EQB Inc. reported third-quarter 2026 adjusted diluted earnings per share of $2.12, missing the $2.24 consensus estimate, as credit provisions rose sharply following the integration of PC Financial’s credit card portfolio. The company’s shares fell 9.86% in after-hours trading to $124.27, down from the prior close of $137.87.
Revenue reached $393 million on an adjusted basis, up 30% quarter-over-quarter and 27% year-over-year, exceeding forecasts. Total revenue, including non-adjusted elements, totaled $425 million. Net interest income rose 22% sequentially and annually to $319 million, while non-interest revenue jumped 77% quarter-over-quarter to $73.9 million on an adjusted basis. Non-interest revenue now accounts for 25% of total revenue, up from 14% in the prior quarter and 12.2% a year earlier.
The PC Financial acquisition, completed on July 1, 2026, added over 4 million customers, $4.5 billion in credit card loans, and more than 90,000 insurance policies. EQB gained access to approximately 4,600 branded locations and $32 billion in annual purchase volumes. Roughly 70% of accountholders are super-prime customers, with an average credit card FICO score of 768 and average credit utilization of 24%.
The integration delivered $15 million in annualized pre-tax synergies in the first month, half of the $30 million target for the two-year period. In its first month, PC Financial contributed $68 million to revenue, $38 million to expenses, and $10 million to adjusted net income. A Day 1 provision for credit losses of $219.1 million was recorded on the acquired credit card portfolio.
Net interest margin expanded to 2.41%, up 33 basis points sequentially and 44 basis points year-over-year, with a 38-basis-point impact from PC Financial credit cards. Total loans under management grew 7% quarter-over-quarter and 12% year-over-year to $82.5 billion. Insured multi-unit residential loans increased 25% year-over-year to $33.3 billion, while uninsured residential mortgages rose 4% to $24.5 billion. Deposits totaled $36.8 billion, up 2% sequentially and 3% annually, with retail direct deposits growing 6% year-over-year to $20.2 billion.
Adjusted non-interest expenses reached $196.8 million, up 32% sequentially and 19% year-over-year. The adjusted efficiency ratio improved by 70 basis points sequentially and 330 basis points year-over-year to 50.1%. The allowance for credit losses surged to $485.4 million from $227.9 million in the prior quarter, with the net ACL percentage rising to 0.95% of portfolio loan assets. Excluding the card portfolio impact, the net ACL percentage would have increased by 4 basis points to 0.50%.
Provisions on impaired loans totaled $48.8 million, or 42 basis points, up 24% quarter-over-quarter. The breakdown included $17.0 million for personal residential loans, $24.9 million for commercial loans (excluding equipment financing), $8.4 million for equipment financing, and $35.2 million for performing loans.
EQB’s CET1 ratio declined 20 basis points sequentially to 13.4%, while total capital stood at 16.6%. Risk-weighted assets increased 25% quarter-over-quarter to $25.4 billion. The board raised the quarterly dividend by 3% to $0.63 per share. The company also issued 7.2 million common shares as partial consideration for the PC Financial acquisition.
CEO Chadwick Westlake described the PC Financial acquisition as a "historic inflection point" for EQB and noted that the technology platform integration creates "a structural advantage over institutions many times our size." EQB will host an investor day on December 7, 2026.
