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Another quarter has ended, and with that comes earnings releases. For investors who follow the financial sector, earnings season might have started when JPMorgan Chase and Wells Fargo posted their results last Friday. However, a handful of smaller banks followed with results Tuesday morning.
Regional banks and savings and loans tend to limit operations to smaller regions of the country, but are generally less exposed to the risky and exotic activities of some of their larger brethren. Their results can often be a small indicator of what has been happening in smaller segments of the economy.
Average Estimated EPS
|First Republic Bank (NYSE: FRC )||$0.66||$0.67||1.5%|
|Huntington Bancshares (Nasdaq: HBAN )||$0.14||$0.17||21.4%|
|New York Community Bancorp (NYSE: NYB )||$0.26||$0.29||11.5%|
|PNC Financial Services (NYSE: PNC )||$1.43||$1.44||0.7%|
Source: Yahoo! Finance and company press releases.
First Republic saw record loan originations during the quarter, helping the bank keep earnings in line with the same quarter last year. The bank also announced that it will be initiating a $0.10-per-share quarterly dividend later in the year.
Huntington Bancshares reported earnings that were up 21% from the previous quarter. This was driven primarily by a 24% increase in noninterest income and a 24% decrease in provisions for credit losses. It reaffirmed its $0.04 quarterly dividend, which still has plenty of room to grow, making Huntington one of the more intriguing banks on the market.
New York Community Bank is already a popular bank stock due to its yield approaching 8%, and it will continue with the payment of the dividend in May for the 33rd consecutive quarter. The first quarter marked the sixth consecutive quarter of improving the quality of its assets, with better loans helping push net income up slightly from the previous quarter.
Finally, PNC Financial reported that net income grew nearly 65% from last quarter, though it was down slightly from the same quarter last year. During the quarter, PNC completed the acquisition and conversion of RBC Bank, the U.S. retail banking subsidiary of Royal Bank of Canada, converting 900,000 customers and more than 400 branches to the PNC name and expanding the footprint of the Pittsburgh-based bank.
Opportunities in regional banks
I 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 of a much larger puzzle. 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.