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
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
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.
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)."