Let’s dig into the relative performance of ServisFirst Bancshares (NYSE: SFBS) and its peers as we unravel the now-completed Q2 regional banks earnings season.
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% since the latest earnings results.
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 print fell short of analysts’ expectations by 5.8%. Overall, it was a softer quarter for the company with EPS and net interest income in line with analysts’ estimates.
Tom Broughton, Chairman, President, and CEO, said, “We were pleased with the loan growth in the quarter, combined with the improved environment for banks like ServisFirst.”
Unsurprisingly, the stock is down 6.7% since reporting and currently trades at $77.40.
Is now the time to buy ServisFirst Bancshares? 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 an impressive beat of analysts’ EPS estimates and a solid beat of analysts’ tangible book value per share estimates.
However, the results were likely priced into the stock as it’s traded sideways since reporting. Shares currently sit at $110.18.
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.
As expected, the stock is down 1.4% since the results and currently trades at $100.
Read our full analysis of Coastal Financial’s results here.
Ameris Bancorp (NYSE: ABCB)
Tracing its roots back to 1971 and expanding significantly through both organic growth and strategic acquisitions, Ameris Bancorp (NYSE: ABCB) is a financial holding company that provides a full range of banking services to retail and commercial customers across select markets in the southeastern United States.
Ameris Bancorp reported revenues of $300.7 million, flat year on year. This number beat analysts’ expectations by 1.4%. It was a very strong quarter as it also logged an impressive beat of analysts’ EPS estimates and a solid beat of analysts’ net interest income estimates.
The stock is up 1.1% since reporting and currently trades at $67.10.
Read our full, actionable report on Ameris Bancorp here, it’s free.
Fulton Financial (NASDAQ: FULT)
Tracing its roots back to 1882 in the heart of Pennsylvania, Fulton Financial (NASDAQ: FULT) is a financial holding company that provides banking, lending, and wealth management services to consumers and businesses across five Mid-Atlantic states.
Fulton Financial reported revenues of $324.1 million, down 3.2% year on year. This result surpassed analysts’ expectations by 1.9%. Overall, it was a very strong quarter as it also recorded a solid beat of analysts’ EPS estimates and a narrow beat of analysts’ tangible book value per share estimates.
The stock is down 6.6% since reporting and currently trades at $17.79.
Read our full, actionable report on Fulton Financial here, it’s free.
Market Update
As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.
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