The U.S. regional banking sector is showing resilience as several mid- and small-cap banks delivered stronger-than-expected third-quarter earnings, according to JPMorgan analyst Anthony Elian.

In a note on the sector's third-quarter earnings season, Elian highlighted widespread earnings beats and favorable outlooks, suggesting that regional bank stocks have room for further upside into 2025.

In addition to strong earnings reports, the Fed's expected gradual rate cuts, the yield curve de-inverting, easing credit quality concerns, potential capital returns, and underweight positioning by investors all lead Elian to say he is "encouraged about the direction...