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. 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
|Columbia Banking System (Nasdaq: COLB )||$0.31||$0.22||(29.0%)|
|Susquehanna Bancshares (Nasdaq: SUSQ )||$0.15||$0.14||(6.7%)|
|United Bankshares (Nasdaq: UBSI )||$0.43||$0.42||(2.3%)|
|WesBanco (Nasdaq: WSBC )||$0.39||$0.45||15.4%|
Sources: Yahoo! Finance and company press releases.
Earnings for the first quarter of 2012 were 52% higher from 2011 at Columbia Bank. Nonperforming assets declined 7.4% during the quarter, further strengthening the bank's balance sheet. The board of directors at the Washington bank also declared a special dividend of $0.14 per share in conjunction with its regular quarterly dividend of $0.08 per share.
Susquehanna Bank saw an increase in assets during the quarter, partially due to the acquisition of Abington and Tower banks. These acquisitions added $2.6 billion in loans and $2.8 billion in deposits to Susquehanna's balance sheet. Net income for the quarter more than doubled from the same quarter last year.
United Bankshares saw a 17.3% increase in earnings over the same quarter last year. United's percentage of nonperforming loans, 1.23% at quarter's end, continues to compare favorably to its peer group, which average 3.37% reported as of Dec. 31. Finally, its recently raised dividend is showing investors the money, with a yield currently over 4.5%.
WesBanco was the only bank on this list to meet expectations, and it did so with earnings up 17.1% from the same quarter last year. WesBanco is one of my favorite regional banks, and compares well with some of its larger competitors. It should keep doing so if it can continue decreasing nonperforming loans by nearly 16% every year, as it has over the past 12 months.
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 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.