Key Highlights

  • Net interest margins across the five banks ranged from 2.47% to 3.80% in the third quarter.
  • Diluted EPS ranged from $0.54 to $1.95, and one bank swung to profit from a year-ago loss.
  • Core deposits and total deposits grew at every bank that reported a deposit figure.
  • Loan balances were mixed, with one bank reporting a 3.0% sequential decline.
  • Quarterly dividends ranged from $0.06 to $0.34 per share.

Are regional bank Earnings improving in the third quarter of 2026?

All five regional banks reported third quarter 2026 results on October 29, 2026, and the common thread was a wider net interest Margin than a year earlier. Financial Institutions (NASDAQ:FISI) reported Net Income of $20.0 million, or $0.99 per diluted share, with record net interest income of $54.3 million. First Business Financial Services (NASDAQ:FBIZ) reported record net income available to common shareholders of $16.4 million, or $1.95 per share.

First Internet Bancorp (NASDAQ:INBK) reported net income of $4.8 million, or $0.54 per share, against a $41.6 million loss a year earlier. Isabella Bank (NASDAQ:ISBA) reported record net income of $6.6 million, or $0.86 per share. PCB Bancorp (NASDAQ:PCB) reported net income to common shareholders of $12.1 million, or $0.85 per share.

Credit and Loan trends were less uniform, which the sections below cover bank by bank.

Financial Institutions: Did record net interest income keep EPS flat at $0.99?

Financial Institutions, the Warsaw, New York parent of Five Star Bank, reported net income of $20.0 million, down from $21.2 million in the second quarter and $20.5 million a year earlier. Diluted EPS of $0.99 matched the year-ago figure. Net interest margin was 3.70%, up 5 basis points from a year ago.

Loans grew 2.2% on the quarter to $4.86 billion and deposits grew 3.3% to $5.47 billion. Net charge-offs were 0.33% of average loans, up from 0.11% in the second quarter, and the efficiency ratio was 56.84%. The company repurchased 185,833 shares during the quarter at an average price of $40.92, and its common Equity Tier 1 ratio was 11.36%.

First Business Financial: Is core deposit growth of 14.9% funding the loan book?

First Business Financial reported net interest margin of 3.80%, the highest of the group, against 3.68% a year earlier. Core deposits rose $386.8 million, or 14.9%, from a year earlier to $2.979 billion, while loans rose 10.2% to $3.677 billion. That allowed period-end wholesale funding to fall $103.1 million to $903.3 million.

Non-performing assets were $40.2 million, or 0.91% of total assets, up from $23.5 million a year earlier, mainly from one $22.7 million Commercial Real Estate relationship. Management expects margin to stay above its 3.60% to 3.65% long term target range in the fourth quarter but to moderate from the third quarter level.

First Internet Bancorp: Is the profit rebuild real with a 2.47% margin?

First Internet Bancorp reported record Revenue of $43.9 million, up 7% from the second quarter, and net interest margin of 2.47%, up 8 basis points on the quarter and 43 basis points on the year. Adjusted diluted EPS was $0.57. The year-ago quarter included a $27.1 million loss on sale of loans.

Net charge-offs fell to 0.82% of average loans from 1.77%, though nonperforming loans rose to 1.63% of total loans after Franchise finance loans moved to nonaccrual. Deposits grew $321.4 million to $5.2 billion. The company guided fourth quarter diluted EPS to $1.02 to $1.07.

Isabella Bank: Can a 3.71% margin carry results through the Grand River deal?

Isabella Bank reported net interest income of $19.4 million, up from $16.2 million, and a fully tax equivalent margin of 3.71%, against 3.15% a year ago. Results included after-tax expenses of $657,000 tied to the proposed Grand River Commerce acquisition. Nine month net income was $16.6 million, or $2.24 per share.

Loans were roughly flat at $1.5 billion, while deposits rose $73.0 million, or 4.0%, since year end to $1.9 billion. All approvals for the Grand River Acquisition are in place, and closing is expected on November 2, 2026.

PCB Bancorp: How did earnings rise while loans fell 3.0%?

PCB Bancorp reported record earnings, with net interest margin of 3.35%, up from 3.28% a year ago, as the cost of interest-bearing deposits fell to 3.77% from 4.09%. Loans held-for-investment fell $87.2 million, or 3.0%, to $2.84 billion after the bank selectively reduced certain large commercial relationships, while deposits rose 5.3% to $3.08 billion.

The bank recorded a $705 thousand Reversal of provision for Credit losses. Non-Performing Assets were $12.3 million, or 0.35% of total assets, up from $8.7 million at June 30, 2026, and Book Value per common share was $28.61.

How do the five banks compare on a calculated basis?

Combined third quarter net income across the five banks was $59.9 million (calculated). That mixes bases, because First Business Financial and PCB figures are net income available to common shareholders.

Year over year diluted EPS growth was about 21.1% at Isabella Bank (from $0.71 to $0.86), about 14.7% at First Business Financial (from $1.70 to $1.95) and about 9.0% at PCB Bancorp (from $0.78 to $0.85), all calculated. Financial Institutions was flat at $0.99.

The gap between the highest margin, 3.80% at First Business Financial, and the lowest, 2.47% at First Internet Bancorp, is 1.33 percentage points (calculated). At PCB Bancorp, deposit growth of 5.3% against a 3.0% loan decline gives an 8.3 percentage point difference (calculated), which fits management's comment on excess liquidity.

What to Watch Next: Dividends, a November Closing and Fourth-Quarter Guidance

Several dated items follow from the reports and give the group a clear calendar. Isabella Bank expects to close the Grand River acquisition on November 2, 2026. First Business Financial will pay its $0.34 quarterly Dividend on November 30, 2026 to holders of record on November 12, 2026. PCB Bancorp will pay $0.22 on or about November 20, 2026 to holders of record on November 13, 2026, and its new repurchase program covers up to 700,000 shares through September 22, 2027.

First Internet Bancorp guided fourth quarter EPS of $1.02 to $1.07 and net interest margin of 2.75% to 2.80% on a fully taxable equivalent basis, assuming one more 25 basis point Fed Funds increase in December. Financial Institutions pays $0.32 per share and has said it stayed below a 57% efficiency ratio.