Oct 23, 2026 earnings call — Record quarter, Illinois State acquisition announced
Net income $41.8 million and revenue hit a record $121 million in Q3.
Revenue $0.1B (est $0.1B) · EPS $0.94 (est $0.82)
Key quotes
"We also announced the acquisition of Illinois State Bancorp."
"During the quarter, we repurchased roughly 522 thousand shares of common stock and increased our quarterly cash dividend by 16.7%."
"Deposits grew $168 million or 8.5% annualized to $8 billion."
Analyst Q&A 9
Why deposits grew so strongly
Q (Nathan Race · Piper Sandler): Analyst asked what drove the strong core deposit growth and whether management sees that pace continuing to reduce wholesale funding and help NIM.
A: Management said the quarterly growth annualizes to 8.5% and was actually higher before repaying about $80 million in broker deposits. They said the growth was mainly everyday commercial banking work—adding banking relationships and more interest checking and noninterest balances—and they will continue to prioritize deposit growth.
"If you look at the changes in the balances, it was driven by interest checking, you know, noninterest bearing, obviously, you know, moved higher also, which would certainly help." — Alberto J. Paracchini (PRESIDENT)
Why they bought Illinois State bank
Q (Brendan Nosal · Hovde Group): Analyst asked how the Illinois State deal originated and what the buyer most likes about the transaction. He also asked if there are more M&A targets available in the region.
A: Management said the deal was relationship driven after meeting the owners and that the sellers wanted a stable home for their franchise built over about 40 years. They said the deal strengthens presence in parts of the city, adds customer relationships, and provides core deposits; they also said the M&A pipeline remains active.
"In terms of what it adds, it adds-- you know, it solidifies our market presence in certain parts of the city where we are just not there." — Alberto J. Paracchini (PRESIDENT)
Noninterest income and specific loan problems
Q (Damon Del Monte · KBW): Analyst asked why guidance for noninterest income falls to $14 million–$15 million and whether some Q3 items were one-time. He also asked about the loans that caused the NPA rise.
A: Management said a BOLI income item this quarter was one-time, bringing noninterest income back to normal levels, and that higher fourth-quarter expense reflects year-end accruals, marketing timing, and incentive compensation. On the NPA increase, they named one loan in the solar industry expected to be resolved early next year and another C&I related to distressed card-debt purchasing; both are well reserved.
"So, 1 of them was in the solar industry, and we expect that 1 to hopefully be resolved sometime early next year." — Mark Fucinato
Why some loans were sold
Q (Daniel Tamayo · Raymond James): Analyst asked whether actions to keep the balance sheet under $10 billion will reverse in 2027 and asked for details on the loan sales in 3Q and whether those sales are recurring.
A: Management said they have been conservative on bond purchases to avoid exceeding $10 billion and expect that to change in the first quarter. They also said most of the loan sales were recurring government-guaranteed (SBA) loans, with small C&I participations and SAG residuals sold as well.
"So the bulk of those sales are the government guaranteed loans." — Thomas J. Bell (CFO)
Will CRE slowdown be offset by other loan types?
Q (Brian Martin · Brean Capital): Analyst asked whether potential slowdown in real estate lending would be offset by growth in C&I and other businesses, and how to think about operating leverage into 2027.
A: Management said their CRE concentration is at a low point so they have capacity to grow CRE, but higher longer-term rates could reduce real estate transaction activity next year. They expect growth to come from multiple businesses—C&I, sponsor lending, SBA, and leasing—and said they aim for revenue growth to exceed expense growth to preserve operating leverage.
"In fact, if you if you have tracked kind of our CRE concentration ratio today, we are probably at a at a pretty low point, which means we have ample capacity to grow that category." — Alberto J. Paracchini (PRESIDENT)
Fixed-rate loan maturities and yields
Q (Brandon Rudd · Stephens): Analyst asked whether the $350 million of fixed-rate loan maturities is per quarter and how their yields compare to new originations.
A: Management confirmed the $350 million is for the quarter and includes leasing. They said the rolling-off yield is about 5.15-ish while new originations yield around 7% to 7.25% depending on asset class—roughly a 200 basis point pickup.
"Yes. that is for the quarter. That includes leasing, and the rate is call it, 5.15-ish." — Thomas J. Bell (CFO)
Deposit pricing and expected betas
Q (Kenneth James · Stephens): Analyst asked how deposits are priced—central rate sheet, index-linked, or negotiated—and whether the 40%–50% beta guidance still applies versus prior cycles.
A: Management said they set rates via a weekly pricing committee using standard rack rates and occasional promotions; some products are index-linked for balance management. They said they are planning on the 40 to 50 beta range already disclosed but will defend the deposit base if needed, and acknowledged each cycle behaves differently.
"we are planning on the 40 to 50 that we already disclosed, but we will we will certainly defend our deposit base and our customers." — Thomas J. Bell (CFO)
Are Q4 costs temporary?
Q (Brendan Nosal · Hovde Group): Analyst asked if the $62 million–$64 million Q4 expense guide includes transitory items that could drop out in early 2027, or whether that run rate will persist.
A: Management said the Q4 estimate is for December and they expect costs to come down in the first quarter, but they were not ready to give specific Q1 guidance yet. They said incentive compensation is the main driver of the higher Q4 expense base.
"We expect the cost to come down in the first quarter Not really ready to give guidance there yet, but the incentive comp is driving the higher expense base for Q4 guidance." — Thomas J. Bell (CFO)
Why buybacks were large and loan rate mix
Q (Nathan Race · Piper Sandler): Analyst asked why buybacks were active even with the stock near highs and whether that pace will be a steady part of capital management; he also asked the loan mix between SOFR and prime.
A: Management said capital priorities are: support organic growth first, sustainable dividend increases second, use capital for M&A third, and buybacks as a safety valve; buybacks are evaluated versus other capital uses and not automatic. They also confirmed the loan mix: SOFR 34%, Prime 19%, Other 4%.
"Second, you know, over time and this past quarter, you know, you saw us do that in terms of having you know, be able to do, you know, consistently over time, you know, dividend increases, that are, you know, call it very sustainable." — Alberto J. Paracchini (PRESIDENT)