Wrapping up Q2 earnings, we look at the numbers and key takeaways for the regional banks stocks, including Republic Bancorp (NASDAQ: RBCAA) 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.
Thankfully, share prices of the companies have been resilient as they are up 5.1% on average since the latest earnings results.
Republic Bancorp (NASDAQ: RBCAA)
With roots dating back to 1974 and operating across multiple states including Kentucky, Indiana, Florida, Ohio, and Tennessee, Republic Bancorp (NASDAQGS:RBCA.A) is a Kentucky-based financial holding company that operates a bank offering traditional banking, mortgage services, and specialized financial products.
Republic Bancorp reported revenues of $92.02 million, up 12.6% year on year. This print fell short of analysts’ expectations by 1.3%. Overall, it was a mixed quarter for the company with a decent beat of analysts’ net interest income estimates.
Interestingly, the stock is up 2.6% since reporting and currently trades at $77.77.
Is now the time to buy Republic Bancorp? 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 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 14.5% since reporting. It currently trades at $125.61.
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 14.2% since the results and currently trades at $115.88.
Read our full analysis of Coastal Financial’s results here.
M&T Bank (NYSE: MTB)
Tracing its roots back to 1856 when it was founded as Manufacturers and Traders Bank in Buffalo, New York, M&T Bank (NYSE: MTB) is a regional bank holding company that provides retail and commercial banking, trust, wealth management, and investment services to consumers and businesses.
M&T Bank reported revenues of $2.40 billion, up 4.1% year on year. This result surpassed analysts’ expectations by 0.6%. Taking a step back, it was a slower quarter as it logged a miss of analysts’ net interest income estimates.
The stock is up 2.9% since reporting and currently trades at $202.70.
Read our full, actionable report on M&T Bank here, it’s free.
Zions Bancorporation (NASDAQ: ZION)
Founded in 1873 during Utah's pioneer era and named after Mount Zion in the Bible, Zions Bancorporation (NASDAQ: ZION) operates seven regional banks across the Western United States, providing commercial, retail, and wealth management services to over a million customers.
Zions Bancorporation reported revenues of $838 million, up 8% year on year. This print topped analysts’ expectations by 3.9%. Overall, it was an exceptional quarter as it also produced a beat of analysts’ EPS estimates and a decent beat of analysts’ tangible book value per share estimates.
The stock is up 2.5% since reporting and currently trades at $58.
Read our full, actionable report on Zions Bancorporation 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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