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Regional banks roll out earnings this week, offering investors insight into the extent of the damage from the March banking panic. Western Alliance Bancorp stock rallied after hours Tuesday following its late results. Zions Bancorp reports Wednesday. Truist Financial (TFC), Key Corp (KEY), Comerica (CMA) and Regions Financial (RF) announce earnings later in the week.
X
Analysts expect most regional bank will report lower deposit levels as customers rushed to larger institutions. Still, Wall Street expects to see some moderate earnings growth, driven by increases in net interest income. Superregional peer PNC Financial Services (PNC) posted mixed results Friday and provided a soft revenue guidance. However, firms may not feel the full impacts from March until 2024, according to Morgan Stanley, which cut its 2023 and 2024 outlook for regional banks in early April.
Western Alliance
Results: Western Alliance adjusted earnings rose 3.6% to $2.30 per share while adjusted revenue leapt nearly 27% to $712.2 million.
Expectations: Analysts polled by FactSet saw Western Alliance adjusted earnings sliding to $2.05 per share on 20% revenue growth to $670 million.
Total deposits fell 8.8% over the year to $47.59 billion, below FactSet forecasts of $52.56 billion. Deposits were down 11.3% from Q4.
Phoenix-based Western Alliance was one of the few regional banks expected to report an increase in average deposits, which ticked up to $55.48 billion, slightly up from $55.39 billion at year-end and well above its $50.37 billion level last year. The results were in-line with forecasts.
Western Alliance increased its provisions for credit losses to $19.4 million for Q1, compared to $3.1 million at year-end and $9 million in Q1 2022.
Total insured deposits increased to 73% of Western Alliance’s total deposits, up from 68% that the firm announced in its early April update ahead of its earnings report.
Outlook: For fiscal 2023, FactSet analysts project earnings will fall 15.4% to $8.21 per share while revenue increases 6% to $2.744 billion.
WAL stock rallied 15% after hours to 37.42 following results. Shares crumbled 65% at the beginning of March as investors fled regional banks.
Zions
Expectations: Wall Street sees Zions Bank (ZION) earnings jumping 20% to $1.53 per share as revenue leaps 23% to $845 million.
Analysts predict deposits fall to $70.82 billion, down 13% from last year and 4.6% from year-end, respectively.
Outlook: Experts forecast Zions full year adjusted earnings ticking up 1% to $5.85 per share on 6% revenue growth to $3.34 billion.
ZION stock rose 3.4% after hours ahead of its report following Western Alliance results. The share price halved during its March plummet and is trading near two-year lows.
Upcoming Regional Bank Earnings
Truist Financial, Key Corp and Comerica all report earnings Thursday, followed by Regions Financial Friday.
Analysts see earnings and revenue rising for all the banks while deposits decline, except for Key whose earnings are expected to edge down 1 cent from last year.
Heavily-battered First Republic (FRC) reports earnings on Monday, April 24 after delaying their results in earlier this month.
You can follow Harrison Miller for more stock news and updates on Twitter @IBD_Harrison
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