Let’s dig into the relative performance of Trustmark (NASDAQ:TRMK) and its peers as we unravel the now-completed Q3 regional banks earnings season.
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 missed analysts’ consensus estimates by 1.1%.
In light of this news, share prices of the companies have held steady. On average, they are relatively unchanged since the latest earnings results.
Trustmark (NASDAQ:TRMK)
Tracing its roots back to 1889 in Mississippi, Trustmark (NASDAQ:TRMK) is a financial services organization providing banking, wealth management, insurance, and mortgage services across five southeastern states.
Trustmark reported revenues of $202.4 million, up 5.3% year on year. This print exceeded analysts’ expectations by 0.7%. Despite the top-line beat, it was still a mixed quarter for the company with a narrow beat of analysts’ revenue estimates but EPS in line with analysts’ estimates.
Duane A. Dewey, President and CEO, stated, “Our momentum continues to build as reflected in Trustmark’s solid financial performance in the third quarter. Diversified loan growth and stable credit quality continued along with cost-effective core deposit growth. Our wealth management business performed well while our mortgage business continued to execute well in a challenging operating environment. We continued to implement organic growth initiatives and make investments to capitalize on opportunities in our marketplace. During the quarter, we added established relationship managers and production talent to accelerate profitable growth in key markets across our franchise. We will continue to add seasoned professionals with proven performance records to supplement our teams and expand and deepen customer relationships. These investments are designed to further enhance our financial performance and create long-term value for our shareholders.”
Unsurprisingly, the stock is down 2.6% since reporting and currently trades at $37.62.
Is now the time to buy Trustmark? 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 $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 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 $174.6 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.
F.N.B. Corporation (NYSE:FNB)
Tracing its roots back to 1864 during the Civil War era, F.N.B. Corporation (NYSE:FNB) is a diversified financial services holding company that provides banking, wealth management, and insurance services to consumers and businesses across seven states and Washington, D.C.
F.N.B. Corporation reported revenues of $457.4 million, up 10.8% year on year. This result surpassed analysts’ expectations by 2.7%. It was a strong quarter as it also produced a solid beat of analysts’ revenue estimates and a beat of analysts’ EPS estimates.
The stock is up 10% since reporting and currently trades at $16.12.
Read our full, actionable report on F.N.B. Corporation here, it’s free for active Edge members.
Axos Financial (NYSE:AX)
Originally founded as Bank of Internet USA in 1999 before rebranding in 2018, Axos Financial (NYSE:AX) is a diversified financial services company that provides digital banking, securities clearing, and investment advisory solutions to retail and business customers nationwide.
Axos Financial reported revenues of $323.4 million, flat year on year. This number beat analysts’ expectations by 1.4%. Zooming out, it was a satisfactory quarter as it also produced a beat of analysts’ EPS estimates but a slight miss of analysts’ tangible book value per share estimates.
The stock is up 3.6% since reporting and currently trades at $81.94.
Read our full, actionable report on Axos Financial 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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