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For those investors who follow the financial sector, this week provides a smorgasbord of information. JPMorgan Chase kicked 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 investment banking.
Average Estimated EPS
|MB Financial (Nasdaq: MBFI )||$0.33||$0.31||(6.1%)|
|SCBT Financial (Nasdaq: SCBT )||$0.40||$0.35||(12.5%)|
|SVB Financial (Nasdaq: SIVB )||$0.77||$0.81||5.2%|
|West Coast Bancorp (Nasdaq: WCBO )||$1.05||$0.83||(21%)|
Sources: Yahoo! Finance and company press releases.
Some earnings highlights
Chicago-based MB Financial saw a dramatic increase in net income available to common shareholders over the previous year, jumping to $0.31 per share from $0.01 per share. Nonperforming loans also decreased substantially, though this was primarily due to the sale of $156.3 million in loans during the second quarter of 2011.
SCBT saw income in 2011 lower than the previous year, but it was still a strong year for the South Carolina bank. Total loans were up $255.5 million since the end of last year, with nonperforming assets up just over 3%. This was partially due to the completion of two FDIC-assisted acquisitions during the previous year.
SVB Financial has been up as much as 8% today after beating analyst expectations. Nonperforming assets declined to a minuscule 0.52% of total loans, and 0.18% of total assets during the year, a testament of the bank's "exemplary credit quality," according to its press release. Furthermore, net income was up 81% for the year, after a decline between 2009 and 2010.
West Coast Bancorp saw some one-time charges during the fourth quarter affect its earnings. The bank recorded a $4.4 million charge in conjunction with the prepayment of some loan obligations and $1 million in charges related to an ongoing restructuring plan. However, both of these expenses are expected to improve pre-tax income by at least $5.8 million during 2012, biding well for the bank next year.
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.