Looking back on regional banks stocks’ Q2 earnings, we examine this quarter’s best and worst performers, including City Holding (NASDAQ: CHCO) 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 102 regional banks stocks we track reported a satisfactory Q2. As a group, revenues were in line with analysts’ consensus estimates.
In light of this news, share prices of the companies have held steady. On average, they are relatively unchanged since the latest earnings results.
City Holding (NASDAQ: CHCO)
With roots dating back to 1957 and a strategic presence along the I-64 and I-81 corridors, City Holding (NASDAQGS:CHCO) operates as a financial holding company providing banking, trust, and investment services through its subsidiary City National Bank across West Virginia, Kentucky, Virginia, and Ohio.
City Holding reported revenues of $78.16 million, up 6.4% year on year. This print exceeded analysts’ expectations by 3%. Overall, it was an exceptional quarter for the company with an impressive beat of analysts’ net interest income estimates and a beat of analysts’ EPS estimates.
Unsurprisingly, the stock is down 1.7% since reporting and currently trades at $121.84.
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 beat of analysts’ EPS estimates and an impressive beat of analysts’ revenue estimates.
The market seems happy with the results as the stock is up 8.4% since reporting. It currently trades at $118.98.
Is now the time to buy UMB Financial? Access our full analysis of the earnings results here, it’s free for active Edge members.
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’ revenue and net interest income estimates.
Interestingly, the stock is up 9.6% since the results and currently trades at $111.16.
Read our full analysis of Coastal Financial’s results here.
German American Bancorp (NASDAQ: GABC)
Founded in 1910 during a wave of community banking expansion in the Midwest, German American Bancorp (NASDAQ: GABC) is a financial holding company that provides banking, wealth management, and insurance services across southern Indiana and Kentucky.
German American Bancorp reported revenues of $89.89 million, up 38.5% year on year. This print topped analysts’ expectations by 0.8%. Zooming out, it was a mixed quarter as it also produced a narrow beat of analysts’ revenue estimates but a slight miss of analysts’ net interest income estimates.
The stock is down 3.5% since reporting and currently trades at $38.77.
Read our full, actionable report on German American Bancorp here, it’s free for active Edge members.
First Bancorp (NASDAQ: FBNC)
Founded during the Great Depression in 1934 and originally known as Montgomery Bancorp, First Bancorp (NASDAQ: FBNC) is a community-oriented commercial bank providing a wide range of financial services to businesses and individuals in North and South Carolina.
First Bancorp reported revenues of $111 million, up 16% year on year. This number beat analysts’ expectations by 2.2%. More broadly, it was a mixed quarter as it also logged an impressive beat of analysts’ revenue estimates but EPS in line with analysts’ estimates.
The stock is up 8% since reporting and currently trades at $50.67.
Read our full, actionable report on First Bancorp here, it’s free for active Edge members.
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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