The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how First Commonwealth Financial (NYSE: FCF) and the rest of the regional banks stocks fared in Q3.

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%.

While some regional banks stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 3.2% 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 5.9% since reporting and currently trades at $15.43.

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 an impressive beat of analysts’ net interest income estimates and a solid beat of analysts’ revenue estimates.

Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 1.8% since reporting. It currently trades at $64.38.

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 22.6% since the results and currently trades at $59.72.

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

SouthState (NYSE: SSB)

With roots dating back to the Great Depression era of 1933, SouthState (NYSE: SSB) is a financial holding company that provides banking services, wealth management, and correspondent banking services across six southeastern states.

SouthState reported revenues of $698.8 million, up 63.9% year on year. This result surpassed analysts’ expectations by 6.5%. It was a stunning quarter as it also logged an impressive beat of analysts’ net interest income estimates and a solid beat of analysts’ revenue estimates.

The stock is down 9.1% since reporting and currently trades at $85.31.

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

ServisFirst Bancshares (NYSE: SFBS)

Founded in 2005 with a focus on serving underserved mid-sized businesses, ServisFirst Bancshares (NYSE: SFBS) is a bank holding company that provides commercial banking services to businesses and professionals through its subsidiary ServisFirst Bank.

ServisFirst Bancshares reported revenues of $136.3 million, up 10.2% year on year. This print missed analysts’ expectations by 7.2%. Overall, it was a disappointing quarter as it also recorded a significant miss of analysts’ revenue estimates and a significant miss of analysts’ net interest income estimates.

The stock is down 10.6% since reporting and currently trades at $68.22.

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

Market Update

As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.

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