Steele Bancorp Q3 EPS Falls to $1.60 on Tough Merger Comp; Core Margin Expands
STLE has more than doubled off its 52-week low of $23.05.
Summary
Steele Bancorp's Q3 2026 net income fell 60.1% to $5.46 million, but only because Q3 2025 carried a $17.83 million merger bargain-purchase gain. Core net interest income rose 38.1% and the margin expanded to 4.53%.
Key Events · Earnings and Guidance · STLE
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Q3 Net Income Falls 60.1% on Merger Comp
Net income was $5.46 million versus $13.68 million in Q3 2025, and EPS fell to $1.60 from $4.77. The prior-year quarter included a $17.83 million bargain purchase gain from the Northumberland merger.
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Core Margin Expands Sharply
Net interest income rose 38.1% to $13.63 million and the tax-equivalent net interest margin widened to 4.53% from 3.97%, as the cost of funds fell 36 basis points to 2.00%.
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Credit Provision Normalizes
The loan loss provision dropped to $625 thousand from $4.23 million a year earlier; the allowance for credit losses on loans stands at 1.14% of total loans.
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Nonperforming Assets Still Elevated
Nonperforming assets were $7.28 million, or 0.80% of loans plus other real estate owned, versus $1.59 million (0.18%) at September 30, 2025.
Analysis · STLE · Finance
The 60.1% drop in net income looks alarming but is almost entirely a comparison artifact: Q3 2025 included a $17.83 million non-taxable bargain purchase gain from the Northumberland merger plus $3.87 million of merger expenses, neither of which recurred. Underneath, the bank is performing better — net interest income rose 38.1% to $13.63 million and the tax-equivalent net interest margin widened to 4.53% from 3.97%, with the cost of funds down 36 basis points. Credit costs also normalized, with the loan provision falling to $625 thousand from $4.23 million. The real watch items are asset quality and capital: nonperforming assets rose to $7.28 million (0.80% of loans plus OREO) from $1.59 million a year ago, and the bank's leverage ratio of 9.55% is up from 8.56% at year-end 2025 but still modest for a $1.28 billion balance sheet.
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At the time of this filing, STLE was trading at $47.99 on OTC in the Finance sector, with a market capitalization of approximately $163.4M. The 52-week trading range was $23.05 to $47.99. This filing was assessed with neutral market sentiment and an importance score of 7 out of 10.