As the Q2 earnings season wraps, let’s dig into this quarter’s best and worst performers in the regional banks industry, including First Busey (NASDAQ: BUSE) and its peers.
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 98 regional banks stocks we track reported a satisfactory Q2. As a group, revenues were in line with analysts’ consensus estimates.
While some regional banks stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 5% since the latest earnings results.
First Busey (NASDAQ: BUSE)
Tracing its roots back to 1868 during America's post-Civil War reconstruction era, First Busey (NASDAQ: BUSE) is a bank holding company that provides commercial and retail banking, wealth management, and payment technology solutions across Illinois, Missouri, Florida, and Indiana.
First Busey reported revenues of $198 million, up 70.4% year on year. This print exceeded analysts’ expectations by 2.4%. Overall, it was a satisfactory quarter for the company with a solid beat of analysts’ tangible book value per share estimates but EPS in line with analysts’ estimates.
Unsurprisingly, the stock is down 8.9% since reporting and currently trades at $22.03.
Is now the time to buy First Busey? Access our full analysis of the earnings results here, it’s free.
Best Q2: UMB Financial (NASDAQ: UMBF)
With roots dating back to 1913 and a name derived from "United Missouri Bank," UMB Financial (NASDAQ: UMBF) is a financial holding company that provides banking, asset management, and fund services to commercial, institutional, and individual customers.
UMB Financial reported revenues of $689.2 million, up 76.7% year on year, outperforming analysts’ expectations by 8.6%. The business had a stunning quarter with a solid beat of analysts’ EPS estimates and an impressive beat of analysts’ tangible book value per share estimates.
Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 1.8% since reporting. It currently trades at $107.81.
Is now the time to buy UMB Financial? Access our full analysis of the earnings results here, it’s free.
Weakest Q2: Coastal Financial (NASDAQ: CCB)
Pioneering the intersection of traditional banking and financial technology in the Pacific Northwest, Coastal Financial (NASDAQ: CCB) operates as a bank holding company that provides traditional banking services and Banking-as-a-Service (BaaS) solutions to consumers and businesses.
Coastal Financial reported revenues of $119.4 million, down 11.7% year on year, falling short of analysts’ expectations by 21.5%. It was a disappointing quarter as it posted a significant miss of analysts’ net interest income estimates and a significant miss of analysts’ EPS estimates.
As expected, the stock is down 6.1% since the results and currently trades at $95.23.
Read our full analysis of Coastal Financial’s results here.
Columbia Banking System (NASDAQ: COLB)
Created through the merger of two Pacific Northwest banking institutions with deep regional roots, Columbia Banking System (NASDAQ: COLB) operates Umpqua Bank, providing commercial, consumer, and wealth management services across eight western states.
Columbia Banking System reported revenues of $510.9 million, up 8.2% year on year. This print topped analysts’ expectations by 3.8%. It was a very strong quarter as it also produced an impressive beat of analysts’ net interest income estimates and an impressive beat of analysts’ EPS estimates.
The stock is up 3.6% since reporting and currently trades at $24.14.
Read our full, actionable report on Columbia Banking System here, it’s free.
Dime Community Bancshares (NASDAQ: DCOM)
With roots dating back to 1910 and a name that evokes the historic "dime savings banks" of America's past, Dime Community Bancshares (NASDAQ: DCOM) is a New York-based bank holding company that provides commercial banking and financial services to businesses and consumers throughout Greater Long Island.
Dime Community Bancshares reported revenues of $109.7 million, up 25.6% year on year. This result surpassed analysts’ expectations by 2.6%. Zooming out, it was a satisfactory quarter as it also produced a narrow beat of analysts’ net interest income estimates but EPS in line with analysts’ estimates.
The stock is down 3.7% since reporting and currently trades at $27.51.
Read our full, actionable report on Dime Community Bancshares here, it’s free.
Market Update
As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.
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