Oct 22, 2026 earnings call — Profitability, loan growth and credit update
Diluted earnings per share were $1.73 this quarter, with tangible book value per share of $48.52.
Revenue $0.1B (est $0.1B) · EPS $1.73 (est $1.66)
Key quotes
"We continue to expect mid-single-digit loan growth for fiscal '27, although quarterly results will reflect our normal seasonality."
"Nonperforming loans also declined by $1 million to $27 million or 0.6% of gross loans from 0.63% at June 30."
"Based on our current interest rate risk model and assuming a static balance sheet, a 100 basis point parallel increase in rates is estimated to reduce net interest income by about 1% over the next 12 months."
Analyst Q&A 5
expense run rate and reserve moves
Q (Brendan Nosal · Hovde Group): First, how should we think about the core expense run rate for the rest of the year? Second, why did reserve coverage rise to $1.31 — is it just the environment or preemptive for possible deterioration?
A: They said they remain on track for the mid-single digits to high single-digit expense growth for the fiscal year and pointed to salary and benefit step-ups with annual merit increases in the March quarter. Management said part of the expense increase came from lower loan originations and lower deferred expenses. On reserves, they said there was nothing specific about deterioration but they had availability in the calculation to take additional provision and chose to do so, and they feel comfortable at $1.31.
"The [ life ] guidance we gave last quarter was sort of the mid-single digits to high single-digit expense growth for the fiscal year." — Greg Steffens (CEO·CHAIR)
loan and deposit repricing; deposit growth
Q (Jordan Ghent · Stephens): When will fixed-rate loans start repricing and by how much? Also, what's driving the recent noninterest-bearing deposit growth and will it continue? Finally, is the modified C&I loan idiosyncratic or could more rate concessions follow?
A: They said about $815 million in loans will reprice over the next 12 months, with an average roll-off rate around 6.5% versus current fixed renewals near 7%, and noted $1.4 billion in CDs renewing at an average of 3.82%. On deposits, they are pushing to carry more balances in noninterest-bearing with new products, but cautioned early signs may be noise and they will keep focusing on it. The modified C&I situation is a one-off with a 20-year customer expanding; the concession put the loan at prime and was not significant, though the borrower is watch-rated.
"we have about $815 million in loans repricing over the next 12 months." — Matthew Funke (PRESIDENT)
where they seek M&A deals
Q (Andrew Liesch · StoneX Financial): Where are you looking geographically and by type for M&A opportunities right now?
A: They said they are targeting more end-market activity and most conversations are Missouri oriented. The geographic focus is adjacent markets from Kansas City to St. Louis to Memphis to Little Rock, and discussions are preliminary.
"We're really looking at more end market activity, we're interested more in the -- more of the people we're talking with are Missouri oriented instead of outlying that our footprint continues to -- we're targeting Kansas City to St. Louis to Memphis to Little Rock." — Greg Steffens (CEO·CHAIR)
Kansas City hires; deposit product; buybacks
Q (Nicholas Holowko · Raymond James): How are the Kansas City hires performing and how will that affect growth? Is the new business deposit account ramping as expected? And with valuation lower, how are you thinking about buybacks?
A: They said the Kansas City team is performing well, giving good presentations, and they expect that momentum to continue with a team focused on both sides of the balance sheet. The new business deposit account is at least meeting early expectations, though rollout noise and seasonality may affect short-term results; they remain positive long term. On buybacks, they said the lower valuation makes repurchases more attractive, they bought shares back at 1.5 of tangible book value, and they expect modest improvement in repurchase activity.
"We feel really good about the team that we've assembled up there, continuing to see good presentations out of that group and expect that momentum to continue." — Matthew Funke (PRESIDENT)
margin outlook, wholesale funding, NPAs timing
Q (Nathan Race · Piper Sandler): If the Fed hikes twice more, what exit margin do you expect and why? Can you reduce wholesale funding as deposits grow? When will nonperforming assets come down to more normal levels?
A: They said an exit margin in the low 3.60s is a plausible outcome. Stefan explained the margin will compress near term from rates and from deposit buildup and balance-sheet mix effects, with some pickup in March from public units and then recovery in 4Q as they reloan at higher spreads. On wholesale, they expect to be less reliant near term and aim to stay in the mid-single digits long term, though FHLB limits and maturities constrain actions until spring. On NPAs, workouts take time; several large relationships are at various stages, some could resolve soon but timing is uncertain; they expect nonperforming assets to be meaningfully lower by the end of the fiscal year and are comfortable with current carrying values.
"So on top of a little bit of compression just from the rate side, we'll also see some from the mix of the balance sheet." — Stefan Chkautovich (CFO)