Don't Overlook These Top Bank Stocks as Q3 Earnings Approach: EQBK, HOMB

With third-quarter earnings season kicking off, investors will be closely watching banking giants such as JPMorgan Chase JPM) and Citigroup C) this week for insights into lending activity, interest margins, and the broader economy.

However, smaller regional banking players Equity Bancshares EQBK) and Home BancShares HOMB) shouldn't be overlooked, as both are expected to deliver notable year-over-year earnings and revenue growth when they report Q3 results on Wednesday, October 14.

Equity Bancshares – EQBK

Headquartered in Wichita, Kansas, Equity Bancshares operates Equity Bank, providing commercial lending, consumer banking, agricultural financing, and wealth-related services across several Midwestern and Southern states.

For Q3, the Zacks Consensus Estimate calls for EPS of $1.31, an 8% YoY increase, with revenue projected to rise nearly 19% to $84.83 million.

Equity Bancshares has demonstrated impressive operating momentum, with Q2 EPS of $1.41 most recently jumping 42% from a year ago and beating expectations of $1.24 by nearly 14%. Its growth strategy, supported by acquisitions, expanding lending operations, and a broader deposit franchise, provides additional opportunities to increase profitability.

Notably, EQBK sports a Zacks Rank #1 (Strong Buy) and further stands out with a 1.88% annual dividend yield and a reasonable 9X forward earnings multiple.

Home BancShares – HOMB

Based in Conway, Arkansas, Home BancShares operates Centennial Bank, offering commercial and consumer banking services, residential mortgages, and real estate financing, with a particularly strong presence in Arkansas and Florida.

Home BancShares is also positioned for another solid quarter, with the Zacks Consensus Estimate calling for Q3 EPS of $0.64, up nearly 5% YoY, and revenue expected to increase over 5% to $293 million.

The company's outlook is supported by healthy net interest income (NII), disciplined expense management, and contributions from its recently completed Mountain Commerce Bancorp acquisition. Encouragingly, Q3 NII is projected to increase more than 7% to $243 million.

HOMB currently sports a Zacks Rank #2 (Buy), reflecting a favorable near-term outlook as it looks to build on its Q2 earnings beat, where quarterly EPS of $0.64 rose 10% YoY and topped expectations of $0.62.

Plus, HOMB trades at a reasonable 11X forward earnings multiple and currently offers a dividend yield over 3%.

Bottom Line

While the big banks will dominate headlines this week, Equity Bancshares and Home BancShares offer compelling exposure to regional banking growth.

With encouraging Q3 expectations, reasonable valuations, and solid dividend yields, EQBK's Zacks Rank #1 (Strong Buy) and HOMB's Zacks Rank #2 (Buy) make both stocks worth watching as their quarterly results approach.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research