[基础分析] 3 Bank Stocks to Watch in Q3

何鸿燊

Dan Freed
10/07/10 - 07:32 AM EDT

NEW YORK (TheStreet) -- While banks like Bank of America(BAC), Citigroup(C) Goldman Sachs (GS)and JPMorgan Chase(JPM) typically dominate the headlines at earnings time, TheStreet's readers have also shown interest in a few other names that tend to attract slightly less attention.

We put together a preview of three of those banks, pointing to some key issues for each that are likely to command investors' attention when third quarter numbers come out.

For the sector as a whole, banks will need to show improvement in bringing down problem assets, according to Peter Kovalski, portfolio manager and banking sector analyst at Alpine Funds in Purchase, N.Y.

"The focus will be asset quality: that's what's going to drive the stock," Kovalski says, noting he expects margins to be weak, especially in banks' investment banking and asset management divisions.

Here are three banks to watch.

3. Huntington Bancshares(HBAN)

Total Assets: $51.6 billion
Headquarters: Columbus, Ohio
Third quarter earnings report date: Oct. 21 (before market open)
TheStreet Ratings grade: C (Hold)

Huntington earned three cents per share in the second quarter, above the analyst consensus that the bank would have a break-even quarter. Improved credit trends were the main driver of outperformance, according to a report from Sandler O'Neill analyst Scott Siefers.
In a note last month after Huntington met with investors and analysts in New York, Siefers wrote that Huntington's management has made "a calculated bet" to give up short-term profits in the hope of gaining market share over the longer term with a more customer-friendly approach.
"The risk," Siefers writes, "is a more customer-focused company that simply earns less than it did previously."


2. Synovus Financial(SNV)

Total Assets: $32.8 billion
Headquarters: Columbus, Ga
Third quarter earnings report date: TBA
TheStreet Ratings grade: D (sell)


Like many banks in the Southeastern U.S., Synovus was particularly hard hit by the housing market's collapse. The bank showed progress in addressing non-performing loans in the second quarter, though Sandler O'Neill analyst Kevin Fitzsimmons wrote in a recent report that he expects improvement to be "less dramatic" in the coming quarter. In part, that's because Synovus's loans to the now-bankrupt Sea Island resort in coastal Georgia account for a sizeable chunk of Synovus's distressed assets. Sea Island is expected to be sold in November to Oaktree Capital Managementand Avenue Capital--well-known investors that specialize in buying distressed assets.

Synovus is one of a number of companies identified by TheStreet in June as having a large deferred tax asset that could potentially be put to use if it were to acquire a company that, unlike Synovus, is showing net profits. Fitzsimmons notes that Synovus would like to make acquisitions, but he expects it to wait until it is itself profitable--an event he doesn't expect until the second half of 2011.


1. Wells Fargo(WFC)

Total Assets: 1.2 trillion
Headquarters: San Francisco, Calif.
Third quarter earnings report date: Oct. 20 (before market opens)
TheStreet Ratings grade: C (Hold)


Wells Fargo earned 55 cents a share in the second quarter, beating Street consensus estimates of 48 cents. Though the results impressed analysts and drove the stock higher over the next several days, the shares fell in August due to what analysts attributed to mortgage-related fears. Chief among these were concerns Fannie Mae (FNMA.OB)and Freddie Mac(FMCC.OB) would force Wells Fargo and other banks to take back an ever-larger number of mortgages that were poorly underwritten. Some analysts, however, have said those fears are overblown.
"The company's core revenues, expenses and pre-provision earnings have been remarkably strong and stable," Oppenheimer analyst Chris Kotowski wrote in July.