As the Q3 earnings season wraps, let’s dig into this quarter’s best and worst performers in the regional banks industry, including First Commonwealth Financial (NYSE: FCF) and its peers.

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 94 regional banks stocks we track reported a satisfactory Q3. As a group, revenues missed analysts’ consensus estimates by 1.1%.

In light of this news, share prices of the companies have held steady. On average, they are relatively unchanged since the latest earnings results.

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 $136 million, up 11.9% year on year. This print was in line with analysts’ expectations, but overall, it was a slower quarter for the company with a significant miss of analysts’ EPS estimates and a slight miss of analysts’ net interest income estimates.

“Our third quarter results reflect continued momentum across our core banking operations,” stated T. Michael Price, President and Chief Executive Officer.

Unsurprisingly, the stock is down 3.8% since reporting and currently trades at $15.77.

Is now the time to buy First Commonwealth Financial? Access our full analysis of the earnings results here, it’s free for active Edge members.

Best Q3: Customers Bancorp (NYSE: CUBI)

Originally founded with a "high-tech, high-touch" branch-light banking strategy, Customers Bancorp (NYSE: CUBI) is a bank holding company that provides commercial and consumer banking services through its Customers Bank subsidiary, with a focus on business lending and digital banking.

Customers Bancorp reported revenues of $232.1 million, up 38.5% year on year, outperforming analysts’ expectations by 7%. The business had a stunning quarter with a solid beat of analysts’ net interest income estimates and an impressive beat of analysts’ revenue estimates.

The market seems content with the results as the stock is up 2% since reporting. It currently trades at $66.83.

Is now the time to buy Customers Bancorp? Access our full analysis of the earnings results here, it’s free for active Edge members.

Weakest Q3: The Bancorp (NASDAQ: TBBK)

Operating behind the scenes of many popular fintech apps and prepaid cards you might use daily, The Bancorp (NASDAQ: TBBK) is a bank holding company that specializes in providing banking services to fintech companies and offering specialty lending products.

The Bancorp reported revenues of $174.6 million, up 38.8% year on year, falling short of analysts’ expectations by 10%. It was a disappointing quarter as it posted a significant miss of analysts’ revenue and net interest income estimates.

As expected, the stock is down 20.3% since the results and currently trades at $61.55.

Read our full analysis of The Bancorp’s results here.

United Community Banks (NYSE: UCB)

Starting as a small community bank in 1950 and expanding through strategic acquisitions across the Southeast, United Community Banks (NYSE: UCB) is a regional bank holding company that provides financial services including loans, deposits, wealth management, and merchant services across the southeastern United States.

United Community Banks reported revenues of $276.8 million, up 12.7% year on year. This result surpassed analysts’ expectations by 2.6%. More broadly, it was a satisfactory quarter as it also produced an impressive beat of analysts’ revenue estimates but net interest income in line with analysts’ estimates.

The stock is flat since reporting and currently trades at $30.23.

Read our full, actionable report on United Community Banks here, it’s free for active Edge members.

M&T Bank (NYSE: MTB)

Tracing its roots back to 1856 when it was founded as Manufacturers and Traders Bank in Buffalo, New York, M&T Bank (NYSE: MTB) is a regional bank holding company that provides retail and commercial banking, trust, wealth management, and investment services to consumers and businesses.

M&T Bank reported revenues of $2.51 billion, up 7.7% year on year. This number beat analysts’ expectations by 3.2%. Overall, it was a strong quarter as it also recorded a solid beat of analysts’ revenue estimates and a beat of analysts’ EPS estimates.

The stock is up 1.1% since reporting and currently trades at $186.98.

Read our full, actionable report on M&T Bank here, it’s free for active Edge members.

Market Update

Thanks to the Fed’s rate hikes in 2022 and 2023, inflation has been on a steady path downward, easing back toward that 2% sweet spot. Fortunately (miraculously to some), all this tightening didn’t send the economy tumbling into a recession, so here we are, cautiously celebrating a soft landing. The cherry on top? Recent rate cuts (half a point in September 2024, a quarter in November) have propped up markets, especially after Trump’s November win lit a fire under major indices and sent them to all-time highs. However, there’s still plenty to ponder — tariffs, corporate tax cuts, and what 2025 might hold for the economy.

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