The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how regional banks stocks fared in Q3, starting with Frost Bank (NYSE: CFR).

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 1.2%.

While some regional banks stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 1.3% since the latest earnings results.

Frost Bank (NYSE: CFR)

Tracing its roots back to 1868 when it was founded during Texas's post-Civil War reconstruction era, Cullen/Frost Bankers (NYSE: CFR) operates Frost Bank, a Texas-based financial institution providing commercial and consumer banking, wealth management, and insurance services.

Frost Bank reported revenues of $567.3 million, up 9.5% year on year. This print exceeded analysts’ expectations by 2.5%. Overall, it was a very strong quarter for the company with an impressive beat of analysts’ tangible book value per share estimates and an impressive beat of analysts’ net interest income estimates.

"In the third quarter, our business saw continued steady loan growth as well as the beginning of our usual seasonal strength in deposit flows in the back half of the year. We remained as laser-focused as ever on pursuing our strategy of opening new locations, extending the Frost experience to more families and businesses, and continuing to deliver top-quality digital banking tools along with an empathetic customer experience," said Cullen/Frost Chairman and CEO Phil Green.

Interestingly, the stock is up 1.5% since reporting and currently trades at $123.30.

Is now the time to buy Frost Bank? 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 an impressive beat of analysts’ net interest income estimates and a solid beat of analysts’ revenue estimates.

The market seems content with the results as the stock is up 2.1% since reporting. It currently trades at $66.93.

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 estimates and a significant miss of analysts’ net interest income estimates.

As expected, the stock is down 19.3% since the results and currently trades at $62.17.

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

Zions Bancorporation (NASDAQ: ZION)

Founded in 1873 during Utah's pioneer era and named after Mount Zion in the Bible, Zions Bancorporation (NASDAQ: ZION) operates seven regional banks across the Western United States, providing commercial, retail, and wealth management services to over a million customers.

Zions Bancorporation reported revenues of $861 million, up 8.7% year on year. This number topped analysts’ expectations by 2.7%. It was a strong quarter as it also put up a solid beat of analysts’ revenue estimates and a beat of analysts’ EPS estimates.

The stock is down 1.4% since reporting and currently trades at $51.28.

Read our full, actionable report on Zions Bancorporation here, it’s free for active Edge members.

United Bankshares (NASDAQ: UBSI)

With roots dating back to 1982 and a strong presence in the Mid-Atlantic region, United Bankshares (NASDAQ: UBSI) is a bank holding company that provides commercial and retail banking services through its United Bank subsidiary across multiple states.

United Bankshares reported revenues of $323.3 million, up 23.1% year on year. This result beat analysts’ expectations by 5.1%. Overall, it was a very strong quarter as it also recorded a solid beat of analysts’ revenue estimates and a beat of analysts’ EPS estimates.

The stock is up 1.6% since reporting and currently trades at $35.99.

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

Market Update

Thanks to the Fed’s series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% in November), and a notable surge followed Donald Trump’s presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by potential trade policy changes and corporate tax discussions, which could impact business confidence and growth. The path forward holds both optimism and caution as new policies take shape.

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

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