Considering Billy Ray Cyrus has somehow managed to be popular in both 1990 and 2010, perhaps there is something to this particular comparison. <\/p>\n
Wouldn't hold your breath on the parachute pants though. <\/p>\n
There are not very many things in common between the start of this decade and the start of the '90s: parachute pants, for one, are no longer quite the fashion statement they once were.<\/p>\n
The early '90s, of course, was also the period that saw a war in Iraq, a
\ncharismatic Democrat replace a Bush in the White House, and divisive health care reform. Sound
\nfamiliar? <\/p>\n
Looking for more similarities, the team at RBC Capital Markets has decided to compare the current post-recessionary U.S. banking environment with that of a similar period between 1990 and 1994, in a series they are calling "Bank to the Future" \u2014 with no apparent apologies to Marty McFly.<\/p>\n
"We believe the 1990-94 banking environment has many similarities to today's environment," the note said. "The 12-month recovery in bank stock prices from their February 2009 lows is very similar to the 12-month recovery from the lows reached in October 1990."<\/p>\n
Carried forward, the team extrapolates upside potential of about 50% for banks over the next 18 months. <\/p>\n
"The advance will be driven by an improvement in credit quality and increased merger and acquisition activity," they said. <\/p>\n
The team also notes that price-to-book ratios between the two time periods are very similar: 1.25 times in the present versus 1.26 times in 1991.<\/p>\n
Banks that will benefit from credit improvement include Associated Banc-Corp.<\/a>, Boston Private Financial Holdings Inc.<\/a>, KeyCorp<\/a>, and Webster Financial Corp.<\/a> Banks that could become "dominant franchises" include PNC Financial Services Group Inc.<\/a>, TCF Financial Corp.<\/a>, State Street Corp.<\/a>, U.S. Bancorp<\/a> and Wells Fargo & Co.<\/a><\/p>\n Considering Billy Ray Cyrus has somehow managed to be popular in both 1990 and 2010, perhaps there is something to this particular comparison. <\/p>\n Wouldn't hold your breath on the parachute pants though. <\/p>\n