Regional Banks Stocks Q2 Recap: Benchmarking Prosperity Bancshares (NYSE:PB)

The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how Prosperity Bancshares (NYSE:PB) and the rest of the regional banks stocks fared in Q2.

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.

While some regional banks stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 4.7% since the latest earnings results.

Prosperity Bancshares (NYSE:PB)

With a network of banking centers spanning the Lone Star State and beyond, Prosperity Bancshares (NYSE:PB) operates full-service banking locations throughout Texas and Oklahoma, offering a wide range of financial products and services to businesses and consumers.

Prosperity Bancshares reported revenues of $310.7 million, up 1.9% year on year. This print fell short of analysts’ expectations by 1.2%. Overall, it was a softer quarter for the company with a significant miss of analysts’ net interest income estimates and EPS in line with analysts’ estimates.

“I am excited to share that our bank continues to grow, with double digit increases in net income and earnings per share compared with the second quarter of 2024. Our net interest margin also improved to 3.28%, a 24 basis point increase compared with the second quarter of 2024 as our interest-bearing assets continue to reprice. Loans grew $219.8 million during the second quarter of 2025, and we continue to see cautious enthusiasm from our customers. As mentioned in my previous comments, these are the results we expected, and these tailwinds should continue to be positive over the next 12 and 24 months,” said David Zalman, Prosperity’s Senior Chairman and Chief Executive Officer.

Unsurprisingly, the stock is down 9.2% since reporting and currently trades at $66.19.

Read our full report on Prosperity Bancshares 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 solid beat of analysts’ EPS estimates and an impressive 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 $110.55.

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.

As expected, the stock is down 6.5% since the results and currently trades at $94.85.

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

First Commonwealth Financial (NYSE:FCF)

Tracing its roots back to the Great Depression era of 1934, First Commonwealth Financial (NYSE:FCF) is a financial holding company that provides consumer and commercial banking, wealth management, and insurance services across Pennsylvania and Ohio.

First Commonwealth Financial reported revenues of $131 million, up 9% year on year. This print beat analysts’ expectations by 4.2%. Overall, it was a very strong quarter as it also put up an impressive beat of analysts’ net interest income estimates and a decent beat of analysts’ tangible book value per share estimates.

The stock is up 3% since reporting and currently trades at $16.58.

Read our full, actionable report on First Commonwealth Financial here, it’s free.

Atlantic Union Bankshares (NYSE:AUB)

Tracing its roots back to 1902 when it first opened its doors in Virginia, Atlantic Union Bankshares (NYSE:AUB) is a full-service regional bank providing commercial and retail banking, wealth management, and insurance services throughout Virginia and parts of Maryland and North Carolina.

Atlantic Union Bankshares reported revenues of $402.9 million, up 84.2% year on year. This number surpassed analysts’ expectations by 11.3%. It was an exceptional quarter as it also produced an impressive beat of analysts’ tangible book value per share estimates and a solid beat of analysts’ EPS estimates.

The stock is down 6.4% since reporting and currently trades at $31.52.

Read our full, actionable report on Atlantic Union Bankshares 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.

Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Growth Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

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