Oct 21, 2026 earnings call — Loan growth outlook and CRE progress
Full-year loan growth guidance 3%-5%; management expects 10%-12% loan growth in 2027.
Revenue $0.4B (est $0.4B) · EPS $1.50 (est $1.43)
Key quotes
"You've already seen that in the guidance we gave that we've already had in the first 19 days of October, $690 million or so of RESG payoffs and pay downs."
"We have added, effective October 1, powersports to that."
"We had over 20% growth within CIB in deposits quarter-over-quarter."
"In our legacy portfolio, the multifamily projects continue to lease."
Analyst Q&A 10
Loan growth and foreclosed properties
Q (Matt Olney · Stephens): He asked why loan balances look set to decline in the current quarter and how management has line of sight for a rebound and positive growth in 2027. He also asked when the $420 million of foreclosed properties will see more activity to reduce that balance.
A: Management said Q4 will see near-record RESG payoffs that shift some expected payoffs into this year, causing modest retracement in Q4 but they still expect 10%-12% loan growth in 2027 with good opportunities across business lines. On foreclosed properties, they said they are working with active buyers for all but one property and prefer patient, thoughtful dispositions or leasing to avoid unnecessary losses.
"We do expect really nice loan growth next year being 10%-12%." — George Gleason (CEO·CHAIR)
Rate moves effect on NII and capital use
Q (Woody Lay · KBW): He asked how additional Fed rate hikes would affect NII growth versus the guidance and how management plans to use capital now that CRE and C&D regulatory ratios are below thresholds. He also asked about the Portico Waterfront loan sale.
A: Tim said loan yields typically move quicker than deposit costs so rate increases would help NII and an up 100 basis point scenario shows about a 4% increase in NII. Management said their capital priority is organic growth, but robust capital gives flexibility for opportunistic buybacks and continued dividends; on Portico they confirmed the loan was paid off in full and the subsequent sale had no credit impact.
"I think if you looked at our interest rate sensitivity analysis in an up 100 scenario, you've got our interest rate sensitivity shows about a 4% increase in NII over that time period." — Tim Hicks (CFO)
Portfolio diversification path
Q (Brian Martin · Brean Capital): He asked how the expected RESG payoffs and portfolio shifts will affect diversification and the balance among CIB, RESG, Indirect Lending, and other groups into late 2027. He also asked about OREO, special mention improvements, and what to expect for reserves/charge-offs.
A: Management said diversification is a key priority and RESG has declined from about 70% to below 50%; CIB is likely to surpass RESG next year and CIB itself is diversified by industry and geography, plus Indirect Lending expanded into powersports and Community Banking is growing. On credit, they said special mention improved and net charge-offs were low this quarter, but provisions depend on macro and growth and are hard to predict.
"CIB is almost certainly going to surpass RESG in outstanding balances at some point next year." — George Gleason (CEO·CHAIR)
Credit outlook and rate impact
Q (Janet Lee · TD Cowen): She asked why management expects net charge-offs to improve in 2027 despite the guidance that they remain elevated in 2026 and 2027, and how higher rates would affect that improvement.
A: Brannon described encouraging leasing, refinancings, and sale payoffs across multifamily, industrial, office and life science projects, saying occupancies are building and many loans have payoffs underway. George added the CRE cycle is not fully over but much improved and small Fed hikes would have negligible effect, while very large hikes would be problematic.
"I can't say enough how encouraged we are at the continued progress in leasing and recapitalization, refinance payoffs, and sale payoffs across the board." — Brannon Hamblen (PRESIDENT)
Funding mix and treasury management
Q (Ryan Kenny · Morgan Stanley): He asked about the strategy to improve the deposit funding mix, updates on the treasury management build-out, and opportunities to win more non-interest-bearing operating accounts.
A: Management handed the question to Jake to explain efforts to improve funding mix and TM capabilities, indicating focus on relationship banking and building products and talent to capture lower-cost deposits. They signaled treasury management and cross-sell will be important to harvest core deposits as CIB grows.
"Yes. Jake, do you want to talk about the focus that you've got and the improvements that you've made on the funded versus unfunded ratios of the portfolio, our utilization rates on these lines?" — George Gleason (CEO·CHAIR)
How CIB will get more deposits
Q (Jake Munn): He asked Jake to describe how CIB will drive deposits, the treasury management build-out, and whether the relationship focus will change the efficiency ratio as the bank becomes more relationship-driven.
A: Jake said CIB aims for relationship banking, cross-selling fee products and treasury services, and has already seen over 20% quarter-over-quarter deposit growth in CIB; the bank is investing in talent and TM tech and expects continued deposit gains into 2027 and 2028. George added they are remodeling operations to improve efficiency, recently reduced net headcount by 94 people while investing in growth areas to help keep the efficiency ratio in the 30s.
CIB growth quality and drivers
Q (Nicholas Holowko · Raymond James): He asked about progress on funding mix and deposit competitiveness and, as a follow-up, whether anything has surprised management about CIB's strong growth and how investors should view its pace and credit quality.
A: George said deposit progress is only starting because they needed to build infrastructure and culture, but early fruits are appearing and fee income is growing; Jake and George explained CIB growth comes from hiring top talent, diverse business lines, and a granular set of many new relationships. Jake noted CIB credit metrics are strong with 0% past due and 0% trailing net charge-offs, and growth is selective and relationship-driven.
"When you look at what we've built, again, we now have 9 major business lines that are providing for this growth." — Jake Munn (PRESIDENT)
Return profile and tax rate
Q (Janet Lee · TD Cowen): She asked how to think about returns in 2027 given PPNR math and the strong efficiency ratio, and also about the quality of the lower tax rate.
A: Tim said they aim to beat PPNR expectations and highlighted accretive repurchases that improve tangible book and EPS; improving capital efficiency and the four strategic priorities are aimed at boosting returns. Tim also explained the lower tax rate is from active investment and tax teams finding municipal securities and renewable energy tax credits, not by accident.
"We work hard on reducing that tax rate." — Tim Hicks (CFO)
Securities strategy and rate hedging
Q (Stephen Scouten · Piper Sandler): He asked for the strategy on securities purchases and if that pace will continue, why now is the right time, and asked about the variable-rate loan re-pricing and any hedging for downside protection.
A: George said the securities portfolio generates about $100 million a quarter in cash flow and they reinvest roll-offs into higher-yielding securities, with average roll-off around 3.5% and improving yields into Q4; Tim added tax-exempt and taxable securities are capital-efficient and provide strong returns on risk-weighted assets. On hedging, George said they sell interest rate hedges but mainly manage rate risk on balance sheet in real time and are not focused on adding sophisticated hedges now.
"That portfolio is generating about $100 million a quarter in cash flow." — George Gleason (CEO·CHAIR)
San Diego RAD loan and allowance trends
Q (Timur Braziler · UBS): He asked what changed behind the RAD loan extension in San Diego, why sponsors are confident leasing will pick up, and what reserve is being booked on new CIB production and the trend in allowance-to-loan ratio.
A: George said the mezz lender and equity jointly committed $100 million more capital and spent time negotiating shared future capital plans, which he views as strong evidence of sponsor commitment and the quality of the asset; Brannon added the sponsor expanded leasing efforts, broadened tenant outreach, and activated retail leasing on the ground. On allowance, George said they will set the ACL each quarter per model and econometric scenarios; CIB loans generally have lower allowance percentages than RESG but it varies by loan and they point to 10-Q disclosures for ACL by category.
"The fact that the mezz lender and the equity jointly contributed a combined $100 million of additional capital to the project is an unquestionable statement from them that they are committed to this project and committed to seeing it through." — George Gleason (CEO·CHAIR)