OSBC 2026年第3四半期決算説明会：NIM 5.27%、信用指標が改善

オールド・セカンド・バンコープ（NASDAQ: OSBC）が発表した2026年第3四半期決算は、GAAP純利益が2,890万ドル（希薄化後1株当たり0.56ドル）となった。5.27%の税引後換算純利ざやと信用指標の改善が見られたものの、1,270万ドルの貸出金純貸倒処理が一部相殺要因となった。

主要なポイント

• GAAP純利益は2,890万ドル（希薄化後1株当たり0.56ドル）。MSR（モーゲージ・サービシング権利）評価調整を除く調整後純利益は2,850万ドル（同0.55ドル）となった。
• 税引後換算純利ざやは前四半期比4ベーシスポイント上昇、前年同期比22ベーシスポイント上昇の5.27%となった。純利息収入は前四半期の8,330万ドルから8,400万ドルに増加した。
• 貸出金の純貸倒処理額は計1,270万ドルで、そのうち商業・産業（C&I）向けが920万ドル、パワースポーツ（レジャー用乗用車等）ローン関連が310万ドルとなった。経営陣は、主要なC&I問題債権の処理はほぼ完了したと述べている。
• 信用指標は大幅に改善した。分類債権は5,780万ドル減少、不良債権は1,680万ドル減少、要注意債権は6,130万ドル（38%）減少した。
• 預貸率は98.3%に上昇し、資金調達の柔軟性が制限されている。経営陣は第4四半期の純利ざやが約5ベーシスポイント低下すると見込んでいるが、短期・中期的には5.20%を上回る水準を維持すると予想している。
• OSBCは当四半期中に150万株の自社株買いを実施した。年初来の買戻し実績は平均価格22.74ドルで計340万株に達した。また、同社は第4四半期の普通株配当金を14%増額することを決定した。

主要財務データ

事業および営業業績

新規融資の実行額は、期末残高がほぼ横ばいにとどまったことから受ける印象よりも良好であった。期中における返済の増加や中途償還、さらにシンジケートローン・ポートフォリオの5,300万ドルの削減が新規実行額を相殺したため、総融資残高は約780万ドル減少した。経営陣によると、第4四半期のパイプラインは小規模企業、中堅企業向けC&I、ヘルスケア、投資用商業不動産、スポンサー・ファイナンス、投資リースなど多岐にわたっている。

平均預金残高は7,800万ドル減少した。これは主に季節的な流出と、ベータ値が高い事実上の大口（ホールセール）預金区分における継続的な減少によるものである。経営陣は買収後の預金流出は大部分が完了したと考えており、第4四半期以降は預金が増加に転じると見込んでいるが、一部の増加にはより高い金利設定が必要になる可能性がある。

ウェルスマネジメント部門は前四半期比および前年同期比で引き続き成長を記録した。モーゲージ・バンキング収入は、主にMSRの時価評価額がそれぞれ77万5,000ドル、100万ドル増加したことにより、前四半期比で43万6,000ドル増、前年同期比で76万2,000ドル増となった。

パワースポーツローン事業では、申込件数が前年比で緩やかに増加した一方、実行額は概ね同水準となった。同社は、消費者の生活圧迫感や信用情報レポートにおける負債の増加を理由に、申し込みの不承認件数を約7%増やした。また、OSBCはDukat USAと複数年の提携・推奨契約を締結した。経営陣はこれにより2026年後半の融資実行が下支えされ、2027年にはより大幅な貢献が期待できるとしている。

非金利費用は前四半期比で37万ドル増加した。給与、役員インセンティブ、従業員保険、物件占有費、不動産税、事務機器費用の増加が、前四半期に計上された一回限りの費用項目が解消したことによるその他の費用の減少によって一部相殺された。

経営陣の業績見通し（ガイダンス）

• 経営陣は、強固なパイプラインと2027年第1四半期に向けたモメンタムの期待に支えられ、2026年第4四半期の融資成長率として1桁台前半を目標としている。
• OSBCは、限界資金調達コスト、預金獲得競争、自社株買いがフリー資金に与える影響により、第4四半期に純利ざやが約5ベーシスポイント低下すると見込んでいる。
• 経営陣は、純利ざやが短期・中期的には5.20%以上を維持すると見込んでいる。今後3〜4四半期にかけて、貸出金ポートフォリオの約45%および有価証券ポートフォリオの約25%の金利が再設定される見通しである。
• 経営陣は費用の伸びが緩やかになると見込んでおり、広範なコスト圧力にもかかわらず、3%〜4%の費用増加率の範囲を支持した。
• 同社は、買収に関連する預金減少の大部分が完了したと見なしており、第4四半期から預金が成長に転じると見込んでいる。
• 経営陣は、投資家は年率約5%の自社株買いを妥当な水準として期待できると述べる一方、小規模な補完的買収に対応できる余力を維持するとしている。

リスクと注目点

当四半期における1,270万ドルの純貸倒処理額は、引き続き主な収益圧迫要因となった。経営陣は主要なC&I債権問題は概ね解決したと考えているが、パワースポーツ関連の貸倒処理は四半期ベースで今後も続くと予想している。

98.3%という預貸率は経営陣の設定する上限に近づいており、今後の融資成長は現在の限界金利で調達する資金への依存度が高まることを意味する。したがって、継続的な資産のリプライスにもかかわらず、預金競争の激化が利ざやを圧迫する可能性がある。

金利の上昇により有価証券ポートフォリオの価値が減少し、1株当たり有形純資産価格の低下の一因となった。また、自社株買いも自己資本およびフリー資金を減少させ、純利ざやと1株当たり利益（EPS）との間にトレードオフを生み出している。

費用のインフレも引き続き制約要因となっている。経営陣は、2027年に予測される従業員向けヘルスケアコストが20%近く上昇すると述べており、全体としての費用増加率を提示された範囲内に抑えるには他分野でのコスト抑制が必要となる。

アナリスト質疑応答の要点

アナリストの関心は、信用損失が転換点に達したかどうかに集中した。経営陣は、分類債権、要注意債権、不良債権の減少を挙げ、融資ポートフォリオの状態についてはここ数年で最も良い手応えを感じていると語った。また、継続的なパワースポーツの貸倒処理に対する充当が必要となることなどから、貸倒引当金比率が1.23%から大幅に低下する可能性は低いとの見解を示した。

利ざやの感度に関して、経営陣は融資ポートフォリオの約半分が変動金利であり、通常SOFRに対して30日のラグをもってリプライスされると述べた。低利回りの固定金利資産のリプライスは追い風となるはずだが、限界預金コストの上昇や自社株買いに伴う資金調達上の影響によって相殺される見通しである。

経営陣は、シンジケートローン事業を取引的でありフランチャイズ価値を高めるものではないと見なしているため、同ポートフォリオのバランスシートに占める割合は今後も低下し続けると述べた。ただし、完全に解消されるわけではなく、その減少が全体としての融資成長に対する逆風となる度合いは和らぐ見込みである。

戦略的機会について、経営陣は買収交渉は引き続き活発であるものの、1年前と比べて一段と活発化しているわけではないと述べた。同社は小規模な補完的取引に注力しており、2027年に機会が浮上することに期待を寄せている。

決算説明会文字起こし（トランスクリプト）全文

決算説明会の完全なトランスクリプト

経営陣による説明

Operator

Good morning, everyone, and thank you for joining us today for Old Second Bancorp, Inc.'s Third Quarter 2026 Earnings Call. On the call today are Mr. Jim Eccher, the company's Chairman, President and Chief Executive Officer; Mr. Brad Adams, the company's Chief Operating Officer and Chief Financial Officer; and Mr. Darin Campbell, the company's Head of National Specialty Lending.

I will start with a reminder that Old Second's comments today will contain forward-looking statements about the company's business, strategies and prospects, which are based on management's existing expectations in the current economic environment. These statements are not a guarantee of future performance, and results may differ materially from those projected. Management would also ask you to refer to the company's SEC filings for a full discussion of the company's risk factors. The company does not undertake any duty to update such forward-looking statements.

On today's call, we will also be discussing certain non-GAAP financial measures. These non-GAAP measures are described and reconciled to their GAAP counterparts in the earnings release, which is available on our website at oldsecond.com on the homepage and under the Investor Relations tab.

Now I would like to turn the call over to Mr. Jim Eccher.

James Eccher

Okay. Good morning, and thank you for joining us. As customary, I have several prepared opening remarks. I'll give you my overview of the quarter and then turn it over to Brad for additional details. I will then conclude with certain summary comments and thoughts about the future before we open it up to questions.

From a GAAP perspective, net income was $28.9 million or $0.56 per diluted share in the third quarter. Return on assets was 1.69% Third quarter 2026 return on average tangible common equity was 15.77% and the efficiency ratio was 52.34%. Excluding all adjusting items, which for the quarter was limited to MSR valuation adjustments, net income for the third quarter was $28.5 million or $0.55 per diluted share.

Third quarter 2026 earnings were impacted by $12.7 million of net loan charge-offs, which consisted of commercial and industrial loan net charge-offs of $9.2 million, primarily related to relationship one relationship we have discussed on prior calls, $6 million of that $9.2 million was previously reserved for. This credit is a warehousing and distribution business that has seen its cash flow position deteriorate over the last year. We feel this credit is now largely behind us. The remaining portion of the charge-off is related to the powersport business, which totaled $3.1 million, which is comparable to the prior quarter powersport charge-off level.

Tangible book value per share decreased slightly to $14.75 as of September 30 from $14.77 as of June 30, and the tangible equity to tangible asset ratio decreased 19 basis points from last quarter from 11.19% to 11%. The modest declines in these metrics are primarily due to stock repurchases of approximately $39.5 million and the change in the value of the securities portfolio due to higher rates during the quarter.

Our financials reflect an exceptionally strong net interest margin at 5.27% for the third quarter of 2026. That's a 4 basis point improvement from last quarter and 22 basis point increase over the prior year on a tax equivalent basis. Pre-provision net revenues increased in the third quarter of 2026 from the prior quarter, primarily due to day count, slightly higher average loan balances and lower average savings and time deposit balances. Total cost of deposits was 102 basis points for the third quarter compared to 100 basis points for the prior linked quarter and 133 basis points for the third quarter of 2025.

For the third quarter of 2026 compared to last quarter, tax equivalent income on average earning assets increased and interest expense on average interest-bearing liabilities increased nominally. Loan-to-deposit ratio is now 98.3% at the end of the third quarter compared to 96.4% last quarter and 91.4% as of September 30, 2025. Total loans declined nominally about $7.8 million during the third quarter. Tax equivalent loan yields increased 3 basis points during the quarter compared to the linked quarter, but reflected a 1 basis point decrease for the quarter year-over-year. The increase in yields in comparison to the prior quarter is driven by higher short-term rates and repricing of lower yielding loans. We expect this to continue in the near term.

Turning to credit. Asset quality trends improved significantly during the quarter, excluding the elevated charge-offs resulting from the single credit we just discussed. Classified loans decreased $57.8 million and nonperforming loans decreased $16.8 million. Criticized loans, an early indicator of stress, declined by $61.3 million or 38% during the quarter. As a percentage of loans, classified loans have not been this low since before COVID. Needless to say, we are extremely pleased with the credit trajectory and its implication for future quarters.

The allowance for credit losses on loans was $64.2 million as of September 30 or 1.23% of total loans from $70.4 million at the end of the second quarter, which was 1.34% of loans. Unemployment and GDP forecast used in future loss rate assumptions remained fairly static from last quarter with no material changes in the unemployment assumptions on the upper end of the range based on recent Fed projections. Noninterest income declined $191,000 in the third quarter of 2026 compared to the prior linked quarter and nominally from the prior year linked quarter.

Wealth Management continues to reflect strong performance and growth quarter-over- linked quarter and prior year linked quarters. Mortgage banking income increased $436,000 compared to linked quarter and increased $762,000 compared to the period -- prior year period, primarily due to the changes in mortgage servicing rights mark-to-market valuations. MSR mark-to-market valuations increased $775,000 quarter-over- linked quarter and $1 million over the prior year period. Total noninterest expense for the third quarter of 2026 increased $370,000 from the prior linked quarter, driven by higher regular salaries, higher officer incentive and employee insurance costs within salaries and employee benefits and an increase in occupancy, furniture and equipment due to continued capital projects and growth in real estate taxes and office equipment costs. These increases were partially offset by a decrease in other expense from several one-off expenses in the prior quarter.

Our efficiency ratio continues to be excellent as the tax equivalent efficiency ratio adjusted to exclude core deposit intangibles, OREO costs and the adjustments to net income, as noted earlier, was 52.0% % for the third quarter compared to 50.8% for the second quarter. Overall, the company continues to perform at an exceptionally high level. Operating leverage is strong. The margin was largely stable and fee businesses are performing well. The improvement in key credit metrics, including reductions in classified and criticized during the third quarter will allow us to finish the year over the next quarter in a much better position to demonstrate the full earnings power of Old Second.

I'll now turn it over to Brad for more color.

Bradley Adams

Thanks, Jim. Net interest income increased to $84 million relative to last quarter at $83.3 million. It also increased $1.3 million from last year. Loan yields increased 3 basis points, while securities yields declined 5 basis points in the third quarter. Total yield on earning assets increased 6 basis points. over the linked quarter to 640 basis points. Cost of interest-bearing deposits increased modestly at 2 basis points and total cost of interest-bearing liabilities increased 1 basis point to 174. The end result was a 4 basis point increase in the tax equivalent NIM to 5.27% versus 5.23% last quarter. Obviously, we believe this continues to be an exceptional margin performance.

Average loans increased $5.5 million or only 0.1% over linked quarter and average deposits, however, decreased by $78 million or 1.4%. Deposit runoff is largely seasonal this quarter with some residual runoff and high beta effectively wholesale deposit captions. Loan origination activity in the third quarter was much better than it appears and in line with budget. but was offset by significant paydown and payoff activity. Loan prepayments through the first 3 quarters have already reached full year 2025 levels.

Certainly, the market environment, including ongoing interest rate volatility and due to high energy prices and broad-based inflation has resulted in outsized payoffs, it appears to us. Our lending teams are continuing to work very hard and pipelines for the fourth quarter are building, which should also bode well for the first quarter of 2027 as well.

From a stock repurchase perspective, we acquired 1.5 million shares during the third quarter, resulting in a reduction to equity and a growth in treasury stock of $39.2 million. Year-to-date repurchases totaled 3.4 million shares at an average price of $22.74. That's a $74.7 million reduction in equity. This has a negative impact on the net interest margin, obviously, but a positive impact on earnings per share. We do expect to continue being active in the repurchase of shares given our extremely strong capital position and current and expected earnings trends.

In addition, based on the strength of the balance sheet and resilient income statement trends, Old Second elected to increase the common dividend in the fourth quarter of 2026 by 14% as we continue to deliver growth commensurate with the bank's performance. Overall, margin trends still feel very good. Obviously, rates along the curve went up quite a bit with recent instability in the Middle East and previous expectations for rate cuts have reversed course into rate hikes. If those trends remain stable from here and high-cost deposit attrition slows, I would expect to maintain exceptional margin performance.

I do believe at this point, however, that we are likely to give back 5 basis points or so with our current loan growth expectations and the rapid rise we have seen in deposit competition recently. Loan growth in the fourth quarter of '26 is being targeted in the low single-digit level. Expense growth will continue to be modest in the quarters ahead.

That's it for my view, and I'll turn the call back over to Jim.

James Eccher

Thanks, Brad. In closing, we feel despite the isolated charge-off was a pretty solid quarter for the company. We're optimistic due to the improvement in credit metrics this quarter, and the rest of the bank is performing ahead of our expectations. We remain positive about loan growth opportunities and the potential for more strategic growth opportunities as well.

That concludes our prepared comments this morning. So I will turn it over to the moderator and open it up for questions.

Operator

[Operator Instructions] Our first question today is coming from Nathan Race with Piper Sandler.

質疑応答

Nathan Race

Jim, obviously, disappointing charge-off number. Obviously, you mentioned you had this previously allocated for. And we've been through several quarters with some credit noise. But just given the reductions in both nonperformers and criticized loans in the quarter, can you just help us in terms of your degree of confidence that we're now in a position today where we can expect charge-offs to be consistently lower. I think we've talked about a range of maybe 35 to 40 basis points is kind of a normalized range going forward. But can you just speak to kind of your degree of confidence that we can expect that to unfold going forward?

James Eccher

Sure, Nate. Yes. I mean obviously, the one charge-off, this has been a lingering credit that we've been working out for the better part of the year. We -- the company is under contract to be sold, albeit at a much lower price. So -- we feel we've got this now largely behind us. I think what we're most encouraged about, Nate, is a significant reductions in classifieds and even a special mention, you got to go back to October of 2019, way before COVID to have classified at this level.

So we think we've turned the corner at an inflection point with a lot of this credit and understanding we are going to have a certain degree of powersport charge-offs on a quarter-over-quarter, but we feel as good about the loan book today as we have in several years.

Nathan Race

Okay. Great. That's helpful. And Brad, a little surprised to hear your comments around giving back 5 bps of margin in the fourth quarter, just given how low beta your deposit franchise has historically been. I appreciate deposit pricing competition is increasing these days, but just given how much repricing you have in assets tied to short-term rates, curious if you can kind of just unpack some of that a bit just in terms of what your beta expectations are for the fourth quarter. And again, if you could remind us kind of what you have repricing on the left side of the balance sheet tied to short-term rates.

Bradley Adams

So there's a couple of things going on. What I would say from the expectation of giving back a few basis points, the drivers of it, one is how many shares we've repurchased. Obviously, we're giving up a fair amount of free funding in order to do that. That has a negative implication. The other thing is the loan-to-deposit ratio is pretty much nearing the ceiling at this point. So for the first time in a while, we are participating at the marginal funding rate relative to our loan growth expectations. And I think that's probably the biggest driver in what I'm talking about. There are, as you point out, things on the other side that are to the good.

At any given time, 50% of our book is variable. And generally, it reprices with a 30-day lag, and then we move relative to SOFR, but SOFR is ahead of what the Fed has been doing, and that rate has been high for a while. So we've been seeing that benefit for quite some time. That being said, we do have -- Jim was positively by the other day talking about this 3.5% commercial real estate loan that repriced in the 6s. And we are seeing some of that. And that's obviously a big benefit.

James Eccher

Yes. I mean I would say 45% of our loan book is going to reprice in the next 3 or 4 quarters. 25% of our securities portfolio is repriced at the same time. So there will be a tailwind there. The net-net of all that is we're going to hang out pretty high at these levels, but guessing within plus or minus 5 basis points. Clearly, I've been pretty bad at it over the last year or so, but I've been bad on the right side of it. So maybe I'm hedging a bit, maybe I'm right. But I still think we're solidly above the 5.20% margin for the near and intermediate term.

Nathan Race

Okay. Great. And then can you guys just kind of speak to just the buyback appetite, obviously, really stepped up on the buybacks in 3Q and over the course of this year. To what extent do you guys want to continue down the path at a similar clip to what we've seen recently? And within that context, curious how you want to balance buybacks with perhaps an acquisition at some point, perhaps sometime next year?

Bradley Adams

I have plenty of capital to do both, Nate. I mean, as you can see, even this quarter, we didn't shrink capital and we bought back 3% of shares. I think it's reasonable for investors to expect us to take out 5% of shares a year and still have the ability to execute on the type of M&A that we're looking for, which as we've talked about in the past, is relatively smaller than what we would have talked about a couple of years ago. It's kind of fill-in type stuff is from our perspective is where the value would be at this point.

Operator

Our next question is coming from [ Mark Shutley ] with KBW.

Unknown Analyst

So loans were roughly flat this quarter with prior prepayments. And I think you said the outlook is low single-digit growth from here. But I was just curious sort of how the pipeline is looking and where you expect to see that growth in the coming quarters.

James Eccher

Yes. I think as Brad pointed out in his comments, loan production was better than maybe what the results showed, and it's probably one of the stronger quarters in the last 6, 7 quarters. I think what we saw was outsized prepayments 2x of what we would normally see in a quarter. Couple that with the fact that we've been actively trying to work down our syndications portfolio. As you know, we have had a significant syndication portfolio come over with West Suburban. We reduced that $53 million this quarter alone. So had we not had that and any outsized payoffs, we would have had a really good quarter.

As far as the pipeline is concerned, as of right now, it is looking like one of the more solid fourth quarters we've had in a long time, and we're optimistic we're going to get out of the gates pretty well in the first quarter next year as well.

Operator

Our next question is coming from Jeff Rulis with D.A. Davidson.

Jeff Rulis

I wanted to kind of maybe a jump off of the loan demand and higher rates. I guess, initially, are you seeing any pullback on the consumer powersports from a loan demand standpoint? Is that any impact that you're seeing out there?

Darin Campbell

Yes. This is Darin Campbell. Yes. No, we're not seeing any pullback at this point. Application volume for us this year is up a little bit over last year from the application process. I will say we've turned down more applications this year compared to last year just for consumer distress. So we're accounting for more debt that we're seeing on credit reports. And so we've turned down, as I said, about 7%. But originations is very similar to the same time last year. Applications is up a little bit. So overall, strong. Our collective card business is actually up quite a bit this year as well. So we're seeing a lot of demand in that area as well. So overall good.

James Eccher

Yes, Jeff, I think when you look at the commercial bank, our pipeline build right now is pretty broad-based. We're seeing it building in small business, middle market C&I, health care, investment CRE and even sponsor and investment leasing. So we're as pleased as we could be with -- and normally, fourth quarter is pretty soft, but pipelines are really pretty good right now.

Jeff Rulis

Appreciate that. And I guess the other side of that is, I think, Jim, you noted that nice to see the benefit of repricing in the book. The flip side of that is any thoughts on kind of repricing risk on the credit side as maybe higher rates as customers face that. I guess, any color on -- are you helping with borrowers in terms of that repricing risk potentially?

James Eccher

Yes. I mean keep in mind, our loan book is very short duration. So a significant part of some of these credits have already been in a higher rate environment. But we stress test constantly. We feel early-stage indicators are low and no concerns at this point. Darin, do you want to add on the consumer?

Darin Campbell

Yes. I think, Brian, just one of the things that's worth mentioning on the call, we're very excited to announce that we signed a multiyear endorsed agreement with Dukat USA. So we -- something we've been working on for quite some time to get to the finish line. That partnership was announced and launched last week. The dealer feedback that we've received from the dealer network has been tremendous. The application flow has already started to come in. So that's been exciting.

And as we think about growth going forward, even in our fourth quarter, this will give us a little boost for the fourth quarter. But if you think about for '27, there will be a substantial boost for us in originations next year. And Dukat is one of the best motorcycle brands that's in the market. So we could not be more excited about this opportunity for us.

Jeff Rulis

Okay. Sounds good on the production side. But again, on Jim, the credit and the repricing on the credit front, feel good about that given the short duration.

Bradley Adams

Yes, this is Brad. I think what you've seen from us in terms of the spike in classified and criticized over the past 3 years has been that very thing. But again, I think it's pretty safe to say we're through that.

Operator

Our next question is coming from Ken Kohut with Raymond James.

Kenneth Kohut

I'm filling in for Danny Tamayo. A lot of my questions have been asked and answered, but maybe just on deposits. You've been talking about optimizing your deposit base really since the Evergreen acquisition closed to more resemble the legacy Old Second deposit base. And we saw another step down in deposits this quarter, and you specifically called out the runoff of higher cost funding acquired from Evergreen. So I'm just wondering how much work is left to do on that front? And should we expect to see further deposit runoff in the coming quarters?

Bradley Adams

I think you'll see deposit growth in the fourth quarter, and I think that most of the attrition post that acquisition is largely behind us. My expectation would be that deposits would grow from here. Some of that will come at a little bit more rate. And obviously, we remain on the lookout to supplement our deposit base through M&A activity as well.

Operator

Our next question is coming from Brandon Rud with Stephens Inc.

Brandon Rud

The first one may be kind of an adjacent question to a prior one. Just on the reserve, it's come down for the past few quarters now. Are there any remaining specific allocations within that? Or is this 123 kind of the steady state you kind of anticipate going forward?

James Eccher

Yes. I mean there's certainly some reserve allocations built into the portfolio, but I think the drawdown in that reserve is largely reflective of the fact that our classified have come down significantly, right? We won't run much lower from here just due to the fact we'll continually have to replace powersport charge-offs quarter-over-quarter, but I don't see a majority drawdown of reserves.

Brandon Rud

Okay. Perfect. And then just one on expenses. It came in a touch higher than we had in our model. Is this like $51.5 million a good expectation for the near term and then growing 3%, 4% annually after that?

Operator

Yes. Our next question is coming from Brian Martin with Brean Capital.

Brian Martin

Brad, maybe just one follow-up on the expense one. Just the resolution of some of these credits that you've gone through the last couple of quarters, is that a tailwind to the expense line? I mean I get your comments about the outlook, but is that part of the reason, I guess, maybe we get a little improvement or if there is any on the expense side?

Bradley Adams

So I mean that's the big delta between kind of the way you look at things and the way I look at things, Brian, there's always ins and outs and what avenues in every quarter. And this quarter, for example, our third-party expense is elevated. The next quarter, it will be something else, but there's always stuff coming and going. And I look at it much more granularly than probably it appears. Like my income statement has like 42 captions for expenses and yours has like 4.

So there's always stuff moving around. I think that in a world where inflation in any real sense is probably between 4% and 5%, being in that 3% to 4% range is a pretty good thing, given I mean I don't know if you noticed your employer is probably cutting your health care benefits and increasing your costs, but our costs are projected in that caption to be up pretty close to 20% next year, which is shocking. So there's a lot of things going on. And I actually feel like kind of that 3% to 4% range is doing pretty damn good, and I feel great about it.

Brian Martin

Yes. That's what I meant, Brad. I guess it seems like you're going to have other stuff this gives you a little bit of a tailwind or at least a little help to offset some of those other items. So just...

Bradley Adams

I mean it helps us deliver on that guidance I just gave for sure. I wouldn't expect -- I think we're doing a lot of heavy lifting to be at that level is the point I'd like to make.

Brian Martin

Got you. That's clear. And then just on the opportunity set on -- I know you talked about strategic opportunities, Jim, just the opportunity set in terms of what's out there. Are you seeing more opportunities today? Are there less out there today? Just kind of how is the environment on opportunities in the...

James Eccher

I mean, Brian, you know Chicago as well as anybody. There's been a handful of transactions obviously announced, and we continue to have conversations. I wouldn't say it's more robust now than it was a year ago. They're active and ongoing. We're hopeful that opportunity arises next year.

Brian Martin

Yes. Okay. And then the last 2 for me were just the new rates on loans and, I guess, what you're putting on the securities book, Brad, just we kind of reconcile those numbers Jim gave in terms of what's repricing here. What are new rates on securities you're thinking about it kind of 5%-ish and then on loans?

Bradley Adams

I'm not adding the securities book at this point, given where we are in deposit competition. It would be largely static in terms of what you'd see there. If there are flows coming out, will be replaced at similar rates. So I wouldn't expect any real movement in the securities book. In terms of loans, it's still in the kind of mid-6s type range would be my guess.

Brian Martin

Okay. Got you. And the last one was just on the syndication book. I know you mentioned it's been running off, Jim, obviously. Just where it stands today? And I guess that runoff is just going to continue. It's just a steady decline in that book. Is that how to think about that, it's not going to really impact the.

James Eccher

Yes. I mean at our peak, we were $550 million in syndications. We've reduced that by over 60% since the end of '21 roughly $285 million. Will it go to 0? No. It's just not going to be a material part of our balance sheet. We just view that business as transactional non-franchise enhancing type business, but we'll continue to do some of it. It's just not going to be a primary focus.

Brian Martin

Okay. And the payoffs will just -- I guess that's what I was getting at. The payoffs won't be a major factor in terms of -- as we go forward here, like maybe it has been as you owned it.

James Eccher

It won't be as much of a headwind as it has been you're correct.

Operator

Okay. As we have no further questions on the lines at this time, I would like to turn the call back over to Mr. Jim Eccher for any closing remarks.

James Eccher

Okay. Thanks, everyone, for joining us this morning. We look forward to talking to you again next quarter. Goodbye.

Operator

Thank you. Ladies and gentlemen, this does conclude today's call. You may disconnect your lines at this time, and we thank you for your participation.