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Banking Industry on Pace to Best Broader Markets in 2012

NEW YORK, NY--(Marketwire - Dec 5, 2012) - U.S. banking stocks have been on an impressive run in 2012. According to the Federal Deposit Insurance Corporation (FDIC) profits from U.S. banks in the third quarter were the best seen since the financial crisis. The KBW Bank Index (BKX) has gained 20 percent year-to-date, nearly double the S&P 500 Index's gain of 12 percent. The Paragon Report examines investing opportunities in the Banking Industry and provides equity research on SunTrust Banks, Inc. ( NYSE : STI ) and U.S. Bancorp ( NYSE : USB ).

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The KBW Bank Index is on pace to best the broader markets for just the third time since 2003. U.S. banks collectively posted a net income of $37.6 billion in the third quarter, which is a 6-year high. Collective revenues in the third quarter grew 3 percent for the year prior, which was the largest gain seen in nearly three years, said the FDIC. This has been the 13th consecutive quarter in which industry profits have increased year-over-year.

"In previous quarters, we have noted that revenue growth has been very sluggish, and most of the improvement in earnings could be traced to lower provisions for loan losses," said FDIC Chairman Martin Gruenberg in a briefing. "Higher revenue contributed more to the increase in earnings than reduced provisions."

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As of September 30, 2012, SunTrust had total assets of $173.2 billion and total deposits of $127.2 billion. The company reported a net income of 1.1 billion in the third quarter of 2012, which was largely due to the sales of the company's stake in the Coca-Cola Company. Shares of SunTrust have gained nearly 55 percent year-to-date.

U.S. Bancorp is the fifth-largest commercial bank in the United States. The company reported a net income of $1,474 million in the third quarter of 2012, a 15.8 percent increase when compared to the third quarter of 2011. U.S. Bancorp is scheduled to release their fourth quarter financial results on Jan. 16, 2013.

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