Regions Financial and Huntington Bancshares Showing Stronger Balance Sheets
March 14 2012 - 8:20AM
Marketwired
Year-to-date, Regional Banking stocks have been some of the
strongest performers on Wall Street. The SPDR S&P Regional
Banking ETF (KRE) is up roughly 11 percent in 2012 as bank balance
sheets continue to improve. The Paragon Report examines investing
opportunities in the Regional Banking Sector and provides equity
research on Regions Financial Corporation (NYSE: RF) and Huntington
Bancshares Inc. (NASDAQ: HBAN). Access to the full company reports
can be found at:
www.paragonreport.com/RF www.paragonreport.com/HBAN
U.S. Banking stocks took a hit earlier this week ahead of
critical stress-test results to be released by the Federal Reserve
on Thursday. If institutions fall short, they could be required to
raise billions in new capital, depressing their shares. If they
pass, dividend increases and stock buybacks by the strongest
institutions are likely to follow as they did after the second
round of tests a year ago. Federal Reserve specialists are trying
to predict how capital levels at the 19 largest banks would
withstand an economic downturn even more severe than the one that
followed the Lehman collapse.
According to a report from The New York Times, the results are
expected to show broadly improved balance sheets at most
institutions.
The Paragon Report provides investors with an excellent first
step in their due diligence by providing daily trading ideas, and
consolidating the public information available on them. For more
investment research on the regional banking sector register with us
free at www.paragonreport.com and get exclusive access to our
numerous stock reports and industry newsletters.
Banks are being required to test their revenue and capital
against a deep recession scenario that has the unemployment rising
to 13% in the second quarter of 2013 and the Dow Jones Industrial
Average dropping to 5,668 in the fourth quarter of 2012. The goal
of the tests is to ensure that banks have capital reserves
necessary to withstand an economic crisis like the one experienced
in 2008 and be able to withstand it without the aid of taxpayer
infusions.
In November the Federal Reserve released details about what
kinds of things it will be looking at as it completes the reviews.
Like in 2011, the central bank said it expects capital plans will
reflect "conservative common dividend payout ratios" and any
dividend payouts above 30% of projected after-tax net income will
receive "particularly close scrutiny."
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