Oct 22, 2026 earnings call — Merger with Great Plains and Q3 financial results
Announced agreement to merge with Great Plains Bancshares, expected to create a franchise of approximately $9 billion in assets.
Revenue $0.1B (est $0.1B) · EPS $1.06 (est $1.00)
Key quotes
"Earlier this month, we announced our agreement to merge with Great Plains Bancshares, parent company of Great Plains National Bank."
"Excluding that sale, underlying loan growth exceeded $144 million."
"Over the past 12 months, noninterest-bearing deposits increased 60.3% compared with 35.5% growth in total deposits."
Analyst Q&A 7
Why margin fell this quarter
Q (Michael Rose · Raymond James): Why did net interest margin fall despite a securitization? Also asked for Q4 margin outlook, loan growth guidance, and whether any fee income was nonrecurring.
A: Management said the Q3 securitization did not add much fee income because they sold loans that had already amortized most fees, and the securities bought had lower yield which dragged the margin. They expect margin improvement in Q4, highlighted higher noninterest-bearing demand and loan growth, and gave a Q4 guide of 3.80%. On fee income, they cited more swap fees, more loan fee income, and about $150,000 of trailing revenue from a factoring sale this quarter.
"I think 3.80% is a pretty good number for the fourth quarter and would hope to overperform versus that number, but 3.80% is kind of what we've penciled in." — John McWhorter (CFO)
Hiring progress and Great Plains timing
Q (Hannah Wynn · KBW): How have recent experienced hires ramped and when will they meaningfully contribute? Also asked for timing and integration plans for the Great Plains deal.
A: They said hiring has been targeted and surgical, with experienced teams often profitable quickly and already contributing to the pipeline, while salary expense has stayed roughly constant. For Great Plains, they expect closing between February 1 and April 1 and said integration should be easier because both banks use FIS and similar treasury platforms, so customer impact should be minimal.
"So for us, this is actually an easier transaction to integrate than even what Keystone was." — Bart Caraway (CEO·CHAIR)
September margin, loan yield drivers, ORE update
Q (Brett Rabatin · StoneX Group): What was the spot margin at quarter end or for September? Also asked why loan yields fell despite higher rates and how much of the loan book is variable. Finally asked for an update on the ORE property credit.
A: Management said September margin was 3.85%. They explained loan yield dynamics are driven by fee amortization and a large premium payoff (Keystone) that reduced yields this quarter, and they remain asset sensitive so they expect yields to rise next month. On the ORE property, there was no material update and it is progressing on the previously discussed trend.
"Brett, don't hold me to this, but September was 3.85%." — John McWhorter (CFO)
Fee income outlook and merger costs
Q (Bernard Von Gizycki · Deutsche Bank): Are you raising your quarterly fee income guide? And what merger-related expenses should we expect next quarter?
A: They said fee income looks higher and indicated the run-rate could be about $5 million quarterly as the bank grows and does more deals. On merger expenses, most costs were from Keystone and they have nearly reached the $13 million originally forecast; they expect only modest merger expense in Q4, roughly $500,000 and maybe up to $1 million at most.
"So I would think this quarter is going to be, I don't know, $500,000, maybe $1 million tops in merger expenses, probably closer to the $500,000, if I had to guess." — John McWhorter (CFO)
Effects of the securitization and deposits
Q (Matt Olney · Stephens): Was the Q3 securitization a drag on financials, and will the planned Q4 securitization be more beneficial? Also asked what drove the strong noninterest-bearing deposit growth.
A: They said the recent Q3 securitization was a slight net negative to noninterest income versus noninterest expense, while earlier securitizations had material fee income. The planned Q4 securitization should be more like the earlier, fee-producing deals and have higher yield on securities bought back. On deposits, treasury management opened many accounts, and the upgraded system enabled onboarding larger accounts, including 25 accounts over $1 million.
"If I look at noninterest income, noninterest expense, that securitization would have been a net negative for the quarter." — John McWhorter (CFO)
Timing of cost savings and rural growth
Q (David Storms · Stonegate): What is the expected cadence of cost savings from Great Plains (50% in 2027)? And will Heritage rural branches continue to drive deposit growth?
A: They said the timing of savings depends on the conversion date and may come later in the quarter because there is no definitive conversion date yet. On rural growth, they view Great Plains as a strong fit that should help grow core, stable deposits faster, expand North Texas footprint, and deliver meaningful deposit synergies over time.
"So kind of pending what we find out about that, we'll have a lot to do with it." — John McWhorter (CFO)
Pipeline drivers and rate sensitivity
Q (Jackson Andrew · Piper Sandler): What is driving the loan pipeline going forward? And how should we think about loan and deposit betas this cycle?
A: They said most new production is coming from C&I lending, especially from new lenders whose pipelines look strong, and some booked lines may see higher utilization soon. On rate sensitivity, they consider themselves slightly asset sensitive, noted their cost of funds has risen far less than market rates, and they are managing the portfolio toward improving margin in Q4.
"I think the -- what I would say is we'll see a little bit from every one of the verticals, but I think the C&I is probably going to be the biggest growth driver over the next quarter." — Bart Caraway (CEO·CHAIR)