Earnings results often indicate what direction a company will take in the months ahead. With Q2 behind us, let’s have a look at Frost Bank (NYSE: CFR) 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 98 regional banks stocks we track reported a satisfactory Q2. As a group, revenues were in line with analysts’ consensus estimates.
While some regional banks stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 4.7% since the latest earnings results.
Frost Bank (NYSE: CFR)
Tracing its roots back to 1868 when it was founded during Texas's post-Civil War reconstruction era, Cullen/Frost Bankers (NYSE: CFR) operates Frost Bank, a Texas-based financial institution providing commercial and consumer banking, wealth management, and insurance services.
Frost Bank reported revenues of $546.9 million, up 7.7% year on year. This print exceeded analysts’ expectations by 0.6%. Overall, it was a strong quarter for the company with an impressive beat of analysts’ tangible book value per share estimates and a decent beat of analysts’ net interest income estimates.
Unsurprisingly, the stock is down 6.5% since reporting and currently trades at $125.53.
Is now the time to buy Frost Bank? Access our full analysis of the earnings results 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 an impressive beat of analysts’ EPS estimates and a solid beat of analysts’ tangible book value per share estimates.
However, the results were likely priced into the stock as it’s traded sideways since reporting. Shares currently sit at $110.55.
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 estimates and a significant miss of analysts’ EPS estimates.
As expected, the stock is down 6.5% since the results and currently trades at $94.85.
Read our full analysis of Coastal Financial’s results here.
Hilltop Holdings (NYSE: HTH)
Transformed from a residential communities business to a financial services powerhouse in 2007, Hilltop Holdings (NYSE: HTH) is a Texas-based financial holding company that provides banking, broker-dealer, and mortgage origination services.
Hilltop Holdings reported revenues of $303.3 million, up 1.9% year on year. This number missed analysts’ expectations by 1.4%. It was a slower quarter as it also logged EPS in line with analysts’ estimates and tangible book value per share in line with analysts’ estimates.
The stock is flat since reporting and currently trades at $30.35.
Read our full, actionable report on Hilltop Holdings here, it’s free.
Westamerica Bancorporation (NASDAQ: WABC)
Founded in 1884 and serving communities from Mendocino County in the north to Kern County in the south, Westamerica Bancorporation (NASDAQ: WABC) provides banking services to individuals and small businesses throughout Northern and Central California.
Westamerica Bancorporation reported revenues of $64.59 million, down 13% year on year. This print beat analysts’ expectations by 0.7%. More broadly, it was a mixed quarter as it also recorded a narrow beat of analysts’ net interest income estimates but EPS in line with analysts’ estimates.
The stock is down 5.9% since reporting and currently trades at $47.77.
Read our full, actionable report on Westamerica Bancorporation 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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