As the craze of earnings season draws to a close, here’s a look back at some of the most exciting (and some less so) results from Q3. Today, we are looking at regional banks stocks, starting with FB Financial (NYSE: FBK).
Regional banks, financial institutions operating within specific geographic areas, serve as intermediaries between local depositors and borrowers. They benefit from rising interest rates that improve net interest margins (the difference between loan yields and deposit costs), digital transformation reducing operational expenses, and local economic growth driving loan demand. However, these banks face headwinds from fintech competition, deposit outflows to higher-yielding alternatives, credit deterioration (increasing loan defaults) during economic slowdowns, and regulatory compliance costs. Recent concerns about regional bank stability following high-profile failures and significant commercial real estate exposure present additional challenges.
The 94 regional banks stocks we track reported a satisfactory Q3. As a group, revenues missed analysts’ consensus estimates by 1.2%.
While some regional banks stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 1.3% since the latest earnings results.
FB Financial (NYSE: FBK)
Founded in 1906 and operating through more than a century of economic cycles, FB Financial (NYSE: FBK) operates FirstBank, providing commercial and consumer banking services across Tennessee, Kentucky, Alabama, and North Georgia.
FB Financial reported revenues of $173.9 million, up 94.2% year on year. This print exceeded analysts’ expectations by 4.2%. Overall, it was an exceptional quarter for the company with a solid beat of analysts’ net interest income estimates and an impressive beat of analysts’ revenue estimates.
President and Chief Executive Officer, Christopher T. Holmes stated, “The Company has aggressive goals in both growth and profitability, and when we assess the year-to-date, I’m proud to say we've delivered. We’ve taken deliberate steps to align and optimize both sides of the balance sheet, establishing a strong foundation for future growth and driving a healthy margin. Additionally, the successful close and conversion of our combination with Southern States marks a significant milestone for our Company. Our team remains focused on disciplined capital management and investing in our future, all with the goal of delivering top-tier returns. As we look ahead to the fourth quarter, we see continuing opportunity to build on this momentum and further elevate the value we provide to our customers and shareholders.”
Unsurprisingly, the stock is down 4.6% since reporting and currently trades at $53.75.
Best Q3: Customers Bancorp (NYSE: CUBI)
Originally founded with a "high-tech, high-touch" branch-light banking strategy, Customers Bancorp (NYSE: CUBI) is a bank holding company that provides commercial and consumer banking services through its Customers Bank subsidiary, with a focus on business lending and digital banking.
Customers Bancorp reported revenues of $232.1 million, up 38.5% year on year, outperforming analysts’ expectations by 7%. The business had a stunning quarter with an impressive beat of analysts’ net interest income estimates and a solid beat of analysts’ revenue estimates.
The market seems content with the results as the stock is up 2.1% since reporting. It currently trades at $66.93.
Is now the time to buy Customers Bancorp? Access our full analysis of the earnings results here, it’s free for active Edge members.
Weakest Q3: The Bancorp (NASDAQ: TBBK)
Operating behind the scenes of many popular fintech apps and prepaid cards you might use daily, The Bancorp (NASDAQ: TBBK) is a bank holding company that specializes in providing banking services to fintech companies and offering specialty lending products.
The Bancorp reported revenues of $174.6 million, up 38.8% year on year, falling short of analysts’ expectations by 10%. It was a disappointing quarter as it posted a significant miss of analysts’ revenue estimates and a significant miss of analysts’ net interest income estimates.
As expected, the stock is down 19.3% since the results and currently trades at $62.17.
Read our full analysis of The Bancorp’s results here.
National Bank Holdings (NYSE: NBHC)
Operating under familiar local brands like Community Banks of Colorado, Bank Midwest, and Bank of Jackson Hole, National Bank Holdings (NYSE: NBHC) operates regional banks across Colorado, Kansas, Missouri, Wyoming, Texas, and other western states, offering commercial, business, and consumer banking services.
National Bank Holdings reported revenues of $108.9 million, up 2.7% year on year. This print beat analysts’ expectations by 3.9%. Taking a step back, it was a mixed quarter as it also recorded a solid beat of analysts’ revenue estimates but a significant miss of analysts’ net interest income estimates.
The stock is down 3.1% since reporting and currently trades at $35.89.
Read our full, actionable report on National Bank Holdings here, it’s free for active Edge members.
Peoples Bancorp (NASDAQ: PEBO)
Founded in 1902 in Ohio and expanding through both organic growth and acquisitions, Peoples Bancorp (NASDAQ: PEBO) is a financial holding company that provides banking, insurance, equipment leasing, and investment services to consumers and businesses.
Peoples Bancorp reported revenues of $118.5 million, up 3.2% year on year. This result surpassed analysts’ expectations by 1.3%. It was a strong quarter as it also logged an impressive beat of analysts’ tangible book value per share estimates and a beat of analysts’ EPS estimates.
The stock is flat since reporting and currently trades at $28.41.
Read our full, actionable report on Peoples Bancorp here, it’s free for active Edge members.
Market Update
In response to the Fed’s rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed’s 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump’s presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025.
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