As the craze of earnings season draws to a close, here’s a look back at some of the most exciting (and some less so) results from Q1. Today, we are looking at regional banks stocks, starting with Provident Financial Services (NYSE: PFS).
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 105 regional banks stocks we track reported a mixed Q1. As a group, revenues missed analysts’ consensus estimates by 1.6%.
In light of this news, share prices of the companies have held steady as they are up 5% on average since the latest earnings results.
Provident Financial Services (NYSE: PFS)
Founded in 1839 and serving communities across New Jersey, Pennsylvania, and New York, Provident Financial Services (NYSE: PFS) operates a regional bank providing commercial, residential, and consumer lending alongside wealth management and insurance services.
Provident Financial Services reported revenues of $208.8 million, up 82.4% year on year. This print exceeded analysts’ expectations by 0.5%. Overall, it was a satisfactory quarter for the company with a decent beat of analysts’ tangible book value per share estimates.
Anthony J. Labozzetta, President and Chief Executive Officer commented, “With the integration of Lakeland behind us, we are starting to see the benefits of the transaction come to fruition. We are very pleased with our first quarter financial results and encouraged by the promising start to the year. Despite ongoing uncertainty in the markets, our core businesses, credit quality and risk management remain strong. Our team is focused on building the business, delivering exceptional customer service and creating value for all stakeholders while remaining agile in this rapidly changing economic and regulatory environment."
Provident Financial Services achieved the fastest revenue growth of the whole group. The results were likely priced in, however, and the stock is flat since reporting. It currently trades at $16.90.
Is now the time to buy Provident Financial Services? Access our full analysis of the earnings results here, it’s free.
Best Q1: 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 $147.8 million, up 3.7% year on year, outperforming analysts’ expectations by 4.4%. The business had a stunning quarter with a solid beat of analysts’ net interest income estimates and an impressive beat of analysts’ EPS estimates.
The market seems content with the results as the stock is up 4.4% since reporting. It currently trades at $44.30.
Is now the time to buy Butterfield Bank? Access our full analysis of the earnings results here, it’s free.
Weakest Q1: Triumph Financial (NASDAQ: TFIN)
Originally focused on traditional banking before pivoting to serve the transportation sector, Triumph Financial (NASDAQ: TFIN) provides specialized financial services to the trucking industry, including payments processing, factoring, banking, and data intelligence solutions.
Triumph Financial reported revenues of $100.8 million, flat year on year, falling short of analysts’ expectations by 3.8%. It was a disappointing quarter as it posted a significant miss of analysts’ tangible book value per share and net interest income estimates.
Interestingly, the stock is up 12.5% since the results and currently trades at $56.05.
Read our full analysis of Triumph Financial’s results here.
OceanFirst Financial (NASDAQ: OCFC)
Tracing its roots back to 1902 when it began serving coastal New Jersey communities, OceanFirst Financial (NASDAQ: OCFC) operates as a regional bank holding company that provides commercial and consumer banking services primarily in New Jersey and surrounding metropolitan areas.
OceanFirst Financial reported revenues of $97.91 million, flat year on year. This print surpassed analysts’ expectations by 2.1%. It was a strong quarter as it also produced a solid beat of analysts’ tangible book value per share and net interest income estimates.
The stock is up 4.3% since reporting and currently trades at $17.17.
Read our full, actionable report on OceanFirst Financial here, it’s free.
First Hawaiian Bank (NASDAQ: FHB)
Dating back to 1858 as Hawaii's oldest bank with deep roots in the Pacific island communities, First Hawaiian (NASDAQ: FHB) operates a full-service community bank providing deposit accounts, commercial and consumer loans, credit cards, and wealth management services across Hawaii, Guam, and Saipan.
First Hawaiian Bank reported revenues of $211 million, up 2.5% year on year. This result beat analysts’ expectations by 0.6%. Zooming out, 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 up 4.1% since reporting and currently trades at $24.26.
Read our full, actionable report on First Hawaiian Bank here, it’s free.
Market Update
As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.
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