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28 Jul, 2023
Sequential earnings declines abounded for US regional banks in Q2 2023
By Arpita Banerjee and Syed Muhammad Ghaznavi
Most US regional banks with $10 billion to $100 billion in assets that reported second-quarter earnings between July 10 and 21 posted sequential declines.
Fewer banks in the category reported such dips than a quarter earlier, however.
Out of the 32 banks that announced earnings during the period, 20 logged lower earnings per share on a sequential basis, compared to 26 that reported quarterly declines between April 13 and April 20, according to S&P Global Market Intelligence data. Twelve of the banks in the analysis logged higher EPS sequentially during the second quarter.
On a year-over basis, 12 banks in the category reported lower EPS as of June 30, while 19 institutions posted higher year-over-year EPS.
Hilltop Holdings biggest loser among smaller regionals
Out of the 13 banks with total assets between $10 billion and $25 billion as of June 30, 11 banks posted quarterly EPS declines in the second quarter.
Six banks posted both sequential and yearly declines in second-quarter earnings, including ServisFirst Bancshares Inc., Hilltop Holdings Inc., OceanFirst Financial Corp., First Financial Bankshares Inc., Banner Corp. and Washington Federal Inc.
Only two banks in the $10 billion-to-$25 billion of assets bucket logged higher quarterly and yearly EPS: Home BancShares Inc. and Independent Bank Corp.
Conway, Ark.-based Home BancShares' second quarter diluted EPS was 52 cents, almost 2% up from the previous quarter and 550% up from the same period a year ago.
Dallas-based Hilltop Holdings reported the biggest decline in second-quarter EPS on both a quarterly and yearly basis. The bank's second-quarter diluted EPS came in at 28 cents, a 30% decline from the previous quarter and a 37.8% decline from the year-ago period.
Hilltop President and CEO Jeremy Ford said on a conference call that the results reflect challenging market conditions in the company's mortgage origination and banking segment and that loan growth is expected to slow, with clients in the commercial real estate segment pulling back.
Five banks posted lower quarterly EPS, yet higher EPS year over year, including First Financial Bancorp., Berkshire Hills Bancorp Inc., BancFirst Corp., OFG Bancorp and FB Financial Corp.
Pinnacle Financial tops the big regionals
Nineteen banks in the $25 billion-to-$100 billion of assets bucket reported second-quarter earnings during the period. Eight posted higher EPS both sequentially and yearly, including Webster Financial Corp., Bank OZK, Texas Capital Bancshares Inc., First Horizon Corp., Columbia Banking System Inc., Commerce Bancshares Inc., Pinnacle Financial Partners Inc. and Fulton Financial Corp.
Nashville, Tenn.-based Pinnacle Financial Partners' EPS grew 44.3% sequentially and 36.6% yearly to $2.54.
Texas Capital's second-quarter diluted EPS was $1.33, up 90% from the previous quarter and up by more than 125% from the same period a year ago.
Four banks in the $25 billion to $100 billion category, including Glacier Bancorp Inc., Zions Bancorp. NA, Synovus Financial Corp. and Hancock Whitney Corp., reported lower earnings compared to the first quarter and the 2022 second quarter.
Salt Lake City-based Zions Bancorp, which was one of the most shorted US bank stocks in June, reported a 16.5% sequential decline in EPS.
Gulfport, Miss.-based Hancock Whitney's second-quarter diluted EPS was $1.35, down 6.9% on a linked quarter basis, and 2.2% on a yearly basis.
Kalispell, Mont.-based Glacier Bancorp's share price fell in the wake of its earnings report as executives delivered a negative net interest margin outlook.
Regional banks that reported sequential declines in EPS but increases on a year-over-year basis included Comerica Inc., East West Bancorp Inc., Wintrust Financial Corp. and F.N.B. Corp.