As the craze of earnings season draws to a close, here’s a look back at some of the most exciting (and some less so) results from Q3. Today, we are looking at regional banks stocks, starting with Axos Financial (NYSE: AX).

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 1.4%.

While some regional banks stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 1.2% since the latest earnings results.

Axos Financial (NYSE: AX)

Originally founded as Bank of Internet USA in 1999 before rebranding in 2018, Axos Financial (NYSE: AX) is a diversified financial services company that provides digital banking, securities clearing, and investment advisory solutions to retail and business customers nationwide.

Axos Financial reported revenues of $323.4 million, flat year on year. This print exceeded analysts’ expectations by 1.4%. Overall, it was a satisfactory quarter for the company with a beat of analysts’ EPS estimates but a slight miss of analysts’ tangible book value per share estimates.

“Net interest income increased 15.5% linked quarter annualized due to strong organic loan growth,” stated Greg Garrabrants, President and Chief Executive Officer of Axos.

Unsurprisingly, the stock is down 1.4% since reporting and currently trades at $77.98.

Is now the time to buy Axos 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.

The market seems content with the results as the stock is up 2.4% since reporting. It currently trades at $67.12.

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 $129.6 million, up 3% year on year, falling short of analysts’ expectations by 33.2%. 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 14.8% since the results and currently trades at $65.61.

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

Commerce Bancshares (NASDAQ: CBSH)

Founded in 1865 during the post-Civil War economic boom, Commerce Bancshares (NASDAQGS:CBSH) is a Midwest-focused bank holding company that provides retail, commercial, and wealth management services to individuals and businesses.

Commerce Bancshares reported revenues of $448.9 million, up 5.6% year on year. This print beat analysts’ expectations by 0.5%. Taking a step back, it was a softer quarter as it produced a significant miss of analysts’ EPS estimates and a miss of analysts’ net interest income estimates.

The stock is down 7.2% since reporting and currently trades at $52.63.

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

Texas Capital Bank (NASDAQ: TCBI)

Founded during the Texas banking renaissance of the 1990s with an entrepreneurial spirit, Texas Capital Bancshares (NASDAQ: TCBI) is a financial services firm that provides banking, wealth management, and investment banking services to businesses and individuals across Texas and beyond.

Texas Capital Bank reported revenues of $340.4 million, up 11.6% year on year. This number surpassed analysts’ expectations by 4.1%. Overall, it was an exceptional quarter as it also produced a beat of analysts’ EPS estimates and an impressive beat of analysts’ revenue estimates.

The stock is up 2.4% since reporting and currently trades at $84.09.

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

Market Update

Thanks to the Fed’s rate hikes in 2022 and 2023, inflation has been on a steady path downward, easing back toward that 2% sweet spot. Fortunately (miraculously to some), all this tightening didn’t send the economy tumbling into a recession, so here we are, cautiously celebrating a soft landing. The cherry on top? Recent rate cuts (half a point in September 2024, a quarter in November) have propped up markets, especially after Trump’s November win lit a fire under major indices and sent them to all-time highs. However, there’s still plenty to ponder — tariffs, corporate tax cuts, and what 2025 might hold for the economy.

Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Growth Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

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