Key Highlights

  • Business First Bancshares, Bank of Hawaii, Northwest Bancshares, Bank of Marin Bancorp and Avidbank are confirmed to report on Monday, October 26.
  • Latest-quarter margins range from 4.73% at Park National (adjusted) to 2.78% at Bank of Hawaii, a spread of 1.95 points, calculated.
  • Northwest Bancshares has the highest dividend yield of the eight banks at 5.30%.
  • Park National's second-quarter adjusted EPS beat the estimate by about 14.9%, after a first-quarter miss of about 10.2%, calculated.
  • The eight banks have a combined market capitalization of about $12.64 billion, calculated.

What Are Investors Missing at Banks Heading Into Late-October Earnings?

Six of eight banks are trading lower on October 21, all within about 1% of prior closes, with no company announcement identified for any of the moves. FirstSun Capital Bancorp (NASDAQ:FSUN) is trading up 0.08% at $38.37, CNB Financial (NASDAQ:CCNE) down 0.35% at $34.46, Business First Bancshares (NASDAQ:BFST) down 0.60% at $31.38 and Bank of Hawaii (NYSE:BOH) down 0.17% at $68.53. Park National (NYSE American:PRK) is down 0.69% at $179.10, Northwest Bancshares (NASDAQ:NWBI) down 0.50% at $15.01, Bank of Marin Bancorp (NASDAQ:BMRC) down 0.97% at $26.67 and Avidbank (NASDAQ:AVBH) up 0.39% at $31.18.

Business First Bancshares and Bank of Hawaii are scheduled to report before the open on Monday, October 26, with Northwest Bancshares and Avidbank after the close. Bank of Marin Bancorp is also scheduled for that day. FirstSun Capital Bancorp and CNB Financial have not yet announced dates and are expected around October 26, and Park National expects to report in the coming weeks.

What may be missed is that the setup differs by name: margin expansion at some, merger digestion and credit at others. Good for the group would be margins holding near second-quarter levels and credit staying contained. Bad would be margin stalls, new charge-offs or gaps between adjusted and GAAP earnings. U.S. Bancorp (NYSE:USB) posted EPS of $1.34 against $1.32 and Regions Financial (NYSE:RF) adjusted EPS of $0.73 against $0.66 earlier in October, a modestly supportive read-across and not a forecast.

Can FirstSun Capital Bancorp Move Past Merger Costs?

FirstSun Capital Bancorp is the Denver holding company for Sunflower Bank. The second quarter brought a GAAP loss of $0.49 a share after $57.6 million of merger expenses, adjusted EPS of $0.45 and net charge-offs of $42.4 million. Management guided the margin slightly above June's 3.76% and plans buybacks of up to $150 million.

Can CNB Financial Keep Its Margin at 3.88%?

CNB Financial is a Pennsylvania holding company operating CNB Bank, ERIEBANK, FCBank and BankOnBuffalo. Second-quarter diluted EPS was $0.91 and the margin was 3.88%. Non-performing assets rose to 69 basis points of assets, which management tied to a single credit, while the efficiency ratio improved to about 56%.

Will Business First Bancshares' Margin Climb Past 3.73%?

Business First Bancshares is the Louisiana and Texas holding company for b1Bank. Second-quarter core EPS was $0.71 and the margin rose 8 basis points to 3.73%. Management expects expenses to decline and is targeting a 1.25% return on assets exiting the fourth quarter, against 1.05% core in the second.

Is Bank of Hawaii's Margin Heading to 2.9%?

Bank of Hawaii is a regional bank providing commercial, personal and wealth management services. Second-quarter diluted EPS was $1.47 and the margin was 2.78%, the ninth straight increase, with management guiding toward about 2.9% by year-end. It plans $20 million of buybacks in each of the next two quarters.

What Do Park National's Beat and Miss Mean for the Next Report?

Park National is an Ohio bank holding company that completed an all-stock merger with First Citizens Bancshares on February 1. Second-quarter adjusted EPS was $3.40 against $2.96 expected, after $2.39 against $2.66 in the first quarter. The adjusted margin was 4.73%, and deposits fell 3.0% in the quarter while net charge-offs stayed at 0.10% annualized.

Can Northwest Bancshares Hold a 3.75% Margin?

Northwest Bancshares is the Pennsylvania holding company for Northwest Bank, operating in six states. Record second-quarter net income was $54 million, or $0.36 per diluted share, with a 3.75% margin against full-year guidance of 3.73% to 3.75%. The call is October 27.

Is Bank of Marin's Trailing Loss Misleading?

Bank of Marin Bancorp is the Northern California community bank holding company for Bank of Marin. Trailing EPS is a loss of $0.90 because of a year-earlier securities repositioning, so the P/E is blank. Second-quarter EPS was $0.58 and the margin rose 14 basis points to 3.38%, with deposit costs falling to 1.28%. The dividend yield is 3.71%.

Will Avidbank Post a Clean Quarter?

Avidbank is a San Jose, California business bank serving venture-backed and commercial clients. Second-quarter adjusted EPS was $0.76 against GAAP $0.71, after a $2.6 million litigation settlement, and the margin was 4.26%. Criticized loans rose to 2.16% of loans from 1.57%, and a $30 million subordinated debt offering closed on August 26.

How Do the Eight Banks Compare on Margin, Yield and Size?

The eight banks have a combined market capitalization of about $12.64 billion, calculated. Park National's $3.24 billion is about 25.6% of that and about 9.5 times Avidbank's $342.21 million, calculated.

Latest-quarter margins run from 4.73% at Park National to 2.78% at Bank of Hawaii, a spread of 1.95 points, calculated. Trailing P/E ratios run from 11.11 at CNB Financial to 19.48 at FirstSun Capital Bancorp, a spread of 8.37 points, calculated, while Bank of Marin Bancorp and Avidbank have blank multiples because trailing earnings are negative. Northwest Bancshares leads on dividend yield at 5.30%, ahead of Bank of Hawaii at 4.08%, while FirstSun Capital Bancorp and Avidbank pay none.

A good outcome is margins at or above second-quarter marks and charge-offs below them. A bad one is a margin stall or a repeat of one-time charges.

Which Dates From October 26 Will Test These Banks?

Business First Bancshares and Bank of Hawaii report before the open on October 26, followed after the close by Northwest Bancshares and Avidbank, with Bank of Marin Bancorp also scheduled that day. FirstSun Capital Bancorp and CNB Financial are expected around then, while Park National has not announced a date. Investors will compare margins, charge-offs and adjusted EPS with second-quarter marks.