Barclays on U.S. Consumer Finance: 1Q11 Thrift and Bank Preview
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Price: $70.00 --0%
Rating Summary:
20 Buy, 10 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 11 | New: 14
Rating Summary:
20 Buy, 10 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 11 | New: 14
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Barclays on U.S. Consumer Finance: 1Q11 Thrift and Bank Preview
Barclays analyst says, "We expect 1Q11 results of savings and loans and small-midcap (smid-cap) banks in our coverage to show a wide range of trends, with HCBK the most negative due to their balance sheet restructuring, while most others should have solid performance with improving credit quality and relatively flat pre-provision net revenue. Virtually all investors we speak with want to see top-line loan growth as the next catalyst to move bank stocks higher, and we expect Signature Bank (Nasdaq: SBNY), First Niagara Financial (Nasdaq: FNFG), Webster Financial (NYSE: WBS), and Investors Bancorp (Nasdaq: ISBC) to oblige that wish, while most others we follow are expected to be flat or, in the case of Hudson City Bancorp (Nasdaq: HCBK), downsized. Below we highlight our expectations for the quarter:
NIM: We expect Fulton Financial (Nasdaq: FULT), New York Community Bancorp (NYSE: NYB), Dime Community (Nasdaq: DCOM), and SBNY to show the most margin improvement (+2-4 bps q-o-q), while we expect HCBK and Capitol Federal Financial (Nasdaq: CFFN) to face the most pressure at -13 bps and -15 bps q-o-q respectively."
"Capital deployment: given the relatively 'overcapitalized' nature of companies our sector, we would not be surprised if companies announced new share repurchase plans following 1Q11 results or later in the year, though our estimates do not currently factor in this possibility. We believe most banks and thrifts in our coverage have likely reached (or exceeded) the upper bound for dividend payout ratios. We see FULT, Susquehanna Bancshares (Nasdaq: SUSQ), and WBS as the most likely candidates for dividend increases, while many of the other companies are "growing into their existing dividend."
Barclays analyst says, "We expect 1Q11 results of savings and loans and small-midcap (smid-cap) banks in our coverage to show a wide range of trends, with HCBK the most negative due to their balance sheet restructuring, while most others should have solid performance with improving credit quality and relatively flat pre-provision net revenue. Virtually all investors we speak with want to see top-line loan growth as the next catalyst to move bank stocks higher, and we expect Signature Bank (Nasdaq: SBNY), First Niagara Financial (Nasdaq: FNFG), Webster Financial (NYSE: WBS), and Investors Bancorp (Nasdaq: ISBC) to oblige that wish, while most others we follow are expected to be flat or, in the case of Hudson City Bancorp (Nasdaq: HCBK), downsized. Below we highlight our expectations for the quarter:
NIM: We expect Fulton Financial (Nasdaq: FULT), New York Community Bancorp (NYSE: NYB), Dime Community (Nasdaq: DCOM), and SBNY to show the most margin improvement (+2-4 bps q-o-q), while we expect HCBK and Capitol Federal Financial (Nasdaq: CFFN) to face the most pressure at -13 bps and -15 bps q-o-q respectively."
"Capital deployment: given the relatively 'overcapitalized' nature of companies our sector, we would not be surprised if companies announced new share repurchase plans following 1Q11 results or later in the year, though our estimates do not currently factor in this possibility. We believe most banks and thrifts in our coverage have likely reached (or exceeded) the upper bound for dividend payout ratios. We see FULT, Susquehanna Bancshares (Nasdaq: SUSQ), and WBS as the most likely candidates for dividend increases, while many of the other companies are "growing into their existing dividend."
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