As CEO of Bank of America (NYSE:BAC), Brian Moynihan is probably accustomed to the occasional bad week at the office. Nevertheless, I have a feeling he's glad this week is over.
On Thursday, B of A reported fourth-quarter earnings of $0.25 per share, missing analyst estimates by about 20%. The stock fell 5% on Thursday in response. Earlier in the week, Moynihan was forced to produce a report on the bank's governance culture and business practices in order to get activist investors to withdraw their proposal to strip Moynihan of his role as chairman of the board.
Despite Bank of America's stressful week, other banks had a much better go of it. In the spirit of focusing on the good instead of the bad, let's take a look at three such banks.
1. First Republic Bank
First Republic Bank (NYSE:FRC) also reported earnings on Thursday, and it struck a much different chord than Bank of America. For the full year, First Republic reported record net income, diluted earnings per share, and sold loans. The bank originated its second-highest dollar volume of loans ever. Revenue was up 17%, led by 29% growth in the bank's wealth management division.
For First Republic, these kinds of results are business as usual, though. You can read why here.
First Republic saw its stock trade flat on Thursday after the announcement, which was actually an impressive performance, given the headwinds to bank stocks during that trading session. The KBW Bank Index was down 1.8% Thursday alone.
2. Bank of the Ozarks
Bank of America has struggled to find consistent profits in recent quarters. Not so for Bank of the Ozarks (NASDAQ:OZRK). This $6.8 billion regional bank has had no issue whatsoever across all of its financial metrics.
The bank's fourth-quarter net income increased 42% year over year. Full-year net income increased 30% to an all-time record for the bank.
Return on assets for the quarter and year were 2.06% and 2.01%, respectively. That's double the industry average, according to the most recent Quarterly Banking Profile from the FDIC. The year 2014 marked the fifth consecutive year in which the bank finished with ROA in excess of 2%. That performance is remarkable.
3. Wells Fargo
Wells Fargo (NYSE:WFC) also had a better week than Bank of America, proving that it's not B of A's massive size that's holding it back. On Wednesday Wells reported another strong quarter and full year, highlighted by healthy revenue growth of 4% and 1%, respectively. ROA continued to top the industry average, coming in at 1.36% for the quarter and 1.45% for the full year.
For some context on just how much better Wells performed than Bank of America, consider that the two banks reported net income of $5.7 billion and $3.1 billion, respectively. Wells Fargo has total assets of $1.7 trillion compared to B of A's $2.1 trillion.
That means Wells produced 84% more profits with 21% fewer assets. That's a pretty convincing argument for which bank had the better week.
What's the point?
It's easy to pick on a struggling company like Bank of America during the week it reports a disappointing quarter. That's not the point of this exercise, though.
The point is that just because a large, headline-grabbing bank like B of A is struggling doesn't mean that there aren't other companies out there doing a better job. They deserve a closer look from investors.
Remember that investing is about finding the best companies at reasonable prices. If a big, laggard bank drags down prices for the whole industry, that's a great thing for value investors. It makes the other, higher-quality companies that much cheaper!
Jay Jenkins has no position in any stocks mentioned. The Motley Fool recommends Bank of America and Wells Fargo. The Motley Fool owns shares of Bank of America and Wells Fargo. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
More from The Motley Fool
Bank of America (BAC) Q4 2017 Earnings Conference Call Transcript
BAC earnings call for the period ending December 31, 2017.
Is Bank of America's CEO a Two-Faced Bitcoin Critic?
The megabank's top executive is telling customers that they can't buy bitcoin from his company, but his staff is doing a lot of patented research in this field. So what's up?
8 Key Takeaways From Bank of America's Earnings Report
Bank of America beat fourth-quarter earnings estimates, but there's a lot more you need to know.