For those investors that follow the financial sectors, this week provides a smorgasbord of information. JPMorgan Chase kicked things off last week, and other mega-banks Citigroup and Wells Fargo reported on Tuesday. Bank of America joined in, reporting earnings this morning.
Not to be forgotten, 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 the trouble in Europe or investment banking.
|Company||Average Estimated EPS||Actual EPS||Difference|
|BB&T Corp (NYSE: BBT )||$0.53||$0.55||3.8%|
|Huntington Bancshares (Nasdaq: HBAN )||$0.14||$0.14||N/A|
|Simmons First National (Nasdaq: SFNC )||$0.39||$0.37||(5.1%)|
|Webster Financial (NYSE: WBS )||$0.42||$0.43||2.3%|
Source: Yahoo! Finance & Company Press Releases
Selected by Fool Matt Koppenheffer as a bank to ring in the New Year, BB&T is currently trading for about half of what it did prior to the 2008 financial crisis. Its earnings release point to a continuing downward trend of non-performing assets, something that has been going on for the last five quarters. Total non-performing assets are down 38% from December 2010.
Huntington Bancshares is a favorite among the regional banks, and it's easy to see why. It trades below book value, and has a healthy 2.7% yield. Even though it met quarterly expectations, profit levels were down from the third quarter, and the stock is down as much as 5.1% early this morning.
Arkansas-based Simmons First National is a favorite of The Motley Fool's resident banking expert Anand Chokkavelu. Since he added it to his Rising Star Portfolio in July, it has returned over 10%. "There is a significant variance when comparing quarter-to-quarter earnings results," according to J. Thomas May, president and CEO, due to an FDIC-assisted acquisition in October 2010 that drove up fourth-quarter earnings.
Webster Financial grew net income 63% over the same period last year. Non-performing loans declined to $188.1 million, down 14.8% from the previous quarter. Chairman and CEO James C. Smith said he looks to "sustain our progress and improve financial performances in 2012, with special emphasis on improving the ratio of expense to revenue."
Opportunities in regional banks
I personally like the potential of regional banks, 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 to a much larger puzzle. To keep an eye on the latest news out of these banks, add them to My Watchlist by clicking here.