Oct 20, 2026 earnings call — Third quarter results and Eastern Michigan integration
Net income was $24.1 million, or $1.39 per diluted share, for the third quarter of 2026.
Revenue $0.1B (est $0.1B) · EPS $1.42 (est $1.35)
Key quotes
"The net interest margin improved to 3.73 during the third quarter of 2026, from 3.49% during the third quarter of 2025."
"Commercial loans, our largest asset class, increased 9% from the prior year-end and quarter-end and helped drive a 17% increase in revenue compared with the third quarter of 2025."
"We remain excited about our combination with Eastern and the opportunities to add customers and employees to our bank as we capitalize on disruptions to markets in Michigan, particularly Southeast Michigan."
Analyst Q&A 5
Margin, deposit sensitivity, and expense guidance
Q (Nathan Race · Piper Sandler): Analyst asked how 25 basis points of cuts would affect margin next year, whether loan and deposit betas will be similar, and about hiring and expense outlook for 2027.
A: Management said asset repricing is easier to model than non-maturing deposits, which can change with Fed behavior and are hard to predict. They noted deposit growth has come from noninterest checking and money markets, some accounts reprice immediately, and their goal is to keep margin relatively stable and make the bank durable to rate changes. Management also said they will hire opportunistically for long-term benefit and that budgeting for 2027 is just starting, with formal guidance in January.
"So our goal is to make, I will not say bulletproof, but make ourselves very durable in any changing interest rate environment." — Charles E. Christmas (CFO)
Fed cash balances and Michigan hiring plans
Q (Brendan Nosal · Hovde Group): Analyst asked where average cash at the Fed will be in 4Q versus $425 million this quarter, and for a status update and timeline on hiring in Southeast Michigan.
A: Management said they expect average cash at the Fed to fall, likely to the upper 300s in the fourth quarter. On Southeast Michigan, they said the team has grown from a small group to about a half-dozen commercial callers and they expect continued hires over the next year, but timing is hard to predict.
"But I would say it is probably going to be still in the upper 300s." — Charles E. Christmas (CFO)
Noninterest income drivers and loan payoffs
Q (Damon DelMonte · KBW): Analyst asked why noninterest income is projected lower in 4Q (mortgage, swaps, or other) and whether payoff activity has peaked and is visible.
A: They said the expected reduction is driven by mortgage seasonality despite rising mortgage production and by lower swap activity as customers are more hesitant given recent rate moves. On payoffs, management said asset sale payoffs are predictable, but paydowns from excess cash flow have increased and are the hardest to forecast; they noted the loan backlog is at a 5-quarter high.
"So it appears that our customers are a little more hesitant than they have been say, typically in the past to get into the swaps." — Charles E. Christmas (CFO)
Loan vs deposit growth, securities, and charge-offs
Q (Matthew Breese · Stephens): Analyst asked if 4Q loan growth will spill into 2027 and whether deposit growth will outpace loans; also asked timing on securities cash flows and whether fourth-quarter charge-offs are deliberate.
A: Management expects originations could carry into 2027 and said deposit growth should roughly parallel loan growth, noting seasonal public-unit flows as a caveat but strong business deposit pipeline. On securities they said the portfolio is laddered with about a 4-year duration, contains callable and discounted agency bonds that would need 200 to 300 basis point rate reductions to be called, and cited specific maturing balances and rates that will reprice. On charge-offs they said the timing has been coincidental and not a deliberate year-end cleanup.
"I would say on an overall basis, our duration of our portfolio is about 4 years." — Charles E. Christmas (CFO)
Business confidence and nonperforming loans
Q (Raymond James): Analyst asked whether business confidence and willingness to invest have changed given higher rates, and whether the small uptick in nonperforming loans is notable.
A: Management said confidence has not changed materially and uncertainty persists but businesses are not markedly less willing to invest. On credit they emphasized nonperforming loans remain at low levels and occasional idiosyncratic stresses show up, not a systemic problem.
"I do not think confidence has changed mid materially." — Raymond E. Reitsma (PRESIDENT)