SBNY: 3 regional bank stocks that have 50%
Today the The 10-year Treasury yield hit its all-time high since May 2019, as investors weighed Federal Reserve Governor Lael Brainard’s comments on the need for the Fed to bring inflation down quickly. Rising Treasury yields bode well for the banking sector as banks derive a significant portion of their income from net interest income (NII).
Additionally, an increase in cash deposits since the onset of the COVID-19 pandemic has also helped the banking sector regain momentum. And the rapid digitization of banks to improve their operational efficiency should contribute to the long-term growth of the sector.
As a result, Wall Street analysts expect shares of fundamentally sound regional banks Signature Bank (SBNY), Western Alliance Bancorporation (WALL) and Bancorp, Inc. Customers (CUBI) for substantial gains in the coming months.
Signature Bank (SBNY)
SBNY, based in New York, provides commercial banking products and services and accepts various deposit products, including checking accounts, money market accounts, escrow deposit accounts, cash concentration accounts, certificates of deposit and other cash management products. The Company offers various loan products which include commercial and industrial loans, home loans and letters of credit.
SBNY’s total interest income increased 24.1% year over year to $606.31 million for the fourth quarter, ending December 31, 2021. Its net income increased 51 .9% from its value a year ago to $262.87 million. The company’s EPS increased 33.1% from the prior year quarter to $4.34. And its total cash and cash equivalents was $29.62 billion for its fiscal year ending Dec. 31, 2021.
Analysts expect SBNY’s revenue to grow 38.2% year-over-year to $607.16 million for the first quarter, ending March 31, 2022. The consensus estimate EPS of $4.28 for the first quarter, ending March 31, 2022, represents a 32% improvement over the year. over-year. Also, it has an impressive history of earnings surprises; it has exceeded consensus EPS estimates in each of the past four quarters.
The stock price has gained 28.5% over the past year and 16.5% over the past nine months.
All 14 Wall Street analysts who have rated the stock have rated it Buy. Closing its last trading session at $282.67, the 12-month median price target of $432.00 indicates a Upside potential of 52.8%. Price targets range from a low of $375.00 to a high of $472.00.
Western Alliance Bancorporation (WALL)
WAL in Phoenix, Arizona, is the banking holding company of Western Alliance Bank, which provides various banking products and related services, primarily in Arizona, California and Nevada. It operates in Commercial; related to the consumer; and Corporate & other segments. The Company offers deposit products, fixed-rate and fixed-maturity deposit account certificates, as well as cash management and residential mortgage products and services.
For the fourth quarter ended December 31, 2021, WAL net revenue increased 65.7% year-over-year to $561.00 million. Its net income rose 27.1% from its value a year ago at $246.00 million, while its adjusted EPS rose 21.2% from its year-ago quarter. at $2.34.
The consensus EPS estimate of $2.08 for the first quarter, ending March 31, 2022, represents a 9.6% year-over-year improvement. Analysts expect its revenue to rise 61.7% year-over-year to $544.81 million for the first quarter, ending March 31, 2022. It beat consensus estimates EPS in each of the last four quarters.
The six Wall Street analysts who have rated the stock have rated it Buy. The 12-month median price target of $127.67 indicates a 63.4% upside potential. The price target ranges from a low of $115.00 to a high of $139.00. The stock closed its last trading session at $78.14.
Bancorp, Inc. Customers (CUBI)
CUBI operates as the banking holding company of Customers Bank which offers financial products and services to individuals and small and medium enterprises. the Wyomissing, Pennsylvania, The Company offers deposit products, including checking, savings, MMDA and other deposit accounts.
During the fourth quarter, ended December 31, 2021, CUBI’s total interest income increased 39.8% year over year to $214.04 million. Its core earnings (a non-GAAP measure) rose 83.4% from its value a year ago at $100.10 million, while its core EPS rose 70.8% from its year-ago quarter at $2.92.
Analysts expect CUBI’s revenue to grow 14.8% year-over-year to $152.40 million in the first quarter (ending March 31, 2022). Additionally, the company has an impressive track record of earnings surprises; it has exceeded consensus EPS estimates in three of the last four quarters. The stock has gained 56% in price over the past year and 26.9% over the past nine months.
Of the five Wall Street analysts who rated the stock, four rated it buy and one rated it hold. Closing its last trading session at $48.6, the 12-month median price target of $76.30 indicates a 57% upside potential. Price targets range from a low of $62.50 to a high of $85.00.
SBNY shares were trading at $275.00 per share on Wednesday afternoon, down $7.67 (-2.71%). Year-to-date, the SBNY is down -14.83%, compared to a -5.96% rise in the benchmark S&P 500 over the same period.
About the Author: Spandan Khandelwal
Spandan’s is a financial journalist and investment analyst specializing in the stock market. Through its ability to interpret financial data, it aims to help investors assess a company’s fundamentals before investing. Continued…