Wrapping up Q2 earnings, we look at the numbers and key takeaways for the regional banks stocks, including TriCo Bancshares (NASDAQ: TCBK) 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 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 1.8% on average since the latest earnings results.
TriCo Bancshares (NASDAQ: TCBK)
Founded in 1975 and headquartered in Chico, California, TriCo Bancshares (NASDAQ: TCBK) operates Tri Counties Bank, providing personal, small business, and commercial banking services through branches across California.
TriCo Bancshares reported revenues of $103.6 million, up 5.4% year on year. This print exceeded analysts’ expectations by 2.6%. Overall, it was a satisfactory quarter for the company with a solid beat of analysts’ net interest income estimates but a narrow beat of analysts’ EPS estimates.
Interestingly, the stock is up 7% since reporting and currently trades at $44.95.
Is now the time to buy TriCo Bancshares? 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 beat of analysts’ EPS and tangible book value per share estimates.
The market seems happy with the results as the stock is up 8.2% since reporting. It currently trades at $118.74.
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 and EPS estimates.
Interestingly, the stock is up 13.2% since the results and currently trades at $114.84.
Read our full analysis of Coastal Financial’s results here.
Home Bancshares (NYSE: HOMB)
Founded in Conway, Arkansas in 1998 and growing through strategic acquisitions across the Southeast, Home Bancshares (NYSE: HOMB) operates as the bank holding company for Centennial Bank, providing commercial and retail banking services to businesses and individuals across multiple states.
Home Bancshares reported revenues of $271 million, up 6.1% year on year. This print beat analysts’ expectations by 4%. Taking a step back, it was a satisfactory quarter as it also recorded a narrow beat of analysts’ net interest income and EPS estimates.
The stock is flat since reporting and currently trades at $28.31.
Read our full, actionable report on Home Bancshares here, it’s free.
Popular (NASDAQ: BPOP)
Founded in 1893 as the first bank in Puerto Rico to serve the working class, Popular (NASDAQ: BPOP) is a financial holding company that provides retail, mortgage, and commercial banking services primarily in Puerto Rico and the mainland United States.
Popular reported revenues of $800 million, up 9% year on year. This number topped analysts’ expectations by 3.5%. It was an exceptional quarter as it also logged a beat of analysts’ EPS and net interest income estimates.
The stock is up 12% since reporting and currently trades at $129.04.
Read our full, actionable report on Popular here, it’s free.
Market Update
In response to the Fed’s rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed’s 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump’s presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025.
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