As the Q3 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 Banner Bank (NASDAQ:BANR) 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 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.
Banner Bank (NASDAQ:BANR)
Founded in 1890 in Walla Walla, Washington, and evolving through more than a century of economic cycles, Banner Corporation (NASDAQ:BANR) operates Banner Bank, providing commercial banking services, loans, and financial products to individuals and businesses across Washington, Oregon, California, Idaho, and Utah.
Banner Bank reported revenues of $172.2 million, up 9.7% year on year. This print exceeded analysts’ expectations by 0.6%. Overall, it was a satisfactory quarter for the company with a beat of analysts’ EPS estimates.
“Banner’s third quarter performance reflects the continued strength of our super community bank strategy, which focuses on building client relationships, preserving a strong funding base, and delivering exceptional service while sustaining a moderate risk profile,” said Mark Grescovich, President and CEO.
Interestingly, the stock is up 2.9% since reporting and currently trades at $64.45.
Is now the time to buy Banner 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 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 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 14% since the results and currently trades at $66.40.
Read our full analysis of The Bancorp’s results here.
East West Bank (NASDAQ:EWBC)
As the largest independent bank in the U.S. focused on bridging financial services between America and Asia, East West Bancorp (NASDAQ:EWBC) operates a commercial bank that provides personal and business banking services with a unique focus on facilitating U.S.-Asia cross-border transactions.
East West Bank reported revenues of $745.8 million, up 13.5% year on year. This number surpassed analysts’ expectations by 2.9%. It was a very strong quarter as it also logged an impressive beat of analysts’ net interest income estimates and a solid beat of analysts’ revenue estimates.
The stock is up 11.7% since reporting and currently trades at $110.37.
Read our full, actionable report on East West Bank here, it’s free for active Edge members.
Columbia Banking System (NASDAQ:COLB)
Created through the merger of two Pacific Northwest banking institutions with deep regional roots, Columbia Banking System (NASDAQ:COLB) operates Umpqua Bank, providing commercial, consumer, and wealth management services across eight western states.
Columbia Banking System reported revenues of $579 million, up 18% year on year. This print topped analysts’ expectations by 1.4%. Overall, it was a very strong quarter as it also produced a beat of analysts’ EPS estimates and a solid beat of analysts’ tangible book value per share estimates.
The stock is up 7.8% since reporting and currently trades at $28.05.
Read our full, actionable report on Columbia Banking System here, it’s free for active Edge members.
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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