Winners and Losers of the Fed's Latest Bank Stress Test

Michael Teague |

Winners and Losers of the Fed's Latest Bank Stress TestThe results of the Federal Reserve’s second round of stress tests for 18 banks were released on Thursday afternoon, with almost no surprises.

American Express (AXP), Bank of America (BAC), the Bank of New York (BK), Capital One (COF), Citigroup (C), Fifth Third Bank Corp (FITB), KeyCorp (KEY), Morgan Stanley (MS), PNC Financial Services Group (PNC), Regions Financial Corp. (RF), State Street Corp. (STT), Sun Trust Banks (STI), US Bancorp (USB) and Wells Fargo (WFC) will surely be happy to be able to announce dividend payouts and share buybacks to their shareholders as soon as possible.  Many of them already have.

Ally Financial’s original plan was rejected last week, and so it is not entirely surprising that this was also the case with their revised plan.  According to the Fed, the bank’s capital ratios would not meet requirements in a worst-case-scenario, nor was its capital planning process found to be sufficient.

BB&T's (BBT) rejection by the fed was much more of a surprise.  Though the bank’s capital met the Fed’s threshold requirements, their dividend payout and stock buyback plans were sent back based on problems with the capital planning process.  The Fed has not explained this decision, but the bank itself has said only that it would have to reconsider “unfunded lending commitments” in order to meet with regulatory requirements.

J.P. Morgan Chase (JPM) and Goldman Sachs (GS) passed, sort of, but must retool their share distribution plans by the end of the third quarter.  In the meantime, their plans were given “conditional approval”, according to a senior Fed official.  Failure to resubmit the plans, however, could result in them ultimately being rejected.

In afterhours trading, J.P. Morgan’s shares dipped 1.92 percent to $50.02, while Goldman’s were down 1.77 percent to 151.30.  BB&T lost just over 3 percent, to $30.77.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to:


Symbol Name Price Change % Volume
AGO.P.B Assured Guaranty Ltd. 26.47 0.26 0.97 1,735
AXP American Express Company 67.36 0.58 0.87 8,561,225
BAC Bank of America Corporation 16.67 0.11 0.66 77,954,926
BBT BB&T Corporation 38.80 -0.16 -0.41 5,636,468
BK Bank of New York Mellon Corporation (The) 43.05 0.80 1.89 12,004,288
C Citigroup Inc. 49.57 -0.01 -0.02 12,728,627
COF Capital One Financial Corporation 74.89 0.38 0.51 3,947,431
FITB Fifth Third Bancorp 21.21 0.19 0.90 6,436,276
GS The Goldman Sachs Group Inc. 174.67 0.16 0.09 2,004,401
JPM JP Morgan Chase 68.49 0.23 0.34 12,175,674
KEY KeyCorp 13.04 0.02 0.15 10,194,614
MS Morgan Stanley 33.44 0.54 1.64 13,910,338
PNC PNC Financial Services Group Inc. (The) 92.92 -0.38 -0.41 3,901,026
RF Regions Financial Corporation 10.64 0.03 0.28 13,930,481
STI SunTrust Banks Inc. 45.66 -0.77 -1.66 5,676,333
USB U.S. Bancorp 43.85 -0.10 -0.23 6,422,391
WFC Wells Fargo & Company 45.09 0.16 0.36 21,490,816


Emerging Growth

Relevium Technologies Inc.

Relevium Technologies Inc is engaged in the acquisition of products, technologies and businesses relating to musculoskeletal function, specifically Pain Relief, Injury Recovery and Active Performance.

Private Markets

XY Find It

Founded by serial entrepreneur Arie Trouw, XY Findables follows a single guiding principle: customers should never lose anything important again. With over 50,000 users around the world, more than 100,000…


Uber connects riders with safe, reliable, convenient transportation providers at a variety of price-points in cities around the world. Uber makes money from charging their drivers 20% of the fare…