Most US community banks logged lower earnings year over year in the third quarter as operational challenges continued.

Of the 54 banks with $5 billion to $10 billion in total assets that announced third-quarter financial results as of Oct. 27, 35 reported earnings-per-share declines on a year-over-year basis, according to an S&P Global Market Intelligence analysis. Sequentially, 27 of the 54 banks reported EPS declines.

Southside Bancshares Inc. was one of the banks that posted lower earnings both quarter over quarter and year over year. The Tyler, Texas-based company's third-quarter EPS was 60 cents, versus 81 cents in the second quarter and 84 cents in the 2022 third quarter.

The sequential net income decline at Southside Bancshares was because of a recorded $7.0 million provision for credit losses, President and CEO Lee Gibson III said in an earnings release. The increase in provision for credit losses was driven by increased economic and repricing concerns forecast in the company's current expected credit loss model, Gibson said.

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Ithaca, NY-based Tompkins Financial Corp. booked a loss of $2.35 per share, compared with EPS of 59 cents in the linked quarter and $1.48 in the prior-year period. The company's results were negatively affected by the sale of $429.6 million of available-for-sale debt securities for an after-tax loss of $47.5 million.

"During the quarter we elected to proactively reposition the balance sheet, which will improve securities revenue," President and CEO Stephen Romaine said in an earnings release, adding that the company expects the improved revenue to exceed the value of the loss recognized in the third quarter through time.

Nicolet Bankshares Inc.'s EPS was $1.14 in the third quarter, down from $1.51 a quarter ago and $1.29 a year ago. Despite the EPS drop, the Green Bay, Wis.-based company's recent results continue to prove its resilience in the challenging environment, President and CEO Mike Daniels said in an earnings release.

Other banks that posted lower EPS both sequentially and year over year include Indiana, Pa.-based S&T Bancorp Inc.; Defiance, Ohio-based Premier Financial Corp.; and Moline, Ill.-based QCR Holdings Inc.

Banc of California Inc., which is in a pending deal to merge with PacWest Bancorp, reported higher earnings on both quarter-over-quarter and year-over-year bases. Its third-quarter EPS was 74 cents, compared with 31 cents in the previous quarter and 40 cents in the year-ago quarter.

Banc of California's most recent financial results reflects several of the Santa Ana, Calif.-based company's decisions to position its balance sheet ahead of the merger, Chairman, President and CEO Jared Wolff said in an earnings call. Those decisions include limiting certain long-term fixed-rate deposits, resolving certain acquired credits and hedging the interest rate risk associated with the various assets the company anticipates selling in connection with the merger's closing, Wolff said.

Westamerica Bancorp. booked EPS of $1.56, up from $1.51 in the second quarter and $1.29 in the third quarter of 2022. The San Rafael, Calif.-based company reaped benefits from its low-cost deposit base, 48% of which was represented by non-interest-bearing checking accounts, Chairman, President and CEO David Payne said in an earnings release.

Greenwood Village, Colo.-based National Bank Holdings Corp.; Ruston, La.-based Origin Bancorp Inc.; and Coral Gables, Fla.-based Amerant Bancorp Inc. were among the other banks that enjoyed earnings improvement sequentially and year over year.

Byline Bancorp Inc.'s EPS was 65 cents, down from 70 cents a quarter ago but up from 55 cents a year earlier. The third-quarter EPS included the impact of merger-related charges taken in connection with the Chicago-based company's acquisition of Inland Bancorp Inc., Byline Bancorp President Alberto Paracchini said on an earnings call.

Iowa City, Iowa-based MidWestOne Financial Group Inc. recorded EPS of 58 cents, up from 48 cents in the linked quarter but down from $1.17 in the prior-year period. In September, the company announced it would sell its Florida operations and reinvest the proceeds into its proposed acquisition of Denver Bankshares Inc.