Earnings season is here once again. We're only a few days in, but we have already seen some impressive numbers from banking behemoths JPMorgan Chase (NYSE: JPM ) , Wells Fargo (NYSE: WFC ) , and Citigroup (NYSE: C ) , with Bank of America (NYSE: BAC ) releasing earnings this morning. While these results are important to those of us that follow the banking sector, my interest lies in some of the smaller banks beyond the behemoths.
With that in mind, I turn my attention to a regional bank that will be reporting earnings Thursday morning. Here are some things I will be watching when it comes to BB&T (NYSE: BBT ) .
Balance sheet strength
Fellow Fool John Maxfield took an in-depth look at BB&T a couple of months ago. The six metrics he examined are important, but I will be focused primarily on two metrics in the earnings report: the tier 1 capital ratio and the percentage of nonperforming loans. Checking in at 10.2% and 1.5%, respectively, continued improvement in these ratios will help to clean up the balance sheet and thus make the bank a better performer going forward.
What analysts are expecting
Speaking of performance, analysts are expecting an increase in revenue and earnings from the same quarter last year, with $2.5 billion in revenue and $0.71 in earnings per share. The bank's performance over the past six months was boosted when it passed the Fed stress tests in March, leading to an increased dividend for shareholders.
What else to expect
One final thing I will be paying particular attention to will be references to new loans originated. Not only do new loans help lower the percentage of nonperforming loans, but they also reiterate that the bank trusts its balance sheet enough to loan more money to consumers. An increasing "good" loan portfolio should help place BB&T alongside peers such as M&T Bank (NYSE: MTB ) and other regionals in stepping up mortgage lending country wide. As the 16th-largest bank in the nation, BB&T can truly lead the way forward for other similarly sized banks.
BB&T is a prime example of a good regional bank, and some of the best opportunities over the next few years can be found among regional banks, including one small, under-the-radar bank. It’s been called one of The Stocks Only the Smartest Investors Are Buying. You can learn about it, and more, in our exclusive free report. Just click here to keep reading.