As the Q2 earnings season wraps, let’s dig into this quarter’s best and worst performers in the regional banks industry, including WSFS Financial (NASDAQ: WSFS) 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 4.2% on average since the latest earnings results.

WSFS Financial (NASDAQ: WSFS)

Founded in 1832 as Wilmington Savings Fund Society and one of the oldest banks in America still operating under its original name, WSFS Financial (NASDAQ: WSFS) operates a community banking and wealth management franchise primarily serving customers in the Mid-Atlantic region through its main subsidiary, WSFS Bank.

WSFS Financial reported revenues of $267.5 million, flat year on year. This print exceeded analysts’ expectations by 1.2%. Overall, it was a strong quarter for the company with a beat of analysts’ EPS estimates and a narrow beat of analysts’ tangible book value per share estimates.

Interestingly, the stock is up 3% since reporting and currently trades at $58.25.

Is now the time to buy WSFS Financial? 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 11.8% since reporting. It currently trades at $122.72.

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 estimates and a significant miss of analysts’ EPS estimates.

Interestingly, the stock is up 13.8% since the results and currently trades at $115.50.

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

Popular (NASDAQ: BPOP)

Founded in 1893 as the first bank in Puerto Rico to serve the working class, Popular (NASDAQ: BPOP) is a financial holding company that provides retail, mortgage, and commercial banking services primarily in Puerto Rico and the mainland United States.

Popular reported revenues of $800 million, up 8.9% year on year. This result surpassed analysts’ expectations by 3.5%. Overall, it was an exceptional quarter as it also recorded a beat of analysts’ EPS estimates and a solid beat of analysts’ net interest income estimates.

The stock is up 7.8% since reporting and currently trades at $124.14.

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

Western Alliance Bancorporation (NYSE: WAL)

Operating through five distinct regional banking divisions across the western United States, Western Alliance Bancorporation (NYSE: WAL) provides commercial banking, treasury management, mortgage services, and specialized financial solutions through its banking divisions and subsidiaries.

Western Alliance Bancorporation reported revenues of $845.9 million, up 9.7% year on year. This print topped analysts’ expectations by 1.9%. More broadly, it was a mixed quarter as it also recorded a narrow beat of analysts’ tangible book value per share estimates but a miss of analysts’ EPS estimates.

The stock is up 4.1% since reporting and currently trades at $88.07.

Read our full, actionable report on Western Alliance Bancorporation here, it’s free.

Market Update

As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.

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