Oct 26, 2026 earnings call — Quarter results: loan growth and margin expansion
GAAP net income was $23.2 million, or $0.71 per share for the quarter.
Revenue $0.1B (est $0.1B) · EPS $0.79 (est $0.74)
Key quotes
"Loans grew a little over 7% annualized, led by the Houston pipeline we talked about last quarter, and deposits grew at a similar pace, which gave us the opportunity to pay down higher cost brokered funding and borrowings."
"Moving on to the margin, our GAAP reported third quarter net interest margin increased 13 basis points linked quarter to 3.86%, while the non-GAAP core net interest margin, excluding purchase accounting accretion, increased 12 basis points from 3.68%-3.80% for the quarter ended September 30th."
"We feel pretty confident that some of those delays in the third quarter will pull through into the fourth quarter and you will start seeing reductions upwards of $15 million in the fourth quarter in those."
Analyst Q&A 6
Loan growth pipeline and Tyler team
Q (Matt Olney · Stephens): He asked for more color on loan pipelines, especially Houston, and asked expectations for the Tyler banker lift-out team.
A: They said the Houston pipeline is beginning to convert into on-the-books production and they expect that to continue. Management expects mid to upper single-digit loan growth in Q4 from the current pipeline and Houston build-out. They said the Tyler team can hit the ground running and should materially grow relationships as they transition their book.
"We do see the Houston pipeline that we have been building beginning to turn into actual on-the-books production, which is exciting, and we believe that will continue." — Jude Melville (CEO·CHAIR)
Drop in fees; SBIC and SSW impact
Q (Feddie Strickland · Hovde Group): He asked what drove the $500,000 step down in other fees and how higher rates and the yield curve might affect SSW and the FIG group.
A: They said there was no single item driving the decline; the fees are somewhat seasonal and lumpy. They called out SBIC income timing and swap revenue as underperformers this quarter but said these items should revert toward normal in Q4. On SSW and FIG, they said SSW focuses client portfolios on cash flow (lower duration risk) and FIG deposits provide cheaper funding versus brokers, helping offset variability.
"I think on the non-interest income side, I think the thing that we felt like that really underperformed expectations, as we mentioned, was the SBIC and the timing of the income from those investments sometimes is a little bit tricky." — Greg Robertson (CFO)
Expense growth and margin outlook
Q (Michael Rose · Raymond James): He asked how to think about expense growth starting in Q4 and into next year given hires and investments, and whether margin can expand further.
A: They said Q4 expense starting point should be about $57 million, then low single-digit organic expense growth over the next year. On margin, they said the reprice from the September 25 basis point hike and asset sensitivity should help, and low-to-mid single-digit quarterly margin expansion is achievable if rate moves are measured and deposit costs are managed.
"I think what we expect in the fourth quarter would be about $57 million as the base case, starting there, and then low single-digit organic growth rate going forward over the next year." — Greg Robertson (CFO)
Loan demand and deposit beta
Q (Gary Tenner · D.A. Davidson): He asked whether higher rates are hurting loan demand or transactions and asked about the deposit beta and whether reducing brokered deposits would lower overall deposit cost.
A: They said demand and the loan pipeline remain strong and the 25 basis point move has not slowed banker activity; recent new deals were around the 7% mark. On deposit beta, they agreed reducing brokered deposits would cause overall deposit cost to rise more slowly than the stated beta, and that is the right way to think about it.
"So far, the rate environment does not look like it has decayed any of the work our bankers have been doing to move those relationships over." — Greg Robertson (CFO)
Dallas market and SpaceX impact
Q (Christopher Marinac · Brean Capital): He asked if Dallas is being de-emphasized and about what SpaceX’s big development means for commercial and residential activity in Louisiana.
A: They said Dallas is not de-emphasized; they recently hired a new market leader and see Dallas as their largest individual market with good opportunity ahead. On SpaceX, they said it is a tremendous opportunity—likely larger than Meta—with commercial benefits appearing sooner and residential benefits over time, and they plan to prioritize new Louisiana branches to capture the benefits.
"When you think about our prioritization of new branches within Louisiana, that's most likely to be our number one priority to make sure that we capture our fair share of the benefits." — Jude Melville (CEO·CHAIR)
NPAs, workouts, and ROAA target
Q (Feddie Strickland · Hovde Group): He asked how to think about workouts and the level of NPAs over the next couple quarters.
A: They said they still expect NPAs to fall in Q4 and that some third-quarter delays should resolve, producing reductions "upwards of $15 million" in the fourth quarter. They expect NPAs and other components to continue improving into next year, targeting an NPL percentage of loans of 50 basis points or less and aiming for a 1.25% ROAA.
"We feel pretty confident that some of those delays in the third quarter will pull through into the fourth quarter and you will start seeing reductions upwards of $15 million in the fourth quarter in those." — Greg Robertson (CFO)