Earnings results often indicate what direction a company will take in the months ahead. With Q3 behind us, let’s have a look at Comerica (NYSE:CMA) 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. On average, they are relatively unchanged since the latest earnings results.
Comerica (NYSE:CMA)
Founded in 1849 during the California Gold Rush era, Comerica (NYSE:CMA) is a financial services company that provides commercial banking, retail banking, and wealth management services to businesses and individuals.
Comerica reported revenues of $838 million, up 3.3% year on year. This print fell short of analysts’ expectations by 0.6%, but it was still a strong quarter for the company with an impressive beat of analysts’ tangible book value per share estimates and a beat of analysts’ EPS estimates.
Interestingly, the stock is up 5.8% since reporting and currently trades at $78.17.
Is now the time to buy Comerica? Access our full analysis of the earnings results 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 38.5% 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 3.1% since reporting. It currently trades at $67.60.
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 18.6% since the results and currently trades at $62.69.
Read our full analysis of The Bancorp’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 $63.74 million, down 14% year on year. This number beat analysts’ expectations by 2%. It was a strong quarter as it also logged an impressive beat of analysts’ net interest income estimates and a decent beat of analysts’ revenue estimates.
The stock is up 2.4% since reporting and currently trades at $47.58.
Provident Financial Services (NYSE:PFS)
Founded in 1839 and serving communities across New Jersey, Pennsylvania, and New York, Provident Financial Services (NYSE:PFS) operates a regional bank providing commercial, residential, and consumer lending alongside wealth management and insurance services.
Provident Financial Services reported revenues of $221.8 million, up 5.3% year on year. This result topped analysts’ expectations by 0.7%. More broadly, it was a mixed quarter as it also logged a narrow beat of analysts’ tangible book value per share estimates but EPS in line with analysts’ estimates.
The stock is flat since reporting and currently trades at $18.49.
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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