Steele Bancorp, Inc. (OTC: STLE), the parent of Central Penn Bank & Trust, closed at $49.01 on October 23, 2026, a one-year high, after reporting third-quarter 2026 earnings of $1.60 a share. Tim Eriksen of Cedar Creek Partners says Steele Bancorp trades at under 7x its Q3 run-rate cash earnings and calls it the largest bank position in his fund. The price looks low on earnings, but the stock is thinly traded, and deposits and problem assets moved the wrong way in the quarter.
This is journalism and commentary, not investment advice. We hold no position unless stated.
Key facts
- Company: Steele Bancorp, Inc., Mifflinburg, Pennsylvania; 12 offices in Centre, Northumberland, Snyder and Union counties.
- Deal history: formed in its current shape by the August 1, 2025 merger with Northumberland Bancorp.
- Q3 2026: net income $5.46 million, or $1.60 a share; return on assets 1.69%, return on equity 17.15%.
- Margin: net interest margin 4.46% (4.53% tax-equivalent); net interest income up 38.1% to $13.63 million.
- Size: total assets $1.28 billion, loans $911.2 million, about 3.41 million shares.
- Book value: $37.20 a share; tangible book about $33.80 by our math.
- Liquidity of the stock: median daily volume of about 350 shares over the last three months, per Yahoo Finance data.
Is STLE a good bet right now?
The valuation case is simple. At $49.01, Steele Bancorp trades at about 7.7x annualized GAAP earnings, 1.32x book value and 1.45x tangible book, for a market value near $167 million by our math.
The case against is about quality and trading. Nonperforming assets rose to 0.80% from 0.18% a year earlier, and a stock that trades a few hundred shares a day can move sharply on small orders.
Why are investors bullish on Steele Bancorp?
- Merger earnings are showing up. Quarterly EPS has run $1.64, $1.43, $1.54 and $1.60 over the last four quarters, per the company.
- High returns. A 1.69% return on assets is strong for a community bank.
- Funding cost. Cost of funds was 2.00% in Q3, and Eriksen says overall deposit costs fell.
- Non-cash charges. Core deposit intangible amortization was $622,000 in the quarter, which bulls add back to get "cash" earnings.
- Income. Dividends of $0.76 and $0.75 a share were paid in the last year, about a 3.1% yield at $49.01.
Who's making this call and why?
Tim Eriksen is a micro-cap investor who runs Cedar Creek Partners and is also CEO of Solitron Devices. On October 23 he wrote: "Stock is trading at under 7 times Q3 run rate." His math adds $0.18 of intangible amortization to the $1.60 of EPS for $1.78 of cash EPS, or $7.12 a year.
Two notes on that math. The $622,000 of amortization is about $0.18 a share before tax and about $0.15 after tax by our math. At the October 22 close of $47.99 his multiple was 6.7x, and at $49.01 it is 6.9x on his basis or about 7.0x after tax.
This is a repeat call. Eriksen first wrote on March 13, 2026: "I have been building a position in Steele Bancorp $STLE." The stock was $33.25 then.
Track record. In our tracking, Eriksen ranks 2nd on the career scoreboard: 15-6 (a .714 win rate) on 21 calls scored at 180 days against the S&P 500, with an average edge of +21.8 points. His March STLE call beat the index by 25.7 points at 180 days. See the scoreboard.
Other supporters: a search of recent X posts found no other investor making a reasoned case on Steele Bancorp; the other posts relayed the earnings numbers.
Who disagrees?
A small account, Bill R., replied: "Didn't love the sequential decrease in noninterest bearing deposits and the apparent concentration." Eriksen answered that the shift into NOW accounts "is pretty minimal" and that overall deposit costs fell.
The filing supports both sides:
- Deposit mix. Noninterest-bearing deposits fell to $142.0 million on September 30 from $222.9 million on June 30, while NOW deposits rose to $357.4 million from $262.5 million.
- Credit. Nonperforming assets were $7.28 million, or 0.80%, up from 0.18% a year earlier.
- Concentration. The company's own risk list cites large uninsured deposits from certain customers, merger integration and local real estate values.
- Trading. Thin volume means quoted prices may not hold for larger buyers or sellers.
What are the key facts to verify?
- The Q3 2026 earnings release filed with the SEC, also on OTC Markets, for EPS, margin, deposits and credit.
- The company newsroom for the same release.
- Whether Q4 EPS stays near $1.60 once a full year of merger accounting is in the base.
What would prove it right or wrong?
Right: Steele Bancorp keeps quarterly EPS near $1.60 or higher, nonperforming assets stop rising, and the market pays a higher multiple for a bank earning a 1.69% return on assets.
Wrong: problem loans keep climbing, more low-cost deposits leave, or the net interest margin slips from 4.46%, and Steele Bancorp ends up cheap for a reason.
This is journalism and commentary, not investment advice. We hold no position unless stated.
