What Happened?
A number of stocks fell in the morning session after a surprisingly weak July jobs report and the announcement of sweeping new tariffs fueled fears of an economic slowdown and an impending interest rate cut. The U.S. economy added just 73,000 jobs in July, the weakest gain in over two years, while the unemployment rate rose to 4.2%. This dismal data significantly increased market expectations for a Federal Reserve interest rate cut, with traders now pricing in an 80% probability of a cut in September. Lower interest rates typically harm bank profitability by compressing their net interest margins—the difference between what they earn on loans and pay on deposits. Compounding these worries, the announcement of new tariffs on imports from 92 countries has sparked fears of a global trade war, which could further dampen economic growth and disrupt supply chains, creating a challenging environment for the banking industry.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
- Regional Banks company ServisFirst Bancshares (NYSE: SFBS) fell 3.2%. Is now the time to buy ServisFirst Bancshares? Access our full analysis report here, it’s free.
- Regional Banks company Seacoast Banking (NASDAQ: SBCF) fell 3.3%. Is now the time to buy Seacoast Banking? Access our full analysis report here, it’s free.
- Regional Banks company Regions Financial (NYSE: RF) fell 3.1%. Is now the time to buy Regions Financial? Access our full analysis report here, it’s free.
- Regional Banks company Prosperity Bancshares (NYSE: PB) fell 3.1%. Is now the time to buy Prosperity Bancshares? Access our full analysis report here, it’s free.
- Regional Banks company Preferred Bank (NASDAQ: PFBC) fell 3.3%. Is now the time to buy Preferred Bank? Access our full analysis report here, it’s free.
Zooming In On Seacoast Banking (SBCF)
Seacoast Banking’s shares are not very volatile and have only had 6 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The previous big move we wrote about was 7 days ago when the stock gained 3.9% on the news that the company reported strong second-quarter 2025 financial results that surpassed analyst expectations on both revenue and earnings. The Florida-based bank posted adjusted earnings per share of $0.52, which was well ahead of the $0.42 Wall Street consensus. Revenue for the quarter reached $151.4 million, also beating expectations and marking a 19.6% increase from the same period last year. The strong performance was underpinned by growth in net interest income and a 6% annualized increase in loans. Investors also looked favorably upon improvements in key operational metrics. The company's net interest margin, a measure of bank profitability, expanded, and its efficiency ratio, which gauges overhead costs, improved. These solid results pointed to healthy growth and effective cost management, which drove positive sentiment.
Seacoast Banking is up 3.7% since the beginning of the year, but at $27.67 per share, it is still trading 10.5% below its 52-week high of $30.90 from November 2024. Investors who bought $1,000 worth of Seacoast Banking’s shares 5 years ago would now be looking at an investment worth $1,436.
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