As the Q3 earnings season wraps, let’s dig into this quarter’s best and worst performers in the regional banks industry, including BankUnited (NYSE:BKU) 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 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 4.3% on average since the latest earnings results.
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 $275.7 million, up 7.3% year on year. This print fell short of analysts’ expectations by 1.3%. Overall, it was a slower quarter for the company with a miss of analysts’ net interest income estimates and a slight miss of analysts’ revenue estimates.
"We continued to deliver on improved profitability this quarter, with gains in EPS, ROA and ROE. We achieved our near-term target of a 3% margin as well." said Rajinder Singh, Chairman, President and Chief Executive Officer.
Interestingly, the stock is up 20.5% since reporting and currently trades at $44.40.
Read our full report on BankUnited 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 content with the results as the stock is up 4.3% since reporting. It currently trades at $68.36.
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 estimates and a significant miss of analysts’ net interest income estimates.
As expected, the stock is down 16.6% since the results and currently trades at $64.41.
Read our full analysis of The Bancorp’s results here.
S&T Bancorp (NASDAQ:STBA)
Tracing its roots back to 1902 in western Pennsylvania's industrial heartland, S&T Bancorp (NASDAQ:STBA) is a Pennsylvania-based bank holding company that provides retail and commercial banking services, cash management, trust services, and investment advisory solutions.
S&T Bancorp reported revenues of $103 million, up 6.9% year on year. This print met analysts’ expectations. Aside from that, it was a mixed quarter as it underperformed in some other aspects of the business.
The stock is up 11.8% since reporting and currently trades at $39.89.
Read our full, actionable report on S&T Bancorp here, it’s free for active Edge members.
WesBanco (NASDAQ:WSBC)
Tracing its roots back to 1870 in West Virginia, WesBanco (NASDAQ:WSBC) is a bank holding company that provides retail and commercial banking, trust services, insurance, and investment products through its subsidiaries across several Midwestern and Mid-Atlantic states.
WesBanco reported revenues of $261.6 million, up 73.5% year on year. This result was in line with analysts’ expectations. Zooming out, it was a mixed quarter as it also recorded a beat of analysts’ EPS estimates but a slight miss of analysts’ net interest income estimates.
The stock is up 4.4% since reporting and currently trades at $32.73.
Read our full, actionable report on WesBanco here, it’s free for active Edge members.
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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