Western Alliance (WAL) experienced a 7% increase in deposits in the second quarter, indicating that the drama is over.

However, investors still face challenges, as most banks paid more for deposits, lowering profits. Twelve regional lenders, including PNC, Truist, Western Alliance, and Zions, lowered their revenue or loan profit expectations for the year.

These institutions are also preparing for greater Federal Reserve capital requirements that could be issued next week.

Bankers say tighter buffers will hurt earnings and lending.

Bank stocks rose this week because their values had plummeted relative to the market, but the group’s earnings outlook hasn’t changed.

Many banks are suggesting that investors be cautious in estimating future earnings results.

The rally’s technical contribution was recognized, with short sellers buying $469 million in bank stocks to cover their holdings.

Retail investors participated, with regional bank stocks seeing three times the typical daily inflows on Wednesday.