Please ensure Javascript is enabled for purposes of website accessibility

Yesterday's Regional Bank Earnings Roundup

By Robert Eberhard - Updated Apr 7, 2017 at 8:09PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Regional banks join the ranks of the "too big to fail" variety in presenting earnings this week.

For those investors who follow the financial sectors, this week provides a smorgasbord of information. JPMorgan Chase kicked things off last week, and mega-banks Citigroup and Wells Fargo reported Tuesday. Bank of America joined in with its release Wednesday.

Not to be forgotten, smaller regional banks also report 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.

Company

Average Estimated EPS

Actual EPS

Difference

Associated Banc-Corp (Nasdaq: ASBC) $0.23 $0.23 0%
City National (NYSE: CYN)            $0.82 $0.82 0%
East West Bancorp (Nasdaq: EWBC) $0.41 $0.43 4.9%
Independent Bank (Nasdaq: INDB) $0.54 $0.52 (3.7%)
Westamerica Bancorp (Nasdaq: WABC) $0.79 $0.77 (2.5%)
Western Alliance Bancorporation $0.09 $0.07 (22.2%)

Source: Yahoo! Finance & Company Press Releases

Some earnings highlights
Wisconsin-based Associated met expectations, and recovered from a $0.18-per-share loss in 2010, posting $0.66 per share for 2011. This was helped by a decrease in non-performing loans of 38% from last year, down to a total of $357 million.

City National met expectations as well, but also announced it will be raising its quarterly dividend to $0.25, pushing its yield to around 2%. The year 2011 also marked the 19th consecutive profitable year for the California bank.

East West Bancorp joined City National in raising its dividend, increasing its annual dividend to $0.40 a share on the strength of record profits for 2011. Nonperforming assets have represented less than 1% of total assets for nine consecutive quarters, further reflecting the company's strong balance sheet.

Independent's slight earnings miss can be attributed to a one-time charge during the fourth quarter amounting to $0.02 a share. Net income was up 12.9% over 2010, driven primarily by an increase in non-interest income, which itself was up 12.4%.

Westamerica also missed expectations, but unlike Independent, its net income was down for the year. As a result, the stock has been down as much as 5% off Wednesday's close. Positive signs from the bank include a decline in non-performing assets over the past year and a recently increased dividend.

After experiencing a loss in 2010, Western Alliance recovered this year, thanks in part to a growth in both its loan portfolio and deposits. Chairman and CEO Robert Sarver noted, "Fourth-quarter results will position the company for growth in 2012 by riding the momentum of higher loan growth, along with a stable net-interest margin, expense management, and continued improvement in asset quality."

Opportunities in regional banks
I personally 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.  In fact, a regional 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.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

East West Bancorp, Inc. Stock Quote
East West Bancorp, Inc.
EWBC
$67.02 (0.19%) $0.13
Independent Bank Corp. Stock Quote
Independent Bank Corp.
INDB
$80.08 (-0.01%) $0.01
Westamerica Bancorporation Stock Quote
Westamerica Bancorporation
WABC
$56.95 (-0.84%) $0.48

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
332%
 
S&P 500 Returns
115%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/28/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.