Regional Banks Find You Can't Win for Growing All the Time
In the slow economic recovery, even banks that grow receive scrutiny. Of the four large regional banks that reported earnings on Wednesday, results were muddled by recent acquisitions at two banks and the other two reported clear progress in profitability and robust loan growth. Investor reaction was mixed.</br></br>Comerica Inc. and M&T Bank Corp. reported fewer new loans than expected and higher costs amid acquisitions, sending shares of the banks near their 52-week lows.</br></br>In contrast, their larger rivals--U.S. Bancorp and PNC Financial Services Group Inc.--reported strong demand from commercial borrowers and managed to keep their profit margin in the lending business from deteriorating amid low interest rates. Their shares were flat to lower, but still a way off their 52-week lows.</br></br>Banks improved capital and reported fewer losses from bad loans in recent quarters, factors that lifted bank stocks. But now that loan demand has picked up and the economy is slowly improving, investors have come to expect more.</br></br>The four lenders reporting quarterly results Wednesday have survived the financial crisis better than others and offered some signs of growth.