FB Financial Falls 4.6% as Margin Compression and Higher Expenses Offset Strong Loan Growth
FB Financial (NYSE: FBK) shares fell about 4.6% after the company reported third-quarter 2026 results that showed solid earnings and balance-sheet growth but weaker net interest margin and higher operating expenses.
Net income was $60.2 million, or $1.20 per diluted share, compared with $1.13 in the prior quarter and $0.43 a year earlier. Adjusted EPS was $1.21, up from $1.14 sequentially and $1.07 in the year-ago quarter.
Loan growth remained strong. Loans held for investment reached $13.18 billion, representing 9.7% annualized growth from the previous quarter and 7.2% growth year over year. Deposits rose to $14.67 billion, up 8.8% annualized from the second quarter and 6.2% from a year earlier.
The main pressure point was net interest margin, which declined to 3.83% from 3.95% in both the prior quarter and the year-ago period. Management said higher funding costs outpaced earning-asset yields, while a $1 million reversal of previously accrued interest on a nonaccrual loan reduced margin by about 3 basis points.
Operating leverage also weakened. Noninterest expense increased to $96.0 million from $91.5 million in the prior quarter, while the efficiency ratio rose to 55.0% from 52.3%. Adjusted expenses also increased, reflecting continued investment in growth initiatives. Mortgage banking income declined to $9.4 million from $11.2 million sequentially and $13.5 million a year earlier.
Credit quality remained generally stable, with annualized net charge-offs of just 0.04%. However, nonperforming loans increased to 1.18% of total loans from 0.94% a year earlier.
The 4.6% decline therefore appears to reflect investor concern over margin compression, softer fee income and rising expenses, which are offsetting otherwise healthy loan and deposit growth and solid adjusted profitability.
Albertsons Rises 2.3% as Turnaround Plan Overshadows Weak Q2 Profitability
Albertsons Companies (NYSE: ACI) shares rose about 2.3% after the grocer reported second-quarter fiscal 2026 results and announced a broader business review aimed at accelerating its turnaround and reducing costs.
Quarterly revenue was nearly flat at $18.89 billion, while identical sales declined 0.8%. Digital remained a bright spot, with sales rising 11%, while pharmacy also continued to grow despite Inflation Reduction Act-related pressure.
Profitability weakened. Net income fell to $51.5 million, or $0.11 per share, from $168.5 million, or $0.30 per share, a year earlier. Adjusted EPS declined to $0.36 from $0.44, while adjusted EBITDA fell to $784 million from $848.4 million.
Margins also came under pressure. Gross margin declined to 26.8% from 27.0%, partly due to higher digital delivery costs and shrink, while selling and administrative expenses rose as a percentage of revenue because of weaker identical sales.
The more important catalyst appears to be management’s accelerated turnaround effort. Albertsons said it is conducting a comprehensive review of its customer strategy, cost structure, operating model, banner portfolio, market assets, businesses and capital allocation priorities. This follows the launch of ACI Edge, which consolidated 11 divisions into four regions and centralized center-store merchandising.
However, the company also withdrew its fiscal 2026 outlook and said it will not provide updated guidance until the business review is completed during the fourth quarter. A refreshed short- and long-term financial framework is expected alongside the turnaround plan, with an investor day planned for spring 2027.
The 2.3% gain suggests investors are looking past the weak quarter and focusing instead on the potential for deeper cost reductions, portfolio changes and improved execution under the new turnaround program.
Domino’s Pizza (NASDAQ: DPZ) shares fell about 3.4% after the company reported third-quarter 2026 results that showed solid earnings growth but only modest same-store sales gains in both the U.S. and international markets.
Global retail sales increased 3.2% excluding foreign currency effects, while U.S. same-store sales rose just 0.3%. International same-store sales increased 0.2% excluding currency impact. The company added 175 net stores globally during the quarter, including 26 in the U.S. and 149 internationally.
Revenue increased 3.4% year over year, driven mainly by higher supply chain revenue and franchise royalty revenue. Supply chain gross margin improved by 0.9 percentage points, helped by procurement productivity.
Profitability was stronger. Income from operations increased 8.3%, net income rose 9.2%, and diluted EPS climbed 12.7% to $4.60 from $4.08 a year earlier.
Cash generation was softer, however. Free cash flow for the first three fiscal quarters declined to $459.8 million from $495.6 million a year earlier, reflecting the timing of advertising payments and changes in operating assets and liabilities.
Domino’s also continued returning capital to shareholders, repurchasing $73.6 million of stock during the quarter and declaring a quarterly dividend of $1.99 per share.
The 3.4% decline in the stock appears to reflect investor concern over weak same-store sales momentum and lower free cash flow, which are overshadowing the company’s stronger earnings growth and improving operating margins.
Citigroup (NYSE: C) shares fell about 1.7% even after the bank reported a strong third quarter, with net income rising to $5.2 billion, or $2.85 per diluted share, from $3.8 billion, or $1.86 per share, a year earlier.
Revenue increased 8% year over year to $23.8 billion from $22.1 billion, supported by growth across Services, Wealth, Markets and Banking. The improvement was partially offset by weaker results in All Other.
Reported EPS increased 53% year over year. Excluding the prior-year goodwill impairment related to Banamex, EPS still rose 27% from $2.24, showing that underlying earnings growth remained solid.
Citigroup said higher revenues and lower expenses drove the increase in net income, although these benefits were partially offset by a higher provision for credit losses.
Capital returns were also significant. The bank returned $4.1 billion to shareholders through common share repurchases and dividends, resulting in an 85% payout ratio. Its CET1 capital ratio stood at 12.8%, while tangible book value per share was $101.59.
The 1.7% decline in the stock appears to reflect investor concern around rising credit provisions and the relatively high payout ratio, which may be tempering enthusiasm around otherwise strong revenue and EPS growth.
Wells Fargo (NYSE: WFC) shares fell about 1% after the bank reported third-quarter 2026 net income of $6.0 billion, or $1.87 per diluted share, up from $5.6 billion, or $1.66 per share, a year earlier.
Revenue increased modestly to $21.87 billion from $21.44 billion, while noninterest expense declined slightly to $13.74 billion. Return on equity improved to 13.8% from 12.8%, and return on tangible common equity rose to 16.3% from 15.2%.
Loan and deposit growth remained strong. Average loans increased 11% year over year to $1.03 trillion, while average deposits rose 11% to $1.48 trillion. Growth was broad-based across Consumer Banking and Lending, Commercial Banking, Corporate and Investment Banking, and Wealth and Investment Management.
Business trends were also solid. Wealth and Investment Management revenue increased 12%, Commercial Banking rose 6%, Consumer Banking and Lending grew 5%, and Corporate and Investment Banking revenue increased 3%. Within CIB, Banking revenue rose 8%, M&A revenue increased 30%, and both equity capital markets and investment-grade underwriting fees climbed 33%. Equities revenue was up 21%.
The main negative was credit costs. Provision for credit losses increased to $1.03 billion from $681 million a year earlier, indicating a more cautious reserve posture despite management saying delinquencies and business losses remain low.
Wells Fargo also returned capital aggressively, repurchasing 28.6 million shares for $2.5 billion during the quarter.
The 1% decline in the stock appears to reflect investor focus on higher credit provisions and a lower CET1 ratio of 10.0% versus 11.0% a year ago, partially offsetting the benefits of stronger earnings, loan growth and improved returns.
Goldman Sachs Rises 1% as Q3 Profit Jumps on Strong Equities and Investment Banking
Goldman Sachs (NYSE: GS) shares rose about 1% after the bank reported strong third-quarter 2026 results, driven by sharp growth in equities and investment banking.
Third-quarter net revenue reached $18.68 billion, up 23% year over year, while net earnings rose to $5.29 billion. Diluted EPS increased to $17.01 from $12.25 a year earlier, and annualized return on equity was 18.7%.
Global Banking & Markets was the main growth engine, with revenue rising 32% to $13.46 billion. Investment banking fees increased 21% to $3.22 billion, supported by stronger advisory activity, IPOs, secondary offerings and investment-grade debt issuance.
Equities was particularly strong, with revenue surging 72% year over year to $6.44 billion. Goldman cited significantly higher revenue in both equities financing and intermediation, including strength in prime financing, portfolio financing and derivatives. FICC revenue was roughly unchanged at $3.47 billion.
Asset & Wealth Management also performed well, with revenue rising 14% to $5.05 billion, helped by higher management fees and incentive fees. Platform Solutions remained a weak spot, with revenue falling 72% to $170 million, largely due to markdowns tied to the Apple Card loan portfolio.
Operating expenses increased 20% to $11.31 billion, reflecting higher transaction-based costs and compensation, although the year-to-date efficiency ratio improved to 59.4% from 62.1%. The firm also returned $4.49 billion to shareholders during the quarter, including $3.0 billion of share repurchases and $1.49 billion of dividends.
The 1% gain in Goldman Sachs shares appears to reflect the strength of its core capital-markets franchise, particularly equities and investment banking, which more than offset higher expenses and weakness in Platform Solutions.
UnitedHealth Slips 0.5% Despite Higher Profitability and Improved Medical Cost Trends
UnitedHealth Group (NYSE: UNH) shares fell about 0.5% even after the company reported stronger third-quarter profitability and improved medical cost performance.
Third-quarter adjusted earnings were $4.69 per share. Revenue came in at $112.7 billion, slightly below the $113.2 billion reported a year earlier, but operating earnings increased sharply to $6.6 billion from $4.3 billion.
A key positive was the medical care ratio, which improved to 88.4% from 89.9% a year ago. UnitedHealth attributed the decline to better medical cost management, benefit design changes, pricing discipline and care delivery improvements. The quarter also benefited from $610 million of favorable prior-period reserve development related to 2026 dates of service.
UnitedHealthcare served 48.3 million consumers and generated $86.3 billion in revenue and $2.8 billion in earnings. Optum reported $66.9 billion in revenue and $3.7 billion in earnings while serving more than 120 million patients and consumers.
Operating efficiency also improved, with the operating cost ratio declining to 12.8% from 13.5% a year earlier. Cash flow from operations totaled $5.1 billion, or 1.2 times net income.
The company updated its full-year 2026 outlook to earnings of at least $19.50 per share and adjusted earnings of at least $20.50 per share.
The modest decline in UnitedHealth shares suggests investors may be focusing on the slight year-over-year revenue contraction and the fact that part of the medical ratio improvement came from favorable reserve development, despite stronger operating earnings and better cost control.
Johnson & Johnson Falls 4.8% Despite Q3 Beat as MedTech Weakness and 2027 EPS Dilution Weigh on Shares
Johnson & Johnson (NYSE: JNJ) shares fell about 4.8% even as the company reported third-quarter operational sales growth of 6%, ahead of analyst expectations, and raised its full-year 2026 guidance.
Innovative Medicine remained the main growth engine, with operational sales up 7.9%. Oncology grew about 17%, while RYBREVANT sales increased 64% and TREMFYA surged 68%. SPRAVATO also delivered 36% growth, highlighting continued momentum across several of J&J’s key pharmaceutical franchises.
The weaker area was MedTech, where operational sales increased just 2.5% and management acknowledged that performance fell short of expectations. J&J specifically pointed to Cardiovascular and Surgery outside the U.S. as areas needing improvement, while ABIOMED continued to face pressure from physician selectivity.
J&J raised its 2026 operational sales growth outlook to 6.7%-7.1%, representing about $100.7 billion at the midpoint. Reported sales are expected to reach roughly $101.2 billion at the midpoint. Adjusted reported EPS guidance was tightened to $11.05-$11.15.
However, investors may be focusing more heavily on the company’s 2027 earnings outlook. Management said the Firefly Bio acquisition and Sail Biomedicines collaboration are expected to reduce full-year 2027 adjusted EPS by a combined $1.36 per share, a meaningful near-term earnings headwind despite their longer-term pipeline potential.
The quarter also included the previously announced $5.5 billion agreement to resolve ovarian talc litigation, subject to participation by at least 95% of remaining claimants. The charge is reflected in third-quarter GAAP results.
The 4.8% decline therefore appears to reflect a combination of softer-than-expected MedTech performance, especially in Cardiovascular and Surgery, and concern over substantial acquisition-related EPS dilution expected in 2027, outweighing the strong pharmaceutical growth and improved 2026 guidance.
JPMorgan Rises 0.4% After Q3 Earnings Show Strong Markets, Banking and Asset Management Growth
JPMorgan Chase (NYSE: JPM) shares rose about 0.4% after the bank reported third-quarter 2026 net income of $15.3 billion, or $5.57 per share. Excluding a significant investment securities loss, net income was $15.8 billion, or $5.75 per share.
Reported revenue reached $50.2 billion, while managed revenue was $50.9 billion. Return on equity was 17% and return on tangible common equity was 20%, rising to 21% excluding the significant item.
The Corporate & Investment Bank was a major growth driver. Investment banking fees increased 14% year over year, while Markets revenue rose 15%. Equity Markets was particularly strong, surging 49%, more than offsetting a 4% decline in Fixed Income Markets.
Consumer & Community Banking also remained resilient, with revenue rising 9%. Debit and credit card sales volume increased 10% year over year, active mobile customers grew 7%, and JPMorgan added more than 650,000 net new checking accounts during the quarter. The Card Services net charge-off rate was 2.91%.
Asset & Wealth Management delivered another strong quarter, with revenue up 14% and assets under management reaching $5.2 trillion, 13% higher than a year earlier. The division recorded $263 billion of client asset net inflows, while average loans increased 20%.
Credit costs totaled $2.7 billion, including $2.2 billion of net charge-offs and a $539 million reserve build. Firmwide average loans increased 10% year over year, while average deposits rose 8%.
The bank also reported a $658 million net investment securities loss in Corporate, reducing EPS by $0.18. JPMorgan returned capital through a $4.4 billion common dividend and $664 million of net share repurchases, though CEO Jamie Dimon said the company reduced buybacks during the quarter to preserve capital for potentially attractive deployment opportunities.
The modest gain in JPMorgan shares appears to reflect another strong operating quarter, particularly in equities, investment banking and asset management, balanced against higher credit costs, lower repurchases and Dimon’s continued caution around sticky inflation, elevated asset prices, rising rates and geopolitical risks.
Wall Street Trades Mixed as U.S. Housing Data Beats Expectations
U.S. stocks traded mixed Tuesday as investors digested stronger-than-expected housing data alongside another increase in weekly private-sector employment.
The S&P 500 slipped 0.07% to 7,801.82, while the Nasdaq Composite fell 0.11% to 27,217.00. The Dow Jones Industrial Average was slightly higher, gaining 0.04% to 51,868.87.
U.S. existing home sales increased to an annualized 3.99 million units in September, above expectations of 3.95 million and up from 3.93 million previously. On a monthly basis, sales rose 1.5%, significantly stronger than the expected 0.8% decline and reversing the previous month’s 3.2% drop.
Separately, ADP’s weekly employment measure showed private payrolls increasing by 24,800, up from 23,800 in the previous reading.
The data points to continued resilience in parts of the U.S. economy, particularly housing and employment. However, the relatively muted equity-market reaction suggests investors remain cautious about how stronger economic activity could influence the Federal Reserve’s interest-rate outlook.
