Oct 22, 2026 earnings call — Credit progress and shift to growth
Net income was $24.2 million and criticized and classified loans totaled $648.4 million.
Revenue $0.1B (est $0.1B) · EPS $0.79 (est $0.34)
Key quotes
"Criticized and classified loans declined by 111 million this quarter and are down $448 million or 41% from a year ago."
"Core deposits increased $197 million during this quarter, while brokered deposits declined $348 million And as a result, total deposits declined $151 million, reflecting the continued reduction in brokered funding."
"Noninterest expense increased $3.1 million to $47.1 million salaries and benefits increased $4.9 million, including $1.5 million of accelerated awards, $1.5 million of compensation tied to new hires, and $1.3 million of annual incentives."
Analyst Q&A 7
large multifamily loan and hires
Q (Justin Crowley · Piper Sandler): He asked for more detail on the large multifamily loan, how the bank is protected from future loss, and whether there are specific reserves. He also asked about affordable-housing exposure, watch list trends, buyback thresholds, and recent hires/Baltimore expansion.
A: Management said the actions taken this quarter protect the bank's economic interest and aim to maximize the outcome on that asset. They confirmed there are specific reserves on the loan and said the affordable-housing exposure is largely contained to this one loan while the rest of the multifamily book is mostly market-rate. They noted the watch list improved as net operating income and coverage improved, and said they need criticized/classified levels closer to peers and into "the threes" before having a substantive buyback conversation; the Baltimore hires are strategic and expected to grow the team and production.
"The action we did take, this quarter, protected the economic interest of the bank, and, we believe will maximize the ultimate outcome." — Stephen R. Curley (CEO)
Baltimore expansion and CRE growth
Q (Hovde Group): He asked how large the Baltimore opportunity might be (hundreds of millions or up to billions) and which local counties they will target. He also asked where CRE growth opportunities exist by segment and geography.
A: Management said they see a huge opportunity in Baltimore and will invest at a pace the bank's earnings allow. Evelyn said the bank had prior traction in Baltimore and brought in a team to serve that market with a business plan and growth targets. On CRE growth, they said opportunity is driven by loan officers finding specific deals, and underwriting follows the asset characteristics rather than broad sector targeting.
"So, I mean, 1 of the things that has worked well with Baltimore is we had really nice traction there before we hired the team." — Evelyn Lee
potential losses: multifamily vs office
Q: He asked how to scale potential loss content for multifamily versus what they saw in office — for example 10% or 20% losses. He wanted a sense of eventual loss rates.
A: Eric provided a proxy using recent resolutions: $130 million of criticized and classified resolved this quarter with a $4 million charge-off, roughly a 3% relationship. Ryan said office dislocation was far more substantial and multifamily loss content is not close to office levels. Steve added that multifamily borrowers generally have equity and cash flow options (remargin, refinance, or sale), and buyers exist for well-built, high-occupancy properties.
"I mean, way I look at it is that we had $130 million of resolution of criticized and classified this quarter with a $4 million charge off." — Eric Newell (CFO)
provision outlook and deposit hiring
Q (Stephen Moss · Raymond James): He asked whether reserves/provision expense are likely to stabilize and how management is thinking about future provision. He also asked for an update on deposit-focused hires and timing.
A: Eric said they compare criticized/classified to peers and estimated a peer-level reference of about $275 million, and that given current visibility any loss content would already be in the reserve; he expects provision and charge-offs to be lower next year and will give a tighter range in January. Steve said they are recruiting treasury management and deposit-gathering leaders, expect some hires and results in the fourth quarter, and plan a national business opportunity rollout early next year once they find the right leader.
"if there was any loss content, we would have already put that into the reserve based on that visibility." — Eric Newell (CFO)
timing for criticized reduction and growth path
Q (KBW): He asked how quickly criticized and classified could fall to the indicated target (a "3-handle") and for the path to the average earning asset growth next quarter. He also asked Steve how his confidence in the bank has evolved since joining.
A: They said a reasonable target would be around $400 million of criticized and classified and that could be achievable by around the end of the second quarter in their view. Eric said balance-sheet growth into the fourth quarter will come from production driven by recent hires, a growing CRE pipeline, and reinvesting investment-portfolio cash flows into higher-yielding loans; they also purchased residential assets that moved yields from 2% to 6%. Steve said his confidence has increased since digging into asset quality and he is now more focused on asset and deposit growth.
"So, you know, where we are today, if you saw us with you know, something around $400 million criticized and classified, I think that would be that would be pretty good performance." — Stephen R. Curley (CEO)
stress testing and C&I deposit momentum
Q (Christopher Marinac · Brean Capital): He asked how much of the stress testing of higher rates is already reflected in special mention and substandard balances. He also asked about net new C&I accounts, deposit momentum, and how deposits could move next year.
A: Ryan said they stress-tested 80% to 90% of balances with 25, 50, and 100 basis-point rate shocks and found credits approaching a 1.0 debt service coverage are already in watch/special mention/substandard. Stephen said watch credits did not increase and their early-warning process improved. Evelyn said new primary relationships brought about $50 million of new deposits in 2026 from 25 relationships, the trajectory for new core relationship deposits remains stable, and quarter-to-quarter seasonality can cause variability.
"close to 100% of them are watch special mention or substandard." — Ryan A. Riel
C&I pipeline, loan mix, and NIM drivers
Q (David Chiaverini · Jefferies): He asked about the C&I loan pipeline for Q4 and how loan mix should evolve between C&I and CRE as the turnaround matures. He also asked what could push 2027 NIM to the high versus low end of the 2.70%–3.05% range.
A: Evelyn said the C&I pipeline built in early 2025 and has stayed stable/growing and remains strong. Steve described his long-run target mix as roughly 40% C&I, 40% CRE, and 20% business banking. Eric said NIM drivers include the forward interest-rate curve as of 9/30 (with three hikes priced), reinvesting and remixing the investment portfolio (including about $350 million of roll-off now earning 2%), the loan composition and spreads placed next year, and funding dynamics such as continued use of brokered deposits (about 11%).
"there is about $350 million of roll off of the investment portfolio next year that we will be able to that is earning us currently 2%, and we will be able to be at higher yields next year." — Eric Newell (CFO)