Finward Bancorp Announces Dividend

What Happened?

A number of stocks jumped in the afternoon session after comments from a key Federal Reserve official boosted hopes for an interest rate cut. 

New York Federal Reserve President John Williams stated he sees “room for a further adjustment” in the near term, sparking a significant market rally. Following his remarks, the probability of the central bank cutting rates at its December meeting jumped from 39% to over 73%, according to the CME FedWatch tool. This positive sentiment provided relief to markets amid concerns over high valuations, particularly in AI-related stocks.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.

Among others, the following stocks were impacted:

• Regional Banks company Coastal Financial jumped 3.8%. Is now the time to buy Coastal Financial? Access our full analysis report here, it’s free for active Edge members.
• Regional Banks company Peoples Bancorp jumped 3.8%. Is now the time to buy Peoples Bancorp? Access our full analysis report here, it’s free for active Edge members.
• Regional Banks company First Interstate BancSystem jumped 3.8%. Is now the time to buy First Interstate BancSystem? Access our full analysis report here, it’s free for active Edge members.
• Regional Banks company Customers Bancorp jumped 3.8%. Is now the time to buy Customers Bancorp? Access our full analysis report here, it’s free for active Edge members.

Zooming In On First Interstate BancSystem (FIBK)

First Interstate BancSystem’s shares are not very volatile and have only had 9 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.

The biggest move we wrote about over the last year was about 1 month ago when the stock dropped 6.7% on the news that disclosures from two lenders raised concerns about deteriorating loan quality across the industry. The drop was triggered by specific incidents that have spooked investors. Zions Bancorp announced a $50 million charge-off—a debt the bank doesn't expect to collect—on a single loan. Separately, Western Alliance Bancorp revealed it was dealing with a borrower who had failed to provide proper collateral. These events are compounding existing anxieties about the regional banking sector, which is already under pressure from elevated interest rates and declining commercial real estate values. The news heightened investor concerns that more cracks could appear in borrowers' creditworthiness, potentially leading to increased loan losses and reduced profitability for other banks in the sector.

First Interstate BancSystem is down 1.7% since the beginning of the year, and at $31.42 per share, it is trading 11.4% below its 52-week high of $35.47 from November 2024. Investors who bought $1,000 worth of First Interstate BancSystem’s shares 5 years ago would now be looking at an investment worth $793.23.

Earnings results often indicate what direction a company will take in the months ahead. With Q3 behind us, let’s have a look at Wintrust Financial 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 missed analysts’ consensus estimates by 1.1%.

While some regional banks stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 1.9% since the latest earnings results.

Wintrust Financial

Founded in 1991 as a community-focused alternative to big banks in the Chicago area, Wintrust Financial (NASDAQGS:WTFC) operates community banks in the Chicago area and provides specialty finance services including insurance premium financing and wealth management.

Wintrust Financial reported revenues of $697.8 million, up 13.3% year on year. This print exceeded analysts’ expectations by 1.2%. Overall, it was a strong quarter for the company with a beat of analysts’ EPS and tangible book value per share estimates.

Timothy S. Crane, President and Chief Executive Officer, commented, “We continued to build on the momentum established in our record first half of the year with record net income, net interest income, strong balance sheet growth and prudent management of net interest margin.”

Interestingly, the stock is up 1.1% since reporting and currently trades at $127.93.

We think Wintrust Financial is a good business, but is it a buy today? Read our full report here, it’s free for active Edge members.

Best Q3: Customers Bancorp

Originally founded with a "high-tech, high-touch" branch-light banking strategy, Customers Bancorp 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.

Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 2.5% since reporting. It currently trades at $63.93.

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

Operating behind the scenes of many popular fintech apps and prepaid cards you might use daily, The Bancorp 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 22.9% since the results and currently trades at $59.54.

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

Community Bank

Tracing its roots back to 1866 in upstate New York, Community Financial System is a financial holding company that provides banking, employee benefits, wealth management, and insurance services to retail, commercial, and municipal customers.

Community Bank reported revenues of $207.1 million, up 9.6% year on year. This result met analysts’ expectations. More broadly, it was a slower quarter as it logged a slight miss of analysts’ net interest income estimates and a narrow beat of analysts’ EPS estimates.

The stock is down 2.1% since reporting and currently trades at $54.86.

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

Peoples Bancorp

Founded in 1902 in Ohio and expanding through both organic growth and acquisitions, Peoples Bancorp 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 print beat analysts’ expectations by 1.3%. 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 flat since reporting and currently trades at $28.50.

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