Quarterly earnings results are a good time to check in on a company’s progress, especially compared to its peers in the same sector. Today we are looking at Customers Bancorp (NYSE:CUBI) and the best and worst performers in the regional banks industry.
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 105 regional banks stocks we track reported a mixed Q1. As a group, revenues missed analysts’ consensus estimates by 1.6%.
In light of this news, share prices of the companies have held steady. On average, they are relatively unchanged since the latest earnings results.
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 $143 million, down 21.3% year on year. This print fell short of analysts’ expectations by 26%. Overall, it was a mixed quarter for the company with an impressive beat of analysts’ EPS estimates but a slight miss of analysts’ tangible book value per share estimates.
“We are pleased to share our first quarter results that highlight the company’s continuing incredible deposit transformation and underscore our success in growing franchise value. Though there is currently a high degree of economic uncertainty and volatility in the macro environment, we believe that Customers’ differentiated business model positions us well to navigate these challenges while we remain flexible and responsive to changes in the external environment. And importantly, with our customer-centric mindset and commitment to service provided by our extraordinary colleagues, we are here to serve our clients as the business environment continues to evolve,” said Customers Bancorp Chairman and CEO Jay Sidhu.
The stock is down 6.6% since reporting and currently trades at $50.92.
Is now the time to buy Customers Bancorp? Access our full analysis of the earnings results here, it’s free.
Best Q1: Butterfield Bank (NYSE:NTB)
Founded in 1784 as one of the oldest banks in the Western Hemisphere, Butterfield Bank (NYSE:NTB) provides banking, wealth management, and trust services to individuals and businesses in select offshore financial centers including Bermuda, Cayman Islands, and the Channel Islands.
Butterfield Bank reported revenues of $147.8 million, up 3.7% year on year, outperforming analysts’ expectations by 4.4%. The business had a stunning quarter with a solid beat of analysts’ net interest income estimates and an impressive beat of analysts’ EPS estimates.
The market seems unhappy with the results as the stock is down 1.1% since reporting. It currently trades at $41.94.
Is now the time to buy Butterfield Bank? Access our full analysis of the earnings results here, it’s free.
Weakest Q1: Triumph Financial (NASDAQ:TFIN)
Originally focused on traditional banking before pivoting to serve the transportation sector, Triumph Financial (NASDAQ:TFIN) provides specialized financial services to the trucking industry, including payments processing, factoring, banking, and data intelligence solutions.
Triumph Financial reported revenues of $100.8 million, flat year on year, falling short of analysts’ expectations by 3.8%. It was a disappointing quarter as it posted a significant miss of analysts’ tangible book value per share and net interest income estimates.
Interestingly, the stock is up 10.7% since the results and currently trades at $55.15.
Read our full analysis of Triumph Financial’s results here.
Community Bank (NYSE:CBU)
Tracing its roots back to 1866 in upstate New York, Community Financial System (NYSE:CBU) is a financial holding company that provides banking, employee benefits, wealth management, and insurance services to retail, commercial, and municipal customers.
Community Bank reported revenues of $196.2 million, up 10.7% year on year. This result was in line with analysts’ expectations. Zooming out, it was a mixed quarter as it also produced a decent beat of analysts’ tangible book value per share estimates but EPS in line with analysts’ estimates.
The stock is down 7% since reporting and currently trades at $53.94.
Read our full, actionable report on Community Bank here, it’s free.
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 $285.9 million, up 7% year on year. This print surpassed analysts’ expectations by 3.6%. It was a very strong quarter as it also recorded a solid beat of analysts’ net interest income estimates and a solid beat of analysts’ EPS estimates.
The stock is down 5.9% since reporting and currently trades at $59.75.
Read our full, actionable report on Ameris Bancorp here, it’s free.
Market Update
The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty for 2025.
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