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50% of midsize stress test participants project to remain profitable

A total of 60 top-tier banks and thrifts with consolidated assets between $10 billion and $50 billion reported annual Dodd-Frank stress test results this year.

The stress-testing cycle runs from the first quarter of 2016 through the first quarter of 2018. All of the results shown are under the "severely adverse" scenario. In order to make the charts included in this article, SNL took the stress test results reported at the holding company level, if available. If holding company data was not available or the holding company was larger than $50 billion, subsidiary level data was used. This consolidation resulted in 60 "top-tier" entities that filed stress test results.

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Thirty of the 60 institutions projected positive cumulative net income over the nine-quarter stress test. American Express Centurion Bank projected the highest pretax profit at $2.6 billion, while Citizens Bank of Pennsylvania projected the highest pretax loss at $1.8 billion. The 60 banks and thrifts had a cumulative projected net income of $1.2 billion for the stress period.

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None of the select institutions projected a capital ratio below the Federal Reserve's regulatory minimum. However, three banks - Western Alliance Bancorp., Synovus Financial Corp. and Fulton Financial Corp., projected minimum Tier 1 risk-based capital ratios below the Fed's well-capitalized minimum of 8%, at 7.4%, 7.8% and 7.3% respectively.

The 60 select banks and thrifts had a median CET 1 ratio of 12.0% for the fourth quarter of 2015, and a median projected minimum CET 1 ratio of 10.4% for the stress period.

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Credit card lenders American Express Centurion Bank and Barclays Bank Delaware reported the highest projected loan losses at 14.40% and 12.90%, followed by another American Express subsidiary, American Express Bank FSB, at 12.00% and two Puerto Rico-based banks, First BanCorp. and Popular Inc., at 8.30% and 8.02%, respectively.

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Click here to access a template containing the results of this year's midsize company-run Dodd-Frank Act stress tests.

Click here to access an article on last year's midsize company-run stress tests.

To view a video training session on CCAR and DFAST, click here.