As the Q3 earnings season wraps, let’s dig into this quarter’s best and worst performers in the regional banks industry, including First Merchants (NASDAQ: FRME) 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 87 regional banks stocks we track reported a softer Q3. As a group, revenues were in line with analysts’ consensus estimates.

In light of this news, share prices of the companies have held steady as they are up 1.4% on average since the latest earnings results.

First Merchants (NASDAQ: FRME)

Dating back to 1893 when it first opened its doors in Indiana, First Merchants (NASDAQ: FRME) is a Midwest regional bank providing commercial, consumer, and wealth management services through branches in Indiana, Ohio, Michigan, and Illinois.

First Merchants reported revenues of $205.3 million, up 19.1% year on year. This print exceeded analysts’ expectations by 0.7%. Despite the top-line beat, it was still a softer quarter for the company with a significant miss of analysts’ net interest income estimates and a miss of analysts’ tangible book value per share estimates.

"First Merchants delivered strong third quarter results. Earnings per diluted share were $1.09, up 11 percent from the third quarter of last year, fully taxable equivalent net interest margin1 rose 6 basis points to 3.44 percent, and deposit growth was solid," said Mark Hardwick, Chief Executive Officer. "We made meaningful progress resolving the two commercial credits identified last quarter, and nonperforming assets remained stable. Our capital position remains very strong and we continue to return capital to shareholders through dividends and share repurchases."

Interestingly, the stock is up 2.1% since reporting and currently trades at $40.82.

Read our full report on First Merchants here, it’s free.

Best Q3: Merchants Bancorp (NASDAQ: MBIN)

With a strategic focus on low-risk, government-backed lending programs, Merchants Bancorp (NASDAQCM:MBIN) is an Indiana-based bank holding company specializing in multi-family mortgage banking, mortgage warehousing, and traditional banking services.

Merchants Bancorp reported revenues of $224.9 million, up 31.5% year on year, outperforming analysts’ expectations by 22.3%. The business had a favorable quarter with a beat of analysts’ EPS estimates and a narrow beat of analysts’ tangible book value per share estimates.

Merchants Bancorp achieved the biggest analyst estimate beat of the whole group. The market seems happy with the results as the stock is up 5.4% since reporting. It currently trades at $51.77.

Is now the time to buy Merchants Bancorp? Access our full analysis of the earnings results here, it’s free.

Weakest Q3: National Bank Holdings (NYSE: NBHC)

Operating under familiar local brands like Community Banks of Colorado, Bank Midwest, and Bank of Jackson Hole, National Bank Holdings (NYSE: NBHC) operates regional banks across Colorado, Kansas, Missouri, Wyoming, Texas, and other western states, offering commercial, business, and consumer banking services.

National Bank Holdings reported revenues of $128.5 million, up 21.8% year on year, falling short of analysts’ expectations by 2.1%. It was an underwhelming quarter as it posted a significant miss of analysts’ net interest income estimates and a significant miss of analysts’ EPS estimates.

As expected, the stock is down 5.3% since the results and currently trades at $36.92.

Read our full analysis of National Bank Holdings’s results here.

Banc of California (NYSE: BANC)

Originally established in 1941 and now operating with a tech-forward approach that includes its SmartStreet platform for homeowner associations, Banc of California (NYSE: BANC) is a California-based bank holding company that provides banking services to small and middle-market businesses, entrepreneurs, and individuals.

Banc of California reported revenues of $307.3 million, up 6.8% year on year. This number beat analysts’ expectations by 0.8%. Aside from that, it was a softer quarter as it produced a miss of analysts’ tangible book value per share estimates and a narrow beat of analysts’ EPS estimates.

The stock is down 1.5% since reporting and currently trades at $17.98.

Read our full, actionable report on Banc of California here, it’s free.

Zions Bancorporation (NASDAQ: ZION)

Founded in 1873 during Utah's pioneer era and named after Mount Zion in the Bible, Zions Bancorporation (NASDAQ: ZION) operates seven regional banks across the Western United States, providing commercial, retail, and wealth management services to over a million customers.

Zions Bancorporation reported revenues of $887 million, up 1.7% year on year. This result missed analysts’ expectations by 1%. It was a softer quarter as it also produced a significant miss of analysts’ tangible book value per share estimates and a slight miss of analysts’ net interest income estimates.

The stock is up 2.6% since reporting and currently trades at $64.76.

Read our full, actionable report on Zions Bancorporation here, it’s free.

Market update

Over the past year, investors have been forced to repeatedly answer the same question: what is the market’s biggest risk? The answer has changed several times, and each shift has reshaped market leadership.

Late in 2025 and early 2026, artificial intelligence became the market’s primary uncertainty. Investors questioned whether AI would erode software pricing power and weaken competitive moats as AI made it easier to replicate once-differentiated products.

By the spring, technology took a back seat to geopolitics. The U.S. conflict with Iran briefly became the market’s dominant narrative, raising concerns about oil prices, inflation, and global growth. But as energy markets remained orderly and fears of a prolonged supply disruption faded, investors quickly turned their focus back to fundamentals.

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