씨코스트 뱅킹(SBCF) 2026년 3분기 실적 발표 컨퍼런스 콜: 13% 대출 성장 및 안정적인 NIM

핵심 요약

• 시코스트 뱅킹 코퍼레이션(NASDAQ: SBCF)은 2026년 3분기 순이익이 5,990만 달러(주당 0.55달러)를 기록했다고 발표했습니다. 조정 순이익은 전분기 대비 9%, 전년 동기 대비 59% 증가한 7,180만 달러(주당 0.66달러)를 기록했습니다.
• 조정 총자산이익률(ROA)은 1.34%로 개선되었으며, 조정 유형자기자본이익률(ROTE)은 16.9%에 달했고, 조정 효율성 비율은 53.9%로 개선되었습니다.
• 대출금은 4억 2,900만 달러 증가한 136억 달러로 연환산 13%의 성장세를 보였습니다. 9월 30일 기준 상업대출 파이프라인은 약 13억 달러를 유지했습니다.
• 순이자마진(NIM)은 3.83%를 유지했습니다. 인수 대출 자산의 이자수익 상각 효과를 제외한 핵심 마진은 전분기 대비 1bp 상승한 3.66%를 기록했습니다.
• 시티즌스 퍼스트 은행(Citizens First Bank)의 기술 통합이 완료되었으며, 경영진은 3분기가 손익계산서에 반영되는 합병 관련 비용의 마지막 단계라고 밝혔습니다. 4분기에는 2027년에 재발하지 않을 것으로 예상되는 약 240만 달러의 일회성 비용이 포함될 예정입니다.
• 경영진은 4분기에 연환산 약 10%의 대출 성장을 예상하고 있으며, 장기적으로는 한 자릿수 높은 수준의 성장이 더 적절하다고 보고 있습니다. 또한 다른 조건이 동일하다면 저비용 계절성 예금 유입에 힘입어 4분기 마진이 확대될 것으로 기대하고 있습니다.

핵심 재무 실적

사업 및 영업 실적

비이자이익은 총 3,160만 달러로 전분기 대비 14% 증가했습니다. 증권 거래 활동을 제외한 조정 비이자이익은 15% 증가한 3,210만 달러를 기록했습니다.

모기지 은행 수익은 시장 금리 상승이 모기지 서비스 관리권(MSR) 가치에 영향을 미치면서 200만 달러 증가한 470만 달러를 기록했습니다. 보험 대리점 수익은 50만 달러 증가했고, 기타 수익은 스왑 및 신디케이션 수수료 증가, SBA 대출 매각 이익, SBIC 투자 수익에 힘입어 140만 달러 증가했습니다.

자산관리 부문의 운용자산(AUM)은 전년 동기 대비 29% 증가한 32억 달러에 달했습니다. 해당 부문은 올해 들어 현재까지 5억 7,400만 달러의 자체(organic) 운용자산을 추가했으며, AUM은 5년간 연평균 성장률(CAGR) 22%를 기록했습니다.

조정 비이자비용은 1억 1,780만 달러로 2분기의 1억 1,480만 달러와 대비됩니다. 공시된 비이자비용 1억 3,330만 달러에는 시티즌스 퍼스트 은행 통합과 관련된 합병 및 통합 비용 1,550만 달러가 포함되어 있습니다.

계절적 비수기 분기 동안 예금은 브로커 정기예금 1억 5,900만 달러 감소를 포함해 전분기 대비 2억 달러 줄었습니다. 무이자 예금은 약 42억 달러로 올해 들어 현재까지 연환산 10% 비율로 성장했습니다. 고객 거래 계좌는 전체 예금의 48%를 차지했으며, 상위 10대 예금주의 비중은 고객 예금의 2%에 불과했습니다.

경영진 가이던스

경영진은 주로 공공 자금 유입에 따라 4분기에 약 3억 달러의 계절적 예금 성장이 있을 것으로 예상하고 있습니다. 이들 예금은 3분기에 사용된 도매 조달 금리보다 100~200bp 낮은 금리가 적용될 것으로 보여, 다른 조건이 동일하다면 마진 확대를 뒷받침할 것으로 전망됩니다.

회사는 예금 베타를 약 35%로 추정하며, 이는 대출 포트폴리오 내 변동금리 비중과 대체로 일치합니다. 따라서 경영진은 연방기금금리의 변화가 마진과 실적에 미치는 직접적인 영향이 비교적 중립적일 것으로 보고 있습니다.

수익자산 재산정(repricing)의 추가 기회로는 현재 4%대 후반의 수익률을 기록 중인 2027년 말까지의 고정금리 만기 자산 약 6억 달러가 포함됩니다. 변동금리 대출 중 3억~4억 달러는 향후 수년간 매년 금리가 재조정되어 약 150bp의 금리 인상이 예상됩니다. 시코스트는 또한 연간 약 6억 달러의 증권 현금 흐름을 통해 대출 자산으로의 점진적 전환을 지원할 수 있을 것으로 기대하고 있습니다.

4분기에 대해 경영진은 일부 파이프라인 이탈 가능성을 감안하면서 연환산 약 10%의 대출 성장을 제시했습니다. 장기적으로는 한 자릿수 높은 수준의 대출 성장이 더 지속 가능하다고 보고 있습니다. 총 재무상태표 성장은 한 자릿수 낮음에서 중간 수준을 유지할 것으로 예상되며, 이는 핵심 예금 성장에 달려 있습니다.

경영진은 조정된 4분기 비용이 3분기 수준인 약 1억 1,800만 달러에서 200만~300만 달러 증가할 것으로 예상하고 있습니다. 또한 2027년에는 재발하지 않아야 할 240만 달러의 일회성 4분기 비용을 식별했습니다. 장기적인 비용 계획의 경우, 경영진은 3분기 조정 비용 기반을 연환산한 후 약 5%의 성장을 적용할 것을 시사했습니다.

회사의 경영 목표는 한 자릿수 높은 수준의 자산 성장과 더불어 ROA 1.30% 이상, ROTE 16% 이상, 효율성 비율 53%~55% 달성입니다. 지속적인 마진 확대는 수익률 곡선의 장기 금리가 비교적 높은 수준을 유지하는지 여부에 일부 달려 있습니다.

리스크 및 주시 영역

• 경영진은 고금리가 결국 대출 수요, 특히 상업용 부동산 대출 수요를 약화시킬 것으로 예상하며, 부동산 가치 하락으로 매수자와 매도자가 가격을 재평가하는 동안 거래가 지연될 수 있다고 보고 있습니다.
• 예금 유치 경쟁으로 인해 예금 베타가 경영진의 예상치인 약 35%를 상회할 수 있으나, 경영진은 자산 재산정을 통해 이러한 압력을 상쇄할 수 있을 것으로 믿고 있습니다.
• 매도가능증권은 금리 상승과 스프레드 확대의 영향으로 3분기 동안 2억 3,700만 달러의 순미실현손실을 추가 기록했습니다. 경영진은 해당 포트폴리오가 대부분 정부기관 보증 증권(agency-backed)으로 구성되어 있으며 매각할 계획은 없다고 밝혔습니다.
• 금리 및 광범위한 지정학적 변동성 속에서 대출 파이프라인의 성약(conversion) 여부는 여전히 불확실합니다. 4분기 대출 성장 전망에는 이미 일부 이탈 가능성이 반영되어 있습니다.
• 뱅커, 기술 및 AI에 대한 투자는 계속될 예정이며, 합병 및 통합 비용이 종료된 후에도 비용 증가를 유발할 것입니다.

애널리스트 Q&A 주요 내용

마진과 관련해 경영진은 시코스트가 반드시 수익성 정점에 도달한 것은 아니라고 밝혔습니다. 장기 금리가 고공행진을 유지할 경우 고정금리 만기, 변동금리 대출 재조정, 약 4.45%의 수익률을 내는 증권에서 대출로의 전환이 2027년까지 추가적인 마진 확대를 뒷받침할 수 있습니다.

대출 성장과 관련해 경영진은 지난 2개 분기가 이례적으로 강세를 보였다고 평가했습니다. 최근의 뱅커 영입이 신규 대출 집행에 기여한 반면, 고금리 환경에서 대출 상환액이 줄어들면 순성장을 달성하는 데 필요한 신규 대출 금액도 줄어들 수 있습니다.

상업용 부동산 및 건설 대출 익스포저에 대해 경영진은 내부 가이드라인(guardrails) 범위 내를 유지하고 다변화된 대출 포트폴리오를 유지할 것이라고 밝혔습니다. 일부 건설 대출은 준장기(mini-permanent) 및 비거주용 상업용 부동산 카테고리로 전환될 것으로 예상되어 추가 건설 대출 여력을 확보할 수 있을 것으로 보입니다.

자금 조달과 관련해 경영진은 현재 대출 성장을 충당하기 위한 추가 증권 매각은 예상하지 않는다고 밝혔습니다. 향후 성장은 핵심 고객 예금에 더 크게 의존할 것으로 보이며, 특히 시티즌스 퍼스트 은행 통합 이후 임직원들이 영업 개발에 다시 집중할 수 있게 된 점이 작용할 것입니다.

실적 발표 컨퍼런스 콜 전문

전체 실적 발표 컨퍼런스 콜 녹취록

경영진 발표

Operator

Welcome to Seacoast Banking Corporation's Third Quarter 2026 Earnings Conference Call. My name is Colby, and I'll be your conference operator today.

[Operator Instructions]

Before we begin, I've been asked to direct your attention to the statement at the end of the company's press release regarding forward-looking statements. Seacoast will be discussing issues that constitute forward-looking statements within the meaning of the Securities and Exchange Act, and its comments today are intended to be covered within the meaning of that act. Please note that this conference is being recorded.

I will now turn the conference over to Chuck Shaffer, Chairman and CEO of Seacoast Bank. Mr. Shaffer, you may begin.

Charles Shaffer

Okay. Thank you, Colby, and good morning, everyone, and thank you for joining us. As we move through today's presentation, we'll reference the third quarter 2026 earnings slide deck available at seacoastbanking.com. Joining me today are Tracey Dexter, our Chief Financial Officer; Michael Young, our Chief Strategy Officer; and James Stallings, our Chief Credit Officer.

Seacoast delivered another strong quarter with continued progress in growth, profitability and operating leverage, all tracking well against the guidance we laid out earlier this year. The quarter also marked an important transition for our company. We successfully completed the technology conversion of Citizens First Bank in The Villages, bringing our integration work largely to a close. The third quarter also represents the end of M&A-related charges flowing through our income statement, providing a cleaner earnings profile and greater visibility into the underlying earnings power of Seacoast.

And, on October 2, Seacoast celebrated its 100th anniversary, an extraordinary milestone made possible by generations of associates, customers, shareholders and the communities we serve.

And turning to the third quarter, net income was $59.9 million or $0.55 per share with adjusted earnings of $71.8 million or $0.66 per share. And I was particularly pleased with the continued improvement in profitability, which has been a major strategic focus over the past year. Adjusted ROA improved to 1.34% and adjusted ROTE increased to 16.9% and adjusted pretax pre-provision earnings grew 58% (sic) [ 49% ] year-over-year.

Organic growth remained strong and loans grew at a 13% annualized rate in the quarter, and we ended September with a commercial pipeline of approximately $1.3 billion. And, importantly, we're generating this growth while maintaining disciplined underwriting and strong credit quality with nonperforming loans declining 15% (sic) [ 0.54% ] and net charge-offs remaining low.

And, on the funding side, total deposits were essentially flat year-to-date, but the underlying franchise trends remain encouraging, particularly as we continue to focus on growing operating accounts. Year-to-date, noninterest-bearing deposits have grown at a 10% annualized rate and year-to-date growth in business accounts offset declines in public fund balances. And we are now moving beyond our seasonal low point for deposits, and I expect core deposit growth from here.

And as we look ahead, Seacoast is operating from a position of considerable strength. We have a fortress balance sheet, substantial liquidity, robust capital, improving profitability and significant organic growth opportunities across our markets. That combination gives us both resilience and considerable flexibility as we move into 2027. And, with the integration largely behind us, our focus is squarely on execution, attracting great bankers, growing organically, deepening customer relationships and investing in technology and AI to operate more efficiently and deliver an even better experience for our customers.

I want to thank our associates for their tremendous commitment to Seacoast and our One Team culture. We have accomplished a great deal thus far in 2026. And with the integration behind us, profitability improving and strong momentum across the franchise, I believe Seacoast is very well positioned for another year of strong performance in 2027.

And, with that, I'll turn it over to Tracey.

Tracey Dexter

Thank you, Chuck. Good morning, everyone. Beginning with Slide 4 and third quarter performance highlights. Seacoast reported net income of $59.9 million or $0.55 per share, up 1% from the prior quarter and 64% from the prior year quarter. Adjusted net income increased 9% sequentially to $71.8 million or $0.66 per share, up 59% from the prior year quarter. Adjusted pretax pre-provision earnings were $100.3 million, up 5% from the prior quarter and 49% from the prior year quarter.

Net interest income increased 2% from the prior quarter. Net interest margin was stable at 3.83%, while margin, excluding acquired loan accretion, increased 1 basis point to 3.66%. Adjusted ROA improved to 1.34%. Loans increased $429 million or 13% annualized during the quarter, supported by continued strong origination activity. We're seeing good results in relationship deposit growth year-to-date with noninterest-bearing deposits up 10% on an annualized basis since the beginning of the year. Adjusted return on tangible equity grew to 16.9%, and we remain well positioned with strong capital.

Moving to net interest income and margin on Slide 5. Net interest income on a fully tax-equivalent basis totaled $185.4 million, up $3.2 million from the prior quarter. Higher average loan balances and higher core loan yields supported growth, partially offset by higher deposit costs and lower average securities balances. Net interest margin remained stable at 3.83%. Excluding acquired loan accretion, core margin increased 1 basis point to 3.66%.

Securities yields increased to 4.52%. Loan yields were 5.89%, up 1 basis point sequentially. And excluding accretion, loan yields increased 3 basis points from the prior quarter to 5.64%. The cost of deposits increased modestly but remained low at 1.6%, and the overall cost of funds was 1.74%.

Turning to noninterest income on Slide 6. Noninterest income totaled $31.6 million, up 14% from the prior quarter. Excluding securities activity, adjusted noninterest income was $32.1 million, up 15% from the prior quarter. Wealth management income continues to build, increasing 2% sequentially. Mortgage banking income increased $2 million from the prior quarter to $4.7 million, with the increase largely the result of the change in the value of mortgage servicing rights resulting from higher market interest rates.

Insurance agency income continues to grow, increasing $0.5 million from the prior quarter. Other income increased $1.4 million from the prior quarter, reflecting higher swap and syndication fees, higher gains on SBA loan sales and higher income from SBIC investments.

Moving to Slide 7. Assets under management reached $3.2 billion, an increase of 29% year-over-year. And as you can see on the chart, a 22% compound annual growth rate over the last 5 years. The team has added $574 million of new organic assets under management year-to-date, reflecting continued new business development and asset inflows from new and existing relationships.

Moving to expenses on Slide 8. Noninterest expense totaled $133.3 million and included $15.5 million of merger and integration costs associated with the completion of the Citizens First Bank, Villages Bancorp conversion. Adjusted noninterest expense was $117.8 million compared with $114.8 million in the prior quarter. The adjusted efficiency ratio improved to 53.9% from 54.5% in the second quarter and 57.6% a year ago, demonstrating continued improvement in core operating leverage. Looking ahead to the fourth quarter, we expect approximately $2.4 million in discrete expenses, which will not recur in 2027.

On to Slides 9 and 10 on the loan portfolio. Loans ended the quarter at $13.6 billion, increasing $429 million or 13% annualized from June 30. The commercial pipeline remains strong at approximately $1.3 billion at September 30, supporting our outlook for continued organic growth. Looking at the allowance for credit losses, the details of which are shown on Slide 11.

The allowance for credit losses was $191 million, 1.41% of total loans compared with 1.38% at June 30. During the third quarter, we recorded an adjustment to the purchase accounting valuation for a loan acquired in The Villages acquisition. This increased the allowance by $8.4 million with a corresponding adjustment to goodwill.

Our credit quality metrics shown on Slide 12, remains solid. Nonperforming loans declined during the quarter to $73.3 million and represent 54 basis points of total loans. Net charge-offs were $5.4 million or 16 basis points of average loans, and the fourth-quarter average is 10 basis points of total loans. The level of criticized and classified loans was stable at 2.9% of total loans.

Turning to deposits on Slides 13 and 14. Total deposits were $16.6 billion at September 30 compared with $16.8 billion at June 30. The third quarter is typically our seasonal low point during the year, but the decline also reflects a $159 million reduction in brokered time deposits. Noninterest-bearing demand deposits remained near flat at $4.2 billion. Average noninterest-bearing balances increased $40 million from the second quarter. Customer transaction accounts represented 48% of total deposits at quarter end, and the top 10 depositors represented only 2% of total customer deposits.

Moving to Slide 15 and the investment securities portfolio. Net unrealized losses in the available-for-sale securities portfolio increased by $237 million during the third quarter, driven by higher rates and wider spreads. As a reminder, this is a high-quality portfolio of largely agency-backed securities and with no anticipated need to sell these securities, the decline in value is considered temporary and will reverse over time as these bonds move towards maturity or as the rate environment changes.

Turning to capital and liquidity on Slide 16. Strong capital levels are a hallmark of the Seacoast franchise. The sequential decline in tangible equity to tangible assets and tangible book value per share primarily reflected the impact of higher rates on the market value of the available-for-sale securities portfolio through accumulated other comprehensive income, and we also put some capital to work through share repurchases. Our robust capital levels continue to provide significant flexibility to support organic growth and disciplined capital deployment.

On Slide 17, demonstrating the components of the change in TBV per share during the quarter, which again was primarily impacted by unrealized losses related to the securities portfolio.

On Slide 18, we reiterate our 2026 guidance. Our results for the quarter continue to evidence the improvements we've achieved in core profitability, strong funding trends and continued execution against our strategic priorities. We remain focused on disciplined growth and long-term shareholder value creation. With that, I'll turn the call back to Chuck.

Charles Shaffer

All right. Thank you, Tracey. And, Colby, we're ready for Q&A.

Operator

[Operator Instructions] And with your first question comes from Woody Lay with KBW.

질의응답

Wood Lay

I wanted to start on the margin outlook and especially get a sense of how the margin trended throughout the quarter and where we kind of sat in the back half of September once we saw the rate hike.

Michael Young

Yes, Woody, this is Michael. I'll take that one. I think generally, the thing to think about as we head into the fourth quarter is that we'll have the return of seasonal deposit flows, namely public funds. Our public funds are more relationship-oriented and therefore, at a lower rate than some of our wholesale funding that we've used to kind of temporarily fund the balance sheet with a strong growth in Q3. And so you'll see a pretty distinct mix shift into Q4 with about $300 million or so of deposit growth at much lower rates, maybe 100 to 200 basis points below our wholesale funding that should lead to a reasonable margin expansion into the fourth quarter, all else equal.

And then taking just the Fed hike portion of that, that occurred in September, as you can see from our disclosures, we're relatively neutral to rates at this point with about a 35% deposit beta. That roughly matches up to our 35% floating rate loan portfolio. And so as we see moves in the Fed funds rate, we don't expect that to be really much of a headwind or a tailwind to the overall margin or earnings outlook.

Wood Lay

Got it. And then I guess even the NIM trajectory past this quarter, I know you're not going to give 2027 guidance, but I would expect loan growth to continue to be strong. And as you think about that incremental growth, does that represent a positive to the margin? Or is incremental growth, are we kind of reaching peak margins from here?

Michael Young

I wouldn't say we're reaching peak margins. That's not how I'd characterize it. Maybe I'll just kind of unpack it a little bit. Again, not providing '27 guidance, but just giving you some of the dynamics that we've articulated in the past. I think there's 3 key buckets to think about on the earning asset side. First, you've got about $600 million of fixed rate maturities through the end of 2027 that are in the high 4% range. So those will step up pretty nicely. And I think in particular, if the long end of the curve stays high and upward sloping, we'll get more leverage out of some of these back book repricing dynamics.

Then you've got the ARM portfolio that has been relatively fixed over the last 3 to 4 years coming out of kind of a concentration of COVID-era originations. Those are all hitting reset windows, about $300 million to $400 million per year over the next couple of years with step-ups of about 1.5% on the rates on those. And then the third bucket would just be the changeover from the securities portfolio to loans as we remix the balance sheet following the acquisitions and the strong loan growth, which is hitting on your direct question, that the securities portfolio is at about a 4.45% yield today.

So as we change over $500 million to $600 million of cash flows from securities to loans over the next couple of years, that provides, again, with a higher rate environment, more power to the earning asset repricing. So all those are kind of tailwinds discretely to earning assets stepping up higher. And then we should be balanced relative to Fed hikes, as I just mentioned on kind of the deposit beta relative to our floating rate positioning on the loan portfolio.

So then the only factor you have left is kind of what is deposit competition going to look like. And we feel good about our ability to continue to grow core funding and relationship funding without feeling maybe as much pressure as peers. So we still feel good, I think, overall about margin expansion from here into 2027 if the long end of the curve stays high.

Wood Lay

All right. That's really great color. I appreciate that. And then I guess just last for me. If I look at the core ROA in the third quarter, you were at a 1.34% ROA. It sounds like there's tailwinds to the margin. You're through the villages conversion, but you're targeting a 1.30% for the fourth quarter. And I was just curious on where you see some of the normalization occurring in the overall profitability.

Michael Young

Woody, this is Michael. I'll start on that one. I think Tracey mentioned in the prepared remarks about $2.4 million in kind of discrete expense items in the fourth quarter that may just put a little pressure in the other direction temporarily for ROA, but the longer-term dynamics of margin expansion should be supportive of ROA over time. But I will call out that we are still investing for growth in the franchise with a high single-digit loan growth rate, et cetera. We're continuing to add and attract talent to the franchise from bankers and other people kind of bringing that in.

So there is still a good bit of investment that's going on to support strong growth in our markets, and we just see lots of opportunity there. So we're going to balance it as we always have with revenue and managing kind of the efficiency ratio and profitability, but it was really important for us to get to the 1.30% level we articulated prior to the acquisition and the 16% ROTE. So feel good about where we are with some tailwinds in a higher rate environment.

Charles Shaffer

And the only thing I'd add, Woody, is we feel strongly that we'll hit the high end of the guidance range that we provided and exit the year in a really strong position.

Operator

[Operator Instructions] Our next question comes from Russell Gunther with Stephens.

Russell Elliott Gunther

I'd love to start on the loan growth discussion, please. Really another great quarter from both an order of magnitude and mix perspective, commercial pipeline essentially unchanged. How are you guys thinking about the sustainability of a double-digit loan growth result near term? And then as we contemplate potential future rate hikes or the 10-year kind of remaining north of 5%, is there an absolute level of rates where demand destruction occurs that puts your organic growth targets at risk?

Charles Shaffer

Yes. That's a great question, Russell. The way we're thinking about things is, one, both last quarter and this quarter were standout quarters, and we probably were growing even greater than what we had expected, which is amazing and the result of the heavy amount of recruiting and banker adds that we made earlier this year and then into the prior year. But looking forward, I mean, there's no doubt as rates move higher, demand will go down. And we have contemplated that as we think about the coming year, particularly in commercial real estate as rates go higher, commercial real estate values come down, you end up at a point where buyers and sellers have to reconcile price again to get transactions to move.

So the way we're thinking about the outlook, the longer-term outlook is remaining in that high single-digit growth rate. That's where we think we'll land. That's what we're modeling to, and that's kind of our expectation into the coming quarter. I would suggest to you probably right around 10% growth rate on an annualized basis is kind of the way to think about Q4 with some gives and takes in there. But more longer term, I think high single digits is a more appropriate sort of modeled growth rate for us.

Michael Young

And Russell, maybe just to tack on one additional piece on that. Just the payoff trends is important to keep in mind as well. So there's production and payoffs in a higher rate environment. We do expect lower payoffs. We had about $380 million this quarter, down from $420 million last quarter. In Q1, we had relatively high payoffs. So it takes a little less production to get to the same level of net growth in a higher rate environment for us anyway. And then additionally, with the mortgage production that we have, ours is a little more resilient and durable than many peers given that it's a lot of kind of new construction related in The Villages.

Russell Elliott Gunther

That's great color, guys. And then, Michael, maybe this one for you, just in terms of point of clarification, how you are thinking about the deposit beta here through the cycle? Was that a 35% kind of total deposit beta? Or is that just near term? Maybe just walk us through how you'd expect to shake out.

Michael Young

Yes, Russell, I think 35% is kind of where we expect to be. We were higher in the last rate hiking cycle, but obviously, that was a pretty acute cycle. And then we've remixed with really strong deposit balances through The Villages acquisition and the Heartland acquisition that look very similar to legacy Seacoast in terms of very granular deposit base with lower price sensitivity. So we still feel pretty good about that overall. Competition, obviously, is something that could emerge and put some pressure on that. But I think with the strong back book repricing dynamics that we have over the next year or so, I think we'll more than offset the competitive pressures with back book repricing dynamics, which gives us the confidence in some continued margin expansion, again, assuming that the long end of the rate -- or long end of the curve stays reasonably high.

Russell Elliott Gunther

Okay. That makes a ton of sense. And then last one for me, guys, just on the expense outlook, maybe just bigger picture, how to think about you guys. I understand the puts and takes for the coming quarter, reiterated the efficiency ratio guide. Is that a band that we would expect you guys to stay in? Or is there kind of a normalized pace of annual growth you contemplate, reflecting thoughts around additional hires or investment in tech?

Charles Shaffer

Yes. I think the way to think about it, Russell, this is Chuck. We'll continue to make investments. I mean we need to invest in bankers to continue the growth rate. We need to invest in tech. But at the same time, as Michael talked about, there's solid revenue tailwinds here moving into the coming year again, assuming the yield curve remains where it is today. And so when you look at overall expenses, if you kind of take out and you look at adjusted expenses for this quarter, we were roughly about $118 million into the coming quarter, we expect a few -- that step up slightly, maybe by $2 million to $3 million depending on a few items.

But if you take that $118 million, annualize it at about a 5% growth rate, that's about our expectation for the coming year to give you a relative sort of way to size it. And just overall, just to reiterate, as we think about running the company, we were going to run the company north of a 1.30% ROA, north of a 16% return on equity and an efficiency ratio band somewhere between, call it, 53% to 55%. We think that's about the right sort of gearing ratio for us with a high single-digit growth rate on the asset side. And that generates solid tangible book value growth and solid return performance, and that's what we're working to deliver for shareholders.

Operator

And your next question comes from the line of Stephen Scouten with Piper Sandler.

Stephen Scouten

So I'm curious on the -- I know, Michael, I think you said some of the construction was from Villages. If you guys might continue to take advantage of your comparatively low concentration on CRE and C&D and kind of be opportunistic in those asset classes in particular?

Charles Shaffer

I mean we'll always be thoughtful. That'd be the best way to start, Stephen, is thinking carefully about it. I do think on what we're going to see in our construction book is as it is built up, we expect that to start to transition over into the mini-perm and move into more of the nonowner-occupied commercial real estate bucket, so move out of construction that frees up some capacity in construction to continue to do some construction over time.

But we're going to manage it within our guardrails. We don't want to get overcommitted to any one area and continue to build a distributed thoughtful loan book. But as the construction moves into more permanent status, there should be some capacity to continue to do construction over time. And then as I mentioned in the last couple of questions there, it will be interesting to see how the market reacts to higher rates. That's kind of the unknown at this point.

Michael Young

And just to clarify on -- sorry, Stephen, just to clarify on The Villages, that was just -- we're financing new deliveries through mortgage. So we're not financing the construction there. It's just that there's a tailwind because it's new deliveries versus refinance or rate-driven mortgage origination volume.

Charles Shaffer

Yes. And that's what we're in the residential category.

Michael Young

Yes.

Stephen Scouten

Got it. Okay. And maybe thinking about that, how you think about pipeline conversion? I mean the commercial pipeline remained really strong quarter-over-quarter, obviously. Just wondering with where rates have gone, do you think about conversion any differently as you try to factor out potential loan growth? And have you, I guess, seen anything from customers over the last couple of months that makes you feel more conservative about that expectation?

Charles Shaffer

We haven't seen fallout yet, but as I guided to in the fourth quarter, I'd roughly model about a 10% annualized growth rate in the quarter. And that does assume that there is a little bit of fallout in that pipeline. We do want to handicap that a little bit. We don't know exactly where that's going. It's really hard to tell. You have a lot -- you have midterms, you have the potential of a war restarting post midterms. And you've got rates that moved up to 5.50% now back to 5%. So things are pretty volatile. So there are a lot of unknowns there. But I would expect, like I mentioned, we do believe we'll be able to deliver high single-digit growth rates throughout the outlook at this point.

Stephen Scouten

Got it. And then just lastly for me, kind of thinking about the pace of balance sheet remix. I think you talked a little bit about securities cash flows. But in this quarter, you actually sold some securities to fund the loan growth. How should we think about kind of the mix shift there that might occur over the next year or 2, given the low loan-to-deposit ratio and the room you have there?

Michael Young

Yes, Stephen, this is Michael. I'll take that one. Generally, I think we will be somewhat remixing. It will be really dependent upon the pace of our organic deposit growth overall. We do have a little higher brokered CD balance, which again should trend down and FHLB balances, which will trend down in the fourth quarter seasonally. But then over time, we really aren't trying to be dependent on those sources of funding. We're going to be focused on core customer funding. And I think we've got a big opportunity to increase that core funding growth now with The Villages conversion behind us and all the associates kind of back in the field doing their normal day-to-day activities and focus on business development versus conversion activities. We're excited about what that can mean for 2027.

Charles Shaffer

Yes. And I'd just reiterate that what Michael said there is important. We spent a lot of time over the last year preparing for this conversion. We had over 300 associates working on it. It took up a significant amount of the mind space and the focus inside the company to deliver what was a really, really solid conversion. I'm very pleased with the outcome of that. But with that behind us now, we can turn all of our attention back to organic growth. And I think we'll see the outcome of that as we move forward.

Michael Young

And maybe, Stephen, just to put a finer point on it, we don't necessarily anticipate any additional security sales to fund loan growth. That was just really strong growth in the last 2 quarters above plan during our seasonally weaker period for deposit growth. And so it was kind of prudent to do so given that some of those were relatively lower-yielding securities anyway on a floating rate basis. And so we replaced that with loans.

But going forward, it will really be -- we'll have kind of $600 million a year of securities cash flow that will probably be used to remix the balance sheet towards loans, as I mentioned earlier. And then the aggregate growth of the balance sheet will be more dictated by the pace of deposit growth, but still in that low to mid-single-digit range. That's what you should think about for kind of aggregate balance sheet growth.

Operator

And with no further questions in queue, I'd like to turn the conference back over to Chuck Shaffer for closing remarks.

Charles Shaffer

Okay. I just want to thank you all for joining us this morning. And again, my congratulations to the Seacoast team for celebrating our 100 years. We appreciate all the support from our associates, from our customers, from our shareholders and all the communities that we work and serve. And it's been exciting to celebrate that here at Seacoast, and we're looking forward to 2027. So thank you all for being here this morning. We're around if anybody has questions post call. Operator, that will conclude the call.

Operator

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