As the Q2 earnings season wraps, let’s dig into this quarter’s best and worst performers in the regional banks industry, including TowneBank (NASDAQ: TOWN) 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 102 regional banks stocks we track reported a satisfactory Q2. As a group, revenues missed analysts’ consensus estimates by 1%.

In light of this news, share prices of the companies have held steady. On average, they are relatively unchanged since the latest earnings results.

TowneBank (NASDAQ: TOWN)

Founded in 1998 with a commitment to community-centered banking in the Hampton Roads region, TowneBank (NASDAQ: TOWN) is a community-focused financial institution providing banking, lending, and wealth management services to individuals and businesses in Virginia and North Carolina.

TowneBank reported revenues of $207.4 million, up 18.6% year on year. This print exceeded analysts’ expectations by 3.8%. Overall, it was an exceptional quarter for the company with a beat of analysts’ EPS estimates and a solid beat of analysts’ net interest income estimates.

"We were pleased to close our Village Bank partnership and successfully complete the systems integration during the second quarter. Internally, our focus will shift during the second half of the year to closing our recently announced partnership with Old Point. Both of these strategic transactions will provide meaningful earnings momentum as we manage through an uncertain economic environment," stated William I. Foster III, President and Chief Executive Officer.

Unsurprisingly, the stock is down 7.6% since reporting and currently trades at $33.15.

Is now the time to buy TowneBank? Access our full analysis of the earnings results here, it’s free for active Edge members.

Best Q2: 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 $232.1 million, up 38.5% year on year, outperforming analysts’ expectations by 7%. 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 content with the results as the stock is up 4.4% since reporting. It currently trades at $68.45.

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 Q2: 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 $174.6 million, up 38.8% year on year, falling short of analysts’ expectations by 10%. 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.

As expected, the stock is down 19.3% since the results and currently trades at $62.15.

Read our full analysis of The Bancorp’s results here.

Amalgamated Financial (NASDAQ: AMAL)

Founded in 1923 by labor unions seeking a financial institution aligned with worker values, Amalgamated Financial (NASDAQGM:AMAL) operates a values-oriented bank that provides commercial banking, trust services, and investment management to socially responsible organizations and individuals.

Amalgamated Financial reported revenues of $86.41 million, up 6.6% year on year. This result beat analysts’ expectations by 3.7%. It was a strong quarter as it also produced an impressive beat of analysts’ revenue estimates and a solid beat of analysts’ net interest income estimates.

The stock is up 5.8% since reporting and currently trades at $28.21.

Read our full, actionable report on Amalgamated Financial here, it’s free for active Edge members.

Peoples Bancorp (NASDAQ: PEBO)

Founded in 1902 in Ohio and expanding through both organic growth and acquisitions, Peoples Bancorp (NASDAQ: PEBO) is a financial holding company that provides banking, insurance, equipment leasing, and investment services to consumers and businesses.

Peoples Bancorp reported revenues of $118.5 million, up 3.2% year on year. This number topped analysts’ expectations by 1.3%. Overall, it was a strong quarter as it also logged a solid beat of analysts’ tangible book value per share estimates and a beat of analysts’ EPS estimates.

The stock is up 4.6% since reporting and currently trades at $30.

Read our full, actionable report on Peoples Bancorp here, it’s free for active Edge members.

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.

Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Growth Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

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