Looking back on regional banks stocks’ Q2 earnings, we examine this quarter’s best and worst performers, including Merchants Bancorp (NASDAQ: MBIN) 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.

Merchants Bancorp (NASDAQ: MBIN)

With a strategic focus on low-risk, government-backed lending programs, Merchants Bancorp (NASDAQCM:MBIN) is an Indiana-based bank holding company specializing in multi-family mortgage banking, mortgage warehousing, and traditional banking services.

Merchants Bancorp reported revenues of $179.2 million, up 12.4% year on year. This print exceeded analysts’ expectations by 12.5%. Despite the top-line beat, it was still a slower quarter for the company with a significant miss of analysts’ EPS and net interest income estimates.

Merchants Bancorp achieved the biggest analyst estimates beat of the whole group. Still, the market seems discontent with the results. The stock is down 8% since reporting and currently trades at $32.03.

Is now the time to buy Merchants 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.

Nicolet Bankshares (NYSE: NIC)

Starting as Green Bay Financial Corporation in 2000 before rebranding in 2002, Nicolet Bankshares (NYSE: NIC) is a regional bank holding company that provides commercial, agricultural, and consumer banking services primarily in Wisconsin, Michigan, and Minnesota.

Nicolet Bankshares reported revenues of $95.74 million, up 12.7% year on year. This result beat analysts’ expectations by 4.4%. Overall, it was a very strong quarter as it also logged a solid beat of analysts’ net interest income and EPS estimates.

The stock is up 5.7% since reporting and currently trades at $133.61.

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

Peoples Bancorp (NASDAQ: PEBO)

Founded in 1902 in Ohio and expanding through both organic growth and acquisitions, Peoples Bancorp (NASDAQ: PEBO) is a financial holding company that provides banking, insurance, equipment leasing, and investment services to consumers and businesses.

Peoples Bancorp reported revenues of $115 million, up 3.2% year on year. This number topped analysts’ expectations by 1.7%. Zooming out, it was a mixed quarter as it also recorded a solid beat of analysts’ tangible book value per share estimates but a significant miss of analysts’ EPS estimates.

The stock is down 5.2% since reporting and currently trades at $29.94.

Read our full, actionable report on Peoples Bancorp 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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