Another quarter has ended, and with that comes earnings releases. For those investors that follow the financial sector, earnings might have started when JPMorgan Chase and Wells Fargo posted their results. However, a handful of smaller banks followed their much larger cousins with results released last week.

Not to be forgotten, regional banks and savings and loans tend to limit operations to smaller regions of the country but are generally less exposed to the risky and exotic activities of some of their larger brethren. Their results can often be an indication of what has been happening in smaller segments of the economy.

Company

Average Estimated EPS

Actual EPS

Difference

Flagstar Bancorp (NYS: FBC) ($0.04) ($0.02) N/A
Ocwen Financial (NYS: OCN) $0.31 $0.14 (54.8%)
SCBT Financial (NAS: SCBT) $0.38 $0.50 31.6%
Prosperity Bancshares (NYS: PB) $0.74 $0.77 4.1%

Sources: Yahoo! Finance and company press releases.


Despite posting a quarterly loss for the first quarter, things are looking up at Flagstar Bank. The loss of $8.7 million was an improvement over both the previous quarter and the first quarter last year, which saw losses of $78.2 million and $31.7 million, respectively. Chairman and CEO Joseph P. Campanelli was confident in the bank's ability to return to profitability this year, reaffirming previous guidance that 2012 will be a profitable year for the Michigan bank.

Revenue at Ocwen Financial was up 48% from the same quarter last year, but higher costs pushed earnings down 12%. During the quarter, Ocwen completed over 23,000 loan modifications, helping customers avoid foreclosure and stay in their homes. This in turn led to a decline in overall delinquencies in its loan portfolio, strengthening its balance sheet going forward.

SCBT experienced an increase in asset quality during the quarter, with net charge-offs reaching their lowest levels since the fourth quarter of 2008. With better-quality assets, the bank saw an increase in net interest income during the quarter, and total deposits grew by $160 million as well.

Net income at Texas-based Prosperity rose 7.7% over the same quarter last year. In December, Prosperity was recognized by Forbes magazine as the best bank in America, and the bank started off 2012 by agreeing to purchase American State Bank, further expanding its total number of branches in Texas to 215, pushing the bank's total assets to over $15 billion.

Opportunities in regional banks
I like the potential of regional banks personally, but they may not be for everyone. Earnings are just one thing to consider when choosing an investment, so view these results as a small piece to a much larger puzzle. In fact, a bank similar to the ones here is featured prominently in our brand new free report: "The Stocks Only the Smartest Investors are Buying." To find out which one it is, get your copy today before it's too late.

At the time this article was published Fool contributor Robert Eberhard holds no position in any company mentioned. Follow him on Twitter @GuruEbby, or click here to see his holdings and a short bio. The Motley Fool owns shares of JPMorgan Chase. The Fool owns shares of and has created a covered strangle position in Wells Fargo. Motley Fool newsletter services have recommended buying shares of Wells Fargo. The Motley Fool has a disclosure policy.
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