ES Bancshares, Inc. Announces Third Quarter 2026 Results; Tenth Consecutive Quarter of Growth in Our Book Value Per Share

ES Bancshares delivered higher Q3 earnings, improved margins, and stronger asset quality.

What the company is saying

ES Bancshares, Inc. reports net income of $1.0 million, or $0.14 per diluted share, for Q3 2026, up from $882 thousand, or $0.13 per share, in Q2 2026. The company highlights core deposit growth of $3.5 million since year-end 2025, including a $12.1 million increase in non-interest bearing deposits. Management, led by CEO Phil Guarnieri, emphasizes improved earnings per share, net interest margin, and book value per share, attributing these gains to cost containment and operational efficiencies. The narrative stresses robust capital ratios, with Tier 1 leverage at 10.35% and total capital at 16.87%, both above regulatory well-capitalized thresholds. The company also notes a decrease in nonperforming assets and a stable expense base, with compensation and benefits rising but offset by lower professional fees and marketing costs. The tone is confident, focusing on realized operational improvements and prudent balance sheet management.

What the data suggests

The disclosed figures show a sequential increase in net income to $1.0 million and EPS to $0.14, with net interest income rising by $148 thousand to $4.8 million despite a lower average loan balance. Net interest margin expanded to 3.21% from 3.10% in the prior quarter, driven by reduced interest expense on borrowings. Asset quality improved, as nonperforming assets fell to $4.9 million or 0.83% of assets, and the ratio of nonaccrual loans to loans receivable, net, dropped to 0.95%. Total assets declined by $20.6 million to $596.1 million, and loans receivable decreased by $26.4 million, reflecting strategic reductions in borrowed funds and brokered deposits. Book value per share increased to $7.78, marking ten consecutive quarters of growth. Capital ratios remain strong, with all key metrics well above regulatory minimums. Non-interest expenses held steady at $3.9 million, with a shift in cost structure toward higher compensation and lower professional and marketing expenses. The data supports management's claims of improved profitability, efficiency, and asset quality.

Analysis

The announcement is a standard quarterly financial results release, presenting realised, audited figures for the third quarter of 2026. All key claims are directly supported by disclosed numerical data, including net income, EPS, net interest margin, asset quality, and capital ratios. There are no forward-looking statements or projections; all information pertains to completed periods and realised outcomes. The tone is factual and proportional, with no promotional or exaggerated language. There is no mention of large capital outlays or deferred benefits, and the financial direction is clearly improving based on the period-over-period metrics. The data quality is high, and the narrative is fully aligned with the evidence.

Risk flags

• ●The decline in total assets and loans receivable, down $20.6 million and $26.4 million respectively since year-end 2025, could constrain future interest income if not offset by new loan growth or alternative earning assets. This contraction may signal a more conservative lending posture or competitive pressures in the loan market.
• ●While nonperforming assets and nonaccrual loans have declined, credit quality could deteriorate if economic conditions worsen or if the current trend reverses. The allowance for credit losses stands at 0.98% of gross loans, which may need adjustment if asset quality weakens.
• ●The company terminated its second stock repurchase plan and did not repurchase shares in Q3 2026, which could signal a shift in capital allocation priorities or caution about future capital needs. Investors should monitor for changes in capital management strategy or regulatory capital requirements.

Bottom line

ES Bancshares posted stronger Q3 2026 earnings, with net income and EPS both rising on improved net interest margin and higher non-interest income. Asset quality metrics improved, and capital ratios remain robust, supporting management's narrative of operational efficiency and prudent risk management. However, the reduction in total assets and loans receivable may limit future revenue growth unless offset by new lending or investment opportunities. The stable expense base and cost discipline are positives, but the end of the stock repurchase plan suggests a more cautious approach to capital deployment. Investors should focus on the company's ability to restore loan growth while maintaining asset quality and profitability. The key takeaway is that ES Bancshares is delivering incremental improvements in profitability and efficiency, but sustaining these gains will depend on reversing the trend of shrinking assets.

Announcement summary

(OTCQX:ESBS) ES Bancshares, Inc., the holding company for Empire State Bank, reported net income of $1.0 million, or $0.14 per diluted common share, for the quarter ended September 30, 2026. This compares to net income of $882 thousand, or $0.13 per diluted common share, for the quarter ended June 30, 2026. Core deposits grew by $3.5 million from year end 2025, including a $12.1 million increase in non-interest bearing deposits. The return on average assets for the third quarter of 2026 was 0.65%, while return on average equity was 7.54% and return on average tangible equity was 7.63%. Net interest margin increased to 3.21% for the three months ended September 30, 2026, up from 3.10% in the prior quarter. Net interest income for the third quarter was $4,814 thousand, with non-interest income of $369 thousand. Book value per share at September 30, 2026, was $7.78, and tangible book value per share was $7.69. As of September 30, 2026, total assets were $596.1 million, a decrease of $20.6 million from $616.7 million at December 31, 2025. Loans receivable, net of Allowance for Credit Losses on Loans, totaled $518.2 million, a decrease of $26.4 million or 4.9% from December 31, 2025. Nonperforming assets were $4.9 million or 0.83% of total assets as of September 30, 2026, down from $5.9 million at December 31, 2025. The ratio of nonaccrual loans to loans receivable, net, was 0.95% at September 30, 2026, compared to 1.08% at December 31, 2025. Total liabilities decreased $23.3 million to $542.5 million at September 30, 2026, from $565.8 million at December 31, 2025. The Bank's Tier 1 capital leverage ratio was 10.35%, common equity tier 1 capital ratio was 15.62%, Tier 1 capital ratio was 15.62%, and total capital ratio was 16.87% as of September 30, 2026. No shares were repurchased during the third quarter of 2026, and the second stock repurchase plan was terminated. The company attributed the increase in net income to higher net interest income, partially offset by higher income taxes. Net interest income increased by $148 thousand to $4.8 million for the third quarter, despite a lower average loan balance. The subordinated debt repriced as of July 30, 2026, adjusting quarterly at a margin of 579 basis points over the 3-month SOFR rate. There was a $44 thousand reversal for credit losses in the third quarter. Non-interest income increased by $52 thousand to $369 thousand, mainly due to higher service charges and fees on loans. Non-interest expenses remained at $3.9 million for the third quarter. Compensation and benefits increased by $196 thousand, offset by a $106 thousand decrease in professional fees and a $49 thousand decrease in marketing expenses.

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