Oct 15, 2026 earnings call — Merger with Lincoln and record loan growth
Core net income was $29.0 million, or $1.40 per share; loans grew $39 million to $5.44 billion.
Revenue $0.1B (est $0.1B) · EPS $1.30 (est $1.29)
Key quotes
"We closed $379 million in loans at an average rate of 6.9%, up $64 million or 20% from last quarter and up $136 million or 56% from a year ago."
"As you know, on September 3, we announced our agreement to merge Lincoln Bancorp, the holding company of Lincoln Savings Bank, headquartered in Reinbeck, Iowa into Equity."
"Total deposits declined $136 million or 2.2% to $6.17 billion."
Analyst Q&A 6
2027 loan growth and Lincoln runoff
Q (Jeff Rulis · D.A. Davidson): He asked how net loan growth might look in 2027 given strong organic production and potential runoff from Lincoln, and whether rates or elections could change M&A activity.
A: Management said they already modeled expected runoff from Lincoln and disclosed some shrinkage. They expect organic loan growth in 2027 of mid-single digit, saying somewhere between 5% and 7%, and noted rising rates may slow smaller banks from selling while they have several active acquisition conversations.
"So we've -- in some of the modeling and the numbers that we released, Jeff, we reflected some of the runoff that we expect already in Lincoln Savings Bank." — Brad Elliott (CEO·CHAIR)
Drivers of net interest margin next quarter
Q (Brendan Nosal · Hovde Group): He asked for a breakdown of the drivers behind the NIM outlook for the next quarter and how Fed hikes versus rising funding costs affect the margin, plus sensitivity to each rate hike.
A: Management said excess liquidity cost about 7-ish basis points of NIM this period and that normalizing liquidity gives a 4.27% margin. They said the Fed move adds about 10 basis points to loan yields, which should outpace deposit cost moves, and that each 25 basis point rate hike adds between 3 and 5 basis points to margin.
"On the current period results, if you take in the excess liquidity that we allowed to carry for the period, that's 7-ish basis points of impact to net interest margin that's neutral to net interest income." — Chris Navratil (CFO)
Deposit growth and credit trends
Q (Matt Olney · Stephens): He asked about the incremental cost of new deposit flows they expect, and about credit this quarter given slightly higher charge-offs and high rate risks into 2027.
A: Management said they are optimistic about remixing balances into noninterest-bearing and low-cost commercial and retail deposits and expect seasonal tax inflows in Q4. They added that teams are winning more accounts (about 20% more same-store accounts in the quarter) and are using tools to capture business; on credit, they cleaned up classified assets, commercial customers look positive, and consumer stress is limited.
"One, we're optimistic about continued remixing and opportunity in our noninterest-bearing and low-cost commercial and retail aspects of the business." — Chris Navratil (CFO)
New loan pricing and buyback plans
Q (Nathan Race · Piper Sandler): He asked whether new loan pricing has worsened in larger markets versus rural ones, and about buyback appetite and other capital uses for 2027.
A: Management said average yield on production this quarter was 6.91% and that pricing varies by market with some competitive pressure but they keep ROE in mind. On buybacks, they are blocked from repurchasing due to the S-4 filing but have Board approval for buybacks (authorization for $1 million or 1 million shares) and see organic growth opportunities alongside selective M&A.
"So one thing I'd note again is our average yield on production this quarter was 6.91%." — Richard Sems (CEO)
Combined expenses and readiness for >$10B
Q (Damon Del Monte · KBW): He asked where first-quarter 2027 noninterest expense would start on a combined basis with Lincoln and whether infrastructure is ready to support going over $10 billion.
A: Management would not give line-item expense guidance now but said the expectation on EPS contribution from Lincoln remains $0.27 and they will provide more explicit guidance closer to closing. They also said they have strengthened risk and compliance, hired a Chief Risk Officer and built operating plans, and feel confident they could handle a transaction that would push them past $10 billion.
"The -- what I'll say on noninterest expense and really the culmination of what is Lincoln is the expectation on the EPS side continues to be the $0.27." — Chris Navratil (CFO)
Lincoln's margin impact and 2027 margin risk
Q (Brett Rabatin · StoneX Group): He asked how Lincoln would affect margin in Q4 if it closes in early December, and whether funding new growth in 2027 risks compressing margin if new production yields less than existing book.
A: Management said Lincoln modeled to lower run-rate margin by 8 to 10 basis points, which for a December 1 close equates to about 2 to 3 basis points of Q4 degradation. They added that maintaining or growing margin from current levels will be hard, and while incremental growth could compress margin slightly, they are willing to accept that if it increases NII, EPS and tangible book value.
"So as you think about that on a single month out of three, you're looking at 2 to 3 basis points of degradation based on, call it, a December 1 close." — Chris Navratil (CFO)