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 reported 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 Estimated EPS
|Boston Private Financial Holdings (NAS: BPFH)||$0.13||$0.15||15.4%|
|Citizens Republic Bancorp (NAS: CRBC)||$0.31||$0.31||0%|
|Glacier Bancorp (NAS: GBCI)||$0.18||$0.20||11.1%|
|Hancock Holding (NAS: HBHC)||$0.55||$0.53||(3.6%)|
|United Bankshares (NAS: UBSI)||$0.44||$0.40||(9.1%)|
Sources: Yahoo! Finance and company press releases.
Some earnings highlights
Continuing the trend started by many other regional banks this earnings season, total loans at Boston Private Financial were up 4% for the quarter, with nonperforming assets down 7% for the quarter. The year also marked a return to profitability for the bank, as it turned a loss of $11.0 million in 2010 to $39.1 million of income in 2011.
Citizens Republic posted a loss for the year, but it was a substantial improvement over the previous year. For 2011, its loss to common shareholders was $16.3 million. In 2010, its loss was $314.6 million. This return to near-profitability made the stock the best-performing regional bank of 2011. The bank was helped by an improvement in nonperforming loans, which dropped below $100 million for the first time since 2007.
At Montana-based Glacier Bancorp, the story was much the same as at Boston Private Financial. Total loans were up 6% for the year, with total nonperforming assets down 21%. Naturally, when a bank has more of its customers actually paying on their loans, income increases. This performance has allowed the bank to continue its $0.13-per-share quarterly dividend, placing the stock's yield around 4%.
An earnings miss prompted investors to push the stock of Hancock Holding down by around 4% this morning. They might have been spooked by a 16% increase in nonperforming assets from the third quarter, and an increase of over 75% from Dec. 31, 2010.
Last but not least, United Bankshares had a successful year despite missing analysts' expectations in the fourth quarter. Last year marked the 38th consecutive year of dividend increases, prompting the stock to be added to the S&P High Yield Dividend Aristocrats list during the fourth quarter. The bank's current yearly dividend of $1.24 per share returns a yield of around 4.3%, with a payout ratio close to 77%, which is pretty remarkable for a bank in this current economic environment.
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, 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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