Wrapping up Q3 earnings, we look at the numbers and key takeaways for the regional banks stocks, including Synovus Financial (NYSE: SNV) 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%.
While some regional banks stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 1.7% since the latest earnings results.
Synovus Financial (NYSE: SNV)
Tracing its roots back to 1888 when a worker accidentally dropped a textile mill payroll into the dust, prompting the need for better banking, Synovus Financial (NYSE: SNV) is a regional financial services company that provides commercial and consumer banking, wealth management, and specialized lending services across five southeastern states.
Synovus Financial reported revenues of $615.4 million, up 9% year on year. This print exceeded analysts’ expectations by 2%. Overall, it was a strong quarter for the company with an impressive beat of analysts’ revenue estimates and a narrow beat of analysts’ tangible book value per share estimates.
"Synovus delivered solid third-quarter results, driven by continued net interest margin expansion, strong non-interest revenue growth and favorable credit trends,” said Synovus Chairman, CEO and President Kevin Blair.
Unsurprisingly, the stock is down 2.2% since reporting and currently trades at $46.04.
Is now the time to buy Synovus Financial? 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 an impressive beat of analysts’ net interest income estimates and a solid beat of analysts’ revenue estimates.
However, the results were likely priced into the stock as it’s traded sideways since reporting. Shares currently sit at $65.
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 23% since the results and currently trades at $59.45.
Read our full analysis of The Bancorp’s results here.
Eastern Bank (NASDAQ: EBC)
Founded in 1818 as one of America's oldest mutual banks before converting to a public company in 2020, Eastern Bankshares (NASDAQ: EBC) operates as a bank holding company providing commercial and retail banking services primarily in Massachusetts, New Hampshire, and Rhode Island.
Eastern Bank reported revenues of $241.5 million, up 18.7% year on year. This print missed analysts’ expectations by 2%. Overall, it was a softer quarter as it also logged a significant miss of analysts’ net interest income estimates and a significant miss of analysts’ EPS estimates.
The stock is down 4.9% since reporting and currently trades at $17.47.
Read our full, actionable report on Eastern Bank here, it’s free for active Edge members.
Pinnacle Financial Partners (NASDAQ: PNFP)
Founded in 2000 with a focus on delivering big-bank capabilities with community bank personalization, Pinnacle Financial Partners (NASDAQ: PNFP) is a Tennessee-based financial holding company that provides banking, investment, trust, mortgage, and insurance services to businesses and individuals.
Pinnacle Financial Partners reported revenues of $544.8 million, up 13.8% year on year. This result beat analysts’ expectations by 4.3%. It was a very strong quarter as it also recorded an impressive beat of analysts’ revenue estimates and a solid beat of analysts’ tangible book value per share estimates.
The stock is down 2.5% since reporting and currently trades at $87.87.
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.
Want to invest in winners with rock-solid fundamentals? Check out our Hidden Gem Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
StockStory’s analyst team — all seasoned professional investors — uses quantitative analysis and automation to deliver market-beating insights faster and with higher quality.
