Oct 16, 2026 earnings call — Quarterly results and capital actions
Diluted GAAP EPS $5.04 and net income $775 million in Q3, with taxable equivalent NII $1.8 billion.
Revenue $2.5B (est $2.5B) · EPS $5.08 (est $4.93) · Next-quarter revenue outlook $1.8B–$1.9B
Key quotes
"Average loans held for investment increased $2.6 billion or 2% to $143.3 billion."
"Loan growth remains solid and deposit growth more than funded the increase, allowing us to reduce our reliance on short-term borrowings while maintaining strong net interest margin."
"Our focus on capital generation and preservation is also reflected in our decision to transfer $8.3 billion of residential mortgage-backed securities from available for sale to held to maturity."
Analyst Q&A 9
deposit costs and funding mix
Q (Daniel Tamayo · Raymond James): Analyst asked if the benefit from shifting from borrowings to deposits remains and whether deposit cost increases were due to competition or the September rate hike.
A: Deposit costs rose 10 basis points quarter-over-quarter, with 4 basis points from CDs issued late Q2/early Q3 that carried a 4.05% rate. Excluding those CDs, costs rose about 6 basis points from normal repricing tied to the higher funds rate. The bank will keep optimizing funding and aims to fund loan growth with deposits first, but can use term funding if needed.
"At that time, we put on a 4.05% rate on those CDs." — Daryl Bible (CFO)
CRE growth and criticized loans
Q (Bill Young · TD Cowen): Analyst asked for updated thoughts on the CRE growth inflection given higher rates, and whether criticized asset levels might stabilize at current levels.
A: Management said CRE has grown two quarters in a row and they expect to keep growing, targeting around mid-single digit growth. They noted criticized balances are expected to be down a bit near term, with CRE driving most improvement, but higher rates could cause some creep next year. They also stressed they underwrite with higher-rate stress testing to help mitigate losses.
"Probably maybe mid-single digit, plus or minus, in that neighborhood is kind of our expectations." — Daryl Bible (CFO)
auto leasing credit and loan pricing
Q (Girard Sweeney · Evercore): Analyst asked whether the auto leasing credit was idiosyncratic or part of broader industry stress, and also asked about loan spread behavior in 3Q and recently.
A: Management said the auto leasing issue was idiosyncratic in their NDFI portfolio and they had some prior visibility and expect a few credits to move to non-accrual, while some loans cure. On pricing, commercial roll-on/roll-off yields rose about 10 basis points in 3Q and overall spreads are relatively flat with a slight positive bias. They will give on price when structure is strong but will not sacrifice structure.
"We also have a feel for non-accrual next quarter as well, and we think that's going to be flat to up a little bit as well." — Daryl Bible (CFO)
fee revenue trends and M&A appetite
Q (Ryan Kenny · Morgan Stanley): Analyst asked how higher rates will affect different fee businesses and whether higher rates change the bank's M&A appetite.
A: Management said higher rates will slow residential mortgage originations and RCC commercial lending volumes, while mortgage servicing and sub-servicing are countercyclical and may benefit. They expect capital markets and corporate trust fees to do well as they invest more in that area and aim to raise fee revenue toward the 30s percent of revenue. On M&A, higher rates change balance sheet marks but they still prize deposit franchises and remain in active talks regionally, with nothing imminent.
"The easy ones are higher interest rates on the yield curve is definitely going to slow down our residential mortgage business, and you're seeing that now, obviously, with new home rates above 7.5%-8% in that range bouncing along right now." — Daryl Bible (CFO)
C&I growth and NIM sensitivity
Q (David Chiaverini · Jefferies): Analyst asked why C&I growth was muted this quarter and whether the mid-3.60s NIM guide for Q4 is sustainable and sensitive to rate moves.
A: Management said C&I was flat because dealer commercial services and owner-occupied loans declined seasonally, while other C&I segments grew. On NIM, they said short-end sensitivity is relatively neutral, maybe slightly liability sensitive, and they are comfortable operating in the mid-3.60s. They expect significant repricing over the next 12 months in investments and maturing fixed-rate loans which should support margin momentum.
"Our investment portfolio, for a given next 12 months, will reprice $6 billion up easily over 100 basis points." — Daryl Bible (CFO)
loan yields, securities repricing, capital plans
Q (Chris O'Connell · KBW): Analyst asked for current pipeline origination yields for C&I and CRE and about securities repricing and how regulatory changes might affect buybacks.
A: Management said commercial loan roll-on/roll-off yields were up about 10 basis points in 3Q and that pricing bounces quarter to quarter. They expect the securities portfolio to continue repricing upward after a 4 basis point increase this quarter. On capital and buybacks they will wait for final Basel III, tailoring, and liquidity rules, expect some positives, and are cautious about tangible equity and rating agency views.
"On the commercial side, when you look at the roll-on, roll-off, we're up about 10 basis points in the third quarter in that space." — Daryl Bible (CFO)
fee disclosure changes and ROTCE target
Q (Nate Stein · Deutsche Bank): Analyst asked why the bank broke out new fee line items and about a loan reclassification, and whether 17% ROTCE for next year is still realistic.
A: Management said the only balance sheet classification change was breaking out available-for-sale/held-for-sale for two mortgage-related portfolios, averaging under $1 billion in that new line. They broke out fees to improve transparency after implementing a new general ledger and expect to add more disclosure over time. They also said 17% ROTCE is attainable for 2027 but will be challenging.
"We believe that 17% is attainable for 2027 for us." — Daryl Bible (CFO)
AI agents moving deposits; private credit
Q (Gerard Cassidy · RBC Capital): Analyst asked whether AI agents moving deposits will pressure deposit rates and what trends the bank sees in private credit.
A: Management said easier information and agents may make shopping for rates simpler, but trust will be the big factor for customers letting agents move money. They are not seeing much actual deposit movement from agents yet but are monitoring it. On private credit, activity is a bit softer on the liability side and the bank sees neutral to slightly positive opportunity to partner or take senior positions.
"But we are not really seeing much impact of actually money being moved out or anything yet." — Daryl Bible (CFO)
margin vs asset growth; sub-servicing scale
Q (Mokshith Reddy · Autonomous): Analyst asked how the bank balances asset and deposit growth versus maximizing NIM, and how they plan to scale mortgage originations and sub-servicing.
A: Management said chasing maximum margin can hurt overall return and revenue growth and that they prioritize serving customers and getting the right returns. They will be open to lower spreads where relationship returns make sense and will lean into relationship growth. On sub-servicing they view it as an important, countercyclical fee line and will invest in technology to scale and compete.
"I would say if you're purely minded to get the maximum interest margin, you probably won't optimize your return performance and your revenue growth." — Daryl Bible (CFO)