Company Reports

PNC 4Q20: Waiting for BBVA USA Close, Tough Rates Environment


PNC in deal closing flight pattern as it waits for the BBVA USA deal to close in the summer. Still experiencing rate pressures as most banks are, but without a stock buyback route. We are Neutral on Stock, Sell on benchmark bonds. Systemic risk Very Low. Counterparty risk Low. 

Citi 4Q20: New CEO, New Vision, Same Old Citi


Citi trying to spin a new strategic look as the new CEO Fraser takes over in February. Still, its results were driven by big reserve release and above-trend capital markets trading/underwriting given the sizable year-long decline in rates. Consent order and operating/risk platform rehab a big challenge. Still a Sell on Stock, benchmark Bonds. Regulatory/counterparty risk falls to Medium from Medium-to-High. 

WFC 4Q20: Better Pitches, Still Operationally Weighed


WFC wants to be a normal bank, but still has major restructuring to do to get back into regulators graces. Looks to sell asset management, corporate trust and rail finance to reposition and add capital in our view. Sell on Stock & benchmark Bonds. Systemic & counterparty risk remains High. 

JPM 4Q20: Lots of Outlook, No Investor Day


JPMorgan  gave its 2021 outlook in its 4Q20 release and is looking for greater technological prowess with commensurate investment spending. Needs to compete against Big Tech, growing FinTech players and foreign bank competition mostly from China banks. Move to Buy on Stock, Sell on benchmark bonds. Regulatory and counterparty risks decline to Very Low and Low, respectively with vaccine rollouts. 

Citi Update: In New CEO Neverland: FCF Farce!


Citi is playing three-card monte on it operating/risk management overhaul as it trys to get the focus on the new CEO, instead of the breakdown in its risk mgt and infrastructure needs. Sell on Stock and benchmark Bonds. Regulatory & counterparty risk back to High. 

M&A Chat: HBAN Buys TCF TCBB of Banking?


HBAN pulls the trigger on the in-region acquisition of TCF Financial. We explore the economic earnings and capital benefits of the deal to HBAN. 

USB: M&A Buyer or By-Stander?


U.S. Bancorp has lots of strategic options as it decides to go more digital banking/alliance(s) or jump back into physical bank M&A. We believe that it has the luxury to wait out better bank M&A valuaitons. Buy on Stock, Sell on benchmark bonds, Low risk indicators in regulatory and counterparty risk. 

WFC @ GS: Likes Long Term, Short Term Systemically Creepy


Wells Fargo CEO sounded chipper on GS Financial Services zoom call. Still, there is too much wood to chop in its restructuring to be so sanguine. Still a Sell on Stock, Perpetual Preferred Stock, and benchmark Bonds. Regulatory risk is Very High and counterparty risk is High. 

TFC: Stuck Between a Merger and a Pandemic


Truist loaded up on perpetual preferred stock YTD to keep the regulators at bay as it deals with merger cost savings delays and an overleveraged balance sheet going into pandemic. Catching up on all fronts. Still commond dividend may be more at risk versus other big regionals. Sell Stock and benchmark Bond, Preferred stock fully priced. Very Low regulatory risk and Low counterparty risk. 

Regions Financial: M&A Mahjong: Who Shall Meld?


Regions Financial continues to stay independent as the latest PNC action bypassed it. We analyse and update our regional bank M&A stratego to see why and when it will be purchased. Seems like a while. Sell capital structure (equity & debt) and counterparty & regulatory indicators are High risk. 

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