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 Community Bank (NYSE: CBU) 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.
Community Bank (NYSE: CBU)
Tracing its roots back to 1866 in upstate New York, Community Financial System (NYSE: CBU) is a financial holding company that provides banking, employee benefits, wealth management, and insurance services to retail, commercial, and municipal customers.
Community Bank reported revenues of $199.3 million, up 8.4% year on year. This print fell short of analysts’ expectations by 1.1%. Overall, it was a slower quarter for the company with a significant miss of analysts’ EPS estimates.
Interestingly, the stock is up 2.8% since reporting and currently trades at $59.60.
Is now the time to buy Community Bank? 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 solid 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 and 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.
Westamerica Bancorporation (NASDAQ: WABC)
Founded in 1884 and serving communities from Mendocino County in the north to Kern County in the south, Westamerica Bancorporation (NASDAQ: WABC) provides banking services to individuals and small businesses throughout Northern and Central California.
Westamerica Bancorporation reported revenues of $64.59 million, down 13% year on year. This result surpassed analysts’ expectations by 0.7%. Aside from that, it was a mixed quarter as it also recorded a narrow beat of analysts’ net interest income estimates but a narrow beat of analysts’ EPS estimates.
The stock is down 2.2% since reporting and currently trades at $49.66.
Read our full, actionable report on Westamerica Bancorporation here, it’s free.
BankUnited (NYSE: BKU)
Born from the ashes of a failed Florida thrift during the 2009 financial crisis, BankUnited (NYSE: BKU) is a regional bank that provides commercial lending, deposit services, and treasury solutions to businesses and consumers primarily in Florida and the New York metropolitan area.
BankUnited reported revenues of $273.9 million, up 9.5% year on year. This print topped analysts’ expectations by 3%. Overall, it was a very strong quarter as it also produced a beat of analysts’ EPS estimates and a narrow beat of analysts’ net interest income estimates.
The stock is up 1.4% since reporting and currently trades at $39.30.
Read our full, actionable report on BankUnited here, it’s free.
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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