Another quarter has ended, and with that come earnings releases. For those investors who 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 morning.
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 a small indicator of what has been happening in smaller segments of the economy.
|
Company |
Average Estimated EPS |
Actual EPS |
Difference |
|---|---|---|---|
|
Bank of Hawaii |
$0.81 | $0.95 | 17.3% |
|
S&T Bancorp |
$0.39 | $0.12 | (69.2%) |
|
SunTrust Banks |
$0.33 | $0.46 | 39.4% |
|
West Coast Bancorp |
$0.23 | $0.27 | 17.4% |
Source: Yahoo! Finance; company press releases.
Bank of Hawaii is a favorite among many investors, particularly because of its Pacific Ocean-sized moat. The bank experienced solid loan growth during the quarter, with total loan balances up 5.1% compared to the same quarter last year. However, due to a long residential foreclosure process, nonperforming assets were up slightly from the previous quarter, though they still represent less than 1% of total loans.
S&T Bancorp's earnings were affected by one-time costs associated with the acquisition of Mainline Bancorp during the quarter, which affected earnings by $0.11 per share. The acquisition helped grow the bank further in Pennsylvania, with the addition of eight branches and $205 million in deposits and $130 million in loans.
With record-low mortgage rates, SunTrust experienced strong mortgage refinancing activity, leading to a 21% increase in noninterest income for the quarter. Nonperforming loans also decreased by 9% for the quarter -- the 11th consecutive quarterly decline.
Net income at West Coast was up 13% over the same period last year, with nonperforming assets down around 25% during the same time. Unlike many of its regional bank compatriots, the Oregon bank has not paid a dividend since July 2009.
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, one of the banks here is featured prominently in our 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.
