US Bond Yields Indicate Recessionary Pressures; Banking Stocks Can Be Attractive Bets

US Bond Yields Indicates Recessionary Pressures; Banking Stocks Can Be Attractive Bets

US 10-year bond yield converges close to three-year bond yield, indicating a possibility of a recession. US 10-year bond yield stands at 2.472%, whereas its 3-year bond yield stands at 2.265%. The major reason being long started a trade war, which reduced the global growth rate. This can be attributed to the ever growing import prices increasing the operating expenses across the industries, leading to a reduction in demand. It would not be wrong to say that the inverted yield curve is one of the things which the market players hate to experience as this might lead to a recession. Therefore, the broader equity markets witnessed a downtrend.

Over the past one year, NASDAQ Bank Index decreased by ~9.3% from $3,984.7 (April 02, 2018) to $3,613.8 (April 01, 2019). It proffers an attractive opportunity for the banking stocks as it is trading at decent price levels. Let’s have a look on some the banking stocks such as CapStar Financial Holdings Inc. (NASDAQ: CSTR), Zions Bancorporation (NASDAQ: ZION), and Westamerica Bancorp (NASDAQ: WABC).

CapStar Financial Holdings Inc. (NASDAQ: CSTR)

Sponsored ad by Kalkine

CapStar Financial Holdings Inc. (NASDAQ: CSTR) provides banking services to consumers and corporate clients, mainly in Tennessee, USA. Its product includes deposits, services, demand deposits, interest-bearing transaction accounts, money market accounts, time and saving deposits, certificate of deposits, and CDARS reciprocal products. It also offers private banking and wealth management services to its HNI clients. As of December 31, 2018, the bank had total assets of US$1,963.88 Mn, deposits of US$1,570.01 Mn, and net loans of US$1,417.68 Mn. The bank’s net interest income grew by ~31.6% Y-o-Y to US$67.78 million in FY18. Its net interest income after loan loss provision increased by 68.5% to $48.85 million in FY18 as compared to the prior year. The bank has well managed its Total risk-based capital of 12.8% with Common equity tier 1 capital ratio of 11.6% during FY18.

On stock information, at the market close on 1st April 2019, the stock of CSTR was trading at $15.70, up by 8.73%, with a market capitalization of ~$277.61 million. The stock has fallen 12.5% over the past one year.

Zions Bancorporation (NASDAQ: ZION)

Financial holding company, Zions Bancorporation (NASDAQ: ZION) conducts its banking operations through branded segments, including Zions Bank, Amegy Bank, California Bank & Trust, National Bank of Arizona, etc. Its services include community banking services, trade finance, personal banking services, such as financial advisory and corporate trust services, etc. It operates in multiple locations of the United States, such as Arizona, California, Colorado, Idaho, Nevada, Oregon, Texas, Washington, etc. As of December 31, 2018, the bank had total assets of US$68.74 Mn, deposits of US$54.10 Mn, and net loans & leases of US$46.71 Mn. The bank’s net interest income grew by ~13% Y-o-Y to US$2.48 billion in FY18. Its net interest income after loan loss provision increased by 11% to 2.27 billion. It includes an increase in Amegy segment by 30% to $594 million. Common equity tier 1 capital ratio stood at 11.7% in FY18.

On the stock information, at market close on 1st April 2019, the stock of ZION was trading at $46.72, up by 2.88%, with a market capitalization of ~$8.70 billion. It has declined by 9.1% from $51.37 in April 02, 2018 to $46.72 in April 1, 2019.

Westamerica Bancorporation (NASDAQ: WABC)

Westamerica Bancorporation (NASDAQ: WABC) is a bank holding company, provides a range of banking services to its customers via its subsidiary, Westamerica Bank, mainly in Northern and Central California. It’s primarily focused on the banking needs of small businesses. Its loan portfolio includes commercial loans, construction loans, consumer instalment loans, commercial real estate loans, etc. As of December 31, 2018, the company had total assets of US$5,568.52 Mn, deposits of US$4,866.83 Mn, and Return on common equity of 11.35%.

For the financial year ending December 31, 2018, WABC interest income increased by 13% to $151.7 million. Its net interest income after loan loss provision was reported at $149.7 million. Its Common Equity Tier I Capital stood at 16.30% in FY18.

On stock information, at the market close on 1st April 2019, the stock of WABC was trading at $62.81, up 1.63%, with a market capitalization of ~$1.69 billion.


Disclaimer

This website is a service of Kalkine Media Pty. Ltd. A.C.N. 629 651 672. The website has been prepared for informational purposes only and is not intended to be used as a complete source of information on any particular company. Kalkine Media does not in any way endorse or recommend individuals, products or services that may be discussed on this site. Our publications are NOT a solicitation or recommendation to buy, sell or hold. We are neither licensed nor qualified to provide investment advice.

Facebook Comments
Join Our Forum

We help you to connect with investors and people connected with the stock market.


6 Cannabis Stocks under Investor’s Limelight…

Cannabis companies that sell both medicinal weed and recreational pot. Marijuana stocks to look at. Marijuana mergers and acquisitions. Dispensary data analytics. Upcoming marijuana IPO’s Those phrases have become increasingly common as marijuana legalization spreads.

Global spending on legal cannabis is expected to grow 230% to $32 billion in 2020 as compared to $9.5 in 2017, according to Arcview Market Research and BDS Analytics. As of June 29, 2018 the United States Marijuana Index, despite a lot of uncertainty around regulations, has over the past 1 year gained 71.49%, as compared to about 12% gain seen by the S&P 500.

Click here for your FREE Report

LEAVE A REPLY

Please enter your comment!
Please enter your name here