Oct 19, 2026 earnings call — Multifamily agency acquisition and NII outlook
Company expects net interest income to rise approximately 8% to 12% in the third quarter of 2027.
Revenue $0.9B (est $0.9B) · EPS $1.78 (est $1.64)
Key quotes
"Included in the quarter were approximately $4 million in expenses associated with our newly acquired multifamily agency platform."
"For the third quarter of 2027, we anticipate net interest income to increase by approximately 8% to 12% Our outlook is based on the forward rate curve as of September 30."
"Since launching the business in 2020, we have nearly doubled the annual fee income contribution by investing steadily in talent, technology and product capabilities."
Analyst Q&A 12
assumptions for 8%–12% NII guide
Q (Bernard Von Gizycki · Deutsche Bank): Analyst asked what assumptions drive the 8% to 12% outlook: deposit growth, mix, beta, and the rate hike path.
A: Management said they assume three rate hikes (December, March, June), expect more growth in interest-bearing deposits versus noninterest deposits, and allowed for about a 40 basis points increase in deposit costs implying a beta in the upper 40s to low 50s.
"Listen, I have tried to call out my prepared remarks that we are anticipating 3 rate hikes as part of that guidance." — Robert Ryan Richards (CFO)
timing for mid-3% NIM
Q (John Pancari · Deutsche Bank): Analyst asked whether the $3.50 NIM target is still realistic and when it could be reached.
A: They said the mid-3s NIM target depends on the rate and deposit environment. With reasonable conservative assumptions, they think reaching mid-3s is possible in 2027.
CRE loan growth and pipeline
Q (David Rochester · Cantor Fitzgerald): Analyst asked why CRE growth outlook was dialed back and for current pipeline and utilization trends.
A: They said CRE pipeline is actually pretty good and they remain disciplined on underwriting and risk selection. Utilization dipped this quarter after stronger utilization in the prior quarter, and C&I pipelines generally are fine though one affiliate had a soft quarter.
"As far as the rest of the portfolio, pipeline's been good in the C and I." — Derek Steward
operating leverage outlook
Q (Christopher McGratty · KBW): Analyst asked if operating leverage can continue next year given NII momentum and needed investments.
A: Management said they see very positive prospects for operating leverage, noting models point to about 6 points or better in third quarter 2027 and they still see potential for positive full-year operating leverage if trends hold.
"We see very positive prospects for operating leverage Some of our assumptions and models would point to 6 points or better in that quarter" — Robert Ryan Richards (CFO)
deposit competition intensity
Q (Ryan Kenny · Morgan Stanley): Analyst asked whether deposit competition is intensifying, where, and what types of competitors matter.
A: They said competition is broad-based across their footprint and manageable. They do not see big impact yet from neobanks; competition exists on both asset and liability sides but is not concentrated in one geography.
"I think across the board, it is a competitive environment out there." — Harris Henry Simmons (CEO·CHAIR)
swap hedges and future purchases
Q (Kenneth Usdin · Autonomous): Analyst asked if the simulated repricing reflects swap ADs this quarter and whether more hedges are built into the 2027 outlook.
A: They said they have been keeping cash flow hedges (receive-fixed) with shorter maturities under 2 years and have been rolling them forward; they added some hedges in the quarter and could add more if conditions persist.
"We have really been keeping our cash flow hedges which are the received fixed shorter maturities kind of under 2 years." — Robert Ryan Richards (CFO)
drivers of NII guide (mix vs funding)
Q (Timur Braziler · UBS): Analyst asked whether NII guidance requires margin expansion and what drives it: funding mix, asset mix, or other factors.
A: They said it is a combination of factors: funding mix, asset mix, and rate sensitivity along with new relationship growth from granular deposit strategies. If the assumed rate hikes and deposit behavior occur, it supports the guide.
"it is both funding mix it is it is assets mix." — Robert Ryan Richards (CFO)
impact of bringing off-balance deposits on costs
Q (David Smith · Truist): Analyst asked how much deposit costs rise when off-balance-sheet funding is brought on and whether loan-side competition is pricing or covenant-driven.
A: They said bringing off-balance deposits on will increase deposit costs but lower overall cost of funding. On the loan side competition shows up in pricing and some unstructured covenant terms; they are keeping underwriting discipline.
"I mean, we are we are seeing primarily pricing but I would say unstructured covenants, etcetera." — Derek Steward
Basis/multifamily revenue sensitivity to rates
Q (David Chiaverini · Jefferies): Analyst asked whether higher rates could hurt the multifamily business and the $30–$40 million medium-term revenue target.
A: They said the $30 million to $40 million target is medium-term (around 2029) and interest rates can have an impact, but multifamily production remains active and the business is a flow model; capital markets revenue lines are lumpy but pipeline looks healthy.
"Related to the Basis business, the $30 million to $40 million was several years out." — Scott McLean (COO)
NIB deposit mix assumption
Q (Janet Lee · TD Cowen): Analyst asked whether noninterest-bearing (NIB) mix is assumed to stay around low-to-mid 30s given the deposit beta.
A: They said it is reasonable to assume interest-bearing deposits will take a larger share in a higher-rate environment and noninterest balances will be harder to get, so mix may shift toward interest-bearing deposits.
"I think it would be reasonable to assume that interest bearing deposits would take a larger share moving forward and that higher rate environment." — Robert Ryan Richards (CFO)
drivers and persistence of deposit strength
Q (Anthony Elian · JPMorgan): Analyst asked what drove strong deposit growth in 3Q and whether that pace will persist into 4Q and beyond.
A: They said quarter-to-quarter results vary but year-over-year deposit growth is healthy; much of recent growth came from money market and 'gold suite' balances which are higher cost, and they are focused on granular deposit gathering that will pay off over the long term.
"there is a lot of the growth came from money market balances or what we refer to as our gold suite balances." — Robert Ryan Richards (CFO)
Basis revenue ramp timing
Q (Jon Arfstrom · RBC): Analyst asked if Basis revenue should step up in fourth quarter after closing in July.
A: They said they are still setting the table and expect better fourth quarter revenue than the third quarter, but they have focused more on next year and medium term rather than giving a specific fourth-quarter forecast.
"But I would expect better fourth quarter revenue than we had in the third quarter closed." — Harris Henry Simmons (CEO·CHAIR)