SOURCE: Paragon Financial Limited

Paragon Financial Limited

March 14, 2012 08:20 ET

Regional Banking Stocks on the Upswing -- Synovus Financial and Flagstar Bancorp Looking Strong

The Paragon Report Provides Equity Research on Synovus Financial & Flagstar Bancorp

NEW YORK, NY--(Marketwire - Mar 14, 2012) - Year-to-date, Regional Banking stocks have been some of the strongest performers on Wall Street. The SPDR S&P Regional Banking ETF (KRE) is up roughly 11 percent in 2012 as bank balance sheets continue to improve. The Paragon Report examines investing opportunities in the Regional Banking Sector and provides equity research on Synovus Financial Corporation (NYSE: SNV) and Flagstar Bancorp (NYSE: FBC). Access to the full company reports can be found at:

U.S. Banking stocks took a hit earlier this week ahead of critical stress-test results to be released by the Federal Reserve on Thursday. If institutions fall short, they could be required to raise billions in new capital, depressing their shares. If they pass, dividend increases and stock buybacks by the strongest institutions are likely to follow as they did after the second round of tests a year ago. Federal Reserve specialists are trying to predict how capital levels at the 19 largest banks would withstand an economic downturn even more severe than the one that followed the Lehman collapse.

According to a report from The New York Times, the results are expected to show broadly improved balance sheets at most institutions.

The Paragon Report provides investors with an excellent first step in their due diligence by providing daily trading ideas, and consolidating the public information available on them. For more investment research on the regional banking sector register with us free at and get exclusive access to our numerous stock reports and industry newsletters.

Banks are being required to test their revenue and capital against a deep recession scenario that has the unemployment rising to 13% in the second quarter of 2013 and the Dow Jones Industrial Average dropping to 5,668 in the fourth quarter of 2012. The goal of the tests is to ensure that banks have capital reserves necessary to withstand an economic crisis like the one experienced in 2008 and be able to withstand it without the aid of taxpayer infusions.

In November the Federal Reserve released details about what kinds of things it will be looking at as it completes the reviews. Like in 2011, the central bank said it expects capital plans will reflect "conservative common dividend payout ratios" and any dividend payouts above 30% of projected after-tax net income will receive "particularly close scrutiny."

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