What happened
So far this earnings season, stocks in the ever-crowded finance sector have done rather well, broadly speaking. That winning streak continued on Friday, with several notching notable gains in price.
Upstart Holdings(NASDAQ: UPST) rose by almost 11%, followed by Byline Bancorp's (NYSE: BY) 9%-plus gain, and Axos Financial's (NYSE: AX) 5% increase. The latter two companies reported solid quarterly earnings, boosting general sentiment on the sector as the week came to a close.
So what
Of the pair publishing earnings, arguably the better results came from Axos Financial. For its fourth quarter of fiscal 2023, the niche bank generated revenue of nearly $236.5 million, for a meaty year-over-year improvement of almost 23%. Non-GAAP (adjusted) net income zoomed even higher, rising by 32% to hit $89.4 million, or $1.50 per share. That trounced the average $1.27 per share estimate from analysts tracking the stock.
Other metrics are headed in the right direction for Axos Financial, including total deposits (which grew by 9%) and net loans (up 17%).
Byline Bancorp, a small lender based in Chicago, also reported its most recent quarter, in its case Q2.
The period saw the company boost its total revenue by 6% year over year to $121.6 million, while lifting net income according to GAAP standards by 7% to $26.1 million ($0.70 per share). Analysts were collectively anticipating only $0.62 per share on the bottom line. Meanwhile, deposits grew by 24%, and loans and leases by 11% during the quarter.
Now what
Those latest sets of results came shortly after the major American banks and financial services companies unveiled their latest quarterly earnings figures.
Many topped expectations, setting the bullish tone the finance industry as a whole enjoys at the moment. Bank of America, to name one, cruised to notable beats on analyst revenue and net income projections. Ditto for its storied peer Morgan Stanley, powered by strength in its wealth management unit, which also scored a double beat in its own second quarter.
Of course, banks and other finance sector companies aren't operating in an entirely sunny environment. Interest rates got a kick higher this week and although this can benefit banks, it's a double-edged sword -- more expensive lending rates sometimes make potential borrowers shy about obtaining loans. And the collapses of SVB Financial and others earlier this year exposed certain vulnerabilities of smaller-scale lenders.
Regardless, the sector as a whole is healthy and thriving. Considering that, we can expect more positive results this earnings season as other finance companies and banks report.
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Bank of America is an advertising partner of The Ascent, a Motley Fool company. Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Axos Financial, Bank of America, and Upstart. The Motley Fool has a disclosure policy.
