Earnings results often indicate what direction a company will take in the months ahead. With Q2 behind us, let’s have a look at M&T Bank (NYSE: MTB) 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 4.3% on average since the latest earnings results.
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 print exceeded analysts’ expectations by 0.6%. Despite the top-line beat, it was still a slower quarter for the company with a miss of analysts’ net interest income estimates.
Interestingly, the stock is up 2.3% since reporting and currently trades at $201.66.
Read our full report on M&T Bank 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 13.3% since reporting. It currently trades at $124.33.
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 12.9% since the results and currently trades at $114.50.
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 beat analysts’ expectations by 0.7%. Taking a step back, it was a mixed quarter as it also logged a narrow beat of analysts’ net interest income estimates but a narrow beat of analysts’ EPS estimates.
The stock is down 1.5% since reporting and currently trades at $50.01.
Read our full, actionable report on Westamerica Bancorporation 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 8.9% year on year. This number topped analysts’ expectations by 3.5%. Overall, it was an exceptional quarter as it also logged a beat of analysts’ EPS estimates and an impressive beat of analysts’ net interest income estimates.
The stock is up 9.1% since reporting and currently trades at $125.64.
Read our full, actionable report on Popular 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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