The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how regional banks stocks fared in Q2, starting with Stellar Bancorp (NYSE: STEL).

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 were in line with analysts’ consensus estimates.

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

Stellar Bancorp (NYSE: STEL)

Created through strategic mergers to serve the growing Texas business community, Stellar Bancorp (NYSE: STEL) is a Texas bank holding company that provides commercial banking services primarily to small and medium-sized businesses and professionals.

Stellar Bancorp reported revenues of $104.1 million, down 2.5% year on year. This print fell short of analysts’ expectations by 0.8%. Overall, it was a mixed quarter for the company with a beat of analysts’ EPS estimates but a slight miss of analysts’ net interest income estimates.

“We are pleased to report our second quarter results that reflect the efforts of our team beginning to add growth to the foundation we’ve built at Stellar Bank,” said Robert R. Franklin, Jr., Stellar’s Chief Executive Officer.

Unsurprisingly, the stock is down 3% since reporting and currently trades at $30.65.

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

Best Q2: UMB Financial (NASDAQ: UMBF)

With roots dating back to 1913 and a name derived from "United Missouri Bank," UMB Financial (NASDAQ: UMBF) is a financial holding company that provides banking, asset management, and fund services to commercial, institutional, and individual customers.

UMB Financial reported revenues of $689.2 million, up 76.7% year on year, outperforming analysts’ expectations by 8.6%. The business had a stunning quarter with a beat of analysts’ EPS and revenue estimates.

The market seems happy with the results as the stock is up 7.1% since reporting. It currently trades at $117.55.

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

Weakest Q2: Coastal Financial (NASDAQ: CCB)

Pioneering the intersection of traditional banking and financial technology in the Pacific Northwest, Coastal Financial (NASDAQ: CCB) operates as a bank holding company that provides traditional banking services and Banking-as-a-Service (BaaS) solutions to consumers and businesses.

Coastal Financial reported revenues of $119.4 million, down 11.7% year on year, falling short of analysts’ expectations by 21.5%. It was a disappointing quarter as it posted a significant miss of analysts’ revenue and net interest income estimates.

Interestingly, the stock is up 10.4% since the results and currently trades at $111.99.

Read our full analysis of Coastal Financial’s results here.

Valley National Bank (NASDAQ: VLY)

Tracing its roots back to 1927 during the economic boom before the Great Depression, Valley National Bancorp (NASDAQGS:VLY) operates Valley National Bank, providing commercial, consumer, and wealth management banking services across several states.

Valley National Bank reported revenues of $495 million, up 9.3% year on year. This result beat analysts’ expectations by 0.5%. More broadly, it was a mixed quarter as it also recorded a narrow beat of analysts’ revenue estimates but net interest income in line with analysts’ estimates.

The stock is up 12.5% since reporting and currently trades at $10.91.

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

Cathay General Bancorp (NASDAQ: CATY)

Founded in 1962 with its first branch in Los Angeles' Chinatown, Cathay General Bancorp (NASDAQ: CATY) operates Cathay Bank, providing commercial banking services to businesses and individuals with a strong presence in Asian-American communities.

Cathay General Bancorp reported revenues of $198 million, up 10% year on year. This print topped analysts’ expectations by 1%. Taking a step back, it was a mixed quarter as it also produced a narrow beat of analysts’ revenue and EPS estimates.

The stock is up 2.4% since reporting and currently trades at $49.01.

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

Market Update

Thanks to the Fed’s series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% in November), and a notable surge followed Donald Trump’s presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by potential trade policy changes and corporate tax discussions, which could impact business confidence and growth. The path forward holds both optimism and caution as new policies take shape.

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

StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.