Bank Stock Roundup: Q4 Earnings in Full Swing; STI, FITB, RF Beat Estimates

The last five trading days were too busy for the banking industry with a number of participants reporting Q4 results. Banks have been witnessing decent improvement in profitability. One of the most noticeable factors was alleviating margin pressure for the majority of banks. Also, growing optimism about gradual improvement in the interest rate scenario seems to have cheered investors, as evident from the gain of bank stocks.

Further, the economic improvement has spurred demand for loans, which led to a rise in interest income. Banks recorded growth in fee income as well. Apart from these, easing energy sector concerns supported the financials by reducing provisions.

Moreover, operating expenses remained under control thanks to effective cost control measures.

(Read: Bank Stock Roundup for the week ending Jan 20, 2016 )

Important Earnings of the Week

1. Improvement in revenues drove SunTrust Banks, Inc. 's STI fourth-quarter 2016 earnings of 90 cents per share, which outpaced the Zacks Consensus Estimate of 88 cents. Results reflected an improvement in net interest income and a rise in non-interest income. However, a jump in provision for credit losses and an increase in operating expenses were the downsides (read more: SunTrust Beats Q4 Earnings; Provisions & Costs Rise ).

2. Fifth Third BancorpFITB delivered a notable positive earnings surprise of 11.6% in fourth-quarter 2016. Earnings per share of 48 cents surpassed the Zacks Consensus Estimate of 43 cents. However, including certain one-time items the bottom line declined 38% on a year-over-year basis. Lower expenses reflected prudent expense management. Further, increase in net interest income and lower provisions were the positive factors. However, lower fee income was an undermining factor (read more: Fifth Third's Q4 Earnings Beat, Provisions Fall ).

3. Regions Financial Corporation 's RF fourth-quarter 2016 earnings from continuing operations of 24 cents per share surpassed the Zacks Consensus Estimate of 22 cents. Better-than-expected results were supported by impressive growth in revenues. However, rise in operating expenses was a downside (read more: Regions Financial Q4 Earnings Beat, Expenses Flare Up ).

4. Capital One Financial Corporation 's COF fourth-quarter 2016 earnings of $1.45 per share lagged the Zacks Consensus Estimate of $1.60. Lower-than-expected results were due to a fall in non-interest income, an increase in provisions and rising expenses. However, higher net interest income and easing margin pressure supported the results to some extent (read more: Capital One Stock Declines as Q4 Earnings Disappoint ).

Price Performance

Here is how the seven major stocks performed:

Company Last Week 6 months
JPM 3.7% 35.3%
BAC 3.5% 61.3%
WFC 3.8% 19.2%
C 2.2% 29.9%
COF 2.7% 32.5%
USB 3.4% 26.2%
PNC 3.6% 47.1%

In the last five trading sessions, Wells Fargo & Company WFC and JPMorgan Chase & Co. JPM were the major gainers, with their shares rising 3.8% and 3.7%, respectively. Also, The PNC Financial Services Group, Inc.'s PNC shares rose 3.6%.

Bank of America Corp. BAC and PNC Financial were the best performers in the last six months, with their shares surging 61.2% and 47.1%, respectively. Moreover, JPMorgan's shares jumped 35.3%.

What's Next?

In the coming five days, nothing major is expected to happen in the banking space. Unless there is a substantial upheaval in the global markets, the bank stocks will continue to perform in a similar fashion.

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J P Morgan Chase & Co (JPM): Free Stock Analysis Report

PNC Financial Services Group, Inc. (The) (PNC): 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

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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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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