Regional Lenders to Post Robust Third-Quarter Earnings Amid Healthy Loan Growth, RBC Says

11:09 AM EDT, 10/09/2026 (MT Newswires) -- Regional banks in the US are expected to report solid third-quarter earnings, supported by healthy commercial loan growth and positive operating leverage, RBC Capital Markets said in a client note on Friday. The brokerage remains constructive on the 22 regional lenders in its coverage and expects them to continue to show "fundamental strength" in the third quarter. RBC expects median sequential loan growth of 1.6% across these lenders, above the consensus estimate of 1.3%, though slower than the 2% growth recorded in the second quarter. RBC also forecasts median net interest income growth of 2.7% from the previous quarter. Commercial borrowers have shown resilience in the quarter despite recent macroeconomic uncertainties, while bankers highlighted favorable loan pipelines and production, according to the brokerage. Sustained confidence in the economy, low unemployment and a supportive operating environment also helped generate broad-based loan demand, RBC said. RBC anticipates seasonal loan growth tailwinds in the quarter, with stable overall margin trends as favorable asset repricing and loan remixing offset short-term deposit cost headwinds. The brokerage expects median net interest margins to improve by one basis point sequentially to about 3.48%. Credit quality is expected to remain stable despite higher interest rates, with RBC forecasting a median net charge-off ratio of 0.20% for the third quarter, unchanged sequentially from the second quarter. The brokerage also expects lenders to maintain "solid capital positions," with potential regulatory changes providing additional flexibility. "We see a supportive path for earnings through the remainder of 2026 despite an evolving macro environment," RBC's associate director of US research, Jon Arfstrom, wrote in the note. "We expect fundamentals to continue to strengthen, and we see recent market volatility as an opportunity for investors." In its coverage, RBC sees First Horizon (FHN), Pinnacle Financial Partners (PNFP), UMB Financial (UMBF), Wintrust Financial (WTFC) and Huntington Bancshares (HBAN) as "well-positioned and attractively valued." First Horizon has a "stable earnings profile" with a diverse business mix, while Huntington's recent outlook revision offers a path for improved investor sentiment, according to the brokerage. RBC's constructive outlook contrasts with BofA Securities' more cautious view of regional bank stocks. In a Thursday client note, BofA said shares could continue to "languish" amid macroeconomic challenges, including rising interest rates and volatile oil prices, even as higher rates support lending margins. BofA expects regional banks' third-quarter earnings per share to grow an average of 7.6% year over year, slowing from 15% growth in the second quarter. Price: 23.09, Change: -0.22, Percent Change: -0.97