was a tailwind. However, lower non-interest income was an undermining factor. (Read more: Fifth Third Beats Q2 Earnings Estimates, Revenues Lag)

2. SunTrust Banks, Inc.'s STI second-quarter 2017 earnings of $1.03 per share outpaced the Zacks Consensus Estimate of 98 cents. Results were primarily driven by an increase in net interest income, partially offset by higher expenses. A decline in provision for credit losses was another positive. (Read more: SunTrust's Q2 Earnings Beat Estimates, Costs Increase)

3. Regions Financial Corporation’s RF second-quarter 2017 earnings from continuing operations of 25 cents per share surpassed the Zacks Consensus Estimate by a penny. Impressive growth in revenues, aided by easing margin pressure supported earnings. A rise in operating expenses and a decline in non-interest income were the undermining factors. (Read more: Revenues Drive Regions Financial Q2 Earnings, Costs Up)

Price Performance

Here is how the seven major stocks performed:
 

Company

Last Week

6 months

JPM

0.7%

6.5%

BAC

1.3%

3.9%

WFC

1.0%

-2.0%

C

2.4%

19.0%

COF

-3.6%

-4.0%

USB

0.6%

0.0%

PNC

1.1%

6.1%


In the last five trading sessions, Citigroup Inc. C and Bank of America Corporation BAC were the top gainers, with their shares increasing 2.4% and 1.3%, respectively. However, Capital One Financial Corp. COF declined 3.6%.

Citigroup and JPMorgan Chase & CO. JPM were the best performers in the last six months, with their shares jumping 19% and 6.5%, respectively. On the other hand, shares of Capital One and Wells Fargo & Company WFC declined 4% and 2%, respectively.

What’s Next?

In the coming five days, price performance of bank stocks is likely to follow a similar trend, unless there is any unprecedented event.

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J P Morgan Chase & Co (JPM): Free Stock Analysis Report
 
SunTrust Banks, Inc. (STI): Free Stock Analysis Report
 
Fifth Third Bancorp (FITB): Free Stock Analysis Report
 
Wells Fargo & Company (WFC): Free Stock Analysis Report
 
Citigroup Inc. (C): Free Stock Analysis Report
 
Bank of America Corporation (BAC): Free Stock Analysis Report
 
Regions Financial Corporation (RF): Free Stock Analysis Report
 
Capital One Financial Corporation (COF): Free Stock Analysis Report
 
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