Atlantic Union recently released its Q3 earnings, reporting $0.84 per share. This is slightly below the Zacks Consensus Estimate of $0.85 and up from last year’s $0.83 per share. The earnings report showed a -1.18% surprise, while the previous quarter had an impressive +18.75% surprise, exceeding expectations of $0.80 with $0.95 per share. The company reported revenues of $375.38 million, which fell short of the Zacks Consensus Estimate by 0.7%. However, this is a significant jump from $221.12 million a year ago. Over the last four quarters, Atlantic Union has beaten revenue estimates twice. Since the beginning of the year, Atlantic Union’s stock has declined by about 10.2%, while the S&P 500 has gained 13.9%. Currently, the stock holds a Zacks Rank of #3 (Hold), indicating it is expected to perform in line with the market. Looking ahead, analysts predict earnings of $0.85 per share on revenues of $381.18 million for future quarters. The outlook for the Banks – Northeast industry, which includes Atlantic Union, could impact its performance, especially since the industry ranks in the top 24% according to Zacks. Meanwhile, NBT Bancorp, another company in this sector, is anticipating its Q3 earnings of $0.97 per share. Atlantic Union missing its earnings and revenue targets reinforces the negative sentiment surrounding its stock this year. With the stock already down over 10% in 2025 while the broader market is up, this report offers little hope. Traders may consider strategies like buying puts or setting up bear call spreads to take advantage of further declines. The current economic situation for regional banks helps explain these disappointing results. With the Federal Reserve maintaining interest rates around 4.75% for much of the past year, bank profits face continuous pressure. According to recent FDIC data, average Net Interest Margins (NIMs) have fallen to 3.10%, making it challenging for banks like AUB to increase earnings. Additionally, ongoing difficulties in commercial real estate—a key lending area for regional banks—are concerning. A recent report from Moody’s Analytics noted that delinquency rates on office loans have reached an alarming 15-year high of 8.2%, posing risks for the entire sector. This context makes AUB’s revenue miss particularly worrisome for future loan loss provisions. With the earnings report now out, the high implied volatility seen before the announcement is likely reducing. This “volatility crush” can be a chance for traders who expect the stock will hover sideways or slowly decline. Selling out-of-the-money covered calls on existing stock positions could be an income-generating strategy in this atmosphere. Reflecting on the memory of the 2023 regional banking crisis, the market is currently very reactive to negative news from this sector. We’ve seen how quickly depositor confidence can waver, negatively affecting the stock prices of banks that show any signs of trouble. This history suggests traders will remain cautious, potentially limiting any short-term rally for AUB. While AUB faces challenges, the broader Banks-Northeast industry is still performing well, suggesting a divergence. This could indicate a pairs trading strategy, where an investor might take a bullish position on a stronger regional competitor while adopting a bearish stance on AUB. The upcoming earnings from NBT Bancorp on October 27 will provide further insight into whether AUB’s issues are unique to the company or reflective of broader industry challenges.

here to set up a live account on VT Markets now