As the Q4 earnings season comes to a close, it’s time to take stock of this quarter’s best and worst performers in the regional banks industry, including KeyCorp (NYSE:KEY) 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 Q4. As a group, revenues beat analysts’ consensus estimates by 1.5%.
In light of this news, share prices of the companies have held steady as they are up 3.5% on average since the latest earnings results.
KeyCorp (NYSE:KEY)
Tracing its roots back to 1849 during the California Gold Rush era, KeyCorp (NYSE:KEY) operates KeyBank, a full-service regional bank providing retail and commercial banking, wealth management, and investment services across 15 states.
KeyCorp reported revenues of $2.01 billion, up 12.5% year on year. This print exceeded analysts’ expectations by 1.8%. Overall, it was a strong quarter for the company with a decent beat of analysts’ revenue estimates and a narrow beat of analysts’ tangible book value per share estimates.
Interestingly, the stock is up 2.7% since reporting and currently trades at $21.75.
Is now the time to buy KeyCorp? Access our full analysis of the earnings results here, it’s free.
Best Q4: Merchants Bancorp (NASDAQ:MBIN)
With a strategic focus on low-risk, government-backed lending programs, Merchants Bancorp (NASDAQCM:MBIN) is an Indiana-based bank holding company specializing in multi-family mortgage banking, mortgage warehousing, and traditional banking services.
Merchants Bancorp reported revenues of $185.3 million, down 4.4% year on year, outperforming analysts’ expectations by 7.8%. The business had a stunning quarter with a beat of analysts’ EPS estimates and an impressive beat of analysts’ net interest income estimates.
The market seems happy with the results as the stock is up 35.3% since reporting. It currently trades at $47.28.
Is now the time to buy Merchants Bancorp? Access our full analysis of the earnings results here, it’s free.
Weakest Q4: 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 $172.7 million, up 8.2% year on year, falling short of analysts’ expectations by 11%. It was a disappointing quarter as it posted a significant miss of analysts’ tangible book value per share estimates and a significant miss of analysts’ revenue estimates.
As expected, the stock is down 20.3% since the results and currently trades at $56.19.
Read our full analysis of The Bancorp’s results here.
FB Financial (NYSE:FBK)
Founded in 1906 and operating through more than a century of economic cycles, FB Financial (NYSE:FBK) operates FirstBank, providing commercial and consumer banking services across Tennessee, Kentucky, Alabama, and North Georgia.
FB Financial reported revenues of $178.4 million, up 33.9% year on year. This result surpassed analysts’ expectations by 1.9%. Aside from that, it was a mixed quarter as it also recorded a decent beat of analysts’ revenue estimates but a slight miss of analysts’ tangible book value per share estimates.
The stock is down 4% since reporting and currently trades at $59.19.
Read our full, actionable report on FB Financial here, it’s free.
Hope Bancorp (NASDAQ:HOPE)
With roots in serving Korean-American communities and now expanded to a multi-ethnic clientele across 12 states, Hope Bancorp (NASDAQ:HOPE) operates Bank of Hope, providing commercial and retail banking services with a focus on serving multi-ethnic communities across the United States.
Hope Bancorp reported revenues of $145.4 million, up 24.8% year on year. This print beat analysts’ expectations by 1.4%. Zooming out, it was a mixed quarter as it also produced a narrow beat of analysts’ revenue estimates but a miss of analysts’ net interest income estimates.
The stock is up 2.7% since reporting and currently trades at $12.10.
Read our full, actionable report on Hope Bancorp here, it’s free.
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