Investment Thesis
EQBK exhibits severely weak profitability with a dangerously low interest coverage ratio of 0.3x, indicating the company cannot adequately service its debt obligations from operating income. The combination of minimal ROA (0.4%), low ROE (3.1%), and thin net margins (6.9%) suggests operational challenges typical of struggling regional banks, despite maintaining positive free cash flow.
Strengths
- Positive operating cash flow of $51.4M provides liquidity buffer
- Free cash flow positive at $38.1M with 11.5% FCF margin
- Moderate debt-to-equity ratio of 0.61x remains manageable
Risks
- Critical interest coverage ratio of 0.3x indicates debt servicing stress
- Extremely low ROA (0.4%) and ROE (3.1%) signal poor operational efficiency
- Operating margin of 8.0% is thin with net margin of 6.9% leaving little room for deterioration
Key Metrics to Watch
- Interest coverage ratio - must improve above 1.0x for financial stability
- Return on assets - target improvement toward industry average of 1.0%+
- Net interest margin trends in competitive banking environment
Financial Metrics
Revenue
330.8M
Net Income
22.7M
EPS (Diluted)
$1.23
Free Cash Flow
38.1M
Total Assets
6.4B
Cash
47.7M
Profitability Ratios
Gross Margin
N/A
Operating Margin
8.0%
Net Margin
6.9%
ROE
3.1%
ROA
0.4%
FCF Margin
11.5%
Balance Sheet & Liquidity
Current Ratio
N/A
Quick Ratio
N/A
Debt/Equity
0.61x
Debt/Assets
88.5%
Interest Coverage
0.25x
Long-term Debt
443.2M
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-03-24T10:44:10.552579 |
Data as of: 2025-12-31 |
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