Wrapping up Q3 earnings, we look at the numbers and key takeaways for the regional banks stocks, including Live Oak Bancshares (NYSE:LOB) 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 101 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 6.2% on average since the latest earnings results.
Live Oak Bancshares (NYSE:LOB)
Founded during the 2008 financial crisis with a vision to reimagine small business banking through technology, Live Oak Bancshares (NYSE:LOB) is a bank holding company that specializes in providing online banking services and SBA-guaranteed loans to small businesses across targeted industries nationwide.
Live Oak Bancshares reported revenues of $153.1 million, up 17% year on year. This print exceeded analysts’ expectations by 3%. Despite the top-line beat, it was still a mixed quarter for the company with an impressive beat of analysts’ revenue estimates but a significant miss of analysts’ EPS estimates.
“Live Oak’s third quarter results reflect the strength of our core banking operations and our continued commitment to serving small businesses across the country. We delivered strong loan production, were again named the SBA’s leading 7(a) lender by dollar amount, had significant deposit growth, and drove total assets to $14.67 billion—a 16% increase year-over-year,” said Live Oak Chairman and CEO James S. (Chip) Mahan III.
The market was likely pricing in the results, and the stock is flat since reporting. It currently trades at $34.70.
Is now the time to buy Live Oak Bancshares? Access our full analysis of the earnings results here, it’s free for active Edge members.
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 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 13.7% since reporting. It currently trades at $74.50.
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 12.4% since the results and currently trades at $67.65.
Read our full analysis of The Bancorp’s results here.
Independent Bank (NASDAQ:INDB)
Tracing its roots back to 1907 and serving as a financial cornerstone in New England for over a century, Independent Bank Corp. (NASDAQ:INDB) operates as the holding company for Rockland Trust, providing banking, investment, and financial services across Eastern Massachusetts and Rhode Island.
Independent Bank reported revenues of $243.7 million, up 39.1% year on year. This result was in line with analysts’ expectations. Aside from that, it was a mixed quarter as it also logged a solid beat of analysts’ tangible book value per share estimates but a narrow beat of analysts’ EPS estimates.
The stock is up 13.7% since reporting and currently trades at $73.19.
Read our full, actionable report on Independent Bank here, it’s free for active Edge members.
Byline Bancorp (NYSE:BY)
Ranking as the fifth most active Small Business Administration lender in the country, Byline Bancorp (NYSE:BY) is a Chicago-based bank that provides banking services to small and medium-sized businesses, commercial real estate developers, and consumers.
Byline Bancorp reported revenues of $115.7 million, up 13.6% year on year. This print surpassed analysts’ expectations by 4.5%. It was an exceptional quarter as it also put up an impressive beat of analysts’ revenue estimates and a solid beat of analysts’ net interest income estimates.
The stock is up 9% since reporting and currently trades at $29.05.
Read our full, actionable report on Byline Bancorp here, it’s free for active Edge members.
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