Key Highlights

  • Third quarter net interest margins at the five banks spanned 2.47% to 3.80%.
  • 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.

Did regional banks lift profitability in the third quarter of 2026?

All five regional banks released third quarter 2026 results on October 29, 2026, and the shared thread was a wider net interest Margin than a year earlier. Financial Institutions (NASDAQ:FISI) posted 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) posted 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, compared with 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 consistent, and the sections below take each bank in turn.

Financial Institutions: Was EPS held at $0.99 despite record net interest income?

Financial Institutions, the Warsaw, New York Holding Company of Five Star Bank, earned $20.0 million, below $21.2 million in the second quarter and up from $20.5 million a year earlier. Diluted EPS of $0.99 equaled the year-ago number. Its net interest margin was 3.70%, 5 basis points higher than a year earlier.

On the quarter, loans climbed 2.2% to $4.86 billion and deposits rose 3.3% to $5.47 billion. Net charge-offs stood at 0.33% of average loans, compared with 0.11% in the second quarter, and the efficiency ratio came in at 56.84%. During the quarter the company bought back 185,833 shares at an average price of $40.92, and its common Equity Tier 1 ratio was 11.36%.

First Business Financial: Are core deposits of 14.9% growth paying for loan expansion?

First Business Financial posted a net interest margin of 3.80%, the group's best, compared with 3.68% a year earlier. Core deposits climbed $386.8 million, or 14.9%, year over year to $2.979 billion, and loans grew 10.2% to $3.677 billion. Period-end wholesale funding, meanwhile, dropped $103.1 million to $903.3 million.

Non-performing assets reached $40.2 million, or 0.91% of total assets, versus $23.5 million a year earlier, driven largely by a single $22.7 million Commercial Real Estate relationship. Management anticipates the margin will remain above its 3.60% to 3.65% long term target range in the fourth quarter, though it should ease from the third quarter level.

First Internet Bancorp: Does a 2.47% margin support the return to profit?

First Internet Bancorp recorded record Revenue of $43.9 million, 7% higher than in the second quarter, and a net interest margin of 2.47%, which is 8 basis points above the prior quarter and 43 basis points above a year earlier. Adjusted diluted EPS came to $0.57. The year-ago quarter had carried a $27.1 million loss on sale of loans.

Net charge-offs dropped to 0.82% of average loans from 1.77%, yet nonperforming loans increased to 1.63% of total loans once Franchise finance loans were placed on nonaccrual. Deposits rose $321.4 million to $5.2 billion. For the fourth quarter, the company guided diluted EPS to a range of $1.02 to $1.07.

Isabella Bank: Will a 3.71% margin support results during the Grand River deal?

Isabella Bank's net interest income rose to $19.4 million from $16.2 million, and its fully tax equivalent margin reached 3.71%, compared with 3.15% a year ago. Results carried after-tax expenses of $657,000 linked to the proposed Grand River Commerce acquisition. Nine month net income totaled $16.6 million, or $2.24 per share.

Loans were about unchanged at $1.5 billion, while deposits increased $73.0 million, or 4.0%, since year end to $1.9 billion. Every approval needed for the Grand River Acquisition has been received, and closing is expected on November 2, 2026.

PCB Bancorp: What lifted Earnings even as loans declined 3.0%?

PCB Bancorp reported record earnings. Its net interest margin reached 3.35%, compared with 3.28% a year ago, as the cost of interest-bearing deposits dropped to 3.77% from 4.09%. Loans held for Investment decreased $87.2 million, or 3.0%, to $2.84 billion after the bank selectively shrank some large commercial relationships, while deposits grew 5.3% to $3.08 billion.

The bank booked a $705 thousand Reversal of provision for Credit losses. Non-Performing Assets stood at $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 far apart are the five banks on calculated measures?

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

Year over year diluted EPS growth was roughly 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 unchanged at $0.99.

The spread 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 yields an 8.3 percentage point difference (calculated), which matches management's remarks on excess liquidity.

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

Several dated items follow from the reports and form a clear calendar. Isabella Bank expects the Grand River acquisition to close on November 2, 2026. First Business Financial plans to 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 to $1.02 to $1.07 and net interest margin to 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 its efficiency ratio stayed below 57%.