STEELE BANCORP INC (STLE)·Q3 2025 Earnings Summary

Executive Summary

• Q3 2025 headline earnings were dominated by acquisition accounting: net income of $13.68M ($4.77 EPS) included a non-taxable $17.83M bargain purchase gain from the Aug 1 Northumberland merger, partially offset by $3.87M merger expenses and a $4.00M one-time CECL provision on acquired non‑PCD loans .
• Core banking trends improved: net interest income more than doubled (+129% YoY to $9.86M) as NIM expanded to 3.97% (from 3.10%), with yield on earning assets rising ~80 bps to 5.78% while deposit rates edged up modestly (2.27% vs 2.19%) .
• Balance sheet scale-up from the merger: assets reached $1.25B (+110% vs YE’24), loans $900.6M, deposits $1.106B; capital remains “well capitalized” (bank Tier 1 leverage 9.93%) with strong contingent liquidity (FHLB capacity ~$472.4M; Fed DW ~$4.8M) .
• No formal financial guidance or call transcript found; dividend cadence updated post-merger to semi-annual (June/December), continuing a 153‑year dividend tradition and $0.74/share paid through June 2025 .
• Street consensus for EPS/Revenue not available on S&P Global; treat comps vs estimates as NA (S&P Global query returned no consensus values for Q3 2025).

What Went Well and What Went Wrong

• What Went Well

  • Net interest income acceleration and NIM expansion: NII rose to $9.86M (+129% YoY) on merger-driven earning asset growth and higher yields; NIM climbed to 3.97% from 3.10% .
  • Balance sheet and liquidity strength: assets reached $1.25B, deposits $1.106B; ample contingent liquidity via ~$472.4M FHLB capacity and ~$4.8M Fed DW .
  • Dividend policy continuity supporting shareholder return narrative: “Steele Bancorp, Inc. has adopted and will continue the semi-annual June and December dividend payment schedule… which has paid dividends for an exceptional 153 consecutive years” .

• What Went Wrong

  • Quality of earnings skewed by nonrecurring items: $17.83M bargain purchase gain inflated noninterest income; merger-related expenses were $3.87M and one-time CECL build of $4.00M depressed core earnings comparability .
  • Higher operating costs from integration: total noninterest expense rose to $10.92M (+275% YoY), led by salaries/benefits (+$2.53M) and merger costs (+$3.77M) .
  • Modest pressure points in credit/asset quality optics: NPA ratio ticked up to 0.18% (from 0.12% last year) and ACL/loans to 1.06% (from 1.00% YE’24), reflecting acquired portfolio and CECL setup; though coverage remains solid (ACL/NPL ~598%) .

Financial Results

Notes: Q3 2025 included a $17.83M bargain purchase gain (non-taxable) and $3.87M merger expenses; provision included a one-time $4.00M CECL for acquired non‑PCD loans .

Segment/Loan Mix (period-end)

Key KPIs and Balance Sheet

Guidance Changes

Earnings Call Themes & Trends

Note: No Q3 2025 earnings call transcript found.

Management Commentary

• Bargain purchase gain driver: “The exchange ratio and lower than book value stock price of the Company was the primary driver in recording a bargain purchase gain on this transaction.”
• Integration costs: “Merger-related expenses include voluntary severance… termination/conversion of [core] systems and legal and other professional expenses.”
• Liquidity and capacity: “Additional borrowing capacity with the Federal Home Loan Bank of Pittsburgh of $472.4 million and $4.8 million in additional borrowing capacity from the Federal Reserve’s Discount Window.”
• Dividend continuity: “Steele Bancorp, Inc. has adopted and will continue the semi-annual June and December dividend payment schedule… which has paid dividends for an exceptional 153 consecutive years.”

Q&A Highlights

• No Q3 2025 earnings call transcript was available in the document set. As a result, there are no Q&A takeaways or guidance clarifications to report for the period.

Estimates Context

• S&P Global consensus estimates for Q3 2025 EPS and Revenue were not available for STLE at the time of query; treat comps vs consensus as NA (no mean or estimate counts returned). Values retrieved from S&P Global.

Key Takeaways for Investors

• The quarter’s outsized EPS ($4.77) is non-repeatable given the $17.83M non-taxable bargain purchase gain; adjust models to strip this out to assess core earnings power .
• Core banking momentum is constructive: NIM to 3.97% with yield expansion outpacing modest deposit rate increases (2.27%); watch for sustainability as rate paths evolve .
• Integration costs and CECL build largely front-loaded: $3.87M merger expense and $4.00M one-time reserve on acquired non‑PCD loans weighted Q3; expect expense normalization and reserve accretion dynamics in forward periods .
• Balance sheet scale and funding base improved materially post-merger (deposits $1.106B, loans $900.6M), with strong contingent liquidity and “well capitalized” status supporting growth and risk management .
• Asset quality stable-to-sound despite optics: NPA ratio 0.18% and ACL/NPL ~598% provide cushion; monitor seasoning of acquired credits through 2026 .
• Securities repositioning and CDI amortization ($0.44M in Q3) will influence run-rate noninterest income/expense; model ongoing CDI amortization per schedule ($14.22M remaining) .
• Dividend cadence clarity (semi-annual) and long dividend history reinforce shareholder return narrative; watch for any post-merger dividend level updates in December .

Additional Detail and Cross-References

• Financial statements and full Q3 2025 release: .
• MD&A detail and capital/ratio disclosures: .
• Merger purchase accounting and fair value tables: .
• Liquidity lines and borrowing capacity: .
• Dividend policy update letter: .

Limitations

• No Q3 2025 earnings call transcript or prior-quarter (Q1–Q2 2025) earnings releases were available in the document set; trend analysis focuses on YoY, YE’24 vs Q3’25, and YTD disclosures .