Oct 26, 2026 earnings call — Credit actions and margin stability
Company took a $1.9 million credit provision, including a $1.4 million charge-off, which reduced quarterly earnings by negative $0.21 per share.
Revenue $0.0B (est $0.0B) · EPS $0.43 (est $0.46)
Key quotes
"you will see that we have $408 million loans indexed to prime, which increased 25 basis points in mid-September, and we will feel the full realized impact starting in the fourth quarter."
"We manage our loan-to-deposit ratio to maximize our net interest income and have curated the security of over $816 million in available funding sources."
Analyst Q&A 4
call intro and audio check
Q (Christopher Marinac · Brean Capital): The analyst simply checked audio at the start of the call.
A: Management opened with a summary of the bank's performance and said lenders are building new owner-occupied and C&I relationships while resolving nonperforming loans. They said core earnings power is strong, driven by expanding margins, disciplined deposit costs and tight noninterest expense control. They noted capital, liquidity and their D.C. market position support managing through the cycle.
credit pipeline question
Q (Christopher Marinac · Brean Capital): The analyst asked what else is in the pipeline of potential credit issues and whether higher rates have caused borrower stress not seen at 9/30.
A: Management only confirmed audio and did not answer the credit question in this turn. The analyst's substantive question was posed but the detailed reply came next.
rates, repricing and reserves
Q (Christopher Marinac · Brean Capital): He asked how the higher-rate environment affects potential loan stress and whether the bank needs additional reserves on the balance-sheet or unfunded exposure.
A: Management said the interest-rate environment is very different than 2023 after rates rose 5.25% and noted they still have legacy loans; they highlighted that $75 million of the 5-year structure is going to be repricing. Management also said the allowance for credit losses to loans rose a little this quarter largely due to a charge-off and that they review reserves each quarter considering local and macro conditions. They added that unfunded exposure changes mostly with utilization rates, causing natural inflows and outflows.
"So as you'll see that the allowance for credit losses to loans did go up a little bit this quarter." — Richard Vari (CFO)
deposits and share buybacks
Q (Christopher Marinac · Brean Capital): He asked about deposit behavior with higher rates and about the priority and room for share repurchases over the next 12 months (and whether capital could be growing as fast as the balance sheet).
A: Management said funding competition in their market is always intense; they saw deposit questions ahead of rate moves, then a pullback after the Fed decision, and they can be selective when adding deposits while laddering time deposits to benefit margins. On buybacks, management said they must be mindful of commercial real estate concentration, that they have that concentration back under the Board's 375% limit, are focusing on C&I and owner-occupied lending, and that they have some room left in the current buyback program.