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Small Banks' Big Earnings Surprise This Week
13 Oct
Summary
- Equity Bancshares expected to grow earnings 8% YoY.
- Home BancShares projects revenue increase over 5%.
- Both banks offer solid dividend yields and reasonable valuations.
As third-quarter earnings season commences, investors are keenly observing major financial institutions. However, regional banks Equity Bancshares and Home BancShares are also set to report notable year-over-year growth on Wednesday, October 14.
Equity Bancshares, based in Wichita, Kansas, operates Equity Bank across several Midwestern and Southern states. The Zacks Consensus Estimate predicts a 1.31 EPS for Q3, an 8% rise from last year, with revenues projected near $84.83 million, up almost 19%. The bank shows strong recent performance, with Q2 EPS jumping 42% year-over-year. Its growth strategy includes acquisitions and expanded lending.
Home BancShares, headquartered in Conway, Arkansas, operates Centennial Bank with a strong presence in Arkansas and Florida. For Q3, the Zacks Consensus Estimate forecasts 0.64 EPS, a nearly 5% year-over-year increase, and revenue over $293 million, up more than 5%. This outlook is supported by healthy net interest income and recent acquisitions.
Both Equity Bancshares (Zacks Rank #1) and Home BancShares (Zacks Rank #2) offer compelling value. EQBK boasts a 1.88% dividend yield and a 9X forward earnings multiple, while HOMB offers a dividend yield over 3% and trades at an 11X forward earnings multiple, making them attractive for investors seeking regional banking exposure.
