Equity Bancshares Q3 core EPS rises on loan growth, lifts dividend

Overview

• U.S. regional bank's Q3 core EPS rose yr/yr

• Net interest income declined slightly from prior quarter but rose 16.6% yr/yr

• Company announced 22% increase in quarterly dividend and merger with Lincoln Bancorp

Outlook

• Company expects Q4 net interest margin of 4.25-4.35%, excluding Lincoln impact

• Equity Bancshares forecasts Q4 non-interest income of $10 mln to $11 mln, excluding Lincoln

• Company sees Q4 non-interest expense between $47 mln and $48 mln, excluding Lincoln impact

Result Drivers

• ORGANIC LOAN GROWTH - Co said organic loan growth, particularly in legacy markets, contributed to results

• HIGHER INTEREST EXPENSE - Co said increased deposit costs outpaced growth in interest income, leading to lower net interest income quarter over quarter

• NON-INTEREST INCOME GROWTH - Co said growth in service charges, treasury services, card income and trust/wealth management revenue drove non-interest income higher

Company press release:

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 2 "strong buy" or "buy", 5 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the banks peer group is "buy."

• Wall Street's median 12-month price target for Equity Bancshares Inc is $55.00, about 17.4% above its October 13 closing price of $46.83

• The stock recently traded at 9 times the next 12-month earnings vs. a P/E of 10 three months ago

Reuters Recommended Reads

• Oct 14 - US banks post solid third-quarter loan growth, but face more competition for deposits

• Oct 13 - FB Financial Q3 adjusted EPS beats amid strong annualized loan, deposit growth

• Oct 13 - Wells Fargo beats profit estimates, but net interest income, revenue fall short

For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.

(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)