third quarter of 2026
Filed Oct 21, 2026Beacon Financial Corporation announced third-quarter 2026 net income of $61.2 million, or $0.73 per basic and diluted share, and operating earnings after tax of $64.7 million, or $0.77 per basic and diluted share.
Net interest income and net interest margin improved from the second quarter, while operating earnings held at $0.77 per share. Reported net income declined, loans and deposits contracted, and credit costs and nonperforming assets increased, including specific reserves on three larger CRE loans.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net interest income, three months ended September 30, 2026GAAP | $197.2M | increased $3.9 million | – |
| Net interest margin, three months ended September 30, 2026other | 3.85 percent | increased 4 basis points | – |
| Non-interest income, three months ended September 30, 2026GAAP | $26.00M | remained consistent | – |
| Total non-interest expense, three months ended September 30, 2026GAAP | $132.7M | increased $5.4 million | – |
| Total non-interest operating expense, three months ended September 30, 2026GAAP | $127.6M | – | – |
| Merger and restructuring expense, three months ended September 30, 2026GAAP | $5.1M | – | – |
| Provision for credit losses on loans and unfunded commitments, three months ended September 30, 2026GAAP | $8.9M | – | – |
| Provision of credit losses on investments, three months ended September 30, 2026GAAP | $53 | – | – |
| Income before provision for income taxes, three months ended September 30, 2026GAAP | $81.53M | – | – |
| Effective tax rate, three months ended September 30, 2026GAAP | 25.0 percent | – | – |
| Net income, three months ended September 30, 2026GAAP | $61.2M | – | – |
| Basic earnings per common share, three months ended September 30, 2026GAAP | $0.73 | – | – |
| Diluted earnings per common share, three months ended September 30, 2026GAAP | $0.73 | – | – |
| Operating earnings after tax, three months ended September 30, 2026non-GAAP | $64.7M | – | – |
| Operating earnings per common share, basic, three months ended September 30, 2026non-GAAP | $0.77 | – | – |
| Operating earnings per common share, diluted, three months ended September 30, 2026non-GAAP | $0.77 | – | – |
| Return on average assets, annualized, third quarter of 2026GAAP | 1.11 percent | – | – |
| Return on average stockholders' equity, annualized, third quarter of 2026GAAP | 9.55 percent | – | – |
| Return on average tangible stockholders' equity, annualized, third quarter of 2026non-GAAP | 12.02 percent | – | – |
| Efficiency ratio, third quarter of 2026other | 59.46 % | – | – |
| Core efficiency ratio, third quarter of 2026other | 53.54 % | – | – |
| Total assets, September 30, 2026GAAP | $21.9B | decreased $375.4 million | – |
| Total loans and leases, September 30, 2026GAAP | $17.7B | decreased $169.8 million | – |
| Total deposits, September 30, 2026GAAP | $18.18B | decreased $303.3 million | – |
| Average balance total deposits, third quarter of 2026other | +1 percent linked quarter | +1 percent linked quarter | – |
| Total cash and cash equivalents, September 30, 2026GAAP | $771.4M | decreased $444.8 million | – |
| Total investment securities, September 30, 2026GAAP | $2B | increased $195.2 million | – |
| Total borrowed funds, September 30, 2026GAAP | $775.5M | decreased $113.1 million | – |
| Stockholders' equity to total assets, September 30, 2026GAAP | 11.52 percent | – | – |
| Tangible stockholders' equity to tangible assets, September 30, 2026non-GAAP | 9.35 percent | – | – |
| Tangible book value per common share, September 30, 2026non-GAAP | $23.81 | decreased $0.17 | – |
| Net loan and lease charge-offs, third quarter of 2026GAAP | $13.5M | – | – |
| Net loan and lease charge-offs as a percentage of average loans and leases, annualized, third quarter of 2026GAAP | 30 basis points | decreased to 30 basis points | – |
| Allowance for loan and lease losses as a percentage of total loans and leases, September 30, 2026GAAP | 1.32 percent | – | – |
| Nonperforming loans and leases as a percentage of total loans and leases, September 30, 2026GAAP | 0.91 percent | an increase of 0.05 percent | – |
| Total nonperforming assets, September 30, 2026GAAP | $163.1M | increased $7.9 million | – |
| Nonperforming assets as a percentage of total assets, September 30, 2026GAAP | 0.75 percent | – | – |
Amounts quoted below without a unit are in thousands, as in the filing’s tables. Per-share figures are as printed.
Capital returns
- The Board of Directors approved a dividend of $0.3225 per share for the quarter ended September 30, 2026.
- The dividend will be paid on November 20, 2026 to stockholders of record on November 6, 2026.
- The Board of Directors approved an increase to its existing stock repurchase program bringing the total authorization up to $125 million.
- The program, subject to regulatory approval, authorizes repurchases of up to $125 million of shares over 12 months following authorization by regulatory authorities.
What drove it
- Net interest income increased $3.9 million to $197.2 million and net interest margin increased 4 basis points to 3.85 percent from the second quarter.
- Loans and leases declined primarily due to lower commercial real estate, consumer and equipment financing loans, partly offset by higher commercial loans.
- Total deposits declined principally because payroll deposits decreased $326.7 million and customer deposits decreased $120.0 million, partly offset by a $143.4 million increase in brokered deposits.
- Non-interest expense included $5.1 million of restructuring expenses. The remaining increase was primarily driven by commercial loan servicing fees, marketing expense and occupancy expense.
- The Company cited the restructuring of a large ABL transaction and smaller-dollar commercial portfolio charge-offs as primary drivers of net charge-offs.
- The Company said total investor commercial real estate as a percentage of total risk based capital declined to 295 percent, achieving the goal outlined in its initial merger announcement.
Concerns
- The provision for credit losses was $8.9 million, compared with $5.0 million in the second quarter, driven by deterioration in three larger CRE loans requiring specific reserves.
- Nonperforming loans and leases rose to 0.91 percent of total loans and leases from 0.86 percent, while total nonperforming assets increased to $163.1 million from $155.2 million.
- Total loans and leases, total deposits, cash and cash equivalents, and total assets all declined from June 30, 2026.
- Reported net income declined to $61.2 million from $64.4 million, and return on average assets declined to 1.11 percent from 1.17 percent.
- Third-quarter 2025 comparisons are not directly comparable because that period reflected one month of combined Company activity and eight months of legacy Brookline standalone results following the Merger.
What to watch
- Whether net interest margin improvement and the increase in net interest income continue while loan balances remain under pressure.
- The trajectory of the three larger CRE loans, criticized and classified loans, nonperforming assets, provisions and charge-offs.
- Management's execution on stated priorities of expense discipline, stronger core funding, disciplined loan growth, credit vigilance and more diversified fee income.
- Regulatory approval and execution of the repurchase program authorized for up to $125 million.
- The impact of payroll-deposit timing, customer deposit trends, brokered deposits and funding costs on liquidity and deposit mix.
Balance sheet and cash flow
- Total assets decreased $375.4 million during the quarter to $21.9 billion at September 30, 2026.
- Total cash and cash equivalents decreased $444.8 million to $771.4 million from June 30, 2026.
- Total loans and leases decreased $169.8 million to $17.7 billion from June 30, 2026.
- Total investment securities increased $195.2 million to $2.0 billion from June 30, 2026, primarily driven by a $335.5 million purchase during the quarter.
- Total deposits decreased $303.3 million from June 30, 2026.
- Total borrowed funds decreased $113.1 million from June 30, 2026.
- No operating cash flow, investing cash flow, financing cash flow, or free cash flow was reported.
Analysis
Beacon reported third-quarter GAAP net income of $61.2 million, or $0.73 per basic and diluted share, versus $64.4 million, or $0.77 per share, in the second quarter. Non-GAAP operating earnings after tax were $64.7 million, or $0.77 per basic and diluted share, compared with $64.4 million, or $0.77 per share, in the prior quarter. The reported third-quarter 2025 comparison is not directly comparable because it contained one month of combined Company activity and eight months of legacy Brookline standalone results after the September 1, 2025 Merger.
Core spread income improved. Net interest income rose $3.9 million to $197.2 million from $193.2 million, and net interest margin increased 4 basis points to 3.85 percent. Non-interest income was $25,999, essentially unchanged from $25,988. The benefit in net interest income did not translate into higher reported earnings because total non-interest expense increased $5.4 million to $132.7 million, including $5.1 million of restructuring expense. Return on average assets declined to 1.11 percent from 1.17 percent, while the efficiency ratio increased to 59.46 percent from 58.06 percent.
Balance-sheet trends reflected subdued demand and deposit volatility. Total loans and leases decreased $169.8 million to $17.7 billion, led by commercial real estate, consumer and equipment financing loans, while commercial loans increased. Total deposits decreased $303.3 million from June 30, driven by payroll and customer deposit reductions that were partly offset by higher brokered deposits. Cash and cash equivalents decreased $444.8 million to $771.4 million, while investment securities increased $195.2 million to $2.0 billion following a $335.5 million purchase during the quarter. Capital ratios improved, with stockholders' equity to total assets at 11.52 percent and tangible stockholders' equity to tangible assets at 9.35 percent.
Credit results require attention. The provision for credit losses increased to $8.9 million from $5.0 million because three larger CRE loans required specific reserves. Net charge-offs declined to $13.5 million from $14.3 million, but nonperforming loans and leases increased to 0.91 percent of total loans and leases from 0.86 percent and nonperforming assets rose to $163.1 million. The Company cited two of the three larger CRE deals as the principal source of the increase in nonperforming assets.
Capital allocation became more shareholder-focused. The Board approved a quarterly dividend of $0.3225 per share and increased the share-repurchase authorization to $125 million, subject to regulatory approval. Management identified expense discipline, core funding, disciplined loan growth, credit vigilance, more diversified fee income and capital returns as its immediate priorities. The filing did not provide quantitative forward guidance.
Management, verbatim
Our quarterly results reflect improvement in net interest income and net interest margin. My early conversations and feedback from our clients and frontline bankers indicate positive momentum to come. At the same time, continued macroeconomic uncertainty and the higher-rate environment contributed to greater caution amongst borrowers and weighed on our overall loan growth.
Sean Gray, Chief Executive Officer
Our immediate priorities are clear: greater expense discipline, stronger core funding, disciplined loan growth, continued credit vigilance, more diversified fee income and returning capital to shareholders.
Sean Gray, Chief Executive Officer
Not in the filing
stated, not guessed- No total revenue was reported.
- No segment reporting or segment revenue was reported.
- No gross margin was reported.
- No operating cash flow was reported.
- No investing cash flow was reported.
- No financing cash flow was reported.
- No free cash flow was reported.
- No quantitative forward guidance was provided.
- No previous outlook section was provided.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.