Looking back on regional banks stocks’ Q2 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 103 regional banks stocks we track reported a satisfactory Q2. As a group, revenues were in line with analysts’ consensus estimates.

In light of this news, share prices of the companies have held steady as they are up 2.2% 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 $146.5 million, up 2.4% year on year. This print fell short of analysts’ expectations by 0.7%. Overall, it was a slower quarter for the company with a narrow beat of analysts’ EPS estimates and net interest income in line with analysts’ estimates.

Michael Collins, Butterfield's Chairman and Chief Executive Officer, commented, “This strong second quarter performance underscores the consistency of our high risk-adjusted returns, supported by disciplined risk management and high-quality client relationships. Butterfield’s proven business model and sustained through-cycle profitability gives our Board the confidence to increase the quarterly cash dividend rate by 14% and authorize a new share repurchase program. As we rebalance our capital return strategy, we continue to evaluate selective, fee-based acquisition opportunities.

The market was likely pricing in the results, and the stock is flat since reporting. It currently trades at $44.16.

Read our full report on Butterfield Bank here, it’s free.

Best Q2: UMB Financial (NASDAQ: UMBF)

With roots dating back to 1913 and a name derived from "United Missouri Bank," UMB Financial (NASDAQ: UMBF) is a financial holding company that provides banking, asset management, and fund services to commercial, institutional, and individual customers.

UMB Financial reported revenues of $689.2 million, up 76.7% year on year, outperforming analysts’ expectations by 8.6%. The business had a stunning quarter with a beat of analysts’ EPS and tangible book value per share estimates.

The market seems happy with the results as the stock is up 8.8% since reporting. It currently trades at $119.43.

Is now the time to buy UMB Financial? Access our full analysis of the earnings results here, it’s free.

Weakest Q2: Coastal Financial (NASDAQ: CCB)

Pioneering the intersection of traditional banking and financial technology in the Pacific Northwest, Coastal Financial (NASDAQ: CCB) operates as a bank holding company that provides traditional banking services and Banking-as-a-Service (BaaS) solutions to consumers and businesses.

Coastal Financial reported revenues of $119.4 million, down 11.7% year on year, falling short of analysts’ expectations by 21.5%. It was a disappointing quarter as it posted a significant miss of analysts’ net interest income and EPS estimates.

Interestingly, the stock is up 16.8% since the results and currently trades at $118.50.

Read our full analysis of Coastal Financial’s results here.

Commerce Bancshares (NASDAQ: CBSH)

Founded in 1865 during the post-Civil War economic boom, Commerce Bancshares (NASDAQGS:CBSH) is a Midwest-focused bank holding company that provides retail, commercial, and wealth management services to individuals and businesses.

Commerce Bancshares reported revenues of $446.2 million, up 6.8% year on year. This print topped analysts’ expectations by 2.8%. It was a strong quarter as it also put up a decent beat of analysts’ tangible book value per share and EPS estimates.

The stock is down 5.2% since reporting and currently trades at $60.

Read our full, actionable report on Commerce Bancshares here, it’s free.

First Financial Bancorp (NASDAQ: FFBC)

Tracing its roots back to 1863 during the Civil War era, First Financial Bancorp (NASDAQ: FFBC) is a bank holding company that provides commercial banking, lending, deposit services, and wealth management to individuals and businesses.

First Financial Bancorp reported revenues of $226.3 million, up 5.4% year on year. This result surpassed analysts’ expectations by 3.1%. Overall, it was a strong quarter as it also logged a decent beat of analysts’ net interest income and EPS estimates.

The stock is up 8.3% since reporting and currently trades at $25.82.

Read our full, actionable report on First Financial Bancorp here, it’s free.

Market Update

In response to the Fed’s rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed’s 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump’s presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025.

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