Looking back on regional banks stocks’ Q3 earnings, we examine this quarter’s best and worst performers, including Butterfield Bank (NYSE:NTB) 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 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 5.6% on average since the latest earnings results.
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 $153.9 million, up 6.8% year on year. This print exceeded analysts’ expectations by 3.9%. Overall, it was a very strong quarter for the company with a solid beat of analysts’ revenue estimates and a beat of analysts’ EPS estimates.
Michael Collins, Butterfield's Chairman and Chief Executive Officer, commented, “Butterfield’s strong third quarter performance demonstrates the resilience of our business model as we improved efficiency across the organization. We delivered higher banking and foreign exchange fees, while our net interest income and margin improved as a result of lower deposit costs and a conservative asset mix. Our proactive capital management continued to deliver strong shareholder returns through a quarterly cash dividend and share repurchases. Together, these outcomes underscore the effectiveness of our strategy and commitment to build long-term value for clients and shareholders.”
Interestingly, the stock is up 18.7% since reporting and currently trades at $49.83.
Is now the time to buy Butterfield Bank? 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 a solid beat of analysts’ net interest income estimates and an impressive beat of analysts’ revenue estimates.
The market seems happy with the results as the stock is up 10% since reporting. It currently trades at $72.14.
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 estimates and a significant miss of analysts’ net interest income estimates.
The Bancorp delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 13% since the results and currently trades at $67.17.
Read our full analysis of The Bancorp’s results here.
First Interstate BancSystem (NASDAQ:FIBK)
Tracing its roots back to 1971 and still guided by founding family principles, First Interstate BancSystem (NASDAQ:FIBK) operates a network of community banks across 14 western and midwestern states, offering comprehensive banking services to individuals, businesses, and government entities.
First Interstate BancSystem reported revenues of $251.9 million, flat year on year. This print came in 1% below analysts' expectations. Aside from that, it was a mixed quarter as it also produced a beat of analysts’ EPS estimates but a miss of analysts’ net interest income estimates.
The stock is up 7.7% since reporting and currently trades at $34.60.
Citizens Financial Group (NYSE:CFG)
Tracing its roots back to 1828 as a community-focused institution, Citizens Financial Group (NYSE:CFG) is a regional bank that provides retail and commercial banking services to individuals, small businesses, and large corporations across 14 states.
Citizens Financial Group reported revenues of $2.12 billion, up 11.3% year on year. This result topped analysts’ expectations by 0.8%. Zooming out, it was a mixed quarter as it also recorded a narrow beat of analysts’ revenue estimates but a narrow beat of analysts’ EPS estimates.
The stock is up 12.3% since reporting and currently trades at $58.66.
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