As the craze of earnings season draws to a close, here’s a look back at some of the most exciting (and some less so) results from Q2. Today, we are looking at regional banks stocks, starting with Hilltop Holdings (NYSE:HTH).
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 98 regional banks stocks we track reported a satisfactory Q2. As a group, revenues were in line with analysts’ consensus estimates.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 5.1% since the latest earnings results.
Hilltop Holdings (NYSE:HTH)
Transformed from a residential communities business to a financial services powerhouse in 2007, Hilltop Holdings (NYSE:HTH) is a Texas-based financial holding company that provides banking, broker-dealer, and mortgage origination services.
Hilltop Holdings reported revenues of $303.3 million, up 1.9% year on year. This print fell short of analysts’ expectations by 1.4%. Overall, it was a slower quarter for the company with EPS in line with analysts’ estimates and tangible book value per share in line with analysts’ estimates.
Jeremy B. Ford, Chairman, President and CEO of Hilltop, said, “During the second quarter of 2025, Hilltop delivered a 1% return on average assets and returned $47 million to stockholders through dividends and share repurchases. PlainsCapital Bank’s net interest margin expanded by 19 basis points as we continued to proactively manage deposit costs and benefited from a higher repricing of earning assets. HilltopSecurities produced a 5% year-over-year improvement in net revenue and a pre-tax margin of 5.8% in the face of a highly volatile quarter from long-term interest rates. PrimeLending had pre-tax income of $3.2 million on $2.4 billion of mortgage origination volume while operating in a persistently challenging home buying market. Notably, PrimeLending’s operating results include a one-time pre-tax benefit of $9.5 million associated with prior legal settlements. As we move into the second half of the year, we will continue to prioritize protecting our balance sheet and executing on our strategic priorities in order to create long-term stockholder value.”
The market was likely pricing in the results, and the stock is flat since reporting. It currently trades at $30.53.
Read our full report on Hilltop Holdings 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 an impressive beat of analysts’ EPS estimates and a solid beat of analysts’ tangible book value per share estimates.
However, the results were likely priced into the stock as it’s traded sideways since reporting. Shares currently sit at $109.80.
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.
As expected, the stock is down 2.9% since the results and currently trades at $98.50.
Read our full analysis of Coastal Financial’s results here.
Fifth Third Bancorp (NASDAQ:FITB)
Named after the merger of Third National Bank and Fifth National Bank in 1908, Fifth Third Bancorp (NASDAQ:FITB) is a financial services company that provides banking, lending, wealth management, and investment services to individuals and businesses across the Midwest and Southeast.
Fifth Third Bancorp reported revenues of $2.25 billion, up 7.8% year on year. This number surpassed analysts’ expectations by 1%. Zooming out, it was a satisfactory quarter as it also logged a solid beat of analysts’ tangible book value per share estimates but EPS in line with analysts’ estimates.
The stock is down 4.5% since reporting and currently trades at $41.11.
Read our full, actionable report on Fifth Third Bancorp here, it’s free.
Bank OZK (NASDAQ:OZK)
Founded in 1903 and rebranded from Bank of the Ozarks in 2018, Bank OZK (NASDAQ:OZK) is a commercial bank that specializes in real estate lending while offering a full range of banking services to individuals and businesses.
Bank OZK reported revenues of $392.8 million, up 6.8% year on year. This print lagged analysts' expectations by 7.2%. It was a slower quarter as it also produced EPS in line with analysts’ estimates and tangible book value per share in line with analysts’ estimates.
The stock is down 8.1% since reporting and currently trades at $47.84.
Read our full, actionable report on Bank OZK 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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