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 OFG Bancorp (NYSE: OFG) and the rest of the regional banks stocks fared in Q1.
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 105 regional banks stocks we track reported a mixed Q1. As a group, revenues missed analysts’ consensus estimates by 1.6%.
Luckily, regional banks stocks have performed well with share prices up 13.9% on average since the latest earnings results.
OFG Bancorp (NYSE: OFG)
Originally founded in 1964 as a federal savings and loan institution, OFG Bancorp (NYSE: OFG) provides banking and financial services including commercial and consumer lending, wealth management, insurance, and trust services primarily in Puerto Rico and the U.S. Virgin Islands.
OFG Bancorp reported revenues of $178.6 million, up 2.4% year on year. This print exceeded analysts’ expectations by 2%. Overall, it was a strong quarter for the company with an impressive beat of analysts’ net interest income estimates and a solid beat of analysts’ tangible book value per share estimates.
Interestingly, the stock is up 23.9% since reporting and currently trades at $45.01.
Best Q1: Butterfield Bank (NYSE: NTB)
Founded in 1784 as one of the oldest banks in the Western Hemisphere, Butterfield Bank (NYSE: NTB) provides banking, wealth management, and trust services to individuals and businesses in select offshore financial centers including Bermuda, Cayman Islands, and the Channel Islands.
Butterfield Bank reported revenues of $147.8 million, up 3.7% year on year, outperforming analysts’ expectations by 4.4%. The business had a stunning quarter with a solid beat of analysts’ net interest income estimates and an impressive beat of analysts’ EPS estimates.
The market seems happy with the results as the stock is up 9.2% since reporting. It currently trades at $46.34.
Is now the time to buy Butterfield Bank? Access our full analysis of the earnings results here, it’s free.
Weakest Q1: Triumph Financial (NASDAQ: TFIN)
Originally focused on traditional banking before pivoting to serve the transportation sector, Triumph Financial (NASDAQ: TFIN) provides specialized financial services to the trucking industry, including payments processing, factoring, banking, and data intelligence solutions.
Triumph Financial reported revenues of $100.8 million, flat year on year, falling short of analysts’ expectations by 3.8%. It was a disappointing quarter as it posted a significant miss of analysts’ tangible book value per share and net interest income estimates.
Interestingly, the stock is up 27.9% since the results and currently trades at $63.72.
Read our full analysis of Triumph Financial’s results here.
Ameris Bancorp (NYSE: ABCB)
Tracing its roots back to 1971 and expanding significantly through both organic growth and strategic acquisitions, Ameris Bancorp (NYSE: ABCB) is a financial holding company that provides a full range of banking services to retail and commercial customers across select markets in the southeastern United States.
Ameris Bancorp reported revenues of $285.9 million, up 7% year on year. This result beat analysts’ expectations by 3.6%. It was a very strong quarter as it also logged a solid beat of analysts’ net interest income and EPS estimates.
The stock is up 6.7% since reporting and currently trades at $67.74.
Read our full, actionable report on Ameris Bancorp here, it’s free.
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 $143 million, down 21.3% year on year. This number lagged analysts' expectations by 26%. Aside from that, it was a mixed quarter as it also logged an impressive beat of analysts’ EPS estimates but a slight miss of analysts’ tangible book value per share estimates.
The stock is up 20.9% since reporting and currently trades at $65.95.
Read our full, actionable report on Customers Bancorp 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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