Another quarter has ended, and with that comes earnings releases. For those investors that follow the financial sector, earnings might have started when JPMorgan Chase and Wells Fargo posted their results last Friday. However, a handful of smaller banks followed their much larger cousins with results released this week.
Not to be forgotten, 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 an indicator of what has been happening in smaller segments of the economy.
Average Estimated EPS
|Astoria Financial (NYSE: AF )||$0.13||$0.11||(15.4%)|
|CVB Financial (Nasdaq: CVBF )||$0.20||$0.21||5.0%|
|First Niagara Financial (Nasdaq: FNFG )||$0.19||$0.19||0%|
|IberiaBank (Nasdaq: IBKC )||$0.67||$0.66||(1.5%)|
|Umpqua Holdings (Nasdaq: UMPQ )||$0.19||$0.23||21.1%|
Sources: Yahoo! Finance and company press releases.
Astoria Financial may have come up just short of earnings expectations, but it wasn't all bad news from the New York bank. Total loan delinquencies declined 6% from the previous quarter, while total deposits were up 12% during the same period. The bank also declared a quarterly dividend for the 68th consecutive quarter, though it was reduced from $0.13 a share to $0.04 a share.
CVB Financial reported first-quarter earnings that were 34.4% higher than the same quarter last year. Total nonperforming assets have declined by 41.7% since the first quarter last year, while non-interest bearing deposits increased 4.6% during the quarter, which represents nearly half of the total deposits at the bank.
First Niagara Financial met expectations after its ninth consecutive quarter of double-digit commercial loan growth. Nonperforming assets were up slightly from the previous quarter, but were still only 0.34% of total assets at the end of the quarter. The bank also hopes to complete its acquisition of 196 branches from HSBC by May, further expanding operations in the Northeast.
IberiaBank missed slightly on earnings, but this was partially due to the costs associated with the acquisitions of two smaller banks. Nevertheless, total loans and deposits were up 3% and 5%, respectively, for the quarter, and nonperforming assets were down slightly, all of which point to successful quarter for the bank.
Umpqua Holdings reported earnings that were up 88.9% over the same period last year, driven partially by record mortgage banking revenue. Nonperforming assets also declined $56.7 million over the past year, with nonperforming assets now accounting for only 1.05% of total assets.
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 to 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.