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Quarter-End Insights

Our Outlook for Bank Stocks

After a quick banking sector rebound from March lows, a few regional bank names still stand out as values.

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Following the stress tests and capital-raising efforts of the second quarter, the banks were flush with new equity and hope in the third quarter--but they were also still awash in a sea of credit losses. Second-quarter earnings calls were filled with suggestions that the consumer credit cycle was nearing its peak. Monthly credit card losses showed some improvement but also showed that any recovery was going to be a bumpy ride.

Jaime Peters does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.