Bank Stock Roundup: Q3 Earnings In Full Swing; Capital One, SunTrust, KeyCorp Beat Estimates

The last five trading sessions have seen a number of earnings releases by banks. Most of the industry participants were able to surpass estimates on the back of revenue strength. An improvement in top line, which had been under pressure over the past several quarters, was sufficient to boost investor sentiment and move the stocks higher.

Organic growth, driven by impressive rise in loan and deposit balances, also cheered investors.

Moreover, absence of substantial legal costs supported the financials of banks this time around. However, the persistent low-rate environment continued to adversely impact net interest margins for most of the banks.

(Read: Bank Stock Roundup for the week ending Oct 21, 2016)

Important Earnings of the Week

1. A rise in revenues drove SunTrust Banks, Inc.'s (NYSE:STI) third-quarter 2016 earnings of 91 cents per share, which outpaced the Zacks Consensus Estimate of 89 cents. Results reflected an improvement in net interest income and a rise in non-interest income. Further, growth in loans and deposits acted as a tailwind. However, a jump in provision for credit losses and an increase in operating expenses were the downsides. (Read more: SunTrust Beats on Q3 Earnings; Provision Increases)

2. Capital One Financial Corporation’s (NYSE:COF) third-quarter 2016 adjusted earnings of $2.03 per share surpassed the Zacks Consensus Estimate of $1.94. Continued improvement in net interest income and non-interest income were the primary reasons for the better-than-expected results. This was partially offset by a rise in expenses and higher provision for credit losses. (Read more: Why Capital One Stock Fell Despite Q3 Earnings Beat)

3. KeyCorp.’s (NYSE:KEY) third-quarter 2016 adjusted earnings of 30 cents per share outpaced the Zacks Consensus Estimate of 26 cents. Better-than-expected results indicate revenue synergies from the First Niagara Financial Group acquisition deal. However, higher operating expenses and a rise in provision for credit losses were the downside. Also, margin pressure persisted during the quarter. (Read more: KeyCorp Q3 Earnings Impress on First Niagara Synergies)

Price Performance

Here is how the seven major stocks performed:

In the last five trading sessions, shares of Wells Fargo & Company (NYSE:WFC) and The PNC Financial Services Group, Inc. (NYSE:PNC) increased 2.9% and 2.7%, respectively. On the other hand, Capital One edged down 0.1%.

Over the last six months, Bank of America Corp. (NYSE:BAC) and JPMorgan Chase & Co. (NYSE:JPM) have been the best performers, with their shares surging 12.6% and 8%, respectively. However, Wells Fargo declined 8.9% over the same time frame.

What's Next in the Banking Space?

Over the next five trading days, performance of banking stocks is likely to remain somewhat similar, unless any unprecedented event occurs.

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