Third Quarter 2026
Filed Oct 14, 2026Third Quarter Results Highlighted by Organic Loan Growth and Announced Merger with Lincoln Bancorp
Net income and core earnings remained strong, with loan growth and fee-income expansion, but net interest income and margin declined sequentially, deposits fell, and nonperforming assets increased.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Total interest and dividend incomeGAAP | $109.0M | – | – |
| Total interest expenseGAAP | $36.13M | – | – |
| Net interest incomeGAAP | $72.84M | down $1.0 million | 16.6% |
| Net interest margin annualizedGAAP | 4.20 % | – | – |
| Provision for credit lossesGAAP | $1.66M | up $353 thousand | – |
| Net interest income after provision for credit lossesGAAP | $71.18M | – | – |
| Total non-interest incomeGAAP | $10.90M | up $2.8 million | – |
| Service charges and feesGAAP | $2.52M | – | – |
| Debit card incomeGAAP | $3.44M | – | – |
| Mortgage banking incomeGAAP | $ 544 | – | – |
| Increase in value of bank-owned life insuranceGAAP | $1.37M | – | – |
| Net gains (losses) from securities transactionsGAAP | $10K | – | – |
| Other non-interest incomeGAAP | $3.02M | – | – |
| Total non-interest expenseGAAP | $48.11M | – | – |
| Salaries and employee benefitsGAAP | $24.03M | – | – |
| Data processing expenseGAAP | $5.47M | – | – |
| Amortization of core deposit intangiblesGAAP | $1.81M | – | – |
| Merger expensesGAAP | $967K | – | – |
| Income before income taxGAAP | $33.97M | – | – |
| Provision for income taxesGAAP | $7.2M | – | – |
| Effective tax rateGAAP | 21.2% | – | – |
| Net income allocable to common stockholdersGAAP | $26.77M | – | – |
| Diluted earnings per shareGAAP | $ 1.29 | – | – |
| Core net income allocable to common stockholdersnon-GAAP | $29.06M | – | – |
| Core earnings per diluted sharenon-GAAP | $ 1.40 | – | – |
| Return on average assets annualizedGAAP | 1.43 % | – | – |
| Return on average equity annualizedGAAP | 12.71 % | – | – |
| Return on average tangible common equity annualizednon-GAAP | 16.10 % | – | – |
| Efficiency rationon-GAAP | 53.99 % | – | – |
| Core non-interest expense to average assetsnon-GAAP | 2.42 % | improved 1 basis point | – |
| Loans held-for-investmentGAAP | 5,444,882 | increasing $39.2 million during the quarter, an annualized increase of 2.9% | – |
| Total assetsGAAP | $7.59B | a decrease of $134.5 million | – |
| Total depositsGAAP | 6,167,428 | down $136.4 million | – |
| Cash and cash equivalentsGAAP | 338,268 | – | – |
| Federal Home Loan Bank advances and Federal Reserve Bank borrowingsGAAP | 389,128 | – | – |
| Subordinated debtGAAP | 98,492 | – | – |
| Total stockholders' equityGAAP | $816.0M | decreased $11.3 million | – |
| Book value per common shareGAAP | $ 39.59 | – | – |
| Tangible book value per common sharenon-GAAP | $ 32.93 | – | – |
| Tangible common equity to tangible assetsnon-GAAP | 9.10 % | up 3 basis points | – |
| Common Equity Tier 1 Capital Ratioother | 12.15 % | – | – |
| Total Risk Based Capital Ratioother | 14.94 % | – | – |
| Tier 1 Leverage Ratioother | 10.18 % | – | – |
| Nonperforming assetsGAAP | $75.39M | – | – |
| Nonperforming assets to total assetsGAAP | 0.99 % | – | – |
| Net charge-offsGAAP | 2,092 | – | – |
| Allowance for credit losses on loans to total loansGAAP | 1.18 % | – | – |
| Allowance for credit losses and discounts on loans to total loansother | 1.65 % | – | – |
Fourth quarter, exclusive of the impact of Lincoln outlook
- Operating expenses$47.0 to $48.0 million
- NoteNet interest margin: 4.25-4.35%
- NoteNon-interest income: between $10.0 and $11.0 million
Capital returns
- The Company announced a 22% increase in our quarterly dividend to $0.22 on outstanding common shares as of September 30, 2026.
- Year to date the Company has repurchased 711,369 shares at a weighted average cost of $44.84.
- As previously announced our repurchase authorization was re-established in September for a total of 1,000,000 shares.
- The dividend payout ratio year to date was 17.3%, within the Company's 10 to 20% target range.
What drove it
- Legacy markets, excluding those acquired through the Frontier and NBC acquisitions, grew at an annualized rate of 11.9%.
- Loan production for the period was $379.3 million, up 20.3% quarter over quarter.
- Growth in interest income of $1.1 million was outpaced by growth in interest expense as deposit costs increased.
- Non-interest income was driven by growth in service charges and fees, treasury services and debit and credit card income along with expansion in trust and wealth management revenue.
- Average earning assets increased $78.0 million driven by investment balances funded by borrowings.
- Loan purchase accounting accretion was $3.3 million in the quarter.
Concerns
- Net interest income declined to $72.8 million from $73.9 million in the previous quarter as cost of funds expanded and earning-asset yield declined.
- Net interest margin declined to 4.20% from 4.36% in the previous quarter.
- Total deposits declined $136.4 million, attributed to rate sensitive time and municipal deposit accounts and seasonal outflows for a few large customers.
- Nonperforming assets increased to $75.4 million, or 0.99% of total assets, from $66.3 million, or 0.86% at prior quarter end.
- The Company continues to estimate the allowance with assumptions reflecting slower prepayment rates and continued disruption from trade policy, elevated inflation, and monetary policy pressures.
- Book capital decreased $11.3 million quarter over quarter, while increasing AOCI as market interest rates moved against the investment portfolio offset positive earnings performance net of dividends.
What to watch
- Whether period-end loan balances that are $50.4 million higher than average balances support management's expected return to a 4.25-4.35% net interest margin in the fourth quarter.
- Deposit pricing competition, deposit-account runoff, and the effect of borrowings used to fund investment balances.
- Credit performance following the increase in nonperforming assets and the $2.1 million of net charge-offs.
- Fourth-quarter non-interest income expected between $10.0 and $11.0 million and non-interest expense expected in the range of $47.0 to $48.0 million, both exclusive of Lincoln.
- Progress of the announced Lincoln Bancorp merger approval process and the eventual effect of Lincoln on reported results.
Balance sheet and cash flow
- Total assets closed the quarter at $7.6 billion, a decrease of $134.5 million which is primarily attributable to cash and cash equivalents.
- Total deposit balances closed the quarter at $6.2 billion, down $136.4 million as compared to the previous period.
- Cash and cash equivalents were 338,268 at September 30, 2026, compared to 546,531 at June 30, 2026.
- Federal Home Loan Bank advances and Federal Reserve Bank borrowings were 389,128 at September 30, 2026, compared to 385,408 at June 30, 2026.
- No operating cash flow or free cash flow was reported.
Analysis
Equity Bancshares reported third-quarter net income allocable to common stockholders of $26.8 million, or $1.29 per diluted share, compared with $26.4 million, or $1.27 per diluted share, in the prior quarter. Core net income was $29.1 million and core earnings per diluted share were $1.40, compared with $29.4 million and $1.41 in the prior quarter. GAAP ROAA was 1.43%, GAAP ROAE was 12.71%, and non-GAAP ROATCE was 16.10%, each modestly below the preceding quarter's reported level.
Organic balance-sheet activity was constructive. Loans held for investment rose $39.2 million during the quarter to $5.4 billion, with legacy markets excluding Frontier and NBC acquisition markets growing at an annualized rate of 11.9%. Loan production reached $379.3 million and was up 20.3% quarter over quarter. However, total deposits ended at $6.2 billion, down $136.4 million from the previous period, reflecting rate-sensitive time and municipal accounts as well as seasonal outflows from a few large customers.
Core spread performance weakened sequentially. Net interest income was $72.8 million, down $1.0 million quarter over quarter despite $1.1 million of interest-income growth, because interest expense increased as deposit costs rose. Net interest margin was 4.20%, below 4.36% in the prior quarter. Management cited investment balances funded by borrowings and an expanding cost of funds, while noting that period-end loan balances were $50.4 million above average balances. It expects a return to a 4.25-4.35% margin in the fourth quarter, absent Lincoln.
Non-interest income improved to $10.9 million from $8.1 million in the prior quarter, supported by service charges and fees, treasury services, debit and credit card income, and trust and wealth-management revenue. Total non-interest expense rose to $48.1 million from $46.9 million, while the non-GAAP efficiency ratio increased to 53.99% from 53.38%. Credit quality warrants attention: nonperforming assets increased to $75.4 million, or 0.99% of total assets, and net charge-offs were $2.1 million. The allowance for credit losses was 1.18% of loans and ACL plus purchase discounts was 1.65%.
Capital remained above the reported regulatory ratios, with CET1 at 12.15%, total risk-based capital at 14.94%, and leverage at 10.18%. Yet book capital fell $11.3 million sequentially to $816.0 million, and tangible book value per share declined to $32.93 from $33.45 as an increasing AOCI position offset earnings net of dividends. The company increased its quarterly dividend 22% to $0.22, repurchased 711,369 shares year to date at a weighted average cost of $44.84, and re-established authorization for 1,000,000 shares. The Lincoln merger approval process is progressing, while fourth-quarter guidance explicitly excludes Lincoln's impact.
Management, verbatim
This quarter our company continued to execute at an exciting level. Earnings were strong, production reached all-time highs and loans grew organically. We are putting teams in place with an aligned mission to deepen and expand customer relationships while providing exceptional service to the communities we serve. The results for the quarter reflect that mission.
Brad S. Elliott, Chairman and CEO of Equity Bancshares
As our teams realized positive operating results in our current footprint, we announced our merger with Lincoln Bancorp, which will add the incredible team members, growing communities and exceptional customers it has been cultivating for 124 years. The approval process is progressing as planned and we look forward to all our teams will accomplish together in 2027 and beyond.
Brad S. Elliott, Chairman and CEO of Equity Bancshares
Not in the filing
stated, not guessed- Previous-period outlook was not provided; therefore no comparison of actual results with prior guidance is available.
- Total revenue was not reported as a distinct line item.
- Gross margin was not reported.
- Operating income was not reported as a distinct line item.
- Operating cash flow was not reported.
- Free cash flow was not reported.
- Management did not provide fourth-quarter revenue, gross-margin, or tax-rate guidance.
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.