Let’s dig into the relative performance of Fifth Third Bancorp (NASDAQ: FITB) and its peers as we unravel the now-completed Q3 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 95 regional banks stocks we track reported a satisfactory Q3. As a group, revenues beat analysts’ consensus estimates by 1.3%.
Thankfully, share prices of the companies have been resilient as they are up 9.6% on average since the latest earnings results.
Fifth Third Bancorp (NASDAQ: FITB)
Named after the merger of Third National Bank and Fifth National Bank in 1908, Fifth Third Bancorp (NASDAQ: FITB) is a financial services company that provides banking, lending, wealth management, and investment services to individuals and businesses across the Midwest and Southeast.
Fifth Third Bancorp reported revenues of $2.31 billion, up 6.4% year on year. This print exceeded analysts’ expectations by 0.8%. Overall, it was a satisfactory quarter for the company with a narrow beat of analysts’ tangible book value per share estimates.
Interestingly, the stock is up 18.3% since reporting and currently trades at $47.75.
Is now the time to buy Fifth Third Bancorp? Access our full analysis of the earnings results here, it’s free for active Edge members.
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 $231.8 million, up 38.3% year on year, outperforming analysts’ expectations by 6.9%. The business had a stunning quarter with a solid beat of analysts’ net interest income estimates and an impressive beat of analysts’ revenue estimates.
The market seems happy with the results as the stock is up 10.1% since reporting. It currently trades at $72.16.
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 $174.7 million, up 38.8% year on year, falling short of analysts’ expectations by 9.9%. It was a disappointing quarter as it posted a significant miss of analysts’ revenue and net interest income estimates.
The Bancorp delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 11.5% since the results and currently trades at $68.32.
Read our full analysis of The Bancorp’s results here.
Western Alliance Bancorporation (NYSE: WAL)
Operating through five distinct regional banking divisions across the western United States, Western Alliance Bancorporation (NYSE: WAL) provides commercial banking, treasury management, mortgage services, and specialized financial solutions through its banking divisions and subsidiaries.
Western Alliance Bancorporation reported revenues of $921.4 million, up 13.1% year on year. This number topped analysts’ expectations by 3.5%. Overall, it was a strong quarter as it also logged an impressive beat of analysts’ revenue estimates and a solid beat of analysts’ tangible book value per share estimates.
The stock is up 13.1% since reporting and currently trades at $86.21.
Atlantic Union Bankshares (NYSE: AUB)
Tracing its roots back to 1902 when it first opened its doors in Virginia, Atlantic Union Bankshares (NYSE: AUB) is a full-service regional bank providing commercial and retail banking, wealth management, and insurance services throughout Virginia and parts of Maryland and North Carolina.
Atlantic Union Bankshares reported revenues of $380.2 million, up 71.9% year on year. This result was in line with analysts’ expectations. More broadly, it was a slower quarter as it recorded a significant miss of analysts’ net interest income estimates and EPS in line with analysts’ estimates.
The stock is up 9% since reporting and currently trades at $37.10.
Market Update
Thanks to the Fed’s rate hikes in 2022 and 2023, inflation has been on a steady path downward, easing back toward that 2% sweet spot. Fortunately (miraculously to some), all this tightening didn’t send the economy tumbling into a recession, so here we are, cautiously celebrating a soft landing. The cherry on top? Recent rate cuts (half a point in September 2024, a quarter in November) have propped up markets, especially after Trump’s November win lit a fire under major indices and sent them to all-time highs. However, there’s still plenty to ponder — tariffs, corporate tax cuts, and what 2025 might hold for the economy.
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