Oct 27, 2026 earnings call — HighPoint acquisition and loan growth
Net loan growth of $116.6 million, or 10.5% annualized from 06/30/2026.
Revenue $0.1B (est $0.1B) · EPS $0.92 (est $0.95)
Key quotes
"Integration work is well underway, and we remain on track for the HighPoint system conversion on November 9"
"Excluding HighPoint, commercial loan generation was very strong, as Brad mentioned, $123 million quarterly growth nearly 21% annualized."
"Looking to the fourth quarter, we expect our net interest margin to continue to benefit from asset repricing in the September fed rate increase partially offset by competitive deposit pricing"
Analyst Q&A 4
large nonperforming condo loan
Q (Brendan Nosal · Hovde Group): Analyst asked for an update on the large nonperforming waterfront condo nonaccrual in Western Michigan: the balance, resolution progress, and the specific reserves on the credit.
A: Management said the credit is stuck in the bankruptcy process and the borrower has until 12:31 to file a reorganization plan. The total credit is about $30 million, with roughly $8 million government guaranteed (USDA), leaving a net exposure of about $21 million, and the bank said it feels fully reserved for any potential loss. They also said there is no systemic issue and that a few credits are driving the recent nonaccrual trend.
"The net exposure on that is about $21 million and I do not think that we specifically disclosed the amount that we have reserved, but we feel like we are fully reserved for any potential loss exposure" — Joel F. Rahn
margins, deposit betas, and costs
Q (Adam Kroll · Piper Sandler): Analyst asked how management sees margin moving as they reprice loans and securities and how they think about deposit betas. He also asked for an update on operating expense expectations for Q4 and cost-save cadence into 2027, and asked about potential for more M&A.
A: Management reiterated prior guidance that margins should continue to grind higher quarter-to-quarter assuming no macro shock. They are targeting a cost-of-funds beta in the 35% to 40% range through the cycle. On costs, the conversion closes November 9, much of the expense runs through December 1, they expect about $3 million of additional merger-related costs in Q4, and they remain on target for about a 40% cost save (but did not achieve the 50% 2026 half-year target). Management said organic growth is the primary growth vehicle and they remain open to opportunistic M&A while focused on integration.
"If we if we can manage in that 35% to 40% range through the cycle, Adam, we would be we would be really happy, and that is where we are we are really targeting." — Gavin A. Mohr (CFO)
loan portfolio growth and mortgage fees
Q (Damon DelMonte · KBW): Analyst asked whether any acquired credits will be exited that could slow loan growth, asked for the overall growth outlook, asked about the schedule for fair value accretion, and asked about mortgage pipelines and fee income into year-end.
A: Management said HighPoint's loan portfolio is solid, their underwriting matches IBC's, and they are not planning exits of those loans. They reiterated a target of low double digit commercial loan growth and expect to continue that into 2027. On fair value accretion, the prior number was an estimate from a third-party model and next quarter will show loan-level detail and it can move with prepayment speeds; on mortgages, production slowed late in the quarter when conforming rates went over 7%, and a about $300 thousand negative fair-value mark hit gains on sale when some loans remained on the portfolio, so if rates stay elevated production will come down.
"HighPoint has a really solid loan portfolio, and their underwriting and their risk appetite mirrors ours." — Joel F. Rahn
banker recruiting, margin outlook, buybacks
Q (Peter Winter · D. A. Davidson): Analyst asked about the recruitment pipeline, whether the prior 2–4 basis point per quarter margin outlook should be moved to the higher end given rates, and asked management's thoughts on share buybacks after the acquisition reduced capital ratios.
A: Management said recruiting remains active, focusing mainly on talent from larger organizations and they have ongoing conversations. They said the previous margin forecast still looks reasonable and might move toward the higher end, but they would not change the range today. On capital uses, priorities are supporting organic growth first, then an upward-trending dividend, then considering share repurchases depending on capital and stock price, and maintaining capacity for other merger opportunities; management said they are optimistic about IBC's direction.
"And I would say when I look at where we are today, the current markets, and where we see it going forward, I am very optimistic about the direction for IBC." — William Bradford Kessel (CEO)