As the second week of bank earnings reports comes to a close, the results are not looking good for small-cap and mid-cap banking companies. Most have missed analysts' estimates — some by wide margins — and their stock prices are suffering.
A report from KBW Inc.'s Keefe, Bruyette & Woods Inc. said large-cap banking companies had a strong quarter but that 57% of small-cap banks and thrifts the company follows and 54% of mid-caps missed analysts' average estimates.
On Wednesday, more banking companies joined those ranks. Shares of BankAtlantic Bancorp Inc. fell 5.3% after the Fort Lauderdale, Fla., company said its first-quarter profit fell 12.3%, to $5.7 million. But excluding a $7.9 million gain from the sale of Ryan Beck Holdings Inc. to Stifel Financial Corp., it lost $2.2 million.
Thomson Financial said the average analyst estimate for BankAtlantic's per-share earnings was 8 cents; the company reported a loss from continuing operations of 4 cents per share, in part because it beefed up its loan-loss provision to account for weakness in its residential development portfolio.
Glacier Bancorp Inc.'s profit rose 18.1%, to $16.1 million, but per share earnings of 30 cents fell 3 cents short of the average estimate. "For the first time in the past three years, we experienced a more normalized first quarter," chief executive Mick Blodnick said in a press release. Investors were apparently not impressed — Glacier's shares fell 5.2%.
The American Banker index of 225 banks fell 0.2%, and the Standard & Poor's 500 closed down 0.1%. But the Dow Jones industrial average rose 0.1%, and the Nasdaq composite closed up 0.2%.
Banking had some good news, though. Seacoast Banking Corp.'s first-quarter profit was up 8.5%, to $6.4 million, and the Stuart, Fla., company said late Wednesday that its net interest margin stabilized because deposits grew. Its shares soared on the news, up 14.7%.
And Boston Private Financial Holdings Inc.'s shares rose 4.8%. It said after the market closed Wednesday that its profit rose 2.4%, to $13.1 million. The company reported "solid loan and deposit growth," Mark Fitzgibbon, research director at Sandler O'Neill & Partners LP, wrote in a note.