Oct 29, 2026 earnings call — Core conversion announced and record earnings
Reported record GAAP net income of $12.7 million for the quarter.
Revenue $0.0B (est $0.0B) · EPS $1.58 (est $1.44)
Key quotes
"Looking ahead, we currently anticipate conversion-related expense of approximately $400,000-$500,000 per quarter over the next four quarters as implementation activities progress."
"Non-interest income increased by 21% this quarter to $4 million, primarily attributable to a record $2.8 million of SBA gain on sale income during the quarter."
"The sale resulted in a $2.5 million recovery of amounts previously charged off and contributed to net recoveries of $1.4 million for the quarter."
Analyst Q&A 3
loan payoffs, DDA deposits, one-time margin
Q (Feddie Strickland · Hovde): He asked if loan payoffs/paydowns are slowing and whether that affects loan growth. He also asked why DDA balances moved and whether any one-time loan recovery boosted margin.
A: Management said payoffs have slowed a bit from last year but remain healthy and the origination pipeline is strong to backfill payoffs. They said DDA changes look seasonal and they are not losing customers; they expect DDA balances to continue growing. They confirmed there was nothing in the quarter related to loan recovery affecting interest income.
"We have seen them slow down a bit from last year." — Chris Gruseke (CEO)
deposit sensitivity and SBA pipeline
Q (Mark Shutley · KBW): He asked how to think about deposit beta if the Fed hikes again. He also asked about visibility into the SBA origination pipeline and expectations into 2027.
A: They said they recently increased retail CD rates effective today and are already repricing some deposits. For another 25 basis point increase, they expect to be relatively neutral over the next four quarters and described offsetting items: $1.6 billion of assets repricing immediately, $600 million of loans rolling off at approximately 580 basis points, $600 million of retail CDs repricing roughly 50 basis points higher, about $300 million of indexed deposits, and interest-bearing non-maturity deposits with a beta north of 50%, around 60%-70% on $1.1 billion. On SBA, they said the SBA team has a robust pipeline and they expect the strong origination to continue into 2027 with a few months of visibility.
"But for another 25 basis point increase, we do expect to be relatively neutral over the next four quarters." — Courtney Sacchetti (CFO)
competition, system conversion, hiring and new lines
Q (Steve Moss · Raymond James): He asked how competition is affecting loan spreads. He also asked what benefits, costs, and cost savings the systems conversion will bring into 2027. He asked about hiring and potential new business lines next year.
A: They said competition has tightened spreads but they are satisfied with current origination margins and avoid competing in the lowest-cost broker CRE market. On the conversion, Chris said the big breakage fees are done, and for the next three or four quarters they expect about $400,000-$500,000 for consultants and temporary workers while they complete a big data project that will enable APIs and faster feature builds. They do not see a material impact to OpEx next year, and longer term the conversion should allow more efficiency and scalability. On hiring, they said much recruiting is already done, people are getting seasoned, and they remain open to new business lines that meet safety and economic standards.
"I do not see a material impact to our OpEx next year, Steve." — Chris Gruseke (CEO)