美股2019年q2美國(guó)中小型預(yù)覽

1、North America Equity Research02 July 2019U.S. Mid- and Small-Cap Banks 2Q19 Earnings PreviewReducing EPS With a NIM Storm on the Way; Rate Cut Playbook; Leveraged Loans On Our RadarWe turned bearish on regional banks in early October 2018 and dont see an end to the bear market for bank stocks any ti

2、me soon. In fact, we look to second quarter earnings as a catalyst for long-only funds to further reduce exposure to banks with, quite literally, there being nowhere to hide. Interest rates dropped like a rock through the quarter with 2Q NIMs likely to feel the squeeze of an inverted yield curve. In

3、 fact, we cant think of many prior periods where deposit costs were rising simultaneous with earning asset yields declining. In addition to us bracing for substantial NIM pressure in 2Q, we see the forward guide for the rest of 2019 as well as 2020 to be even worse. While many banks have been in den

4、ial that the next move out of the Fed was likely a cut, with July now pricing in 100% odds of a cut, managements will need to give a forward look on net interest margins assuming the forward curve and, to this end, were bracing for shock and awe. While credit quality is likely to remain healthy in t

5、he quarter, we stand behind our call that the next credit cycle could be worse than prior cycles. In fact, we see the rampant growth of covenant lite leveraged loans as havingU.S. Mid and Small Cap Banks Steven Alexopoulos, CFA AC(1-212) 622-6041steven.alexopBloomberg JPMA ALEXOPOULOS <GO>Alex

6、 Lau(1-212) 622-3428aleJanet Lee(1-212) 622-4803janet.Anthony Elian, CFA(1-212) 622-5067anthony.J.P. Morgan Securities LLCthe potential to cause a minor downturn in the economy toe more pronouncedas a result of these assets being held by trustees and custodians rather than banks (which are the ideal

7、 party to work out problem loans given that liquidity flows into banks during downturns and out of nonbanks!). With a backdrop for banks that offers much more risk than reward, our bearish call on bank stocks remains fully intact.·Rate Cut Scenario Playbook. With the 10-year yield now below the

8、 fed funds rate, we believe the worst pressure on NIMs this cycle is now at our doorstep. In fact, with rates across the yield curve plunging while deposit costs are still marching higher, we see NIMs declining in the 20 bps range in the remainder of 2019. While pressure will be worse over the near

9、term on liability sensitive banks, once the Fed starts cutting rates, the more intense pressure will spread to asset sensitive banks.Leveraged Lending Being Done Outside of the Bank System Could Be a Big Problem for Banks. As central banks around the world have conducted one of the largest experimen

10、ts in history via QE, a side effect of rates being deeply negative across many developed economies has been a global search for yield, contributing directly to the rampant growth of covenant lite leveraged loans. In fact, leveraged loans are now $1.2T (vs. $1.3T of subprime securities pre-GFC), with

11、 covenant lite making up 85% of leveraged loan issuance. In the next downturn, these new entrants will likely prove to be far less equipped than banks to work through problem loans.··Key 2Q19 Trends: (1) We expect NIMs to contract 4 bps, driven by loan yieldsdeclining 1 bp and interest bea

12、ring deposit costs rising 6 bps, (2) We project averageloans (+6.6% ann.) and average deposits (+5.4% ann.) to increase at a solid pace,(3) Mortgage banking likely to be stronger with total origination volumes rising 54% per the MBA forecast, (4) Credit metrics likely to tick up sequentially and com

13、eoff low bases, and (5) ROTEs to remain relatively stableat 15.8%.·Sector Positioning: FRC remains in the #1 Spot, FHN moves to #2, and NYCB again our top UW. While FRC remains our top pick, we will likely see a betterbuying opportuon earnings. Moving into #2 is FHN as its bond trading business

14、should see a surge in revenue with an ideal environment ahead. With NYCB most directly impacted by new rent regulations, it is again our top Underweight.See page 169 for analyst certification and important disclosures.J.P. Morgan does and seeks to do business with companies covered in its research r

15、eports. As a result, investors should be aware thatthe firm may have aof interest that could affect the objectivity of this report. Investors should consider this report as only a singlefactor in making their investment 獲取報(bào)告1、2、3、每周群內(nèi)7+報(bào)告；當(dāng)日華爾街日?qǐng)?bào)、4、行研報(bào)告均為公開(kāi)利歸原作者所有，起點(diǎn)財(cái)經(jīng)僅分發(fā)做內(nèi)部學(xué)習(xí)。掃一掃 關(guān)注公號(hào)回復(fù)

16、：加入“起點(diǎn)財(cái)經(jīng)”群。Steven Alexopoulos, CFA (1-212) 622-6041steven.alexopNorth America Equity Research02 July 2019Equity Ratings and Price TargetsMkt Cap ($ mn) Rating Price TargetCompanyTickerPrice ($)CurPrevCurEnd Date Dec-20PrevEnd Date Dec-19Amalgamated Bank BankUnitedCadence Bancorporation Comerica Inco

17、rporated Cullen/Frost Bankers Inc. FB FinancialFirst HawaiianFirst Horizon National First RepublicGreat Western Bancorp, Inc. Huntington Bancshares KeyCorpM&T BankMetropolitan Bank Holding Corp.AMAL US BKU US CADE US CMA US CFR US FBK US FHB US FHN US FRC US GWB US HBAN US KEY US MTB US MCB US N

18、YCB US PBCT US SBNY US SIVB US SNV US TCBI US UMPQ US WBS US ZION US561.093,347.012,667.9511,347.055,916.371,141.553,474.784,698.8816,558.522,034.4114,461.8018,075.2423,338.97368.204,723.766,263.796,812.1111,686.675,521.913,076.133,710.294,371.878,455.8317.6633.7620.7273.0193.7937.0025.7214.9098.923

19、5.7313.8217.84170.8144.4410.1116.83123.24223.3635.0761.2016.8347.5446.33OW UW OW N UW N N OW OW N N N N OW UW N OW OW N N N OW Nn/c n/c n/c n/c n/c n/c n/c n/c n/c n/c n/c n/c n/c n/c n/c n/c n/c n/c n/c n/c n/c n/c n/c18.5034.0022.5074.0090.0037.5026.5016.50112.0035.0014.0017.50174.0046.009.5017.00

20、132.00250.0035.0065.0017.0051.0047.00n/c 37.0024.5083.00100.0038.0028.0017.00118.00n/c n/c n/c173.00n/c 11.5017.50147.00285.0039.0061.0017.5058.0050.00Dec-20 Dec-20 Dec-20 Dec-20 Dec-20 Dec-20 Dec-20 Dec-20 Dec-20 Dec-20 Dec-20 Dec-20 Dec-20 Dec-20 Dec-20 Dec-20 Dec-20 Dec-20 Dec-20 Dec-20 Dec-20 De

21、c-20Dec-19 Dec-19 Dec-19 Dec-19 Dec-19 Dec-19 Dec-19 Dec-19 Dec-19 Dec-19 Dec-19 Dec-19 Dec-19 Dec-19 Dec-19 Dec-19 Dec-19 Dec-19 Dec-19 Dec-19 Dec-19 Dec-19New York CommuBankPeople's United Financial Signature BankSVB Financial Group Synovus Financial Corp.Texas Capital Bancshares, Inc. Umpqua

22、Holdings Corporation Webster Financial Corporation Zions Bancorp NASource: Company data, Bloomberg, J.P. Morgan estimates. n/c = no change. All prices as of 01 Jul 19.2Steven Alexopoulos, CFA (1-212) 622-6041steven.alexopNorth America Equity Research02 July 2019Table of Contents2Q19 Sector Outlook5K

23、ey Valuation Metrics16Deep Dive: Rate Cut Scenario Playbook17The Road Ahead35Summary of Revisions to EPS Estimates38Portfolio Manager 2Q19 Macro Summary39Mid- and Small-Cap Bank Trends at a Glance40JPM vs. Consensus EPS Estimates49Amalgamated Bank 2Q19 Preview (AMAL, OW)50BankUnited 2Q19 Preview (BK

24、U, UW)54Cadence 2Q19 Preview (CADE, OW)58Comerica 2Q19 Preview (CMA, N)63Cullen/Frost 2Q19 Preview (CFR, UW)67FB Financial 2Q19 Preview (FBK, N)70First Hawaiian 2Q19 Preview (FHB, N)74First Horizon 2Q19 Preview (FHN, OW)78First Republic 2Q19 Preview (FRC, OW)83Great Western CY2Q Preview (GWB, N)89Hu

25、ntington 2Q19 Preview (HBAN, N)93KeyCorp 2Q19 Preview (KEY, N)97M&T Bank Corporation 2Q19 Preview (MTB, N)102Metropolitan Commercial Bank 2Q Preview (MCB, OW)106New York CommuBank 2Q19 Preview (NYCB, UW) .111Peoples United 2Q19 Preview (PBCT, N)116Signature Bank 2Q19 Preview (SBNY, OW)119SVB Fin

26、ancial 2Q19 Preview (SIVB, OW)123Synovus 2Q19 Preview (SNV, N)127Texas Capital 2Q19 Preview (TCBI, N)131Umpqua 2Q19 Preview (UMPQ, N)135Webster 2Q19 Preview (WBS, OW)139Zions 2Q19 Preview (ZION, N)1433Steven Alexopoulos, CFA (1-212) 622-6041steven.alexopNorth America Equity Research02 July 2019Table

27、 1: US Mid- and Small-Cap Banks Valuation SummarySource: Company reports and J.P. Morgan estimates. Priced as of 6/28/19.4Price/Price/Price/Price/ Dec '20 Total Market 2018A 2019E2020E2021EJPMSeniorLastPrice AssetsCapEPSEPSEPSEPS Ticker CompanyRatingAnalystPriceTarget ($ Bil.) ($ Bil.)(x)(x)(x)(

28、x)Core Core Core Core EPS EPS EPS EPS 2018A 2019E 2020E 2021E2018A Price/TBV TangiblePerBookShare(%)DollarMRQCurrent VolumeTBV Dividend Short 30 Day MA PerYieldInterest($ MM)Share(%)(% of o/s)AMAlgamated BankOverweightAlexopoulos$17.45 $18.50 $4.9$0.612.612.510.79.1$1.38$1.40$1.63$1.91$13.17133%$0.9

29、$13.690.0%0.6%BKU BankUnitedUnderweightAlexopoulos$33.74 $34.00 $32.7$3.310.712.311.010.1$3.16$2.75$3.07$3.34$26.64127%$22.7$28.702.5%3.0%CADE Cadence BancorporationOverweightAlexopoulos$20.80 $22.50 $17.5$2.78.1$2.06$2.33$2.41$2.56$13.62153%$22.8$13.233.4%2.8%CMA ComericaNeutralAlexopoulo

30、s$72.64 $74.00 $70.7$11.210.09.08.88.3$7.25$8.07$8.25$8.75$42.89169%$122.0$43.553.7%3.6%CFRCullen/FrostUnderweightAlexopoulos$93.66 $90.00 $31.7$5.913.713.713.613.0$6.86$6.85$6.86$7.21$40.75230%$23.7$44.253.0%3.6%FBKFB FinancialNeutralLau$36.60 $37.50 $5.3$1.114.012.912.111.0$2.62$2.83$3.02$3.33$17.

31、02215%$2.9$17.730.9%1.3%FHBFirst HawaiianNeutralAlexopoulos$25.87 $26.50 $20.4$3.512.611.911.811.3$2.05$2.17$2.19$2.29$11.22231%$18.2$11.874.0%1.1%FHNFirst Horizon NationalOverweightAlexopoulos$14.93 $16.50 $41.1$4.710.6$1.40$1.47$1.63$1.78$8.81169%$45.0$9.113.8%5.0%FRCFirst Republic BankO

32、verweightAlexopoulos$97.65 $112.00 $101.8 $16.320.519.017.315.2$4.75$5.14$5.63$6.41$45.22216%$93.5$46.810.8%5.7%GWB Great Western BancorpNeutralLee$35.72 $35.00 $12.8$2.012.111.511.210.6$2.95$3.11$3.20$3.38$18.72191%$10.1$19.253.4%2.8%HBAN Huntington BancsharesNeutralAlexopoulos$13.82 $14.00 $108.2

33、$14.511.210.710.510.0$1.23$1.29$1.32$1.39$7.29190%$137.1$7.624.3%2.3%KEYKeyCorpNeutralAlexopoulos$17.75 $17.50 $141.5 $17.910.210.09.89.2$1.74$1.77$1.82$1.92$11.10160%$156.7$11.513.8%1.5%MCB Metropolitan Bank HoldingOverweightLau$44.00 $46.00 $1.7$0.414.411.710.99.4$3.06$3.75$4.05$4.68$30.34145%$1.0

34、$31.070.0%0.4%MTB M&T BankNeutralAlexopoulos $170.07 $174.00 $120.0 $23.212.811.711.010.0$13.33 $14.54 $15.51 $17.04$69.21246%$112.0$71.132.4%1.0%NYCB NY CommuBancorpUnderweightAlexopoulos$9.98$9.50 $52.1$4.712.413.412.411.4$0.80$0.75$0.80$0.88$7.85127%$56.6$7.926.8%10.4%PBCT People's United

35、NeutralAlexopoulos$16.78 $17.00 $48.1$6.712.812.812.011.4$1.31$1.32$1.39$1.47$9.23182%$46.6$9.354.2%5.5%SBNY SignatureOverweightAlexopoulos $120.84 $132.00 $48.5$6.79.3$9.25$10.86 $11.78 $12.97$79.16153%$52.0$81.511.9%1.7%SIVB SVB FinancialOverweightAlexopoulos $224.59 $250.00 $60.2$11.7

36、12.311.410.99.4$18.22 $19.73 $20.57 $23.85$97.29231%$113.3$98.420.0%2.3%SNVSynovusNeutralAlexopoulos$35.00 $35.00 $46.6$8.27.6$3.64$4.11$4.26$4.62$24.78141%$49.5$24.273.4%3.2%TCBI Texas Capital BancsharesNeutralAlexopoulos$61.37 $65.00 $28.4$9.49.0$5.73$6.24$6.52$6.85$49.44124%$32

37、.7$51.000.0%4.1%UMPQ Umpqua HoldingsNeutralAlexopoulos$16.59 $17.00 $27.4$3.710.7$1.55$1.59$1.68$1.78$10.19163%$21.6$10.445.1%1.7%WBS Webster HoldingOverweightAlexopoulos$47.77 $51.00 $28.2$4.412.711.711.410.7$3.76$4.07$4.20$4.48$23.67202%$29.8$24.553.4%3.4%ZION Zions BancorporationNeutral

38、Alexopoulos$45.98 $47.00 $69.2$8.411.210.610.19.6$4.12$4.33$4.56$4.80$31.97144%$93.8$32.922.6%13.5%Mid- and Small-Cap Bank Average12.311.510.99.6169%3.4%2.8%Steven Alexopoulos, CFA (1-212) 622-6041steven.alexopNorth America Equity Research02 July 20192Q19 Sector OutlookBear Market for Bank Stocks Un

39、likely to End Anytime Soon; We Look at the Underappreciated Risk with Leveraged LendingSince we turned bearish on regional bank stocks in early October 2018, over the past several months investors have commented to us that they were surprised by just howbearish we hade on regional bank equities. In

40、fact, it surprised many investorswhen we indicated that the last time we were this bearish on regional bank stockswas during the Great Financial Crisis of 2008/2009. With that said, however, post announcement of a threat of US tariffs on Mexico (on May 30, 2019), this seemed to be an inflection poin

41、t for bond as well as stock markets, with many more investors in the aftermath migrating over to our bear camp on regional banks. With that said,however, on an overall basis we still see investors as having too much exposure to regional banks. As we met with investors through the quarter, we continu

42、ed to hear from many that bank stocks were still attractive with factors such as (1) cheap valuations, (2) strong credit quality, and (3) the potential for M&A as reasons for maintaining sector exposure. In our view, however, we see far too much risk in the regional bank sector and without the c

43、ommensurate reward potential. As a result, our bearish call on regional banks remains fully intact.With the two main pressure points on bank stocks being net interest margins and credit quality, we see pressure ramping sharply on bank NIMs over the near term while credit risk is likely to rise even

44、further over the intermediate term. We would also remind investors that we see a near term storm ahead in terms of credit risk, withthee of the next cycle likely to be worse than prior cycles. In terms of thepotential pressure on bank net interest margins, banks are now at an unusual juncture in tha

45、t, at least over the very near term, deposit costs are likely to continue resetting higher, but in the backdrop of earning asset yields seeing downward pressure.Conceptually speaking, this is being driven by the further inversion of the yield curve during the quarter (as measured from the fed funds

46、rate to the 10-year portion of the curve).In terms of the potential for higher deposit rates, while the direction of deposit costs is still likely higher, today we find ourselves in largely unchartered waters. In fact,while our ms that forecast deposit rates continue to suggest that deposit costs st

47、illneed to reset around 75-80 bps above levels reported in 1Q19 (in the 1.0% range),with the forward curve now implying over four cuts in the funds rate through YE20, a shift in deposit behavior from the banks is likely to throw a monkey wrench in our forecast. Case in point, during the quarter we h

48、osted meetings with several bank management teams and while the messaging around deposits was very diverse, with some banks still increasing well below market rates on money market deposits for example, other banks indicated that in response to the forward curve now showingrate cuts that they were n

49、ot only slowing the pace of deposit promotions, but for the promotions still in the market, duration was being cut down dramatically (for example, a prior 24-month CD promotion was being replaced with a 9-month promotion and at a lower rate). As a result of this shift in deposit behavior now taking

50、place, while we continue to see upward pressure on deposit rates we now see deposit betas trailing off materiallyand potentially sooner than later. Even with5Steven Alexopoulos, CFA (1-212) 622-6041steven.alexopNorth America Equity Research02 July 2019deposit pressure likely abating over the next fe

51、w quarters, however, given the inverted yield curve, downward pressure on NIMs is likely to persist.During the second quarter, the 5-year Treasury yield declined 47 bps () while the10-year Treasury yield declined 40 bps (). On a year-over-year basis, the 10-yearTreasury yield has declined by 83 bps.

52、 With longer-term interest rates fallingprecipitously over the past year, or the past quarter for that matter, this will placedownward pressure on the yields of mortgage related assets (such as resi mortgage and commercial real estate) as well as securities portfolios. While the potential for deposi

53、t cost pricing pressure abating is a positive, given the direction of loan and securities yields over the next year, we see pressure on NIMs as being even more intensewith the pressure point moving from the liability to the asset side of the balance sheet. The bottom line is that until the Fed actua

54、lly reduces the funds rate and is able to restore some degree of steepness to the yield curve, pressure on bank NIMs is likely to get much worse before it gets better.While industry NIMs are likely to remain under pressure over the intermediate term, however, all balance sheets are not created equal

55、. Generally speaking, we tend to find that banks are in one of two camps, asset or liability sensitive. Asset sensitive banks tend to be banks with higher concentrations of commercial banking, which bring along high levels of non-interest bearing deposits as well as variable rate loans indexed to Prime and Libor. Liability sensitive banks tend to be more consumer in nature, with deposit costs being more sensitive to moves in short-term rates with assets that tend to be longer in duration (typically at the 3-5 year portion of the yield curve). With the yield curve n