Looking back on regional banks stocks’ Q2 earnings, we examine this quarter’s best and worst performers, including OFG Bancorp (NYSE: OFG) 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 103 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 1.1% on average since the latest earnings results.

OFG Bancorp (NYSE: OFG)

Originally founded in 1964 as a federal savings and loan institution, OFG Bancorp (NYSE: OFG) provides banking and financial services including commercial and consumer lending, wealth management, insurance, and trust services primarily in Puerto Rico and the U.S. Virgin Islands.

OFG Bancorp reported revenues of $182.4 million, up 1.4% year on year. This print was in line with analysts’ expectations, and overall, it was a satisfactory quarter for the company with a beat of analysts’ EPS estimates.

The market was likely pricing in the results, and the stock is flat since reporting. It currently trades at $43.93.

Is now the time to buy OFG Bancorp? 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% since reporting. It currently trades at $118.49.

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 15.1% since the results and currently trades at $116.80.

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

Commerce Bancshares (NASDAQ: CBSH)

Founded in 1865 during the post-Civil War economic boom, Commerce Bancshares (NASDAQGS:CBSH) is a Midwest-focused bank holding company that provides retail, commercial, and wealth management services to individuals and businesses.

Commerce Bancshares reported revenues of $446.2 million, up 6.8% year on year. This print topped analysts’ expectations by 2.8%. It was a strong quarter as it also recorded a decent beat of analysts’ tangible book value per share and EPS estimates.

The stock is down 6% since reporting and currently trades at $59.48.

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

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 number surpassed analysts’ expectations by 0.5%. More broadly, it was a mixed quarter as it also logged a beat of analysts’ EPS estimates but net interest income in line with analysts’ estimates.

The stock is up 9.2% since reporting and currently trades at $10.59.

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

Market Update

Thanks to the Fed’s rate hikes in 2022 and 2023, inflation has been on a steady path downward, easing back toward that 2% sweet spot. Fortunately (miraculously to some), all this tightening didn’t send the economy tumbling into a recession, so here we are, cautiously celebrating a soft landing. The cherry on top? Recent rate cuts (half a point in September 2024, a quarter in November) have propped up markets, especially after Trump’s November win lit a fire under major indices and sent them to all-time highs. However, there’s still plenty to ponder — tariffs, corporate tax cuts, and what 2025 might hold for the economy.

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