Oct 22, 2026 earnings call — Earnings with loan and deposit growth
Net income was $16 million for the third quarter, or $0.77 per diluted share.
Revenue $0.0B (est $0.0B) · EPS $0.77 (est $0.70)
Key quotes
"Despite the continued headwinds of $47 million in early payoffs during the quarter, our loan balances grew by $38 million, or at an annual growth rate of 4.7%."
"During the quarter, we replaced $150 million of brokered CDs bearing a weighted average rate of 3.89%, with $125 million of brokered CDs maturing over the next 9 months with an average rate of 4.08%."
"During the quarter, we repurchased 82,075 shares of treasury stock at an average price of $26.96."
Analyst Q&A 5
Fee income and expense outlook
Q (Brendan Nosal · Hovde Group): He asked if the lease gain was moved from gain on sale into lease revenue and then asked what will drive fee income in coming quarters. He also asked whether expense run rate will stay near $28 million next quarter or revert to prior outlook.
A: They said they separated the gain on sale between mortgage and leasing. They expect fourth-quarter fee income of $9 million to $9.5 million, influenced by holiday interchange and interest rates affecting mortgage, and said Q4 expenses will likely be closer to the $28.7 million to $29.5 million range.
"Yes, we separated out the gain on sale into both the mortgage and the leasing lines." — Ian Whinnem (CFO)
Deposit strength and securities timing
Q (Jeff Rulis · D.A. Davidson): He asked what drove the strong noninterest-bearing deposit quarter and whether the securities repositioning happened in time to help margin in Q3 or if there is a tail into Q4. He also asked about margin trajectory.
A: They said deposits seasonally hit a low at the end of Q2 and then rebounded, helped by investments in treasury management and private banking. The securities repositioning happened toward the end of the quarter so there is a tail, and the subordinated debt reprices December 1 from 3.25% fixed to 3-month SOFR plus 2.19%, which they expect will cost between 5 and 6 basis points quarterly (about a 2-basis-point impact in Q4) with modest further margin upside of roughly 1 to 2 basis points going forward.
"And so that's going to cost us on a quarterly basis between 5 and 6 basis points is what we're anticipating now." — Ian Whinnem (CFO)
Deposit beta, loan growth, expenses
Q (Adam Kroll · Piper Sandler): He asked what deposit beta to expect with more hikes, which loan segments will drive mid-single-digit loan growth and how the pipelines look, and whether there will be significant tech or talent investments in 2027.
A: They said their playbook expects a lag and a beta and that 50% is probably about right, with a lag. For loan growth, they said it's relationship-driven rather than specific segments, pipelines are quite strong though residential may face headwinds, and unfunded construction loans are about $270 million. They also said they will continue revenue-generating investments in colleagues, marketing, and technology into 2027.
"I think 50% is probably about right, with a lag associated with that." — Ian Whinnem (CFO)
Deposit beta and M&A stance
Q (Timothy Switzer · KBW): He asked to repeat the beta and whether it applies to total deposits or only interest-bearing, whether beta rises with more hikes, and for any update on bank M&A interest and criteria.
A: They clarified the beta applies to the interest-bearing side and that they expect about a 50% beta with a lag. They said pricing in markets is mostly rational though some competitors make irrational offers with fine print, and on M&A they have no imminent deals, are talking to people, and will only do deals that are not longer than 3 years or very dilutive and that protect shareholders.
"I think we're anticipating what will work out to be about a 50% beta." — Ian Whinnem (CFO)
Loan demand, sub-debt, and margin impact
Q (Tyler Cacciatori · Stephens): He asked whether higher rates are hurting borrower activity or the pipeline and about roll-on versus roll-off dynamics, then asked if they plan to redeem the subordinated debt in December or prioritize buybacks and growth, and how further hikes affect margin.
A: They said they have not seen much pullback so far, pipelines continue to increase, and single-digit loan growth is achievable; they are pricing 5-year loans in the mid- to high 7s to hold about a 2.75% margin. On the subordinated debt, they said there are currently no plans to redeem or partially pay it down because it still provides useful capital for organic growth or buybacks. They also said each rate hike should give about 1 to 2 basis points of margin expansion per quarter as they remain slightly asset-sensitive.
"As of now, there's no plans to redeem the sub debt nor even do a partial paydown of it." — Ian Whinnem (CFO)