Seeking Alpha: Fifth Third Catches Up To The Pack

Like Wilshire Bancorp (NASDAQ:WIBC), I thought Fifth Third (NASDAQ:FITB) offered investors some interesting and attractive value back in January of this year. Like in the case of Wilshire, I thought that investors would have to have some patience to see the Street come around and recognize that value given a less-exciting outlook for loan growth and interest spread improvement. And like in the case of Wilshire, I was wrong about the timing - the shares rose almost 25% since that piece, very nearly making it the best performer in its weight class (just edged out by Key (NYSE:KEY), but Regions Financial (NYSE:RF) is very close behind).

I'd just as soon see my performance come sooner than later, so I'm not complaining that Fifth Third has gotten the recognition I thought it was due. Looking ahead, though, here again we have another story where the future returns are likely to be more traditionally "bank-like", with future rate hikes, expansion of fee-generating businesses, and expense reductions as the primary performance drivers. Given better valuation I'd lean more toward U.S. Bancorp (NYSE:USB) today with new money (or banks outside the U.S.), but Fifth Third isn't overvalued today and can still generate a decent return from here.

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Fifth Third Catches Up To The Pack

Seeking Alpha: U.S. Bancorp Standing Out A Bit On Value

U.S. Bancorp (NYSE:USB) has done alright in the six months since I last reviewed this large U.S. bank. The shares are up about 11%, which puts it on par with Wells Fargo (NYSE:WFC), but a little behind BB&T (NYSE:BBT), Fifth Third (NASDAQ:FITB), and PNC Financial (NYSE:PNC). As is the case for most of the large U.S. banks, there's nothing particularly wrong with the company today but it is tougher to drive growth in a market where lending competition is heating up and rates are still pretty cool.

On a relative basis, U.S. Bancorp is starting to look a bit like a bargain, but I would note that solid lending growth is a little more important to the value here than it is for some of the peer group. Over the long term, I continue to believe that U.S. Bancorp has a proven model that can drive above-average returns and while I think the valuation of U.S. banks has gotten to a point where future returns are likely to be unexciting (not bad, just unexciting), this is still a credible long-term holding.

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U.S. Bancorp Standing Out A Bit On Value

Seeking Alpha: PNC Financial Doing Enough In A 'Good Enough Is Good Enough' Environment

Nobody expected this to be a banner quarter for large banks, and with the likes of Wells Fargo (NYSE:WFC), BB&T (NYSE:BBT), U.S. Bancorp (NYSE:USB), and PNC Financial (NYSE:PNC) now having reported, it seems safe to say that it hasn't been. Sluggish economic performance in the U.S., not to mention ample competition, is keeping a lid on loan demand and rates, and most banks just don't have enough dry powder in their fee businesses or expense reduction plans to build strong growth.

I like PNC well enough back in January, and the shares are up about 17% since then - more or less matching Fifth Third (NASDAQ:FITB) and outperforming BB&T, U.S. Bancorp, and Wells Fargo. I don't see many obvious bargains in larger U.S. banks, but with the recent run of performance of PNC, these shares look a little less of a bargain on a relative basis. From here on, this looks like a long-term value accretion story - if you're comfortable with that, hold what you have. If you're looking for more dramatic outperformance, I'm not sure this is the name for you.

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PNC Financial Doing Enough In A 'Good Enough Is Good Enough' Environment

Seeking Alpha: BB&T Not Content To Just Wait For Better Rates

On the whole, most of the larger banks in the U.S. are playing a waiting game - they're competing for growth where they can, particularly in commercial lending, but largely sitting tight in the hope of a more profitable yield curve in the quarters ahead. That hasn't been BB&T's (NYSE:BBT) approach, as this super-regional has not only been looking to the M&A market to find good returns on capital, but is also actively reconfiguring its loan book.

I do still expect BB&T's efforts to lead to ROEs in the low double-digits in a few years, and I believe BB&T is one of the few larger banks with meaningful capacity to be active on the M&A front (or at least in the banking space). Like most other quality banks, including U.S. Bancorp (NYSE:USB) and Wells Fargo (NYSE:WFC), this potential is not lost on the Street and the shares aren't a striking bargain. I believe that BB&T is still a solid holding, but investors need to calibrate their expectations back to more normalized levels for bank stocks and not expect significant market outperformance.

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BB&T Not Content To Just Wait For Better Rates

Seeking Alpha: BB&T Looking To Leverage Its Strengths In The Quarters Ahead

Whether you like BB&T (NYSE:BBT) as an investment or not, I think even the bears (the rational ones, at least) will acknowledge that BB&T has a well-deserved reputation for excellent cost management, a diversified revenue and fee mix, solid growth-through-acquisition, and an ability to reposition itself as the market demands. Those are all traits that are going to be critically important to the company in the coming quarters, as the bank will be integrating two large acquisitions (and a third deal that's not exactly trivial), repositioning its lending portfolio, and leveraging additional cross-selling opportunties.

How cheap (or not) BB&T is depends on your horizon. In terms of near-term performance (estimated 2015 returns on tangible common equity), BB&T does indeed look expensive relative to some of its peers. Look a few years out, though, and factor in the synergies of acquisitions, higher rates, and a different loan book and I believe that a low-double digit ROE supports a fair value in the low $40's.

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BB&T Looking To Leverage Its Strengths In The Quarters Ahead

Seeking Alpha: Reality Has (Slowly) Caught Up With First Horizon Shares

I liked First Horizon (NYSE:FHN) about three and a half years ago and again a year ago, and though the stock has lagged Regions Financial (NYSE:RF) and SunTrust (NYSE:STI) since October of 2011, it has been a relative outperformer over the last year. First Horizon continues to make credible progress on running off its non-strategic loan book and reducing operating expenses while also slowly moving back to a growth footing.

The odds may still favor First Horizon becoming an acquisition target in a few years, but in the here and now, the company still has significant scope to improve its efficiency ratio and perhaps take advantage of higher rates. I think First Horizon is more or less fairly valued now, but I still see opportunities for the bank to outperform and start earning a bigger benefit of the doubt in analyst models.

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Reality Has (Slowly) Caught Up With First Horizon Shares

Seeking Alpha: BB&T Breaks From The Pack Again

I've said before that North Carolina-based super-regional bank BB&T (NYSE:BBT) seems to have a knack for moving against the tides in banking. When other banks are reporting good quarters, BB&T disappoints and when its super-regional peers report lackluster quarters it seems to do better. So I suppose it shouldn't really be a surprise that BB&T offered up a pretty solid set of results in a reporting season where most of its peers haven't impressed the Street.

BB&T isn't particularly asset-sensitive and it looks like next year will be another "muddle through" unless/until rates start moving up. Management is going to be busy, though, as it has three significant acquisitions to integrate, including the largest acquisition announced/attempted since the new regulatory system was put in place.

BB&T shares still look undervalued to me and the bank still has the capacity to do additional deals and increase its exposure to commercial lending.

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BB&T Breaks From The Pack Again

Seeking Alpha: BB&T Buys Again And Restates Its Case

To its credit, BB&T (NYSE:BBT) continues to do what it needs to do. The company's management is looking to deploy capital that it can't use in its lending operations, and M&A is likely to remain a centerpiece of that strategy. Management is also remaining focused on reducing operating expenses - a key item on the to-do list for a company that otherwise generates a lot of positives from its asset base. Neither the recent Investor Day nor the acquisition of Bank of Kentucky (NASDAQ:BKYF) really change the long-term value to a significant extent, but they're positive incremental developments for a company/stock that remains undervalued.

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BB&T Buys Again And Restates Its Case

Seeking Alpha: BB&T Makes A Solid Acquisition, Needs To Impress At Its Investor Day

Since missing sell-side estimates for the second quarter and guiding to slower loan growth and higher expenses, BB&T (NYSE:BBT) shares have had a rougher go of it. While the SPDR S&P Bank ETF (NYSEARCA:KBE) has climbed more than 1% since BB&T's report, and direct rivals like Wells Fargo (NYSE:WFC), PNC (NYSE:PNC), and Bank of America (NYSE:BAC) are all in the green, BB&T shares have fallen more than 3%.

I believe that BB&T still has a lot to offer investors. The company is continuing to build its franchise, as seen in a recent deal for Citi (NYSE:C) branches in Texas, and will be hosting its first Investor Day in six years on September 11. The branch acquisition is a good use of capital to grow the business and this Investor Day is a chance to convince the Street that the company has a good plan for cost reduction, loan growth, and capital deployment. I believe BB&T shares are about 10% undervalued today, making it one of the better risk/reward/quality trade-offs in the banking sector right now.

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BB&T Makes A Solid Acquisition, Needs To Impress At Its Investor Day

Seeking Alpha: PNC Financial Looks Undervalued, With Quality To Spare

Not unlike Fifth Third Bancorp (FITB), PNC Financial (PNC) is looking to offset relatively sluggish growth in its traditional core markets by expanding into the faster-growing Southeast region, while also prioritizing mortgage market share growth and operating efficiencies. PNC doesn't offer the highest exposure to higher rates, but the company generates above-average yields at below-average costs and with solid credit quality. Growth expectations seem fairly modest, and PNC shares don't seem to be getting the full value benefit of its likely trend in returns on capital.

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PNC Financial Looks Undervalued, With Quality To Spare

Seeking Alpha: Growth And Self-Improvement Versus Value At TCF Financial

Regional mid-cap bank TCF Financial (TCB) hasn't been shy about changing its business model to adapt to the new realities of the banking market. The company has cleared out a lot of its high-cost capital and shifted its operational focus towards a national specialty/niche lending platform with a low-cost local deposit base. The model TCF Financial is following carries above-average risks and the shares are not particularly cheap by convention means, but this bank looks poised to be an above-average grower at a time when bank earnings growth is hard to find.

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Growth And Self-Improvement Versus Value At TCF Financial

Seeking Alpha: Facing Up To A Bad Call On Synovus

Admitting mistakes is never fun, but if you're going to write about stocks in public fora it is a part of the job description. Four months ago, I thought Synovus (SNV) shares had gone far enough, as I saw the probable lack of revenue and operating profit growth, coupled with a potentially slower credit recovery and the need to pay back TARP as limiting factors. Since then, the shares are up 19%. Now, in fairness to myself, the stocks I liked better at the time - including BB&T (BBT) and Bank of America (BAC) - haven't exactly been embarrassments (up 14% and 21%, respectively), but Synovus' 19% gain is definitely more than I thought was likely to come.

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Facing Up To A Bad Call On Synovus

Seeking Alpha: Hancock Holding Needs To Marry Better Performance With Its Good Footprint

While speculating on where people are going to want to live in five, 10, or 20 years' time may be enjoyable as a thought-exercise, it's not really a good thesis for investing in any particular company. That said, I believe that Hancock Holding's (HBHC) footprint across the Gulf Coast states is an attractive one on balance, and one where ongoing population trends and the dynamics of the U.S. energy industry are likely to create an attractive operating environment.

Although Hancock's location may be good enough, the recent performance hasn't been. This bank has made something of a habit lately of missing expectations, with weak internal loan growth, higher than expected margin compression, and non-interest expenses weighing down results. A cost-cutting program and sizable share buyback offer some support, but it looks like the valuation here already presupposes better results in the coming years.

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Hancock Holding Needs To Marry Better Performance With Its Good Footprint

Seeking Alpha: Eagle Bancorp Could Be A Long-Term Love Story

This may be the early stages of a banking love story, or at least a crush, and it goes to show that sometimes the process of digging up information and research on a company can lead you to an even better idea. That seems to be case with Eagle Bancorp (EGBN), a stock which I've followed intermittently, but didn't really dig into until after writing an article on regional peer Sandy Spring Bancorp (SASR).

I walked away from Sandy Spring thinking it was an okay idea, and the stock is up about 15% since then. While Eagle Bancorp is up less (about 11%) over the same stretch, this may be the stock to watch in the metro D.C. area. Management here runs a pretty tight ship, with a clear focus on organic share growth against regional rivals and disciplined underwriting. Even though the stock is near a new 52-week high as of this writing, my analysis suggests that this stock may be undervalued by 10% to 30%.

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Eagle Bancorp Could Be A Long-Term Love Story

Seeking Alpha: CenterState Bank An Odd Mix Of Performance Potential And Iffy Valuation

Bank stock investing is not for the investor who likes things neat, tidy, and easy. Although the basic operation of banking is simple in theory (borrow at one rate, lend at a higher rate, and what's left over after expenses is profit), the accounting rules muddy the waters considerably.

Even among those banks with relatively simpler operations, community banks that don't engage in extensive trading, leasing, or multi-state operations, you can find curious disconnects between value and operations. Florida's CenterState Banks (NASDAQ: CSFL) seems to be a case in point. While I think this bank offers good leverage to a recovery in Florida and has the potential to outperform with its covered loans, the company's high operating expenses and historical returns on assets and equity suggest that much of that value is already in the stock.

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CenterState Bank An Odd Mix Of Performance Potential And Iffy Valuation

Investopedia: Mediocre Performance Clouding BB&T's Long-Term Value

The management of BB&T (NYSE:BBT) once enjoyed a pretty sterling reputation for their performance, but a variety of missteps seem to be accumulating. Couple that with “industry standard” mediocre performance, and I can understand why BB&T shares have gone almost nowhere over the past year and are, in fact, one of the worst performers of the peer group. For investors willing to play the long game, though, I do believe that meaningful value remains in these shares at today's price.

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Seeking Alpha: For Sandy Spring Bancorp, It Looks Like Buy Or Be Bought

Banking regulators seem to be trying to achieve a delicate balance between a banking system that is too consolidated among a small group of giant institutions ("too big to fail") and a system that is too fragmented to run efficiently and provide high levels of service. While I believe that regulators will be loath to let the top 10 (or perhaps the top 20) banks get much larger, I also believe they'd like to see even more competition coming from the next tier. To that end, Sandy Spring Bancorp (SASR) could have an interesting future in the Mid-Atlantic region as either a growth-by-M&A story or as a target itself.

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For Sandy Spring Bancorp, It Looks Like Buy Or Be Bought

Seeking Alpha: Going It Alone Could Be A Tough Road For Synovus Investors

If I'm brutally honest, following bank stocks on a week to week basis is a challenging (and not particularly exciting) pursuit. While we all got a vivid lesson in just how badly wrong these business models can go, even on a quarter to quarter basis we're pretty much talking about submarine races - there's a lot going on below the surface, but you'll never see it.

That is relevant to Synovus (SNV) as these shares have enjoyed quite a run - up 35% over the past year, about 66% from the summer 2012 lows, and near a 52-week high on optimism about the prospects for improved performance, a TARP repayment, and a possible acquisition. That long-held expectation of a deal could actually be the biggest risk factor for these shares today. While the company could indeed hold value for an acquirer, it's much harder to find an attractive target price on its own operating credentials and a failure to see a bid materialize after the TARP repayment could set shareholders up for some depressing performance.

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Going It Alone Could Be A Tough Road For Synovus Investors

Seeking Alpha: Ongoing Progress At BB&T, But Plenty Left To Do

I've complained in the past that BB&T (BBT) doesn't always get its due in the sell-side community, and the stock's so-so performance over the past year would seem to back that up. Certainly there are legitimate questions to ask about the company's net interest margin, return on equity, and capital deployment plans. At the same time, though, the company has built an impressive franchise footprint and has multiple levers to pull for incremental growth. On balance, BB&T remains one of the more attractive risk-reward prospects among the larger banks.

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Ongoing Progress At BB&T, But Plenty Left To Do

Seeking Alpha: Will PNC Financial's Potential For Improvement Translate Into Real Value?

Even though they rarely get them nowadays, investors want clean reports from banks and PNC Financial's (PNC) inability to deliver them has turned into an issue when it comes to the stock's multiples and valuation. Where investors understand that Bank of America (BAC) still has a big mess to clean up and generally believe U.S. Bancorp (USB) management when they call an item "one time," PNC has put investors through something more like "death by paper cuts."

The good news for the PNC bulls is that this company's credit profile is in generally good shape and commercial loan growth has been strong. On the bearish side, though, is persistent spread pressure, increasing competition, and incrementally more doubt about the company's long-term return on equity potential.

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Will PNC Financial's Potential For Improvement Translate Into Real Value?