Oct 29, 2026 earnings call — Loan repricing, securities yields, and funding
Management moderated 2026 loan growth guidance to low to mid single digits, and reported $0.93 diluted earnings per share.
Revenue $0.1B (est $0.1B) · EPS $0.93 (est $0.79)
Key quotes
"We expect the September fed rate increase to be accretive to fourth quarter loan yields as approximately 55% of our loan book will reprice over the next 90 days."
"The MBS purchases of $172.2 million in the third quarter of coupons ranging from 5% to 6%, A duration of 6.9 years and a yield of 5.75%."
"CDs totaling $517 million with an average rate of 3.63% will reprice in Q4. We expect to retain the majority of these deposits, but believe there will be a near term need to increase the rates offered."
Analyst Q&A 5
securities yield and asset quality
Q (Brett Rabatin · StoneX Group): He asked whether the securities portfolio yield will hold or decline and whether funding costs will rise in Q4. He also asked for updates on past-due payoffs, Austin multifamily projects, and asset quality.
A: Suni said a one-time CMBS prepayment and swap ineffectiveness affected Q3 and she expects securities yield to hold into Q4 because prepays have slowed. Keith said about 55% of the loan book will reprice and most repricing has already happened since the September Fed move, which should help loan yields. On asset quality, management said they are conservative in risk ratings, saw payoffs on four multifamily assets in Q3, have had no charge offs, and do not see near-term losses.
"So on the securities portfolio, of course, we had the 1 time CMBS prepayment of $65 thousand." — Suni Davis
margin drivers and deposit costs
Q (Woody Lay · KBW): He asked what drove the NIM outperformance and whether that would continue. He also asked for the spot cost of deposits and expectations after the rate hike.
A: Keith said winning a few loans with higher spreads and careful funding management drove the positive surprise. Suni said they used brokered deposits again, maximized discount window collateral, and were opportunistic; Julie reported cost of deposits was $1.89 in the third quarter versus $1.94 at June 30. Keith noted newly put deposits were higher during the quarter and said deposit competition will push pricing up, while C&I growth should bring stickier, cheaper deposits over time.
"We have maxed out our collateral at the discount window and continue to borrow there because that is the cheapest rate that we can get wholesale wise." — Suni Davis
loan growth and capital uses
Q (Michael Rose · Raymond James): He asked how to think about payoffs, the reduced pipeline, and loan growth expectations for next year. He also asked about buybacks and M&A plans.
A: Keith said he would not expect a drastic change in 2027 and described initiatives to even out loan growth, including growing consumer lending and a HELOC product launched in the last 30 days. He said they are being opportunistic with buybacks when the stock trades below where they think it should be, and acquisitions are likely in the future though nothing active today; he expects possible opportunities in 2027.
"Some of that is gonna come through a home equity line of credit product that we actually is out and available to customers today." — Keith Donahoe (CEO)
loan-to-deposit ratio and C&I growth
Q (Matthew Covington Olney · Stephens): He asked if the loan-to-deposit ratio can move higher from about 80% and whether there is a target for brokered deposits. He also asked for more color on C&I growth and pipeline.
A: Keith said the ratio could move a little higher but it depends on their ability to gather deposits and on brokered deposits; Suni manages funding daily. He said they have internal limits for brokered deposits but no fixed target and they use wholesale only as needed for the best rate. On C&I, he said growth is coming from the Houston team and East Texas hires, and they expect more hires to drive additional pipeline.
"We have internal limits, but, no, there is not a target." — Keith Donahoe (CEO)
NIM sensitivity, securities duration, reserves
Q (Stephen Scouten · Piper Sandler): He asked whether the NIM benefit depended on loan reprice versus deposit moves and whether they quantified NIM per 25bp hike. He also asked about the securities duration move and whether reserves will rise with more C&I loans.
A: Keith said a seasonal deposit relationship reduced deposits in Q3 and that loans have repriced faster than deposit costs so far; he noted about $131 million of loans reprice in Q4 at roughly $4.74–$4.75 now. They have not quantified NIM impact per 25bp and will run that number. Suni said the longer securities duration was driven by the rising rate environment rather than a deliberate move, and Keith/Julie said they do not expect a material reserve increase now and reported about 1.11% coverage on pure commercial loans.
"That had more to do with the rising rate environment." — Suni Davis