Wrapping up Q3 earnings, we look at the numbers and key takeaways for the regional banks stocks, including TowneBank (NASDAQ: TOWN) 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 98 regional banks stocks we track reported a satisfactory Q3. As a group, revenues beat analysts’ consensus estimates by 1.3%.

Thankfully, share prices of the companies have been resilient as they are up 8.4% on average since the latest earnings results.

TowneBank (NASDAQ: TOWN)

Founded in 1998 with a commitment to community-centered banking in the Hampton Roads region, TowneBank (NASDAQ: TOWN) is a community-focused financial institution providing banking, lending, and wealth management services to individuals and businesses in Virginia and North Carolina.

TowneBank reported revenues of $215.7 million, up 23.6% year on year. This print was in line with analysts’ expectations, but overall, it was a mixed quarter for the company with a solid beat of analysts’ tangible book value per share estimates but a miss of analysts’ net interest income estimates.

"We’re excited to have completed most of the Village integration and system conversions, marking a major milestone for our team. Our immediate priority is to finalize the Dogwood partnership and integrate Old Point systems which we expect could occur in the first quarter of 2026. Looking ahead, we anticipate scheduling the Dogwood system integration in the second half of 2026. I want to express my sincere gratitude to our dedicated teammates whose leadership and commitment to our mission of Serving Others and Enriching Lives make these achievements possible," stated William I. Foster III, President and Chief Executive Officer.

The market was likely pricing in the results, and the stock is flat since reporting. It currently trades at $33.70.

Is now the time to buy TowneBank? 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 $231.8 million, up 38.3% year on year, outperforming analysts’ expectations by 6.9%. 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 happy with the results as the stock is up 16.8% since reporting. It currently trades at $76.56.

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 $174.7 million, up 38.8% year on year, falling short of analysts’ expectations by 9.9%. It was a disappointing quarter as it posted a significant miss of analysts’ revenue and net interest income estimates.

The Bancorp delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 9.6% since the results and currently trades at $69.82.

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

First Horizon (NYSE: FHN)

Tracing its roots back to 1864 during the Civil War era, First Horizon (NYSE: FHN) is a Tennessee-based bank holding company that provides commercial and consumer banking, wealth management, and specialty financial services across multiple states.

First Horizon reported revenues of $893 million, up 7.5% year on year. This result beat analysts’ expectations by 5.2%. Overall, it was an exceptional quarter as it also produced a solid beat of analysts’ revenue estimates and a beat of analysts’ EPS estimates.

The stock is up 6.5% since reporting and currently trades at $24.52.

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

Hilltop Holdings (NYSE: HTH)

Transformed from a residential communities business to a financial services powerhouse in 2007, Hilltop Holdings (NYSE: HTH) is a Texas-based financial holding company that provides banking, broker-dealer, and mortgage origination services.

Hilltop Holdings reported revenues of $331.1 million, up 7.8% year on year. This number surpassed analysts’ expectations by 6.6%. It was an exceptional quarter as it also recorded a beat of analysts’ EPS estimates and an impressive beat of analysts’ revenue estimates.

The stock is up 6.7% since reporting and currently trades at $34.62.

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

Market Update

In response to the Fed’s rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed’s 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump’s presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025.

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