Loading...
01/10 16:56
Loading...
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call summary and Q&A indicate a positive outlook. Financial performance shows improved loan yields and decreased nonperforming loans. Noninterest income is stable, with strong future growth expectations. The Progressive Bank acquisition is progressing well, and potential share repurchases are positive for shareholders. While some uncertainties exist, such as the impact of a government shutdown on SBA loan sales, overall sentiment is positive, with expectations for loan growth and operational savings. The market is likely to react positively, anticipating a 2% to 8% stock price increase.
GAAP net income and EPS $21.5 million and $0.73 per share, respectively. Included $1.6 million merger in core conversion-related expense, $2.0 million employee retention tax credit, and a $77,000 gain on sale of securities.
Non-GAAP core net income and EPS $21.2 million and $0.72 per share, respectively. Excluded noncore items like merger-related expenses and tax credits.
Core ROAA 1.06% for the quarter. Indicates consistent profitability.
Core efficiency ratio 60.45% for the quarter. Reflects improved operational efficiency.
Total loans held for investment Declined $26.6 million or 1.7% annualized on a linked-quarter basis. Driven by $479 million in paydowns and payoffs, offset by $452 million in new loan production.
Total deposits Increased $87.2 million, mostly due to a $131.4 million net increase in interest-bearing deposits, offset by a $44.15 million decrease in noninterest-bearing deposits.
Noninterest-bearing deposits Net growth of $58.2 million since March 31, 2025, representing approximately 9% annualized growth.
FHLB borrowings Decreased $125.5 million from the prior quarter. A deliberate decision to reduce excess borrowings.
GAAP net interest margin Remained unchanged at 3.68% on a linked-quarter basis.
Non-GAAP core net interest margin Declined 1 basis point from 3.64% to 3.63% for the quarter ended September 30.
Loan discount accretion Elevated at $1.1 million for the quarter, expected to drop to $800,000-$900,000 range going forward.
Cost of total deposits Increased 3 basis points on a linked-quarter basis.
Total loan yields Increased 5 basis points on a linked-quarter basis. Core loan yields for the quarter were 6.94%.
Weighted average new and renewed loan yield 7.46% for the third quarter.
Weighted average rate on new accounts 3.32% in September, down from 3.34% in June.
Core noninterest expense $49.3 million, down slightly from the prior quarter. Expected to increase modestly in Q4 due to timing of investments.
Core noninterest income $11.6 million for the third quarter, relatively in line with expectations.
Loans past due 30 days or more Decreased from 0.89% to 0.27% of total loans held for investment, roughly $38 million as of September 30, 2025.
Nonperforming loans Decreased to 0.82% of loans held for investment as of September 30, 2025.
Nonperforming assets Increased slightly to 0.83% of total assets, due to transfer of nonaccrual loans to other real estate owned.
Correspondent Banking Unit Revenue: The company has introduced a new chart illustrating the momentum in revenue generation from its young correspondent banking unit. It has partnered with about 175 banks and expects to generate over $17 million in revenue this year, contributing roughly $5 million to the combined net income.
M&A Initiatives: The company is progressing with two M&A initiatives. The Oakwood Bank transaction is expected to achieve full economic benefits by Q1 2026. The Progressive Bank transaction is on track to close in early Q1 2026, with full integration scheduled for August 2026.
Expense Control: The company has maintained flat core noninterest expenses for three quarters, focusing on generating operating leverage after significant investments in asset size.
System Conversion: Successfully converted the entire core bank to a new processor at the end of Q2 and Oakwood Bank to the new system at the end of Q3, enhancing operational efficiency.
Dividend Increase: The company announced a $0.01 increase in its quarterly common stock dividend, marking the ninth consecutive year of dividend increases.
Expense Control: The company has achieved three quarters of flat core noninterest expenses, but there is a risk of increased expenses in Q4 due to timing of investments and partial quarter impact of Oakwood cost savings.
Loan Portfolio: Total loans held for investment declined by $26.6 million, with significant paydowns and payoffs exceeding new loan production. CRE and C&I loans decreased, which could impact revenue generation.
Deposit Composition: Noninterest-bearing deposits decreased by $44.15 million, which could pressure overall growth. The company also experienced a temporary $60 million deposit outflow in Q3.
Net Interest Margin: The core net interest margin declined slightly by 1 basis point, and there is a risk of further margin compression due to changes in deposit and loan yields.
Acquisition Integration: The company is integrating Oakwood Bank and Progressive Bank, but there are risks associated with achieving full economic benefits and operational challenges during the integration process.
Credit Quality: Nonperforming assets increased slightly, and there was a transfer of nonaccrual loans to other real estate owned, indicating potential credit quality concerns.
Operating Leverage and Expense Control: The company expects to maintain its focus on generating operating leverage and effective expense control, which has been a driver of incremental quality earnings improvement. This trend is expected to continue.
M&A Initiatives: The company anticipates achieving the full economic benefits of the Oakwood transaction by Q1 2026. The Progressive Bank transaction is expected to close early in Q1 2026, with full integration and unified financials by Q4 2026.
Correspondent Banking Unit Growth: The company projects over $17 million in revenue from its correspondent banking unit in 2025, contributing approximately $5 million to net income. This initiative is expected to drive more capital-efficient earnings as it scales.
Net Interest Margin Stability: The company aims to maintain its historically stable and relatively strong net interest margin as it grows within its retained capital.
Core ROAA Run Rate: The company expects to achieve a core ROAA run rate of approximately 1.2% by the end of Q4 2026.
Loan Repricing: Approximately $646 million in fixed-rate loans maturing over the next 12 months are expected to reprice in the mid- to low-7% range.
Deposit Betas: The company sees 45% to 55% overall deposit betas as achievable regarding any future rate cuts.
Dividend Increase: The company announced an increase in its quarterly common stock dividend by $0.01. This marks the ninth consecutive year of dividend increases since the company started paying dividends in 2015.
The earnings call summary and Q&A indicate a positive outlook. Financial performance shows improved loan yields and decreased nonperforming loans. Noninterest income is stable, with strong future growth expectations. The Progressive Bank acquisition is progressing well, and potential share repurchases are positive for shareholders. While some uncertainties exist, such as the impact of a government shutdown on SBA loan sales, overall sentiment is positive, with expectations for loan growth and operational savings. The market is likely to react positively, anticipating a 2% to 8% stock price increase.
The earnings call reveals mixed signals: while there's a positive outlook on loan growth and fee income, concerns about increased NPLs and unclear management responses on NPAs and cost savings temper optimism. The Q&A highlights potential risks and uncertainties, such as elevated FHLB borrowings and flat margins in Q3. Despite some positive elements like the successful core conversion and growth in SSW, the lack of immediate capital return plans and elevated expenses keep the sentiment neutral.
The earnings call presents a mixed picture: while there are improvements in net interest margin and non-interest income, there are concerns about decreased deposits, increased non-performing assets, and lack of clarity in management responses. The absence of share repurchase or dividend announcements also tempers positive sentiment. The Q&A session reveals some optimism but also highlights uncertainties, particularly regarding loan growth and margin expansion. Overall, the sentiment is neutral, as positive aspects are balanced by potential risks and unclear guidance.
The earnings call shows mixed results: strong NIM expansion and capital position are positive, but deposit decreases and increased NPAs are concerning. The Q&A reveals uncertainty in loan growth and fee income, with management unable to provide clear timelines for resolving nonaccrual loans. The potential for a share buyback is positive but not yet implemented. Overall, the mixed signals and lack of strong catalysts suggest a neutral stock price movement.
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
