3 Regional Bank Stocks That Crushed Q3 EarningsWritten by Dan Schmidt. Published 10/24/2025.
Key Points- The regional banking sector has been wobbly lately, thanks to several high-profile bankruptcies and concerns about bad loans.
- Despite a wave of headwinds, Q3 earnings from this sector have largely outperformed expectations.
- USB, PNC, and COF are three regional bank stocks that could benefit from strong earnings at the end of the year.
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 surfacing like a game of Whack-A-Mole.
Free book: How to ride the crypto rebound to profits (Ad)Most people won't know how to capitalize on the current momentum...
Will you be ready?
Get your FREE copy of "Crypto Revolution" before I change my mind.
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 NewsInvestors in the banking sector have been getting a 2023-like sense of déjà vu from recent headlines. 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 exposure to those 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 related to fraud-affected loans. Two quick successive bankruptcies, even at smaller companies like Tricolor and First Brands, had investors fretting over potential contagion.
After all, if one regional bank already suffered a $50 million hit, how much more damage might be revealed?
Other factors that have investors spooked this month include:
- 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 difficult. CRE loans account for about 44% of regional banks' portfolio holdings.
- Interest-Rate and Regulatory Uncertainty — The Fed may have started cutting rates, but the pace of future cuts is still being debated. 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 would be most affected by some rule changes, smaller banks still face an uncertain regulatory backdrop.
- 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 the news might be less consequential during calmer times, the timing added accelerant to an already fragile situation.
While these factors have given the market plenty to worry about, regional banks—especially the three below—proved remarkably resilient in Q3.
3 Banks That Soared Above Earnings EstimatesQ3 earnings season may mark a turning point for the regional banking industry. The sector has lagged the broader market for much of 2025, but recent earnings success could help change that narrative.
Here are three companies to monitor for a potential regional banking rebound.
U.S. Bancorp: Multi-Pronged Plan Leads to Record RevenueWith a market cap approaching $75 billion, U.S. Bancorp (NYSE: USB) might be outgrowing its “regional” label.
The bank generates more than $40 billion in annual sales and pays a 4.35% dividend yield, but its recent earnings report was the real catalyst. USB reported record revenue in Q3, beating both top- and bottom-line estimates.
USB’s net interest income (NII) rose more than 2% year-over-year (YOY), and non-interest income grew nearly 10% thanks to expansion in wealth-management fees.
Technically, USB shares are trading between the 50-day and 200-day simple moving averages (SMA). The Relative Strength Index (RSI) rebounded from an “Oversold” reading, and the stock may not need much momentum to clear the 50-day SMA again.
PNC Financial: Strong Earnings Can’t Halt Stock Skepticism PNC Financial Services Group Inc. (NYSE: PNC) has a steady history of EPS and revenue beats, and the most recent quarter was no exception.
Like USB, PNC reported better-than-expected Q3 2025 results, including a 7% YOY increase in NII to $3.6 billion. Credit losses also declined sharply YOY, from $243 million to $167 million.
Despite the strong quarter, investors remain cautious. The stock got a brief post-earnings bump before retreating, and it took an “Oversold” RSI reading to finally halt the decline. For PNC to turn these earnings beats into a sustained rally, overtaking the 200-day SMA will likely be the first step.
Capital One Financial: Insulated From Most Regional HeadwindsShares 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% year-to-date, massively outperforming most regional peers. A key reason is the sizeable moat the bank has built against broader sector trouble.
Capital One reported 23% quarter-over-quarter revenue growth in its Q3 2025 earnings release, with NII of approximately $12.4 billion and net interest margins expanding to 8.3%. Credit losses also came in below expectations as the bank’s consumer- and commercial-lending mix kept it more insulated from CRE and other problem loans.
COF is among the first large-cap regional bank stocks to retake its 50-day SMA this month — a traditionally bullish signal that could mark the start of the next leg of the rally.
Quarterly beats for USB, PNC and COF don't guarantee a sustained sector turnaround, but they do provide a meaningful counterpoint to recent fears. If these improvement trends continue and credit metrics remain stable, regional banks may be on firmer footing heading into 2026. |
