Oct 19, 2026 earnings call — Loan growth, margin expansion, Houston start-up
Reported net income of $87.3 million, or $0.80 per diluted share.
Revenue $0.2B (est $0.2B) · EPS $0.80 (est $0.83)
Key quotes
"So in this quarter, the total pipeline less than 90 days is up 58% over last quarter."
"And I still expect it in that 5 to 7 basis point increase range."
"Regarding provisions, we increased our allowance for loan losses by approximately $7.2 million to $189 million as of the end of the quarter."
Analyst Q&A 4
Loan margin outlook and deposit costs
Q (Stephen Scouten · Piper Sandler): He asked how much margins could change next year and whether a December rate hike or liability sensitivity would change assumptions. He also asked if deposit growth could limit loan growth and what deposit initiatives exist.
A: They expect a 5 to 7 basis point increase in margin and see room to expand because about $1.5 billion of low fixed-rate loans will reprice and renewals/new loans averaged 6.59% this quarter. They were selective on deposit pricing as the Fed raised rates and will be opportunistic and disciplined on deposits and assets. They said 53% of the loan book is variable rate, the deposit pipeline is good, and fourth quarter usually brings strong deposit growth by region.
"And I still expect it in that 5 to 7 basis point increase range." — David Sparacio (CFO)
Securities, BOLI and one-time expenses
Q (David Bishop · Hovde Group): He asked what restructurings they are contemplating in securities or non-earning assets and how large that could be. He also asked how big the nonrecurring operating expenses were and what they related to.
A: They accelerated swaps of maturing treasuries and will be opportunistic on smaller securities maturing in the fourth quarter. They have about $465 million in BOLI with low yields on older policies and now can structure deals to improve those yields; they are not planning restructurings that would take security losses. On expenses they said they were about $2 million above their normal run rate this quarter, expect a quarterly run rate around $50 million to $51 million, and noted a catch-all of one-time items including ORE/NPA costs and a yacht-related expense.
"And so we have an opportunity now with that favorable ruling from the Treasury to structure a deal where we can improve those yields and do some swap outs on those." — David Sparacio (CFO)
Loan pricing, credit reserve, and buybacks
Q (Stephen Moss · Raymond James): He asked if loan spreads have improved and how management sees loan pricing going forward. He also asked about the reserve increase, any specific credits including the roughly $100 million relationship, and their appetite for the 2 million share repurchase.
A: They said competition has become more rational, many customers now prefer floating rates, and higher rates can produce better loan pricing region to region. For credit, one notable unexpected credit action was portfolio-based and did not move reserves materially, they took a charge of just over $7 million on the large multifamily portfolio and are pursuing orderly liquidation of those 8 credits over the next 2 to 4 quarters. On buybacks they will be cautious, prioritize having adequate capital to fund growth, and aim to remain well-capitalized while considering repurchases over time.
"We took a charge of just over $7 million this quarter that represents the first true charge-off we've taken with respect to that portfolio of large multifamily properties." — Jim Harper
Texas expansion, C&I mix, buyback capital levels
Q (David Bishop · Hovde Group): He asked for an update on Texas loan and deposit volumes and pricing versus other regions, and whether Texas is driving recent C&I growth. He also asked what capital targets guide share repurchase decisions.
A: They said pricing is stronger in Texas, loans and deposits are larger, and they expect about $200 million in the pipeline for the remainder of the year while aiming for breakeven by the first or second quarter of next year. They noted Texas has produced more commercial real estate than expected and activity has been fairly evenly split between real estate and C&I so far, with C&I growth also in other regions and some energy credits with good pricing. On repurchases they said over time they may repurchase stock as long as CET1 does not decline as a percent of assets and they remain top-tier well-capitalized.
"So we expect they probably have $200 million in the pipeline for the remainder of the year." — Thomas Broughton (CEO)