Oct 27, 2026 earnings call — Profitability improves with broad loan growth
Net income increased to 10.2 million for the quarter, and loans increased approximately 58 million this quarter.
Revenue $0.0B (est $0.0B) · EPS $0.94 (est $0.87)
Key quotes
"Loans increased approximately 58 million for the quarter or 10% annualized and were up 17% over the past year."
"More importantly, excluding that temporary inflated balance, and broker deposits, generated approximately 76 million of core deposit growth."
"We also strengthened our capital during the quarter by issuing $30 million of new subordinated debt and redeeming our existing $22 million issuance."
Analyst Q&A 5
margin, spot rate, and expenses
Q (Matthew Clark · Piper Sandler): He asked for the spot loan margin at quarter end, how you treat temporary deposits, and what beta you manage to. He also asked the adjusted margin in September and the expected operating expense run rate.
A: Management said they exclude temporary deposits and estimated the spot rate at September 30 was around $3.13, up from $30.07 last quarter. They expect to keep beta below 50, hopefully closer to 40. For September margin they would not give a specific number but said normalized margin was probably closer to the low 420s and operating expenses should be flat to slightly up in Q4.
"You know, we are estimating the spot rate at September 30 was around $3.13." — Patrick Timothy Oakes (CFO)
loan pipeline and broker deposits
Q (Gary Tenner · D. A. Davidson): He asked whether fourth-quarter C&I loan growth should follow historical strength and whether broker deposits (about 10 million) will go to zero in Q4 or linger into 2027.
A: Management said there is no reason to expect Q4 will not be a pretty strong quarter and they feel good about the pipeline and recent closings. On broker deposits, the 10 million will mature in the fourth quarter; they may decide to add broker deposits for year-end funding, but the existing broker balances should be gone.
"Well, that 10 million will mature in the fourth quarter." — Patrick Timothy Oakes (CFO)
hiring plans and long-term efficiency
Q (Andrew Terrell · Stephens): He asked for details on recent hires (HOA group, SBA team) and the hiring pipeline. He also asked whether mid- to high-40% efficiency is a reasonable long-term target.
A: Management said the hiring pipeline for the balance of the year will be modest, though they remain opportunistic. They are focused on becoming a preferred SBA lender (realistically in Q1) and expect the HOA team and specialty deposits to make modest impact this year and more impact in 2027. For efficiency, they set a bar around or below 50% and hope to move down slowly as revenue grows and hires are leveraged.
"The hiring pipeline for the balance of the year is going to be pretty modest if we will still always be opportunistic." — Mark D. Mordell (CEO·CHAIR)
new loan yields and margin outlook
Q (Andrew Liesch · Stonex Financial): He asked what the blended new loan yield was during the quarter and whether margin might decline over time as you grow, even with rate hikes.
A: Management said core new loan yield, excluding fees, was about 6.82, in the 6.80s. They said margins will benefit from Fed rate increases but future margin depends on deposit costs and how competitive funding becomes; they hope new initiatives like HOA will reduce deposit cost and help keep margin stable.
"You know, it is more like 6.82 or so." — Patrick Timothy Oakes (CFO)
customer resilience and tax rate
Q (Sim Coffey · Green Capital): He asked how resilient clients are to further rate hikes and whether a point exists that would stall them. He also asked the right tax rate for the year.
A: Management said many clients are seasoned and not highly leveraged, they monitor closely and run sensitivity tests, and they are not currently concerned though thresholds could occur. On tax rate, management said it is lower this year due to BOLI proceeds received in second quarter and they expect it to tick back up next year to mid-28.
"And I think it will tick back up next year to, you know, mid-28." — Patrick Timothy Oakes (CFO)