Higher loan loss reserves weigh on earnings
EQB Inc., the parent company of Equitable Bank, reported lower first-quarter earnings compared with a year earlier, as higher provisions for credit losses offset growth in deposits and assets under management.
For the three months ended January 31, 2026, net income totaled $79.5 million, down from $107.7 million in the same period last year. Diluted earnings per share were $2.11, compared with $2.77 a year earlier. Revenue was $306.8 million, down from $322.6 million.
Despite the year-over-year decline in profit, market coverage following the release noted that EQB shares traded modestly higher in early trading, with commentary pointing to expense discipline and adjusted earnings performance even as credit costs increased.
Credit costs were a key factor in the quarter. Provision for credit losses rose to $39.1 million from $18.7 million a year earlier, reflecting higher impaired provisions in the commercial and personal lending portfolios. Non-interest expenses were $158.4 million, compared with $159.3 million in the prior-year quarter.
“While we expect operating environment headwinds to persist through the first half of the year, we delivered strong first quarter performance with meaningful expense improvement and continued strategic investment in high-impact growth areas. Importantly, we also delivered stable margins and maintained our disciplined approach to lending, anchored in our robust risk management framework,” EQB CFO Anilisa Sainani said.
On an adjusted basis, diluted earnings per share were $2.26 and adjusted net income was $85.2 million. Adjusted return on equity was 11.1%.
In its lending portfolio, commercial loans under management increased 19% year over year, while personal lending loans under management declined 2%.
The company’s balance sheet continued to expand. As of January 31, 2026, total assets were $53.1 billion. Deposits increased to $37.5 billion from $34.6 billion a year earlier. Total assets under management and administration reached $142 billion, up 8% year over year. EQ Bank reported 633,000 customers, up 18% from a year earlier, and added 26,000 new retail and business customers during the quarter. EQ Bank deposits totaled $9.94 billion.
“EQB's first quarter reflects the outcome of our refreshed strategic focus and important steps forward to challenge the market, raise the bar in banking and win for Canadians, while progressing toward our ROE objectives. We strengthened execution across our core franchise, expanded loans under management, significantly improved efficiency and maintained prudent credit provisioning,” EQB President and CEO Chadwick Westlake said.
The company also provided an update on its planned acquisition of PC Financial. In January 2026, EQB filed applications with the Office of the Superintendent of Financial Institutions and the Competition Bureau of Canada and established an Integration Management Office to prepare for the transaction.
“In every environment, we must perform and deliver differentiated choice for customers. The opportunity set for Canada's Challenger Bank is tangible and growing because Canadians deserve better options. We are energized to close our agreement to acquire PC Financial, partner with Loblaw Companies and make banking more competitive across Canada with EQ Bank,” Westlake said.
EQB declared a quarterly dividend of $0.59 per common share, payable March 31, 2026, to shareholders of record as of March 13, 2026. During the quarter, the company repurchased 1,066,890 common shares under its Normal Course Issuer Bid and established an Automatic Securities Purchase Plan in January 2026.
Its quarterly earnings call and webcast were scheduled for 10:30 a.m. ET on February 26, 2026.
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