Looking back on regional banks stocks’ Q3 earnings, we examine this quarter’s best and worst performers, including Preferred Bank (NASDAQ: PFBC) 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 94 regional banks stocks we track reported a satisfactory Q3. As a group, revenues missed analysts’ consensus estimates by 1.1%.
In light of this news, share prices of the companies have held steady. On average, they are relatively unchanged since the latest earnings results.
Preferred Bank (NASDAQ: PFBC)
Founded in 1991 with a focus on serving the Pacific Rim community in Southern California, Preferred Bank (NASDAQ: PFBC) is a commercial bank that provides banking products and services to small and mid-sized businesses, entrepreneurs, real estate developers, and high net worth individuals.
Preferred Bank reported revenues of $74.98 million, up 3.7% year on year. This print exceeded analysts’ expectations by 3.5%. Overall, it was a very strong quarter for the company with an impressive beat of analysts’ revenue estimates and a solid beat of analysts’ net interest income estimates.
Li Yu, Chairman and CEO, commented, “We are pleased to report a quarterly record for diluted earnings per share of $2.84 for the third quarter of 2025. Net income for the quarter was $35.9 million.
Interestingly, the stock is up 6% since reporting and currently trades at $91.29.
Is now the time to buy Preferred 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 a solid beat of analysts’ net interest income estimates and an impressive beat of analysts’ revenue estimates.
The market seems content with the results as the stock is up 3.1% since reporting. It currently trades at $67.60.
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 18.6% since the results and currently trades at $62.69.
Read our full analysis of The Bancorp’s results here.
German American Bancorp (NASDAQ: GABC)
Founded in 1910 during a wave of community banking expansion in the Midwest, German American Bancorp (NASDAQ: GABC) is a financial holding company that provides banking, wealth management, and insurance services across southern Indiana and Kentucky.
German American Bancorp reported revenues of $94.15 million, up 50.9% year on year. This result topped analysts’ expectations by 3.6%. It was a strong quarter as it also put up an impressive beat of analysts’ tangible book value per share estimates and a solid beat of analysts’ revenue estimates.
The stock is up 1.5% since reporting and currently trades at $39.82.
Read our full, actionable report on German American Bancorp here, it’s free for active Edge members.
City Holding (NASDAQ: CHCO)
With roots dating back to 1957 and a strategic presence along the I-64 and I-81 corridors, City Holding (NASDAQGS:CHCO) operates as a financial holding company providing banking, trust, and investment services through its subsidiary City National Bank across West Virginia, Kentucky, Virginia, and Ohio.
City Holding reported revenues of $81.26 million, up 7% year on year. This print surpassed analysts’ expectations by 2%. Overall, it was a very strong quarter as it also produced an impressive beat of analysts’ tangible book value per share estimates and a beat of analysts’ EPS estimates.
The stock is flat since reporting and currently trades at $120.10.
Read our full, actionable report on City Holding 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.
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