Barclays on U.S. Consumer Finance: 2Q11 Thrift and Bank Outlook

Barclays on U.S. Consumer Finance: 2Q11 Thrift and Bank Outlook

Barclays analyst says, "As the thrifts and small/mid-cap banks in our coverage report 2Q11 earnings over the next two weeks, we expect credit quality to be the primary driver of EPS growth while loan growth remains slow and margins are mixed. Capital deployment should also continue to be a key theme, as much of our coverage is relatively overcapitalized."

"Capital deployment: Now that banks/thrifts have a bit more clarity around capital requirements, we expect management teams and boards to increasingly focus on M&A, dividends and share repurchases. Fulton (Nasdaq: FULT) recently raised their dividend 20% to $0.05/share, Washington Federal (Nasdaq: WFSL) recently authorized additional share repurchases and purchased $250M of deposits, and others have more actively pursued M&A (First Niagara (Nasdaq: FNFG), People's United (Nasdaq: PBCT), and Susquehanna Bancshares (Nasdaq: SUSQ)) or have sounded incrementally more optimistic about the potential for it (Webster Financial (NYSE: WBS))."

"Durbin Amendment: Most banks in our coverage were minimally exposed to the Durbin impact, but those that are (PBCT, WBS, New York Community (NYSE: NYB), FULT, and SUSQ) should see a small revenue pickup of 0.5%-3.0% annualized vs. our prior expectations under the initially proposed 12-cent cap."

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