The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how Brookline Bancorp (NASDAQ: BRKL) and the rest of the regional banks stocks fared in Q2.
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 99 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 3.3% on average since the latest earnings results.
Brookline Bancorp (NASDAQ: BRKL)
Founded in 1871 and operating through three subsidiary banks across three states, Brookline Bancorp (NASDAQ: BRKL) is a multi-bank holding company that provides commercial, business, and retail banking services to small and mid-sized businesses and individuals in New England and New York.
Brookline Bancorp reported revenues of $94.66 million, up 9.6% year on year. This print fell short of analysts’ expectations by 0.8%. Overall, it was a softer quarter for the company with a significant miss of analysts’ tangible book value per share estimates and a slight miss of analysts’ net interest income estimates.
The market was likely pricing in the results, and the stock is flat since reporting. It currently trades at $11.05.
Read our full report on Brookline Bancorp 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 beat of analysts’ EPS estimates and an impressive beat of analysts’ tangible book value per share estimates.
The market seems happy with the results as the stock is up 8.8% since reporting. It currently trades at $119.38.
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.
Interestingly, the stock is up 9.4% since the results and currently trades at $111.
Read our full analysis of Coastal Financial’s results here.
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 number beat analysts’ expectations by 3%. Overall, it was an exceptional quarter as it also logged a solid beat of analysts’ net interest income estimates and a beat of analysts’ EPS estimates.
The stock is up 2.1% since reporting and currently trades at $126.57.
Read our full, actionable report on City Holding here, it’s free.
SouthState (NYSE: SSB)
With roots dating back to the Great Depression era of 1933, SouthState (NYSE: SSB) is a financial holding company that provides banking services, wealth management, and correspondent banking services across six southeastern states.
SouthState reported revenues of $664.8 million, up 56.2% year on year. This result topped analysts’ expectations by 3.8%. It was an exceptional quarter as it also recorded a solid beat of analysts’ net interest income estimates and a beat of analysts’ EPS estimates.
The stock is up 5.2% since reporting and currently trades at $102.20.
Read our full, actionable report on SouthState here, it’s free.
Market Update
The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty for 2025.
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