Looking back on regional banks stocks’ Q2 earnings, we examine this quarter’s best and worst performers, including Bank OZK (NASDAQ:OZK) 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 100 regional banks stocks we track reported a satisfactory Q2. As a group, revenues beat analysts’ consensus estimates by 1.2%.
Thankfully, share prices of the companies have been resilient as they are up 5.5% on average since the latest earnings results.
Bank OZK (NASDAQ:OZK)
Founded in 1903 and rebranded from Bank of the Ozarks in 2018, Bank OZK (NASDAQ:OZK) is a commercial bank that specializes in real estate lending while offering a full range of banking services to individuals and businesses.
Bank OZK reported revenues of $392.8 million, up 6.8% year on year. This print fell short of analysts’ expectations by 7.2%. Overall, it was a slower quarter for the company with a significant miss of analysts’ revenue estimates and a narrow beat of analysts’ EPS estimates.
George Gleason, Chairman and Chief Executive Officer, stated, “One of our goals for 2025 is to improve on our record 2024 net income and EPS. Our strong results for the first half of the year put us in a great position to achieve that goal. Our talented, entrepreneurial and veteran team is well suited for the very dynamic environment in which we operate today. Our excellent results for the quarter included record net income, record EPS, record net interest income, excellent growth in loans and deposits, and solid asset quality. These results demonstrate our team’s ability to proactively and effectively manage the various challenges of this environment while capitalizing on numerous opportunities.”
Unsurprisingly, the stock is down 10.1% since reporting and currently trades at $46.68.
Read our full report on Bank OZK here, it’s free for active Edge members.
Best Q2: 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 an impressive beat of analysts’ net interest income estimates and a solid beat of analysts’ revenue estimates.
The market seems happy with the results as the stock is up 8.3% since reporting. It currently trades at $70.97.
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 Q2: 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 estimates and a significant miss of analysts’ net interest income estimates.
As expected, the stock is down 14% since the results and currently trades at $66.40.
Read our full analysis of The Bancorp’s results here.
Lake City Bank (NASDAQ:LKFN)
Dating back to 1872 and deeply rooted in Indiana's communities, Lakeland Financial Corporation (NASDAQ:LKFN) operates Lake City Bank, providing commercial and consumer banking services throughout Northern and Central Indiana.
Lake City Bank reported revenues of $70.13 million, up 12.5% year on year. This number surpassed analysts’ expectations by 1.3%. Zooming out, it was a slower quarter as it produced a significant miss of analysts’ net interest income estimates and a miss of analysts’ EPS estimates.
The stock is down 5.2% since reporting and currently trades at $58.64.
Read our full, actionable report on Lake City Bank here, it’s free for active Edge members.
First Bancorp (NASDAQ:FBNC)
Founded during the Great Depression in 1934 and originally known as Montgomery Bancorp, First Bancorp (NASDAQ:FBNC) is a community-oriented commercial bank providing a wide range of financial services to businesses and individuals in North and South Carolina.
First Bancorp reported revenues of $97.58 million, up 18% year on year. This print lagged analysts' expectations by 10.5%. Overall, it was a slower quarter as it also recorded a significant miss of analysts’ revenue estimates and EPS in line with analysts’ estimates.
First Bancorp had the weakest performance against analyst estimates among its peers. The stock is up 9.2% since reporting and currently trades at $51.23.
Read our full, actionable report on First Bancorp here, it’s free for active Edge members.
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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