Wrapping up Q2 earnings, we look at the numbers and key takeaways for the regional banks stocks, including First Horizon (NYSE: FHN) 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 2.9% on average since the latest earnings results.

First Horizon (NYSE: FHN)

Tracing its roots back to 1864 during the Civil War era, First Horizon (NYSE: FHN) is a Tennessee-based bank holding company that provides commercial and consumer banking, wealth management, and specialty financial services across multiple states.

First Horizon reported revenues of $830 million, up 1.8% year on year. This print was in line with analysts’ expectations, and overall, it was a satisfactory quarter for the company with an impressive beat of analysts’ tangible book value per share estimates but net interest income in line with analysts’ estimates.

Interestingly, the stock is up 6.2% since reporting and currently trades at $22.50.

Is now the time to buy First Horizon? 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 estimates and a solid beat of analysts’ tangible book value per share estimates.

The market seems happy with the results as the stock is up 9.9% since reporting. It currently trades at $120.56.

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 10.8% since the results and currently trades at $112.40.

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

Community Bank (NYSE: CBU)

Tracing its roots back to 1866 in upstate New York, Community Financial System (NYSE: CBU) 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 $199.3 million, up 8.4% year on year. This print missed analysts’ expectations by 1.1%. It was a slower quarter as it also recorded a significant miss of analysts’ EPS estimates and a slight miss of analysts’ tangible book value per share estimates.

The stock is up 4.7% since reporting and currently trades at $60.69.

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

Butterfield Bank (NYSE: NTB)

Founded in 1784 as one of the oldest banks in the Western Hemisphere, Butterfield Bank (NYSE: NTB) provides banking, wealth management, and trust services to individuals and businesses in select offshore financial centers including Bermuda, Cayman Islands, and the Channel Islands.

Butterfield Bank reported revenues of $146.5 million, up 2.4% year on year. This result came in 0.7% below analysts' expectations. Overall, it was a slower quarter as it also produced a narrow beat of analysts’ EPS estimates and net interest income in line with analysts’ estimates.

The stock is up 1.1% since reporting and currently trades at $45.

Read our full, actionable report on Butterfield Bank here, it’s free.

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.

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