Oct 21, 2026 earnings call — NIM expansion, deposit growth, and AI/payments investment
Board approved a 14% increase in the quarterly dividend to $0.40 per share.
Revenue $0.1B (est $0.1B) · EPS $2.58 (est $2.38)
Key quotes
"Growth in the EB-5 vertical drove the lion's share, around 75%, of the increased deposits during Q3."
"So we expect approximately 4.15%-4.20% for the fourth quarter."
"Alongside the continued strength and momentum of our core commercial banking franchise, we expect our enterprise-wide AI initiatives and the rollout of our payments platform to become meaningful drivers of future earnings and efficiency."
Analyst Q&A 4
deposits, margin, credit, expenses
Q (Feddie Strickland · Hovde Group): Are the EB-5 deposit gains one-time or persistent? What is the margin path if rates hike again? Which non-accruals remain and will there be recoveries? How should we think about expense growth into 2027?
A: Management said the EB-5 uptick came from momentum plus a cutoff date for certain applications, and they expect momentum to continue though maybe not at the same pace. They said best-case for margin is maintaining and each 25 basis points move typically causes about 5 basis points of NIM compression; they aim to maintain the 415, 420 NIM guidance. On credit, they expect recoveries in fourth quarter 2026 from legacy NPLs that have been restructured or gone through legal; on expenses they said it is early but they expect to control expense growth and are hopeful for lower year-over-year expenses in 2027, noting the AI initiative may show a return on investment.
"We're pretty confident we're going to realize some recoveries in fourth quarter 2026." — Mark DeFazio (CEO)
non-interest deposit growth and betas
Q (David Konrad · KBW): What assumptions for non-interest bearing deposit growth going forward? What deposit betas are you using in the rate-hike cycle?
A: They said this quarter's large non-interest bearing deposit growth was driven largely by the EB-5 vertical and repeating that every quarter would be a challenge, so some deceleration is reasonable to expect. They said they are slightly liability sensitive, have "$1 billion worth of swaps" rolling off in April and August next year, and an effective beta in the 2027 forecast model of "65%" (about "75%" if swaps are excluded).
"We have an effective beta within the current forecast model for 2027 of 65%." — Daniel Dougherty (CFO)
balance sheet growth and gaming testing
Q (Timur Braziler · UBS): Will balance sheet growth moderate into 4Q and early next year? Any update on the gaming payments initiative and its relation to crossing $10 billion?
A: They said the pace of balance sheet growth is "remaining according to plan" and they expect to be "very close to $1 billion in loan growth for the year." They noted "$400 million" of short-term investments available to fund Q4, expect deposit gathering to exceed loan growth, and said the $10 billion expense threshold is not related to gaming. On gaming, they have up to "3" operators in queue, have "2" signed, will begin integration and testing, and expect to be live in the first quarter of next year, with testing in the next "30 to 45 days."
"I am happy to report that we have 2 signed up." — Daniel Dougherty (CFO)
lending outside footprint, fees, buybacks
Q (Feddie Strickland · Hovde Group): Are you still originating new C&I and CRE outside NY and FL or mostly legacy? Were fee schedule changes behind higher service charges? Will buybacks continue?
A: They said it's "a little bit of both" but "most of it's legacy," and they will stay in those markets driven mainly by relationships with existing clients and clients' appetite to enter emerging markets. They said the higher service charge line was "primarily as a result of the growth." On buybacks, management said "I am committed to continue buying back the stock for as long as I think the shares are on sale" and expects to execute further purchases.
"The answer is yes, we will stay in those markets, but it's going to be driven by our relationship with existing clients primarily and their appetite to enter emerging markets that we can understand and follow our discipline around credit." — Daniel Dougherty (CFO)