3 Regional Bank Stocks That Crushed Q3 Earnings
Halloween is a few days away, but regional banks may have already hit their quota of scares for the month. From poor loan performance to fraud charges to subprime bankruptcies, regional banks were giving investors plenty of reasons to stay away.
But now that the Q3 earnings season is underway, several regional banks are reporting results that have calmed market jitters. One quarter doesn’t constitute a turnaround, and headwinds for this sector keep bubbling up like a game of Whack-A-Mole.
Still, optimism is seeping back into market sentiment, and the three regionals we’ll focus on today have reported results that could shift the sector.
Regional Banks Have Been Desperate for Good News
Investors in the banking sector have been getting 2023 vibes based on the headlines hitting the press lately. Several concerns were emerging, including fraud allegations and bankruptcies at subprime auto lender Tricolor and parts supplier First Brands.
Many prominent large-cap banks had significant exposure to these companies, but the fallout was more pronounced at regionals like Fifth Third Bancorp (NASDAQ: FITB) and Zion Bancorp (NASDAQ: ZION), the latter of which took a $50 million charge due to fraud-affected loans. Two quick successive bankruptcies, even at small-scale companies like Tricolor and First Brands, had investors fretting over a potential contagion.
After all, if one regional bank already suffered a $50 million hit, how much more carnage was yet to be revealed?
Other factors that had investors spooked this month included:
- The ‘Maturity Wall’ — Commercial real estate (CRE) has been a primary concern for banking investors since the pandemic. An estimated $1 trillion in CRE loans will come due by the end of the year, and persistently high rates have made refinancing these loans difficult. CRE loans account for about 44% of regional banks' portfolio holdings.
- Interest Rate and Regulatory Uncertainty - The Fed might have started cutting, but the pace of future cuts is still being hotly debated within the central bank’s walls. Additionally, Fed governor Michael Barr expressed concerns about potential regulatory rollbacks, such as reductions in capital requirements and less stringent stress tests. While big banks are more affected by these rules, smaller banks still must deal with an uncertain legislative environment.
- Western Alliance Lawsuit - Earlier this month, Western Alliance Bancorp (NYSE: WAL) announced a fraud-related lawsuit against Cantor Group V LLC, which sent WAL shares down 10%. While this news might be inconsequential in tranquil periods, the timing of the lawsuit added accelerant to a flammable situation.
While these factors have given the market plenty to worry about, regional banks—especially these three—have proved remarkably resilient in Q3.
3 Banks That Soared Above Earnings Estimates
Q3 earnings season may mark a turning point for the regional banking industry. The sector has lagged the broader market for most of 2025, but recent earnings success may shift the stubborn tide.
Here are three companies to monitor for a regional banking rebound.
U.S. Bancorp: Multi-Pronged Plan Leads to Record Revenue
With a market cap approaching $75 billion, U.S. Bancorp (NYSE: USB) might be outgrowing its regional bank status.
The bank generates more than $40 billion in annual sales and pays a 4.35% dividend yield, but its recent earnings report is the true catalyst. USB reported record revenue in Q3, beating both top and bottom line estimates.
USB’s net interest income (NII) jumped more than 2% year-over-year (YOY), and non-interest income grew nearly 10% thanks to expansion in wealth management fees.
USB shares are entering a critical level. Despite fundamental tailwinds, the stock remains stuck between the 50-day and 200-day simple moving averages (SMA). The Relative Strength Index (RSI) showed momentum revert following an Oversold signal, but the stock likely doesn’t need much of a boost to breach the 50-day SMA again.
PNC Financial: Strong Earnings Can’t Halt Stock Skepticism
If you look at the past earnings of PNC Financial Services Group Inc. (NYSE: PNC), you’ll find a steady history of EPS and revenue beats, and the most recent quarter was no different.
Like USB, PNC Financial announced better-than-expected earnings results for Q3 2025, including a 7% YOY boost in NII to $3.6 billion. Credit losses also declined sharply YOY, from $243 million to $167 million.
Despite a strong quarter, investors remain unsure about PNC’s trajectory. The stock received a brief post-earnings bump before retreating once again, and it took an Oversold RSI to halt the decline finally. If PNC shares want to turn these earnings beats into a sustained rally, overtaking the 200-day SMA will be the first step.
Capital One Financial: Insulated From Most Regional Headwinds
Shares of Capital One Financial Corp. (NYSE: COF) have held up remarkably well in 2025, quietly advancing while broader volatility hit the financial sector
The stock is up 23% YTD, massively outperforming most of its regional peers. And the reason for the bank's success is the large moat it has built against broader sector trouble.
Capital One reported 23% revenue growth from the previous quarter in its Q3 2025 earnings release, with NII of approximately $12.4 billion and interest margins expanding to 8.3%. Credit losses also came in below expectations, as the bank’s consumer and commercial lending mix kept it insulated from the CRE and bad-loan worries plaguing the industry.
COF is also one of the first large-cap regional bank stocks to retake its 50-day SMA this month, a traditionally bullish signal indicating the next leg of the rally is about to commence.
