As the Q2 earnings season wraps, let’s dig into this quarter’s best and worst performers in the regional banks industry, including First Interstate BancSystem (NASDAQ: FIBK) 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 99 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 as they are up 1.8% on average since the latest earnings results.

First Interstate BancSystem (NASDAQ: FIBK)

Tracing its roots back to 1971 and still guided by founding family principles, First Interstate BancSystem (NASDAQ: FIBK) operates a network of community banks across 14 western and midwestern states, offering comprehensive banking services to individuals, businesses, and government entities.

First Interstate BancSystem reported revenues of $248.3 million, up 1.6% year on year. This print fell short of analysts’ expectations by 1.8%. 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.

“Our net interest margin continued to improve as expected, and we are prudently managing expenses while focusing our efforts on organic growth. Our liquidity and capital levels are strong, providing us a solid foundation to grow and improve profitability through relationship banking. This quarter, our results reflect a series of actions that position the bank for future success, including the outsourcing of our consumer credit card product,” said James A. Reuter, President and Chief Executive Officer of First Interstate BancSystem,

Interestingly, the stock is up 12.5% since reporting and currently trades at $33.06.

Is now the time to buy First Interstate BancSystem? Access our full analysis of the earnings results here, it’s free.

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 tangible book value per share estimates.

The market seems happy with the results as the stock is up 8.2% since reporting. It currently trades at $118.74.

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

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’ net interest income and EPS estimates.

Interestingly, the stock is up 13.2% since the results and currently trades at $114.84.

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

First Financial Bancorp (NASDAQ: FFBC)

Tracing its roots back to 1863 during the Civil War era, First Financial Bancorp (NASDAQ: FFBC) is a bank holding company that provides commercial banking, lending, deposit services, and wealth management to individuals and businesses.

First Financial Bancorp reported revenues of $226.3 million, up 5.4% year on year. This print surpassed analysts’ expectations by 3.1%. Overall, it was a strong quarter as it also recorded a decent beat of analysts’ net interest income and EPS estimates.

The stock is up 8.9% since reporting and currently trades at $25.96.

Read our full, actionable report on First Financial Bancorp here, it’s free.

United Community Banks (NYSE: UCB)

Starting as a small community bank in 1950 and expanding through strategic acquisitions across the Southeast, United Community Banks (NYSE: UCB) is a regional bank holding company that provides financial services including loans, deposits, wealth management, and merchant services across the southeastern United States.

United Community Banks reported revenues of $260.2 million, up 6.1% year on year. This number met analysts’ expectations. However, it was a mixed quarter as it underperformed in some other aspects of the business.

The stock is flat since reporting and currently trades at $31.42.

Read our full, actionable report on United Community Banks here, it’s free.

Market Update

The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty for 2025.

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