이스턴 뱅크셰어스(EBC) 2026년 3분기 실적발표 콘퍼런스콜: 사상 최대 이익 및 순이자마진(NIM) 전망

핵심 요약

• 이스턴 뱅크셰어스(Eastern Bankshares)는 3분기 희석 주당순이익(EPS) 0.51달러, 영업순이익 1억 1,100만 달러로 사상 최대 실적을 발표했으며, 이는 2분기 대비 4%, 전년 동기 대비 50% 증가한 수치다.
• 총매출은 전분기 대비 1% 증가한 3억 660만 달러를 기록했다. 영업비용이 감소하면서 영업효율성비율은 47.5%로 개선되었고, 평균유형보통주자본 영업이익률(ROATCE)은 15.7%로 상승했다.
• 예금 비용 상승이 자산 수익률 개선을 상쇄하면서 순이자마진(NIM)은 4bp 하락한 3.62%를 기록했다. 경영진은 4분기 NIM이 비교적 안정적인 수준을 유지하고 2027년에는 완만하게 개선될 것으로 예상하고 있다.
• 기말 대출 잔액은 상업용 부동산(CRE) 대출 2억 2,900만 달러 및 상업 및 공업(C&I) 대출 9,300만 달러 증가에 힘입어 2억 6,100만 달러(1.1%) 증가했다. 9월 말 기준 상업용 대출 파이프라인은 약 10억 달러 규모다.
• 자산 건전성이 개선되어 순상각률은 평균 대출의 9bp로 낮아졌고, 부실대출(NPL)은 8,480만 달러(총 대출의 36bp)로 감소했다.
• 회사는 해당 분기 동안 5,670만 달러의 자사주 매입과 3,240만 달러의 배당금 지급을 통해 주주에게 총 8,910만 달러를 환원했다.

주요 재무 데이터

사업 및 영업 실적

상업용 대출이 대차대조표 성장을 견인했다. 신규 대출 실행이 견조하게 유지되고 2분기 대비 상환액이 감소하면서 상업용 부동산(CRE) 대출 잔액은 2억 2,900만 달러 늘었다. 상업 및 공업(C&I) 대출 잔액은 광범위한 고객 활동에 힘입어 9,300만 달러 증가했다. 경영진은 금리 상승으로 일부 투자 결정과 대출 계약 체결이 지연되고 있지만, 대출 파이프라인은 여전히 견조하다고 밝혔다.

주택담보신용대출(HELOC) 잔액은 4,400만 달러 증가했으며, 주택담보대출은 소폭 상승했다. 회사는 HELOC 및 상업용 대출 성장을 지속적으로 선호하며, 2026년 주택담보대출 포트폴리오는 비교적 변동이 없을 것으로 예상하고 있다.

기말 예금은 9,800만 달러 증가했으며, 평균 예금은 2분기 대비 6억 6,700만 달러(2.6%) 늘었다. 총예금비율(비용)은 9bp 상승한 1.56%를 기록했으며, 9월 말 시점 예금 비용은 1.59%에 달했다. 고객들이 유동성을 선호함에 따라 머니마켓 잔액은 계속 증가했다.

자산관리(Wealth Management) 부문의 수탁자산(AUA)은 운용자산(AUM) 108억 달러를 포함해 116억 달러에 달했다. AUM은 9,700만 달러의 순유입에 힘입어 전분기 대비 1억 5,600만 달러 증가했다. 자산관리 수수료는 전년 동기 대비 10% 증가했으나, 계절적 요인에 따른 세무 신고 대행 수수료 감소로 2분기 대비로는 소폭 감소했다.

영업 비이자비용은 전분기 대비 670만 달러 감소했다. 직원 복리후생비, 임차료, 전문 서비스 비용 및 기타 영업 비용 절감이 연방예금보험공사(FDIC) 보험료 100만 달러 증가분을 충분히 상쇄했다.

이스턴은 3분기 중 평균 단가 22.11달러에 260만 주(5,670만 달러)를 매입했다. 또한 컨퍼런스 콜 전날까지 3,380만 달러를 들여 160만 주를 추가 매입하면서 2027년 말까지 예정된 매입 승인 한도 중 850만 주가 남게 되었다.

경영진 가이던스

경영진은 2026년 7월에 제시한 연간 가이던스를 유지했다. 연초 이후 누적 NIM은 3.64%로 회사가 제시한 연간 범위인 3.60%~3.65% 내에서 유지되었다.

회사는 4분기 NIM이 비교적 안정적으로 유지되고 2027년에는 소폭 개선될 것으로 예상하고 있다. 이 전망에는 추가 금리 인상이 반영되어 있다. 경영진은 고정금리 자산의 금리 재설정(리프라이싱) 속도가 예금 비용의 추가 상승을 상회할 것으로 보고 있으며, 4분기에 약 10억 달러, 2027년에는 분기당 약 8억 달러 규모의 자산 리프라이싱이 이루어질 예정이다.

경영진은 실효세율이 약 22% 수준으로 돌아갈 것으로 예상하고 있다. 4분기 비용은 2분기와 3분기 평균을 바탕으로 기본 분기 비용 기준 약 1억 6,300만 달러에서 1억 6,400만 달러를 기록하며 3분기 대비 증가할 것으로 예상된다.

2027년의 경우 경영진은 기술 및 AI 관련 지출 증가를 포함하여 비용이 통제 가능한 수준 내에서 소폭 증가할 것으로 예상하고 있다. 공식 2027년 가이던스는 회사가 고금리 환경을 추가 평가한 후 1월에 발표될 예정이다.

리스크 및 주요 점검 사항

뉴잉글랜드 시장 전반의 예금 경쟁은 지속되고 있으며, 특히 금리가 추가 인상될 경우 4분기와 2027년까지 이어질 수 있다. 경영진은 3분기 예금 가격 책정(금리 인상) 압박이 예상보다 강했다고 인정했다.

높은 금리로 인해 일부 상업용 대출 의사결정이 지연되고 있으며, 차입자가 원리금상환비율을 유지하기 위해 더 많은 자기자본을 투입해야 할 수도 있다. 이는 대출 수요 감소나 거래 종료 지연으로 이어질 수 있다.

소수 차주로 인해 상업용 요주의 및 고정이하 대출이 소폭 증가했다. 그럼에도 경영진은 전반적인 자산 건전성이 견조하다고 밝혔으며, 인수한 하버원(HarborOne)의 신용 문제 대부분이 해결되었고 남은 작업은 1분기까지 연장될 수 있다고 덧붙였다.

경영진이 언급한 기타 불확실성 요소로는 인플레이션 압력, 금리 전망 변화, 전반적인 거시경제 여건 등이 있으며, 이는 2027년 대출 및 이익 성장 속도에 영향을 줄 수 있다.

애널리스트 Q&A 하이라이트

• 대출 성장: 경영진은 2026년 목표에 대해 여전히 자신감을 갖고 있다. C&I가 약 10억 달러 규모의 상업용 파이프라인에서 가장 큰 비중을 차지하지만, 높은 금리로 인해 일부 고객의 의사결정이 지연되고 있다.
• 마진 및 예금 베타: 이스턴은 과거 평균 수준인 50% 부근의 예금 베타 목표를 계속 유지하고 있다. 경영진은 금리가 추가 상승하더라도 자산 리프라이싱이 완만한 마진 개선을 뒷받침할 것으로 예상한다.
• 대출 금리 책정: 핵심 CRE 및 C&I 스프레드는 대체로 175~200bp 수준을 유지하고 있다. 치열한 경쟁은 수수료 수익도 창출할 수 있는 대형 우량 차입자에 집중되어 있다.
• 자금 조달 능력: 9월 30일 기준 회사의 예금은 대출보다 약 20억 달러 더 많았다. 경영진은 현재 자금 조달이 대출 성장을 제약하는 요인이라고 보지 않는다.
• 유가증권 포트폴리오: 이스턴은 4분기에도 지속적인 재투자와 유가증권의 소폭 순증가를 기대하고 있다. 최근 매입 건의 수익률은 자산군에 따라 약 6%~6.5% 수준이었다.
• 전략적 우선순위: 경영진은 은행 인수합병(M&A)보다는 자체적인 유기적 성장, 수익성 및 자본 환원에 집중하고 있다고 설명했다. 또한 광범위한 지점 구조조정 프로그램도 추진하지 않고 있다.

실적발표 컨퍼런스 콜 전문

전체 실적 발표 컨퍼런스 콜 녹취록

경영진 발표

Operator

Welcome to the Eastern Bankshares, Inc. Third Quarter 2026 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded for replay purposes. In connection with today's call, the company posted a presentation on its Investor Relations website, investor.easternbank.com.

Today's call will include forward-looking statements. The company cautions investors that any forward-looking statement involves risks and uncertainties and is not a guarantee of future performance. Please refer to the company's forward-looking statement on Slide 19 of this presentation as well as the risk factors described in the company's SEC filings. The company will also discuss both GAAP and certain non-GAAP financial measures. For reconciliations, please refer to the company's earnings press release and SEC filings.

I'd now like to turn the call over to Denis Sheahan, Eastern Chief Executive Officer.

Denis Sheahan

Thank you. Good morning, everyone, and thank you for joining us. On the call today with me are Executive Chair and Chair of the Board of Directors, Bob Rivers; President and Chief Operating Officer, Quincy Miller; and our Chief Financial Officer, David Rosato. We're pleased with our third quarter performance, which reflects disciplined execution of our priorities. We delivered record operating earnings, generated attractive returns, maintained excellent asset quality and returned meaningful capital to shareholders, all while continuing to drive organic growth across both our banking and fee-based businesses.

These results further reinforce Eastern's standing as a premier bank in Greater Boston, one of the nation's largest and most affluent banking markets. The increase in period-end loan balances was primarily driven by strong commercial real estate originations and broad-based C&I growth. As expected, CRE payoffs moderated from the second quarter, leading to solid growth overall in commercial real estate.

Commercial loan pipelines remain strong, although the pace of closings has been somewhat slower than anticipated as some clients take a more measured approach to investment decisions amid interest rate uncertainty. Overall, customers remain resilient as business activity continues to generate demand for financing. We believe there are a lot of opportunities in the Commercial Banking segment, and we are well positioned to gain share. Customers value our ability to deliver a broad set of commercial capabilities typically associated with larger institutions while also providing the certainty of execution that comes from local decision-making and knowledge.

The Eastern brand is highly regarded across our market and the franchise is deeply rooted. We live and work here, and our extensive involvement in the communities we serve resonates with customers. On the funding side, period-end deposits grew modestly despite seasonal municipal outflows. While the deposit environment remains competitive and costs move higher, we remain committed to gathering core deposits to support our growth strategy and balancing these efforts with margin performance.

Importantly, the strength of our core deposit base and limited reliance on wholesale funding provide us with the flexibility to stay disciplined while also supporting customer relationships. Wealth Management is an important component of our long-term growth strategy, and we achieved another successful quarter. Assets under management and administration increased from the end of the second quarter, driven by both positive net flows and market appreciation. Our comprehensive team-based approach continues to differentiate us across our target market of $2 million to $20 million in investable assets. We offer a level of service to this segment that larger firms typically cannot deliver. Importantly, we get compensated well for these services with an average fee ratio of approximately 70 basis points.

While we're in the early stages of capitalizing on the full potential of this business, the increasing alignment between our wealth and banking teams, combined with the attractive wealth demographics across our footprint is generating meaningful momentum, and we are encouraged about its long-term outlook. Our asset quality remains a clear source of strength, reflecting conservative underwriting and proactive risk management.

Net charge-offs declined linked quarter and as anticipated, nonperforming loans improved for the third consecutive quarter following the HarborOne merger. We are confident in our credit profile, including the sectors that have received greater attention in Boston, such as life science, which we have limited exposure. We know our investor office portfolio exceptionally well, and it represents only 4% of total loans. The portfolio is well reserved and continues to perform within our expectations.

While overall credit trends remain favorable, our experienced credit team continues to actively monitor the macro environment and local market for emerging risks that could impact our customers, positioning us to respond quickly and decisively when needed. Finally, given our profitability, we continue to generate capital in excess of our growth needs. As we have consistently communicated, we are committed to thoughtfully rightsizing our capital position over time. That commitment was evident again this quarter as we returned meaningful capital to shareholders through both share repurchases and quarterly dividend while continuing to support organic growth opportunities.

As always, our results reflect the efforts of an exceptional team, and I want to thank our colleagues for their continued commitment and execution. I also want to express my gratitude to our customers for choosing Eastern as our financial partner and to shareholders for their ongoing trust and support. We never take these relationships for granted. And every day, we are focused on delivering strong, sustainable performance and value for all stakeholders.

David, I'll hand it over to you to provide further details on third quarter financials.

R. Rosato

Thanks, Denis, and good morning, everyone. Our third quarter financial performance was strong and highlighted by record operating net income, further improvement in key profitability metrics, including return on average assets and return on average tangible common equity. Positive operating leverage driven by an increase in net interest income and lower expenses, solid balance sheet growth, supported by strong commercial lending activity, sustained excellent asset quality and meaningful capital returns to shareholders.

The third quarter also benefited from a modestly lower effective tax rate, primarily reflecting a higher level of tax-preferenced items. Going forward, we expect the effective tax rate to return to about 22%. We reported record operating net income of $111 million or $0.51 per diluted share, an increase of 4% linked quarter and 50% from a year ago, reflecting the enhanced earnings power of the company. Net interest income growth, combined with well-controlled expenses, produced another quarter of positive operating leverage. As a result, the operating efficiency ratio improved to 47.5%, contributing to a 3 basis point increase in operating ROAA to 141 basis points and a 37 basis point improvement in operating return on average tangible common equity to 15.7% compared to the second quarter.

Total revenue of $306.6 million increased 1% linked quarter as growth in net interest income was offset by lower fee income. Starting with Slide 5 of the presentation. Net interest income grew 2% linked quarter, reflecting the benefit of continued balance sheet growth. Net interest margin declined 4 basis points to 3.62%, which was in line with our expectations as higher funding costs more than offset improvement in asset yields. Asset yields increased 2 basis points, driven by favorable loan and securities repricing, while interest-bearing liability costs rose 8 basis points due to higher deposit costs.

Net discount accretion contributed 26 basis points to the margin compared to 28 basis points in the prior quarter. Excluding accretion, the margin declined 2 basis points linked quarter. Importantly, our year-to-date net interest margin of 3.64% remains well within our full year guidance range of 3.60% to 3.65%. While the benefits of a steeper yield curve and higher rates are supporting asset repricing, those tailwinds continue to be offset by competitive deposit pricing. As a result, we currently expect net interest margin to remain relatively stable in the fourth quarter and to modestly improve into next year.

We show the repricing characteristics of our interest-earning assets on Slide 6. We have approximately $8.8 billion of floating rate assets repricing constantly with short-term rates. Beyond that, we expect approximately $1 billion of fixed rate variable assets repricing in the fourth quarter and roughly $800 million per quarter in 2027.

As detailed on Slide 7, operating noninterest income decreased $9.2 million or 16% compared to a particularly strong second quarter results. The largest contributor to the variance was a $6.3 million decrease in income from investments for employee retirement benefits, reflecting weaker equity market performance. This unfavorable impact on fee income was partially offset by a $2.5 million reduction in related benefit costs reported in noninterest expense.

Miscellaneous income and fees also decreased $3.1 million, largely as a result of gains on the sale of commercial loans recognized in Q2 that did not reoccur in Q3.

Turning to Wealth Management on Slide 8. Assets under administration increased to $11.6 billion, including $10.8 billion in assets under management. AUM increased $156 million linked quarter, primarily driven by $97 million in positive net flows, highlighting the continued momentum in the business. Wealth management fees declined modestly from the prior quarter as growth in AUM revenues was more than offset by lower tax preparation fees, which are seasonally higher in the second quarter. Compared to Q3 '25, fees increased 10%, reflecting strong organic and market-driven asset growth over the last year.

As detailed on Slide 9, the third quarter demonstrated our ongoing focus on prudent expense management and operating efficiency as noninterest expense decreased $8.3 million or 5% linked quarter. Notably, we did not incur any nonoperating costs in the current quarter compared to $1.6 million in Q2. On an operating basis, noninterest expense was down $6.7 million.

The current quarter benefited from the following: $2.2 million decrease in salaries and employee benefits, primarily due to lower costs related to employee retirement benefits that I referenced earlier; a $1.9 million decrease in occupancy and equipment expenses, reflecting lower depreciation and maintenance costs; a $1.8 million decrease in professional services, primarily due to shareholder advisory fees in Q2 that did not reoccur in the third quarter, and a $1.9 million decrease in other operating expenses, largely driven by a release of unfunded commitment reserves. These declines in noninterest expense were partially offset by a $1 million increase in FDIC insurance costs.

Moving to the balance sheet, starting with deposits on Slide 10. Period-end balances increased $98 million linked quarter despite seasonal municipal outflows. On an average basis, deposits increased $667 million or 2.6% from the second quarter. Consistent with recent trends, money market balances continue to grow as customers maintained a preference for liquidity. Total deposit costs of 156 basis points increased 9 basis points linked quarter with a September spot rate of 159 basis points, reflecting elevated competition for deposits in the New England market.

In response to higher short-term rates, we took targeted actions to appropriately position offerings to defend and grow market share. Looking ahead, we remain focused on gathering core deposits while balancing growth with margin performance.

Looking at loans on Slide 11. Period-end balances increased $261 million or 1.1% linked quarter. CRE balances grew $229 million, supported by strong originations, although payoffs remained a headwind despite moderating from Q2 levels. C&I balances increased $93 million, reflecting broad-based growth across the portfolio and continued client activity. Commercial pipelines remain strong and ended September at approximately $1 billion, with a balanced mix between CRE and C&I.

Turning to consumer lending. Home equity balances increased $44 million. Given the strong underlying demand across our footprint for this product, we continue to see home equity as an attractive area of growth. Residential mortgage balances were up modestly from Q2. However, our expectation is the residential portfolio will remain relatively flat in 2026 as we favor HELOC and commercial loan growth.

Moving to Slide 13. Our capital position remains strong as indicated by CET1 and TCE ratios of 13% and 9.6%, respectively. We are focused on rightsizing capital through organic growth, share repurchases and quarterly dividends. We expect to continue to generate excess capital but are managing our CET1 towards the median of the KRX. Tangible book value per share of $12.96 declined 1% linked quarter, primarily driven by higher unrealized losses in the available-for-sale securities portfolio reflected in AOCI. Excluding this mark-to-market impact, tangible book value per share would have increased approximately 2% from Q2 despite returning $89.1 million of capital to shareholders during the quarter.

In addition to $32.4 million of cash dividends paid, we repurchased 2.6 million shares for $56.7 million at an average price of $22.11, which was $0.30 below the VWAP for the quarter. As a result, our diluted common shares outstanding were 215.5 million as of September 30. Fourth quarter to date, we have also repurchased an additional 1.6 million shares through yesterday for a total cost of $33.8 million and now have 8.5 million shares remaining in our authorization that runs through the end of 2027.

We continue to view our buyback through 2 lenses: core and opportunistic. The core component reflects our need to consistently repurchase shares to steadily reduce capital levels. The opportunistic component is more price sensitive. As we remain disciplined and focused on creating value for shareholders. As a result, the pace of repurchases may vary from quarter-to-quarter based on market conditions and the stock's valuation. While we control capital generation and the pace of buybacks, we do not control valuation.

As displayed on Slide 14, asset quality remains excellent. Net charge-offs to average total loans of 9 basis points declined from 17 basis points in Q2, and NPLs improved by $24.6 million to $84.8 million or 36 basis points of total loans. Notably, NPLs continued to improve in both the Legacy Eastern and acquired HarborOne portfolios. Commercial criticized and classified loans increased modestly from the second quarter, reflecting higher balances in both the Legacy Eastern and HarborOne portfolios. The increase was primarily driven by a small number of relationships.

To conclude, our third quarter results underscore the strength of the franchise. We generated record operating net income, produced positive operating leverage and maintained excellent asset quality, all while executing against our priorities of growing organically and returning capital to shareholders. As we look ahead, we remain encouraged by the underlying momentum across the franchise. At the same time, we continue to operate in a dynamic environment characterized by elevated deposit competition, evolving interest rate expectations, inflationary pressures and broader macroeconomic uncertainty. While these factors may influence the pace of loan and earnings growth in 2027, we believe our relationship-based banking model, disciplined expense management and strong balance sheet position us well to continue delivering attractive returns to shareholders.

This concludes our remarks, and we'll now open up the call for questions.

Operator

[Operator Instructions] your first question comes from the line of Damon DelMonte with Keefe, Bruyette & Woods.

질의응답

Damon Del Monte

Just want to start off on loan growth kind of around the commentary with the C&I outlook with kind of a bit of a pause from customers. Just wondering if that impacts your outlook for the full year at all or if you think you're still on track for your updated guide that you provided last quarter?

Denis Sheahan

Damon, thanks for joining us. So pipeline still remain very robust. And actually, the C&I segment is the largest component of our pipeline overall. So we feel really good about that. But certainly, the increase in interest rates, as you might expect, has an impact. We -- more conversations with clients about the fact that rates have gone up. And so it does slow things down somewhat, but we're still optimistic overall and certainly regarding the targets we provided for this year. As we look ahead into next year, we'll have to reassess and we'll provide new guidance at the beginning of the year in terms of -- once we've had more time to digest the higher rate environment, what our outlook for '27 would be.

Damon Del Monte

Okay. Great. And then on the CRE side, are you seeing similar trends with payoffs kind of moderating so far here in the fourth quarter?

Denis Sheahan

Well, certainly, I'll speak to the third quarter. Payoffs did moderate. We did expect them to. If we go back to the beginning of the year, we did expect elevated payoffs in part because of the environment, but also because of the HarborOne merger. And as we anticipated in Q3, they did modify somewhat, although at an elevated level overall. But in a higher rate environment, yes, we would expect payoffs to slow to some degree.

Damon Del Monte

Okay. Great. And then just one for David on securities, the average securities this quarter were up linked quarter. Could you just remind us, was that kind of a full quarter impact from activity in the second quarter? Or were those purchases here in the third quarter?

Denis Sheahan

It was both -- Damon, so we had -- we cash flow about $40 million a month, which we have been reinvesting this year, plus we've added to that both last quarter and this quarter.

Damon Del Monte

Okay. And can we expect there to be a little bit more growth in the securities portfolio?

Denis Sheahan

Yes, sorry. And I think that trend of reinvestment and net growth -- net modest growth will continue into Q4.

Operator

Your next question comes from the line of Justin Crowley with Piper Sandler.

Justin Crowley

I was wondering if you could frame up for us the state of play on the deposit side a bit more. And I think you kind of alluded to this, David, but is your sense or it sounds like it's your sense that competition, and I suppose yourselves included, moved on rate just in advance of the December hike. Or could there -- could that be less of the case and we could see a longer lag here, especially if we think about a couple of more hikes that may be on the way? How are you thinking about that going forward?

R. Rosato

Yes, it's the million-dollar question, Justin. The deposit pressure continues. It's -- I would say it's broadened out to -- it's from smaller banks to larger regionals as well. We think it's going to continue into Q4 and into next year if we do, in fact, see another 75 basis points of tightening from the Fed.

The good news from our perspective is, and we called it out in our comments, the $1 billion of fixed rate asset repricing in Q4 and the $800 million or so a quarter next year. We believe that the fixed rate asset repricing will outpace deposit cost increases, leading to a slightly better margin. But we underestimated deposit pricing in Q3, frankly, as you can see in our results. Our Q margin, if you adjust for a little slowdown in accretion in the residential mortgage portfolio was down 2 basis points.

Justin Crowley

Okay. Got it. That's helpful. And then just flipping to the lending side. You talked about higher rates and what it's doing as far as customers, some of the uncertainty. But curious for you folks and not that you go that far out on the risk spectrum, but just if you guys at all are tightening up the credit box in any meaningful way and if there are just some deals that don't work with the move in interest rates.

Denis Sheahan

Well, we can give you a couple of examples. We're just talking to a senior lender about this of loans that sort of had to be reworked because of the change in interest rates. And it's a combination of, as you'd imagine, with higher rates, the debt service coverage ratio changes. So that requires that the borrower has to put in more equity to meet -- to satisfy our requirements. And that happened in that situation, perhaps in some other situations, it may not.

The other thing that is -- has an effect here is with higher rates, sometimes the sale price of a property would need to be renegotiated modestly to accommodate for the buyers' need to pay a higher rate on the loan. So those things have an effect and they can have an effect on the speed to close those loans. It can also have an effect on demand. But we've been through this before, different rate cycles, and I'm confident in the team's ability to sort of weather through this period.

R. Rosato

Justin, I would just add to that because our credit box is fairly tight and conservative. Our customer base has the ability to put up more equity in the example that Denis cited rather than a more highly levered client base who doesn't have those -- that ability. So on a relative basis, I think we have a better ability to manage through this.

Justin Crowley

Okay. Great. That makes sense. And then just one last one. You guys have, of course, done a lot of work on just improving asset quality. You called that out and maybe selectively moving some credits out of the bank if we think about the acquired portfolio. So I guess I'm curious where you think you are there? And is the legwork basically complete at this point? Or is there still a little room left to go?

Denis Sheahan

I think we feel like we're on track. We -- as we mentioned at the beginning of the year, we knew we'd have sort of an increase in the nonperforming assets, nonaccrual loans, and we'd work our way through it. So if you look at our level of nonperformers at the end of the quarter, 36 basis points, that's a pretty normalized level. And so we think we're through most of the issues we needed to work through on the acquired portfolio.

R. Rosato

Yes. As Denis says, we're right on track. There's probably another quarter into Q1 at most of working through that portfolio. As you can see, that 36 basis points that Denis referenced, it is essentially half HarborOne and half Legacy split right down the middle.

Operator

Your next question comes from the line of Feddie Strickland with Hovde Group.

Feddie Strickland

I wanted to clarify on the directional NIM guide. Thanks David, for that. Does that include any rate hikes? And does the fixed rate repricing story still outpace funding costs in a scenario where we get, let's call it, 2 more hikes over the next couple of quarters?

R. Rosato

Yes. Good question, Feddie. Yes, it does include additional rate hikes. And the conclusion still holds.

Feddie Strickland

Okay. And then just one more piece to that. Just again, I appreciate the detail on the fixed rate asset repricing. Can you give us a sense for the rate that you're able to get on the new securities purchases as well as kind of where these loans are repricing up to?

R. Rosato

Well, on the securities portfolio, if you look in the page that we have there, we've been able to drive up security purchases on average about 10 basis points a quarter through the last year, some quarters a little higher, some quarters a little lower. We're putting in -- depending what asset class you're talking about, whether it's mortgage-backs, which were primarily doing hybrid ARMs or municipal bonds, you're putting in yields at 6% to 6.5%, depending on asset class. So quite additive to the portfolio.

And then the second part of your question was just on the loan -- was on the loan side. And with as much talk about competition on loan spreads, we're actually seeing loan spreads for the most part, being held relatively stable. So you're talking 175 to 200 basis points across our bread and butter CRE and C&I portfolios. It's -- where we're really seeing spread competition is what I would call them, the larger, more marquee names in the markets that also would have strong fee income opportunities.

Feddie Strickland

Got it. That's helpful. And just one more for me, just on expenses. Are there any items that could meaningfully add to the expense base in the fourth quarter? And directionally, as we think out to '27, just given the step down in expenses in the third quarter, could we potentially see expenses either flat or maybe even slightly lower for the year? Just trying to get a sense for where they could go.

R. Rosato

I would caution you a touch there. I would expect expenses to tick up a bit in Q4 relative to Q3. We kind of went, the investment advisory fees that we called out linked quarter drove that down. That's not repeatable. Maintenance operating expense there was a little below trend. I would think more about the average of the second and third quarter, which puts that expense base, call it, $163 million, $164 million in that neighborhood.

Operator

Your next question comes from the line of Tyler Cacciatori with Stephens.

Tyler Cacciatori

This is Tyler on for M. Breese. I was wondering if you could talk a little bit about the loan-to-deposit ratio. I know the seasonal muni outflows played a role this quarter, but is there any level you start to pull back on loan growth if deposit growth doesn't keep pace? Or is that not really a constraint you're focused on today?

R. Rosato

If you look over many years, our loan-to-deposit ratio has ticked up. But if you look at our 9/30 balance sheet, we have $2 billion more deposits than we have loans today. And we've made comments about our residential mortgage portfolio being a little larger than normal because of acquisitions. So we're certainly focused on growing our deposit base to fund loan growth, but we're not at a point where we believe it would be a constraint on loan growth.

Tyler Cacciatori

Okay. Great. And then just one more quick one. Do you happen to have the spot cost of deposits maybe at quarter end or in the month of September?

R. Rosato

Yes, we do. So it was 1.56%, as we said, for the quarter. We ended September at 1.59%.

Operator

Your next question comes from the line of Laurie Hunsicker with Seaport Research Partners.

Laura Havener Hunsicker

Just staying on margin. By the way, I love Slide 6. That's super helpful. Spot margin, do you have that?

R. Rosato

Sure. The spot margin for September was 3.62%.

Laura Havener Hunsicker

Okay. Great. And then just going back to expenses more broadly. And I realize you haven't yet given guidance for next year, but can you help us think about where you all sit in terms of sort of a tech AI spend relative to where you were this year and then branch rationalization, which is something that certainly some of your peers are looking at. How do you approach that?

R. Rosato

So we are certainly focused -- we have seen tech AI spend go up this year modestly. We're in the middle of a budget process where we are seeing increased ask for tech spend and people to support that tech spend. At the end of the day, we will be able to absorb that in our full expense base in a manner that puts year-over-year expenses well under control. They will increase, and they will increase modestly, but we don't think the tech AI spend is -- we're going to be sitting here in January, delivering bad news on the expense line.

Denis Sheahan

And then I'll jump in as far as your question about branch rationalization. We don't have a program you referred that some others may have of rationalizing a branch no more than we would in any other period. Anything we think about there, whether it's expansion or potential branch closure, is sort of onesie-twosie. We evaluate each of our markets and our presence there in terms of its growth potential, our profitability, et cetera. So we don't have a significant plan in terms of branch rationalization.

Laura Havener Hunsicker

Okay. That's helpful. And then just very high level, Denis, maybe you can comment. I think we know the answer, but just would like to hear you say it, whole bank M&A. Where do you sit on that at the moment?

Denis Sheahan

Yes. Laurie, our position remains the same as it has been for quite some time. We're focused on -- we're very pleased to deliver a nice clean quarter with sort of no non-operating items, as David referenced. The profitability performance of the company is improving significantly. We're generating a lot of capital. We're returning a lot of capital, and that's exactly what we're focused on. We're not focused on M&A at all.

Operator

[Operator Instructions] your next question comes from the line of Jared Shaw with Barclays Capital.

Jared David Shaw

Should we assume with the removal of the guidance side, is that -- are we -- are you removing guidance? Or how should we think about guidance from last quarter?

R. Rosato

Yes. Jared, I did chuckle to myself when I read your note last night. The -- our practice is guidance in January, midyear update in July, not quarterly guidance. So there really wasn't -- we haven't removed anything. That's just what our practice is.

Jared David Shaw

Okay. So it's not -- so what was left from July is still sort of we can call that still the current guidance?

R. Rosato

100%. And I slightly referenced that in the comments around the margin. Even though the margin was down, it's still within that guidance. But we have not changed any of our thoughts for full year '26 relative to what we put out on -- in July.

Denis Sheahan

Other than your earlier comments during Q&A, you referenced expenses in Q4, the tax rate. So Jared, it's largely, it's the same guidance.

Jared David Shaw

Got it. Okay. And then what are your thoughts on expected beta given the sort of the changed rate outlook and the competition that you referenced? How should we think about your thoughts of deposit beta through the cycle here?

R. Rosato

Yes. So again, a really important question. Our goal, our thought today is we'll be able to achieve the historic 50% deposit betas that we have done -- that we did in the last up cycle. Every one of these cycles is different, as we all know. What's different this cycle is the industry moved before the Fed moved, right? That's kind of what we're experiencing on deposit costs last quarter and slightly in Q2. The -- it's the level of deposit competition, which is also driven by the level of loan demand, ultimately is going to control that beta.

But there's nothing other than the fact that the industry moves sooner that should be different this cycle. The deposit power of our franchise is only stronger now than it has been in the past as we're bigger and more important in our market. So we stand by the historical averages we've been able to achieve, which is essentially a 50% beta.

Jared David Shaw

Okay. All right. And then just finally for me, any update on the competitive environment on commercial with some of the consolidation that we've seen? Is that flowing through to the potential to -- to see some movement among borrowers?

Denis Sheahan

Jared, yes. I mean, certainly, there has been a change in the competitive environment with some of the consolidation that's happened. We've been able to attract talent to our company. We're very pleased with that, very high-caliber talent. And we've been able to keep our pipeline at an elevated level and good growth in C&I and now growth returning in CRE. So we are benefiting to a degree, yes, from the consolidation and our outlook would -- absent higher rates, we'll give you some guidance in January as to what we think 2027 will look like. But the team is in place to be able to take more share in the market.

Operator

There are no further questions at this time. I will now turn the call over to Denis Sheahan for closing remarks.

Denis Sheahan

Thank you for joining us. We look forward to speaking with you following our next quarterly earnings.

Operator

This concludes today's conference call. You may now disconnect.