WFC does not have the core drivers gas to justify its stock surge. EPS beat was on reserve releases and restructuring needs to continue. Still some small progress on business/asset sales. Move to Neutral on stock, Sell on benchmark bonds. Regulatory and counterparty risk remains High.
Wells Fargo's 10K shows the most securities shrinkage of the big banks as it had the asset cap and less lending opportunities in the Covid environment. CLOs still high relative to pack and indicative of its higher risk appetite.
Merger Monday strikes again as M&T follows through on its intentions and agrees to acquire Peoples Bank of CT. More community banking with scale in the Northeastern states from Boston to Buffalo to NYC metro to Baltimore region. CRE concentrations fall a bit, and M&T's higer FCF helps both. Sell on M&T benchmark bonds, Hold on Stock. Regulatory and counterparty risk Very Low and Low, respectively.
MTB holding up well in CRE as government stimulus helps out for it and the banking industry. Hedges rolling off and no clear message on stock buybacks. Turn to Buy on Stock and maintain Sell on benchmark bonds. Systemic and counterparty risk at Very Low and Low, respectively.
COF had much lower provisions, but still missed on a adjusted basis. Still expected stock buybacks should boost Stock as we move to a Buy. Still Sell on benchmark bonds. Systemic risk moves to Very Low and counterparty risk to Low.
Regions beat estimates, but had very unimpressive results relying on reserve releases as a non-core boost.. Remain a Sell on Stock & benchmark Bonds. Very Low systemic risk and Medium counterparty risk.
Truist beats consensus but is challenged to complete its merger integration given Covid constraints. Investment banking and insurance were the drivers. Sell on Stock & benchmark Bonds. Systemic risk Very Low. Counterparty risk Low.
USB takes a more conservative reserve stance as only regional not to reslease. Looking for gradual economic pickup for earnings growth and to lift its payments business. On the stock buyback trail as well. Buy Stock, Sell benchmark bonds. Systemic risk is Very Low and counterparty risk Low.
Key had a record revenues year driven by investment banking and consumer mortgage and fintech generated consumer loans. With attractive financial metrics we move to a Buy on the Stock. Still a Sell on rich benchmark bonds. Sytemic risk Low. Counterparty risk Low-to-Medium.
Fifth Third seems to have run out of gas as it lacks growth drivers and is reliant on macro forces for potetential revenues lift. Remain a Sell on the stock and Sell on benchmark bonds. Sytemic and counterparty risks are Low.