Oct 30, 2026 earnings call — Record earnings driven by loan and deposit growth
EPS grew 6% compared to $1.84 in the second quarter.
Revenue $0.0B (est $0.0B) · EPS $1.95 (est $1.67)
Key quotes
"For the third quarter, total loans were up 10% annualized, marking our 20th consecutive quarter of loan growth."
"Fees in lieu of interest, primarily prepayment fees and asset-based lending fees, declined $468,000 from the second quarter to $2.8 million."
"On the efficiency ratio, our outstanding year-to-date result of 57.87% was helped by Q3 coming in at an impressive 55.12%, which Brian will cover."
Analyst Q&A 5
Loan growth and margin details
Q (Damon DelMonte · KBW): Analyst asked why loan growth looks slower in Q4 and asked for details on the 380 margin number and fees in lieu. He also asked whether expense reinvestments hit Q4 or 2027 and if expenses can stay under $27 million next quarter.
A: Management said the loan pipeline for Q4 is a little softer than prior quarters but not systemic, and one or two large loans could restore expected growth. They explained the 380 reported margin includes 31 basis points of fees in lieu, down from 36 last quarter, and expect the core margin nearer the five-quarter average of 25 basis points with normalized prepayments. They expect a small step-up in expenses in Q4 (including about $300,000 of marketing) and confirmed expenses next quarter could stay under $27 million.
"380 reported this quarter, that includes 31 basis points of the fees in lieu of compared to 36 last quarter, so five basis points less there." — Brian Spielmann
Deposit costs, betas, wealth growth
Q (Nathan Race · Piper Sandler): Analyst asked what incremental cost of deposits looks like now, what deposit beta assumptions are, and whether private wealth growth (low double-digit) is sustainable next year.
A: Management said deposit competition is similar to the past three or four quarters and they have not seen a big shift in deposit costs. They monitor money market funds as a proxy (around 380) and see CDs over four; they plan for an 80% beta on existing business and have historically beaten that. On private wealth, they said low double-digit growth is sustainable based on recent hires and expansion outside Madison into Southeast Wisconsin and Kansas City.
"We plan for an 80% beta on existing business, and we have been better than that over time." — Brian Spielmann
Wisconsin collateral and buybacks
Q (Jeff Rulis · D.A. Davidson): Analyst asked if the Wisconsin land resolution can be piecemeal, how the market will receive those parcels, and housekeeping on SBA exit and buybacks.
A: Management said there are five land parcels; they expect to get control of them about the same time but selling them could happen at the court date or afterward and likely not all at once. They noted they cannot advertise the assets but have seen market interest for the land. They confirmed the SBA exit is fully in Q3 run rates and said they bought back 12,000 shares for about $835,000 in the quarter plus 29,058 shares in October, and have used $2.9 million of the $5 million authorization to date.
"We expect to get control of those at about the same time, and then it's a matter of finding buyers for those parcels." — Dave Seiler (CEO)
Margin trend and loan growth drivers
Q (Brian Martin · Brean Capital): Analyst asked when the elevated margin will trend back to range and what will drive loan growth in 2027, including whether higher rates shift the loan mix.
A: Management said funding-side pressure from rate moves will likely compress the temporary elevated margin, and they expect to give back some of the short-term benefit as core funding grows. For 2027 loan growth they plan to add producers in successful markets and channels (example: asset-based lending, floor plan finance) and highlighted C&I opportunities; specialized segments are about 23% of the portfolio. They plan to keep pursuing positive operating leverage into 2027.
"When I think about that, I look at kind of year-to-date 2026, we are at just over 58% efficiency ratio." — Brian Spielmann
Operating leverage and efficiency targets
Q (Nicholas Holowko · Raymond James): Analyst asked how much operating leverage and return on tangible common equity could improve toward the goal above 15% by 2028 and whether targets might change.
A: Management said continued growth plus positive operating leverage will improve returns, but they are not ready to give a new target yet. They noted the prior strategic goal was to get the efficiency ratio below 60%, which they have achieved and may revisit as they are about halfway through the plan. They said the current five-year plan through 2028 includes achievable positive operating leverage, while acknowledging step-up costs for growth and work on productivity using AI and automation.
"When we did release our last strategic plan, our goal was to get that number below 60%." — Dave Seiler (CEO)