Let’s dig into the relative performance of TowneBank (NASDAQ: TOWN) and its peers as we unravel the now-completed Q2 regional banks earnings season.
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 as they are up 1.7% on average since the latest earnings results.
TowneBank (NASDAQ: TOWN)
Founded in 1998 with a commitment to community-centered banking in the Hampton Roads region, TowneBank (NASDAQ: TOWN) is a community-focused financial institution providing banking, lending, and wealth management services to individuals and businesses in Virginia and North Carolina.
TowneBank reported revenues of $207.4 million, up 18.6% year on year. This print exceeded analysts’ expectations by 3.8%. Overall, it was an exceptional quarter for the company with a beat of analysts’ EPS and net interest income estimates.
"We were pleased to close our Village Bank partnership and successfully complete the systems integration during the second quarter. Internally, our focus will shift during the second half of the year to closing our recently announced partnership with Old Point. Both of these strategic transactions will provide meaningful earnings momentum as we manage through an uncertain economic environment," stated William I. Foster III, President and Chief Executive Officer.
Unsurprisingly, the stock is down 5.2% since reporting and currently trades at $34.
Is now the time to buy TowneBank? Access our full analysis of the earnings results here, it’s free for active Edge members.
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 and tangible book value per share estimates.
The market seems happy with the results as the stock is up 9.3% since reporting. It currently trades at $120.
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’ net interest income and EPS estimates.
Interestingly, the stock is up 10.6% since the results and currently trades at $112.19.
Read our full analysis of Coastal Financial’s results here.
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 print 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 and EPS estimates.
The stock is up 7.2% since reporting and currently trades at $30.64.
United Bankshares (NASDAQ: UBSI)
With roots dating back to 1982 and a strong presence in the Mid-Atlantic region, United Bankshares (NASDAQ: UBSI) is a bank holding company that provides commercial and retail banking services through its United Bank subsidiary across multiple states.
United Bankshares reported revenues of $306 million, up 19.6% year on year. This number topped analysts’ expectations by 2.6%. It was a very strong quarter as it also put up an impressive beat of analysts’ net interest income and EPS estimates.
The stock is up 2% since reporting and currently trades at $37.60.
Read our full, actionable report on United Bankshares here, it’s free for active Edge members.
Market Update
Thanks to the Fed’s series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% in November), and a notable surge followed Donald Trump’s presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by potential trade policy changes and corporate tax discussions, which could impact business confidence and growth. The path forward holds both optimism and caution as new policies take shape.
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