Key Highlights

● Third-quarter adjusted earnings of $1.90 a share topped the $1.85 analysts expected.

● Revenue rose from a year earlier to $261.9 million, with net income of $89.7 million.

● Ladder Capital also rose after quarterly results, with Regions and Citizens reporting beats.

● Fifth Third reports Oct 19, with KeyCorp and Ally Financial following Oct 20.

The quarter

Independent Bank Corp. (NASDAQ:INDB), the holding company for Rockland Trust, reported third-quarter adjusted earnings of $1.90 a share, ahead of the $1.85 analysts had expected, according to market reports. Revenue rose from a year earlier to $261.9 million, and net income came to $89.7 million.

The bank's net interest margin, the gap between what it earns on loans and securities and what it pays on deposits and borrowings, widened. For a lender, a wider margin generally means more income from each dollar of assets.

The shares rose on Friday, after a report of a gain before the opening bell. The S&P SmallCap 600 member was one of a handful of small lenders to rise on earnings during a session in which the broader market fell.

Small lenders stood out

Independent Bank was not alone. Ladder Capital (NYSE:LADR) rose to $9.19 after its third-quarter results, with distributable earnings of $0.35 a share. Ladder, a commercial real estate finance company, also reported more than $700 million in new investments during the quarter.

Larger regional banks reported mixed results. Regions Financial (NYSE:RF) beat estimates with adjusted earnings of $0.73 a share and raised its full-year net interest income outlook. Citizens Financial (NYSE:CFG) topped forecasts and raised its dividend, while M&T Bank (NYSE:MTB) beat on earnings but missed on net interest income. Truist Financial (NYSE:TFC) traded lower before the bell despite an adjusted earnings beat.

Market reports said regional banks are seeing resilient loan growth, with artificial intelligence build-out lending among the drivers. "The clouds are as dark as they ever were, but the economy's still strong. People are investing into it," PNC (NYSE:PNC)'s CEO said.

Financials found buyers

Money rotated into financials on Friday, along with energy, utilities, consumer staples and health care. The Financial Select Sector SPDR Fund rose by mid-morning, and Visa (NYSE:V) and Mastercard (NYSE:MA) set intraday record highs.

The broader market declined. The S&P 500 fell 84.62 points to 7,659.44, the Nasdaq Composite dropped 572.99 points to 26,140.03 and the Dow Jones Industrial Average slipped 175.28 points to 52,002.41. The Russell 2000 lost 45.90 points to about 2,721. No closing level for the S&P SmallCap 600 was available.

The 10-year Treasury yield eased to roughly 5.1, after topping 5.3 earlier in October, its highest since 2002. The two-year yield posted a third straight weekly decline.

Fifth Third Opens the Next Bank Wave

Rate expectations will matter for lenders' margins, since the level and shape of the yield curve influence both loan pricing and deposit costs. The Federal Reserve, which raised rates by a quarter point in September, announces its next decision on Oct 28. Fed Chair Kevin Warsh declined to preview the outcome. "I don't prejudge meetings," he said at an IMF gathering in Bangkok.

More regional bank results arrive next week. Fifth Third (NASDAQ:FITB) reports Monday, Oct 19, before the open, and Zions (NASDAQ:ZION), Western Alliance (NYSE:WAL), Wintrust (NASDAQ:WTFC) and BOK Financial (NASDAQ:BOKF) also report that day. KeyCorp (NYSE:KEY) and Ally Financial (NYSE:ALLY) report Tuesday, Oct 20, and Huntington Bancshares (NASDAQ:HBAN) reports Thursday, Oct 22.