Atlantic Union released its Q3 earnings, reporting $0.84 per share, just below the Zacks Consensus Estimate of $0.85. This is a slight increase from last year’s $0.83 per share. The report showed a -1.18% earnings surprise, whereas the previous quarter saw a +18.75% surprise, beating the expected $0.80 with $0.95 per share.

The company reported revenues of $375.38 million, slightly missing the Zacks Consensus Estimate by 0.7%. However, this was a big leap from the $221.12 million recorded a year ago. Over the past four quarters, Atlantic Union has exceeded revenue estimates twice.

Atlantic Union’s stock performance has dipped by about 10.2% since the year’s start, compared to the S&P 500’s 13.9% gain. The stock is currently rated as a Zacks Rank #3 (Hold), suggesting it will perform in line with the market for now.

For future quarters, consensus estimates project an EPS of $0.85 on revenues of $381.18 million. The outlook for the Banks – Northeast industry, where Atlantic Union operates, could affect its performance, with the industry ranked in the top 24% by Zacks. Meanwhile, NBT Bancorp, another company in the sector, awaits its Q3 results, predicting earnings of $0.97 per share.

Atlantic Union’s miss on both earnings and revenue reinforces the bearish sentiment we’ve seen in its stock all year. With the stock already down over 10% in 2025 while the broader market is up significantly, this report provides little reason for optimism. This may lead traders to consider buying puts or establishing bear call spreads to capitalize on further potential downside.

The broader economic environment for regional banks helps explain these weak results. With the Federal Reserve holding interest rates around 4.75% for much of the past year, we have seen persistent pressure on bank profits. Recent industry data from the FDIC shows average Net Interest Margins (NIMs) have compressed to 3.10%, making it difficult for banks like AUB to grow earnings.

Furthermore, we must consider the ongoing stress in commercial real estate, a key lending area for regional banks. A Moody’s Analytics report from last week noted that office loan delinquency rates have hit a 15-year high of 8.2%, a risk that weighs heavily on the entire sector. This backdrop makes any sign of weakness, like AUB’s revenue miss, a significant concern for future loan loss provisions.

With the earnings announcement now public, the high implied volatility we saw leading up to the report has likely subsided. This “volatility crush” presents an opportunity for traders who believe the stock will now drift sideways or slowly downward. Selling out-of-the-money covered calls against an existing stock position could be a strategy to generate income in this environment.

Looking back, the memory of the 2023 regional banking crisis makes the market especially sensitive to any negative news from this sector. We saw back then how quickly depositor confidence can shift, punishing stocks of banks that show any sign of trouble. This history suggests traders will remain cautious, potentially keeping a lid on any near-term rally for AUB.

While AUB is struggling, the broader Banks-Northeast industry remains in the top quartile of performers, which points to a divergence. This could suggest a pairs trading strategy, where one might consider a bullish position on a stronger regional peer against a bearish stance on AUB. The upcoming earnings from NBT Bancorp on October 27 will give us a clearer picture of whether AUB’s problems are company-specific or a sign of wider industry weakness.