CHICAGO, Jan. 14, 2011 /PRNewswire/ -- Today, Zacks Equity
Research discusses the U.S. Banks Industry, including: Sandy
Spring Bancorp Inc. (Nasdaq: SASR), Bank of the Ozarks
Inc. (Nasdaq: OZRK), Wilmington Trust Corporation (NYSE:
WL) and Zions Bancorp (Nasdaq: ZION).
(Logo:
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A synopsis of today's Industry Outlook is presented below. The
full article can be read at
http://www.zacks.com/stock/news/45937/U.S.+Banks+Stock+Update+-+January+2011
U.S. Banks Stock Update – January
2011
The Treasury's requirement of focusing on banking institutions
towards higher-quality capital will help banks absorb big losses.
Though this would somewhat limit the profitability of banks, a
proper implementation would bring stability to the overall sector
and hopefully address bank failures.
Specific banks that we like with a Zacks #1 Rank (short-term
Strong Buy rating) include Sandy Spring Bancorp Inc.
(Nasdaq: SASR) and Bank of the Ozarks Inc. (Nasdaq:
OZRK).
The financial system is going through massive de-leveraging, and
banks in particular have lowered leverage. The implication for
banks is that the profitability metrics (like returns on equity and
return on assets) will be lower than in recent years.
Furthermore, the financial crisis has dramatically accelerated
the consolidation trend in the industry. As a result, failure of a
large financial institution will be a major concern in the upcoming
quarters as weaker entities are being absorbed by the larger
ones.
We think banks with high exposure to housing and Commercial Real
Estate loans, like Wilmington Trust Corporation (NYSE: WL)
and Zions Bancorp (Nasdaq: ZION), will remain under
pressure.
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