As the Q2 earnings season comes to a close, it’s time to take stock of this quarter’s best and worst performers in the regional banks industry, including Nicolet Bankshares (NYSE:NIC) 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 98 regional banks stocks we track reported a satisfactory Q2. As a group, revenues were in line with analysts’ consensus estimates.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 5.7% since the latest earnings results.
Nicolet Bankshares (NYSE:NIC)
Starting as Green Bay Financial Corporation in 2000 before rebranding in 2002, Nicolet Bankshares (NYSE:NIC) is a regional bank holding company that provides commercial, agricultural, and consumer banking services primarily in Wisconsin, Michigan, and Minnesota.
Nicolet Bankshares reported revenues of $95.74 million, up 12.7% year on year. This print exceeded analysts’ expectations by 4.4%. Overall, it was a very strong quarter for the company with an impressive beat of analysts’ net interest income estimates and a decent beat of analysts’ EPS estimates.
Unsurprisingly, the stock is down 4.3% since reporting and currently trades at $121.
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 solid beat of analysts’ EPS estimates and an impressive beat of analysts’ tangible book value per share estimates.
Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 1.2% since reporting. It currently trades at $108.39.
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 estimates and a significant miss of analysts’ EPS estimates.
As expected, the stock is down 8.9% since the results and currently trades at $92.40.
Read our full analysis of Coastal Financial’s results here.
Regions Financial (NYSE:RF)
Tracing its roots back to 1971 and operating in a region known as the "heart of Dixie," Regions Financial (NYSE:RF) is a financial holding company that provides banking services, wealth management, and specialty financial solutions across the South, Midwest, and Texas.
Regions Financial reported revenues of $1.91 billion, up 10.1% year on year. This print topped analysts’ expectations by 2.9%. It was a strong quarter as it also logged an impressive beat of analysts’ net interest income estimates and a narrow beat of analysts’ tangible book value per share estimates.
The stock is up 1.3% since reporting and currently trades at $24.89.
Read our full, actionable report on Regions Financial here, it’s free.
ServisFirst Bancshares (NYSE:SFBS)
Founded in 2005 with a focus on serving underserved mid-sized businesses, ServisFirst Bancshares (NYSE:SFBS) is a bank holding company that provides commercial banking services to businesses and professionals through its subsidiary ServisFirst Bank.
ServisFirst Bancshares reported revenues of $132.1 million, up 15.1% year on year. This result lagged analysts' expectations by 5.8%. It was a softer quarter as it also logged EPS in line with analysts’ estimates and net interest income in line with analysts’ estimates.
The stock is down 6.9% since reporting and currently trades at $77.31.
Read our full, actionable report on ServisFirst Bancshares here, it’s free.
Market Update
Thanks to the Fed’s series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% in November), and a notable surge followed Donald Trump’s presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by potential trade policy changes and corporate tax discussions, which could impact business confidence and growth. The path forward holds both optimism and caution as new policies take shape.
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