Regional Bank Earnings Roundup
For those investors who follow the financial sector, this week provides a smorgasbord of information. JPMorgan Chasekicked things off two weeks ago, with megabanks Citigroup, Wells Fargo, and Bank of America reporting last week.
Not to be forgotten, some smaller regional banks also report their quarterly results this week. As the name suggests, regional banks tend to limit operations to smaller regions of the country, and thus are not as exposed as some of their larger cousins to the troubles in Europe or in investment banking.
Average Est. EPS
|Eagle Bancorp (NAS: EGBN)||$0.33||$0.35||6.1%|
|Susquehanna Bancshares (NAS: SUSQ)||$0.12||$0.12||N/A|
|Texas Capital BancShares (NAS: TCBI)||$0.55||$0.67||21.8%|
|Umpqua Holdings (NAS: UMPQ)||$0.18||$0.19||5.6%|
|Washington Trust Bancorp (NAS: WASH)||$0.46||$0.47||2.2%|
Source: Yahoo! Finance and company press releases. N/A = not applicable.
Some earnings highlights
The fourth quarter of 2011 "represented the 12th consecutive quarter of increasing net income for Eagle Bancorp," according to Chairman and CEO Ronald D. Paul. Net income for the year was up 47% over 2010, reaching record heights, with total assets up 36% over the same period.
Susquehanna Bancshares assets were inflated for the year due to an acquisition during the fourth quarter. Nevertheless, 2011 was a good year for the Pennsylvania bank. Net loans were up 9% from year-end 2010, with total deposits up 12% over the same period.
For Texas Bancshares, total nonperforming assets were down 13.5% for the quarter, while total assets were up 5.6%. For the year, net income reached record levels, up 104% to $76.1 million. CEO George Jones went on to say, "We believe the performance has been exceptional in light of what remains a challenging environment for the banking industry."
Umpqua Holdings saw Texas Bancshares' 104% increase in net income and raised them, posting an increase of 360% in earnings over 2010. This was helped in part by a 53% decrease in net charge-offs for the year, as well as a 37% decrease in total nonperforming assets. Based on this performance, the stock may be poised to pop, though it has been down as much as 4% this morning.
Joining Texas Bancshares in the record-income category is Washington Trust. The Rhode Island-based bank had record income for both the fourth quarter and full year of 2011. It also surpassed $3 billion in total assets for the first time in its 211-year history. The board of directors also continued the bank's 17-year dividend history, declaring a $0.22-per-share dividend for the quarter.
Opportunities in regional banks
I like the potential of regional banks personally, but they may not be for everyone. Earnings are just one thing to consider when choosing an investment, so view these results as a small piece of a much larger puzzle. In fact, a bank similar to the ones here is featured prominently in our brand-new free report, "The Stocks Only the Smartest Investors are Buying." To find out which one it is, get your copy today before it's too late.
At the time this article was published Fool contributor Robert Eberhard holds no position in any company mentioned. Follow him on Twitter @GuruEbby. The Motley Fool owns shares of Citigroup, Wells Fargo, Bank of America, and JPMorgan Chase. The Fool owns shares of and has created a covered strangle position on Wells Fargo. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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