Bank stocks are generally having a solid week as the largest U.S. financial institutions wrap up quarterly results and regional firms begin releasing their results. Salt Lake City-based Zions Bancorp (ZION) rallied following its solid results Wednesday. Truist Financial (TFC) slid early Thursday after delivering a rare miss for the sector in its premarket report.
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Truist Financial
Charlotte, N.C.- based Truist posted a 15% earnings decline to 92 cents per share for its Q2 report, missing estimates of $1 per share. Earnings, excluding items related to the BB&T and SunTrust merger in 2019, were 95 cents per share for the quarter. Revenue rose 5.1% to $5.972 billion, just beating forecasts of $5.968 billion.
Net interest income climbed 6.9% to $3.68 billion. Meanwhile, deposits fell to $400 billion from $408 billion in Q1 and $424 billion last year.
The bank increased its provision for credit losses to $538 million in Q2, from $502 million the prior quarter and $171 million last year, respectively.
Truist guided to a 4% revenue decline for Q3, but expects adjusted revenue to tick up 1% to 2% for fiscal 2023.
TFC stock dropped 5.7% Thursday following results. Shares climbed 3.1% Wednesday leading up to the report. Truist stock fell 21% so far this year.
Zions Bancorp
Zions reported late Wednesday that its Q2 earnings fell 14% to $1.11 per share, while revenue ticked up 1.9% to $780 million. The results edged out analyst earnings forecasts of $1.08 per share on $750.3 million in revenue.
Customer deposits grew by $2 billion, or 3.2% during the quarter, to $65.9 billion. Total deposits increased by 7.4% to $74.3 billion during the quarter, but were still down 6% from last year.
Net interest income was essentially flat year-over-year at $591 million, but fell 13% from Q1.
The bank increased its provision for credit losses to $46 million from $41 million a year ago.
Wedbush raised its price target on ZION shares to 38 from 30 Thursday following the results and maintained a neutral rating on the stock. RBC Capital boosted its price target to 37 from 32 but kept a sector perform rating on Zions.
ZION stock rallied 10.2% Thursday following the report. Shares jumped 6.3% on Wednesday ahead of results. ZION stock has rebounded 22% over the past three months as the spring bank panic subsided. Zions shares are still down 23% for the year.
Bank Stocks
Regional bank stocks were largely positive early Thursday and added to their gains from the week as reports rolled in.
The SPDR S&P Regional Banking ETF (KRE) surged 8.5% this week and leapt nearly 15% so far for the month, MarketSmith data shows.
Los Angeles-based PacWest (PACW), which suffered heavy declines during the bank panic, inched up slightly and swung 1.4% higher premarket. Shares closed 11% higher on Wednesday and rallied 22% this month ahead of its earnings report next week.
Comerica (CMA) also logged a 22% gain in July. Gains narrowed to 1.4% early Thursday, after surging 3.5% Wednesday. The Texas-based bank announces results Friday.
Huntington Bancshares (HBAN), which also reports Friday, ticked down slightly in early trade and added nearly 2% Wednesday. HBAN’s rally is slightly more muted compared to other bank stocks and advanced 9.2% this month.
You can follow Harrison Miller for more stock news and updates on Twitter @IBD_Harrison
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