The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how regional banks stocks fared in Q3, starting with Eastern Bank (NASDAQ:EBC).
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 94 regional banks stocks we track reported a satisfactory Q3. As a group, revenues missed analysts’ consensus estimates by 1.1%.
In light of this news, share prices of the companies have held steady as they are up 3.1% on average since the latest earnings results.
Eastern Bank (NASDAQ:EBC)
Founded in 1818 as one of America's oldest mutual banks before converting to a public company in 2020, Eastern Bankshares (NASDAQ:EBC) operates as a bank holding company providing commercial and retail banking services primarily in Massachusetts, New Hampshire, and Rhode Island.
Eastern Bank reported revenues of $241.5 million, up 18.7% year on year. This print fell short of analysts’ expectations by 2%. Overall, it was a softer quarter for the company with a significant miss of analysts’ net interest income and EPS estimates.
Interestingly, the stock is up 2.6% since reporting and currently trades at $18.83.
Read our full report on Eastern Bank 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 $232.1 million, up 38.9% year on year, outperforming analysts’ expectations by 7%. 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 5.1% since reporting. It currently trades at $68.90.
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 $174.6 million, up 38.8% year on year, falling short of analysts’ expectations by 10%. It was a disappointing quarter as it posted a significant miss of analysts’ revenue and net interest income estimates.
As expected, the stock is down 18.7% since the results and currently trades at $62.79.
Read our full analysis of The Bancorp’s results here.
Origin Bancorp (NYSE:OBK)
Founded in 1912 during the early boom days of Louisiana banking, Origin Bancorp (NYSE:OBK) is a financial holding company that provides personalized banking services to businesses, municipalities, and individuals across Texas, Louisiana, and Mississippi.
Origin Bancorp reported revenues of $109.8 million, up 21% year on year. This print beat analysts’ expectations by 7.6%. It was a very strong quarter as it also produced a beat of analysts’ EPS estimates and an impressive beat of analysts’ revenue estimates.
The stock is up 5.9% since reporting and currently trades at $36.39.
Read our full, actionable report on Origin Bancorp here, it’s free for active Edge members.
Peoples Bancorp (NASDAQ:PEBO)
Founded in 1902 in Ohio and expanding through both organic growth and acquisitions, Peoples Bancorp (NASDAQ:PEBO) is a financial holding company that provides banking, insurance, equipment leasing, and investment services to consumers and businesses.
Peoples Bancorp reported revenues of $118.5 million, up 3.2% year on year. This number surpassed analysts’ expectations by 1.3%. Overall, it was a strong quarter as it also put up a solid beat of analysts’ tangible book value per share estimates and a beat of analysts’ EPS estimates.
The stock is up 3.2% since reporting and currently trades at $29.63.
Read our full, actionable report on Peoples Bancorp here, it’s free for active Edge members.
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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