Wrapping up Q3 earnings, we look at the numbers and key takeaways for the regional banks stocks, including Amalgamated Financial (NASDAQ: AMAL) 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 Q3. As a group, revenues beat analysts’ consensus estimates by 1.3%.
Thankfully, share prices of the companies have been resilient as they are up 8.4% on average since the latest earnings results.
Amalgamated Financial (NASDAQ: AMAL)
Founded in 1923 by labor unions seeking a financial institution aligned with worker values, Amalgamated Financial (NASDAQGM:AMAL) operates a values-oriented bank that provides commercial banking, trust services, and investment management to socially responsible organizations and individuals.
Amalgamated Financial reported revenues of $86.41 million, up 6.8% year on year. This print exceeded analysts’ expectations by 3.4%. Overall, it was a strong quarter for the company with a solid beat of analysts’ revenue estimates and an impressive beat of analysts’ net interest income estimates.
Priscilla Sims Brown, President and Chief Executive Officer, commented, “What stands out to me this quarter is mainly that we keep delivering great results. And the quality and sustainability of our earnings allows us to handle problem situations with ease.”
Interestingly, the stock is up 22.7% since reporting and currently trades at $32.73.
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 $231.8 million, up 38.3% year on year, outperforming analysts’ expectations by 6.9%. 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 happy with the results as the stock is up 16.8% since reporting. It currently trades at $76.56.
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 $174.7 million, up 38.8% year on year, falling short of analysts’ expectations by 9.9%. It was a disappointing quarter as it posted a significant miss of analysts’ revenue and net interest income estimates.
The Bancorp delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 9.6% since the results and currently trades at $69.82.
Read our full analysis of The Bancorp’s results here.
Western Alliance Bancorporation (NYSE: WAL)
Operating through five distinct regional banking divisions across the western United States, Western Alliance Bancorporation (NYSE: WAL) provides commercial banking, treasury management, mortgage services, and specialized financial solutions through its banking divisions and subsidiaries.
Western Alliance Bancorporation reported revenues of $921.4 million, up 13.1% year on year. This print surpassed analysts’ expectations by 3.5%. It was a strong quarter as it also logged an impressive beat of analysts’ revenue estimates and a solid beat of analysts’ tangible book value per share estimates.
The stock is up 13.5% since reporting and currently trades at $86.55.
First Hawaiian Bank (NASDAQ: FHB)
Dating back to 1858 as Hawaii's oldest bank with deep roots in the Pacific island communities, First Hawaiian (NASDAQ: FHB) operates a full-service community bank providing deposit accounts, commercial and consumer loans, credit cards, and wealth management services across Hawaii, Guam, and Saipan.
First Hawaiian Bank reported revenues of $226.4 million, up 7.8% year on year. This number topped analysts’ expectations by 3.8%. Overall, it was a very strong quarter as it also put up an impressive beat of analysts’ revenue estimates and a beat of analysts’ EPS estimates.
The stock is up 10.1% since reporting and currently trades at $26.07.
Read our full, actionable report on First Hawaiian Bank here, it’s free for active Edge members.
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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