As the Q2 earnings season wraps, let’s dig into this quarter’s best and worst performers in the regional banks industry, including First Hawaiian Bank (NASDAQ: FHB) 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 99 regional banks stocks we track reported a satisfactory Q2. As a group, revenues were in line with analysts’ consensus estimates.
In light of this news, share prices of the companies have held steady as they are up 3.2% on average since the latest earnings results.
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 $217.5 million, up 6.3% year on year. This print exceeded analysts’ expectations by 2.1%. Overall, it was a strong quarter for the company with a beat of analysts’ EPS and tangible book value per share estimates.
“I’m happy to report that First Hawaiian Bank had an outstanding second quarter, and posted net income of $73.2 million, a 23.6% increase over the first quarter,” said Bob Harrison, Chairman, President, and CEO.
Interestingly, the stock is up 1.9% since reporting and currently trades at $25.67.
Is now the time to buy First Hawaiian Bank? 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 a beat of analysts’ EPS and tangible book value per share estimates.
The market seems happy with the results as the stock is up 10.7% since reporting. It currently trades at $121.50.
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.
Interestingly, the stock is up 12% since the results and currently trades at $113.61.
Read our full analysis of Coastal Financial’s results here.
Trustmark (NASDAQ: TRMK)
Tracing its roots back to 1889 in Mississippi, Trustmark (NASDAQ: TRMK) is a financial services organization providing banking, wealth management, insurance, and mortgage services across five southeastern states.
Trustmark reported revenues of $198.6 million, up 77,394% year on year. This result was in line with analysts’ expectations. Overall, it was a satisfactory quarter as it also produced a decent beat of analysts’ net interest income estimates.
Trustmark pulled off the fastest revenue growth among its peers. The stock is up 5.1% since reporting and currently trades at $40.69.
Read our full, actionable report on Trustmark here, it’s free.
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 $64.59 million, down 13% year on year. This number beat analysts’ expectations by 0.7%. Zooming out, it was a mixed quarter as it also logged a narrow beat of analysts’ net interest income and EPS estimates.
The stock is down 3.3% since reporting and currently trades at $49.12.
Read our full, actionable report on Westamerica Bancorporation here, it’s free.
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.
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 is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.
