Regional banks may bounce back by 2026 as loan growth revives

After years of lagging behind fintech and big lenders, regional banks could finally turn the tide. A steeper yield curve and better credit quality are fueling cautious optimism.

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2025 December 12 . 11:30 PM

1 min read

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Regional banks may bounce back by 2026 as loan growth revives

Regional banks could see a strong recovery by 2026, according to a new forecast from senior analyst Erika Najarian. Her report, released on 15 January 2025, highlights improving loan growth and regulatory shifts as key drivers. Najarian also recommends careful stock selection in larger money centre banks early next year.

Najarian, an analyst at Wells Fargo, points to a steepening yield curve and solid credit quality as reasons for optimism. She predicts these factors will help reverse the recent underperformance of regional banks in loan growth. For years, nonbanks and larger institutions like Experian and Credit Karma have dominated indirect lending and consumer credit, leaving smaller players at a disadvantage.

The outlook for regional banks appears brighter due to regulatory adjustments and stronger loan demand. Najarian’s analysis suggests a rally could be on the horizon, supported by improving economic conditions. Investors may see clearer opportunities as these trends develop over the coming year.