Oct 28, 2026 earnings call — Buyback, credit reserves, and margin outlook
Company repurchased approximately $88 million of stock during the quarter at an average price of $21.18.
Revenue $0.1B (est $0.1B) · EPS $0.45 (est $0.46)
Key quotes
"When you drill down further into the watch loans, you know, we are down over $100 million year-to-date."
"The net interest margin increased to 4.11% supported by a decline in deposit cost to 1.67% and the impact of the Fed's latest hike on our variable rate loan portfolio."
"And combined with a new authorization, repurchased approximately $88 million of stock during the quarter at an average price of $21.18."
Analyst Q&A 8
deposit costs, deposit mix, buybacks
Q (Kelly Motta · KBW): They asked how sustainable the lower deposit cost is in a higher-rate environment and what deposit beta to expect. They also asked drivers of strong noninterest-bearing deposit growth, upcoming CD maturities and rates, and details on buyback activity.
A: Management said they target mid single digit loan growth and want deposits to fund that growth, so they expect to pay market rates. They use an outside vendor and are modeling a roughly 25% deposit beta on non-maturity deposits. Management explained the CD mix shift, how most maturing CDs behave, and said the board approved a $25 million buyback tranche and they will be active next week but will not pre-announce timing.
"But that is the estimate we are using, about a 25% deposit beta." — James R. Reske (CFO)
nonperforming loans resolution path
Q (Daniel Tamayo · Raymond James): They asked how management sees the path to resolve the recent rise in NPLs and classified loans. They wanted to know what is driving the reserve increase.
A: Management said three identified credits made up the bulk of this quarter's specific reserves. They noted about 20% of criticized loans come from their Central Pennsylvania entry and they are working those down; there is one larger loan about 10 and probably one over 5 in that criticized bucket.
"We had 3 identified credits that made up the bulk of the reserve." — Thomas Michael Price (CEO)
C&I loan growth and rate impact
Q (Brian Sohocki): They asked whether recent C&I loan growth can continue and how higher rates will affect demand across loan categories. They wanted to know where management is focusing loan growth.
A: Management said they feel they are turning the corner on C&I, with some equipment finance slowdown but traction across regions and a focus on broad-based growth across six lending categories. They said higher rates will dampen demand, especially on commercial real estate, and that modest single-digit loan growth targets remain achievable and allow repricing to help margins.
higher rates’ effect on CRE demand
Q (Michael McCuen): They asked directly about the impact of higher short-term rates on loan demand, especially CRE. They wanted clarity on how much rising rates could hurt financings.
A: Management said rising rates will dampen demand and will be most pronounced on commercial real estate. They explained that a 0.5 to 1.0 point increase can make some projects unfinanceable or make maturing loans much tougher, while they will try to reprice fixed-rate loans and pursue modest loan growth.
"And it will dampen demand particularly on the commercial real estate side." — Thomas Michael Price (CEO)
margin drivers and tax credit impact
Q (Karl Shepard · RBC): He asked what drives the strong margin performance and what could prevent holding it into 2027. He also asked how to think about the tax rate given recent energy tax credit purchases and future timing.
A: Management said rising loan yields, favorable loan and deposit mix, and a granular consumer deposit base are supporting margin, and prior strategic deposit actions helped create optionality to shift to growth. On tax credits, they said credits can be purchased up to 75% of federal tax liability (about 25 million per year for them), so stacking 2026 plus 2023 and 2024 could be about $75 million of credits and would create a lump that lowers the effective tax rate.
"So if you did 2026 and then 2023 and 2024, that is, like, $75 million worth of credit." — James R. Reske (CFO)
NIM sensitivity and deposit promos
Q (Matthew Breese · Stephens): He asked how potential rate hikes would change the NIM outlook, given management’s baseline. He also asked how to reconcile high promo deposit rates in the market with the company’s historical deposit beta and promo activity.
A: Management said their baseline NIM outlook assumed no further hikes and a frozen yield curve; if the Fed cuts as in outside forecasts, NIM could peak earlier and then trail down, but the September hike and ongoing loan repricing help NIM near term. They reiterated they model a historical 25% beta on non-maturity deposits and will include expected promos in their math, and they will respond to competitive promo activity as needed.
"We have had a historical 25% beta, but that is on the non maturity deposits." — James R. Reske (CFO)
top nonperforming loans details
Q (Brian Sohocki): He asked for specifics on the top NPAs: which loans, where they are, asset class, impairment amount, and what loss content or actions exist. He wanted concrete color on the major problem loans.
A: Management said much of the criticized exposure is from the Centric/Central Pennsylvania entry; within that $60 million criticized bucket there is one loan over $10 million and limited impaired dollars, so it is granular beyond the largest loans. For the quarter’s additions, the largest was a $16 million C&I credit and other top nonaccruals included a $5 million Pittsburgh mixed-use and an $11 million existing nonperformer; beyond the top 3–4 loans, balances drop below $5 million and decline quickly.
timeline for provisions, unfunded commitments, growth
Q (Manuel Navas · Piper Sandler): He asked the timeline for charge-offs and provisioning and whether prior guidance of a few quarters of elevated charge-offs still holds. He also asked whether unfunded commitments mean stronger near-term loan growth.
A: Management said they do not give specific quarter-by-quarter reserve guidance but expect to work through the identified credits over the next couple of quarters and manage within typical provision levels. They noted this quarter had their highest provisioning ever and that 3.5 million of it was unfunded construction; Brian said $33.5 million of committed lines are mostly construction and HELOCs and those takedowns typically fund over the next 12 to 18 months, and Thomas said over $100 million of investment real estate construction grew this quarter and will fund over a 12- to 18-month period.
"We do not provide specific guidance to the future quarter reserve and provisioning." — Brian Sohocki