In 2021 and 2022 several Canadian banks expanded into the U.S.A. chiefly TD and BMO.The rewards can be great but there is more risk in another country with it’s own rules and regulations.Equitable Bank has taken a different strategy.First in 2022 it acquired a small western Canadian bank with four main branches called Concentra Bank and secondly it opened up a few new branches in Quebec.And to handle their new operations EQB chose a new board chair. Equality has gradually gotten bigger over the last 5 years and traded at $20 then and now is more than 3 times higher at $68.In fact, EQB has become the 7th largest bank or bigger than Laurentian Bank as well as Canadian Western Bank.It has been slowly and quietly adding to it’s operations. For example, EQB could make another small “tuck-in” acquisition in 2023 as their number of outstanding shares remains quite reasonable.And there are some small banks around like State Street Bank and others that would be accreive to their operation. 
Annual Results
It released it’s 2022 results on May2 and the results were solid.Adjusted revenue was up 22% and e.p.s. up almost 10%.These results contained low loan losses and 2 quarters of results from Concentra Bank.The consolidation of Concentra operations raised operational expenses temporarily.Still annual e.p.s. came in at $9.17 or up almost 10%.While customer growth was up 23% to 308,300 and Assets under Management (AUM) showed a steady incease to $105 billion.And in January they launched their EQB Bank Card which has been well received.Concentra Bank has raised revenues and earnings for the last 2 quarters of 2022 and will do for Q1 of 2023. 
The Next Quarter
This is the first full quarter sunce acquiring Concentra and it had record quarterly earnings.Adjusted net income came in at $102 million or up 10% over Q1 2022.While adjusted diluted e.p.s. was 7% higher than Q1 2022 at $2.62 per share.And the dividend was 6% higher to $.35 per share.Although AUM was only up 2% to $105 billion in this quarter.
The Following Quarter
It is the position of this blog that both Canada and U.S.A are experiencing “a soft landing” of the economy.That means that likely the worst of the bad economic news is over and gradually there will be more and more good news.Recorded e.p.s. for EQB in Q1 was $2.62 and on an annual basis would be about $10 per share even with one disappointing quarter.This is a big jump over the $8.00 annual earnings shown for 2021. It is possible that the acquisition of Concentra diluted earnings temporarily in 2022 and now are bouncing back.But if Q1 is on trend then Q2 could be as high as $2.25-$2.50 per share and annual earnings could be about $10.00 per share. This blog believes that Q2 results are very important and if e.p.s. are $2.60 or greater then annual e.p.s. could be in the range of $10.50 -$11.00.This would mean that the Concentra Bank is more profitable than EQB originally forecasted.And this would put EQB in a good position to pick up another tuck-in acquisition.With this e.p.s. and an industry low P/E/ ratio of 8 times,
plus a small acquisition, this could easily put EQB in the price range of $75-$80 by December,
Dale Mcintyre (M.S.Sc.(Econ) is a freelance writer that pricipally writes business blogs for Zacksinvestmentresearch and MarketBeat. https://www.zacks.com/
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