Discover Financial Services (DFS) posted earnings per share of $1.40 in 2Q17, which missed the analysts’ estimate of $1.45. DFS reported revenues of $2.42 billion in 2Q17, beating the analysts’ estimate of $2.40 billion.
The price-to-book value ratios of Synovus, BB&T, SunTrust Banks, Regions Financial, and Capital Bank Financial are 1.43x, 1.19x, 0.93x, 0.77x, and 1.37x.
REITs are the most overvalued sector in XLF on a price-to-book multiple basis. On average, REITs traded at a price-to-book multiple of 3.57x as of Monday, July 6.
While the risks of a contagion spreading here are small, US stock markets here could be affected by what happens to European stocks because of the crisis in Greece.
In this series, we’ll review the banking sector’s two primary indicators—loan and deposit growth. Total loans are generally made up of commercial and industrial loans, consumer loans, and real estate loans.
The yield curve has steepened a bit compared to where it was a week or even a month ago. Investors should consider the yield curve slope an indicator of bank performance.
When interest rates rise, banks typically increase the interest they charge for loans faster than what they pay on deposits. This gives an immediate boost to their margins.
Banks benefit from a steeper yield curve, which allows banks to lend on higher long-term rates and borrow on lower short-term rates. This boosts banks’ margins.
Lower interest rates on a sustained basis have negatively impacted the performance of the US banking sector. Banks are not able to use much deposit pricing strategies to boost margins.
According to the Fed’s data, total loans for all US commercial banks increased 7.9% in the week ending May 6. Loan growth is vital to banks’ income growth.
Regions Financial (RF) reported its first quarter earnings on April 21. While the revenue for the quarter increased by 1% YoY, the net income declined 26%.
Dividend yield is a company’s annual dividend per share. It’s expressed as a percentage of its share price. Dividend yields are important if you want a regular stream of income.
BB&T’s (BBT) Specialized Lending consists of businesses and subsidiaries that provide specialty finance products. The segment’s net income decreased 5.9%.
BB&T’s Community Banking segment offers a variety of loan and deposit products and other financial services. The segment’s net interest income decreased in 2014.
Regions Financial’s loan portfolio can broadly be classified into business and consumer loans. Business loans account for ~62% of the total loan portfolio.
For a bank, the net interest margin is the difference between the interest income generated and the interest paid out as a percentage of interest-earning assets.
The Baupost Group initiated a position in RF Micro Devices Inc. (RFMD) that accounted for 1.25% of the fund’s total portfolio. Baupost also started a new position in RFMD’s peer and merger partner, TriQuint Semiconductor (TQNT).
