Cuộc họp công bố kết quả kinh doanh Q3 2026 của Peapack-Gladstone Financial (PGC): EPS, tăng trưởng dư nợ cho vay và triển vọng NIM

Peapack-Gladstone Financial Corporation (NASDAQ: PGC), hoạt động dưới tên thương hiệu Peapack Private, đã báo cáo tăng trưởng lợi nhuận và bảng cân đối kế toán tiếp diễn trong quý 3 tài chính năm 2026. Doanh thu tăng nhanh hơn chi phí, trong khi biên lãi thuần, các chỉ số tín dụng và hiệu quả hoạt động đều cải thiện so với quý trước.

Những điểm chính

• Lợi nhuận ròng phân bổ cho cổ đông phổ thông tăng 17% so với quý trước lên 18,5 triệu USD. EPS pha loãng tăng 15% lên 0,99 USD.
• Tổng doanh thu đạt 88 triệu USD, tăng 2% so với quý trước và tăng 24% so với cùng kỳ năm ngoái. Doanh thu thuần cốt lõi trước dự phòng rủi ro tăng 76% so với cùng kỳ năm ngoái lên 32,3 triệu USD.
• Biên lãi thuần tăng 2 điểm cơ bản so với quý trước lên 3,34%. Ban lãnh đạo kỳ vọng sẽ cải thiện thêm 2–3 điểm cơ bản mỗi quý cho đến năm 2027 bất chấp áp lực từ chi phí vốn.
• Dư nợ cho vay tăng 403 triệu USD trong quý lên 7,1 tỷ USD, trong khi tiền gửi tăng 301 triệu USD lên 7,4 tỷ USD. Cả hai chỉ số đều vượt mục tiêu tăng trưởng hàng quý của công ty.
• Tỷ lệ chi phí trên thu nhập cải thiện lên 63%, thấp hơn gần 16 điểm phần trăm so với quý 3 năm 2024, do chi phí hoạt động giảm 1% so với quý trước.
• Chất lượng tín dụng cải thiện so với quý trước. Tài sản nợ xấu giảm 20% xuống 58 triệu USD, trong khi nợ xấu xóa sổ ròng giảm xuống 4,7 triệu USD.

Dữ liệu tài chính cốt lõi

Thuế suất thực tế là 20,5%, so với 28,4% trong quý trước. Quý 3 bao gồm khoản lợi ích một lần khoảng 1,8 triệu USD từ tín dụng thuế sản xuất, điều mà ban lãnh đạo không kỳ vọng sẽ lặp lại trong quý 4.

Hoạt động kinh doanh và vận hành

Cho vay thương mại và công nghiệp tăng 409 triệu USD, tương đương 15%, so với cùng kỳ năm ngoái. Các khoản vay mới phát sinh trong quý có lãi suất khoảng 6,4%, trong khi tiền gửi mới có mức lãi suất ở vùng khoảng 2,5%. Danh mục cho vay có khoảng 75% lãi suất cố định và 25% lãi suất thả nổi.

Tiền gửi thanh toán không trả lãi đạt khoảng 1,6 tỷ USD, tăng 18% so với cùng kỳ năm ngoái. Ngân hàng đã mở trung bình hơn 600 tài khoản hoạt động không trả lãi mỗi quý trong năm quý qua.

Doanh thu quản lý tài sản tăng 9% so với cùng kỳ năm ngoái lên 17,3 triệu USD. Quy mô tài sản quản lý và quản trị vào cuối quý đạt 13,6 tỷ USD, thấp hơn một chút so với quý 2. Ban lãnh đạo cho biết tình hình kinh doanh tháng 10 và triển vọng quý 4 rất khả quan sau khi biến động thị trường cùng dòng vốn của khách hàng khiến tổng tài sản quý 3 đi ngang.

Danh mục cho vay bất động sản nhiều hộ gia đình chịu khống chế giá thuê tại New York đã giảm xuống 775 triệu USD, chiếm 11% tổng dư nợ cho vay so với 18% ở thời điểm hai năm trước. Công ty không phát hành thêm khoản vay mới trong phân khúc này và tiếp tục duy trì lịch trình trả gốc định kỳ cũng như suy giảm tự nhiên theo mối quan hệ.

Tài sản nợ xấu giảm 14 triệu USD so với quý trước xuống 58 triệu USD, tương đương 0,68% tổng tài sản. Các khoản vay quá hạn 30–89 ngày giảm 18% xuống 39 triệu USD, tương đương 0,56% tổng dư nợ cho vay. Tỷ lệ bao phủ nợ xấu cải thiện lên 126%.

Để hỗ trợ tăng trưởng bảng cân đối kế toán, công ty đã phát hành 20 triệu USD cổ phần ưu đãi chuyển đổi còn lại vào tháng 7. Công ty cũng đã triển khai chương trình tái đầu tư cổ tức tự nguyện trong quý 4 như một nguồn bổ sung vốn cổ phần phổ thông.

Dự báo của ban lãnh đạo

Ban lãnh đạo tái khẳng định các mục tiêu vận hành hàng quý “2-2-2”: 200 triệu USD tăng trưởng dư nợ cho vay, 200 triệu USD tăng trưởng tiền gửi và 2 triệu USD lợi nhuận cốt lõi trước dự phòng gia tăng. Công ty cho biết họ có khả năng đạt được các mục tiêu này rất cao trong quý 4 năm 2026 và quý 1 năm 2027, mặc dù tốc độ tăng trưởng của quý 3 được đánh giá là mạnh mẽ một cách bất thường.

Ban lãnh đạo dự kiến biên lãi thuần sẽ cải thiện khoảng 2–3 điểm cơ bản mỗi quý cho đến năm 2027. Các yếu tố hỗ trợ bao gồm quy mô kinh doanh mới và việc ấn định lại lãi suất cho khoảng 1,4 tỷ USD tài sản lãi suất cố định trong hai năm tới. Các tài sản đó có lãi suất danh nghĩa bình quân gia quyền khoảng 3,90%, và ban lãnh đạo ước tính lợi ích tiềm năng từ việc ấn định lại lãi suất là 150–200 điểm cơ bản.

Trong năm 2027, ban lãnh đạo đặt mục tiêu tăng trưởng chi phí hoạt động ở mức giữa một chữ số. Các khoản đầu tư theo kế hoạch dự kiến sẽ tập trung vào công nghệ và trí tuệ nhân tạo thay vì nhân sự. Công ty cho biết hiện có khoảng 100 đại lý AI đang trong giai đoạn thử nghiệm cuối cùng trên toàn tổ chức.

Giám đốc Tài chính (CFO) chỉ ra rằng thu nhập ngoài lãi hàng quý khoảng 21 triệu USD là mức tham chiếu hợp lý sau khi loại trừ các khoản chi phí một lần trong quý 3 và tác động dài hạn từ việc rút khỏi mảng kinh doanh bán lại khoản vay SBA.

Ban lãnh đạo đặt mục tiêu đạt tỷ suất sinh lời trên tổng tài sản (ROA) trên mức 1% tính theo quy mô hàng quý vào đầu năm 2027. Các mục tiêu dài hạn hơn của công ty vẫn duy trì ở mức ROA tối thiểu 1,25% và tỷ suất sinh lời trên vốn chủ sở hữu (ROE) 14%, với trọng tâm thực thi kéo dài đến quý 4 năm 2027. Công ty cũng mục tiêu nâng lợi nhuận cốt lõi tính theo năm từ khoảng 130 triệu USD lên khoảng 180 triệu USD.

Rủi ro và các vấn đề cần theo dõi

Chi phí tiền gửi tiếp tục chịu áp lực từ sự cạnh tranh, các đợt tăng lãi suất của Cục Dự trữ Liên bang (Fed) và việc gia tăng sử dụng nguồn vốn vay từ Ngân hàng Cho vay Nhà ở Liên bang (FHLB). Chi phí nợ phải trả chịu lãi tăng 10 điểm cơ bản so với quý trước. Ban lãnh đạo cho rằng hệ số beta tiền gửi tổng thể ở mức 50%–60% là trong tầm kiểm soát, nhưng thừa nhận rằng các đợt tăng lãi suất tiếp theo có thể tạo ra thêm áp lực.

Tăng trưởng dư nợ cho vay nhanh chóng đã làm giảm một số đệm vốn bất chấp lợi nhuận cải thiện. Ban lãnh đạo cho biết họ đang cân bằng giữa tăng trưởng mối quan hệ khách hàng với kỷ luật vốn, đồng thời kỳ vọng lợi nhuận giữ lại sẽ tài trợ cho tỷ trọng lớn hơn trong nhu cầu vốn tương lai khi khả năng sinh lời cải thiện.

Các kết quả định giá cập nhật đối với danh mục bất động sản nhiều hộ gia đình chịu khống chế giá thuê cho thấy xu hướng tài sản đảm bảo trái chiều. Một số bất động sản bị sụt giảm giá trị định giá, trong khi những tài sản khác giữ ổn định hoặc cải thiện. Ban lãnh đạo không thấy sự suy giảm mang tính hệ thống nhưng dự kiến các trường hợp nhỏ lẻ có thể yêu cầu trích lập dự phòng, ghi giảm giá trị hoặc đàm phán sửa đổi điều khoản.

Điểm nhấn phiên Hỏi & Đáp với chuyên gia phân tích

• Ấn định lại lãi suất khoản vay nhiều hộ gia đình: Khoảng 500 triệu USD dư nợ cho vay bất động sản nhiều hộ gia đình chịu khống chế giá thuê dự kiến sẽ được ấn định lại lãi suất trong năm quý tới. Mức trả gốc định kỳ bình thường của danh mục là khoảng 5 triệu–6 triệu USD mỗi quý.
• Tái cơ cấu khoản vay: Các khoản tái cơ cấu tiềm năng được đánh giá theo từng trường hợp cụ thể. Ngân hàng có thể yêu cầu trả bớt gốc, bổ sung tài sản đảm bảo, bảo lãnh, điều chỉnh lịch trả gốc hoặc rút ngắn thời gian gia hạn để đổi lấy các ưu đãi.
• Nguồn vốn và biên lãi: Ban lãnh đạo kỳ vọng việc ấn định lại lãi suất cho danh mục hiện hữu và tăng trưởng dư nợ cho vay sẽ bù đắp phần lớn áp lực từ chi phí tiền gửi tăng cao, mặc dù việc ấn định lại lãi suất tiền gửi nhìn chung diễn ra nhanh hơn so với tài sản.
• Triển vọng khoản vay: Công ty mô tả triển vọng cho vay rất tích cực, có tầm nhìn rõ ràng cho cả quý 4 năm 2026 và quý 1 năm 2027. Tăng trưởng dự kiến sẽ tiến gần hơn về khung chỉ tiêu hàng quý “2-2-2” sau một quý 3 tăng trưởng mạnh bất thường.
• Cho vay tiêu dùng: Tăng trưởng phản ánh các khoản vay mua nhà ở mới phát sinh, hạn mức tín dụng chuyên nghiệp, các khoản vay mua lại, hạn mức tín dụng thế chấp bằng khoản đầu tư và một số khoản vay mua du thuyền.
• Lộ trình chi phí: Sau khi chi phí gần như đi ngang trong ba quý, ban lãnh đạo dự kiến các khoản điều chỉnh thông thường về lương thưởng, chăm sóc sức khỏe và hợp đồng thuê sẽ tạo ra một bước tăng, tiếp theo là tốc độ tăng trưởng trở lại mức bình thường hơn.

Toàn văn biên bản cuộc họp kết quả kinh doanh

Toàn văn cuộc gọi công bố kết quả kinh doanh

Phần trình bày của ban lãnh đạo

Operator

Welcome to the Peapack-Gladstone Financial Corporation Third Quarter 2026 Earnings Call. Please be advised that today's conference is being recorded. I will now hand the conference over to Matthew Remo, Treasurer and Head of Corporate Finance. Please go ahead.

Matthew Remo

Thank you and good morning, everyone. I'm joined today by our President and CEO, Doug Kennedy; and our CFO, Frank Cavallaro, who will provide an overview of our third quarter results. John Babcock, our President of Wealth Management; and Lisa Chalkan, our Chief Credit Officer, are also here if there are any questions. If you have not yet read the earnings release and investor presentation we issued yesterday afternoon, you may access them by going to the Investor Relations page on our company website at peapackprivate.com. You may also access the investor presentation directly within our webcast today. After the presentation, we will be happy to take questions.

Our comments today may contain forward-looking statements, which are subject to risks and uncertainties that may cause our results to differ materially from expectations. Cautionary statements about reliance on this information are included in the earnings release and investor presentation as well as our SEC filings and other investor materials. The earnings release and presentation also include non-GAAP financial measures, so it is important to review the appropriate reconciliations in the appendices to each document.

And with that, it is my pleasure to turn the call over to Doug.

Douglas Kennedy

Thanks, Matt. Good morning, everybody, and thank you for joining us on our third quarter call. On behalf of the entire team at Peapack Private, I'm pleased to report yet another strong quarter for our company. Before we get into the numbers, I want to frame the quarter, what you're seeing in Q3 is not a one quarter story as a result of a strategy that we've been executing on 2023 and is now showing up consistently in our results. The big takeaway for the quarter is continued growth and profitability.

Revenue continued to grow significantly faster than expenses, and expenses actually declined from the second quarter. That combination drove core pretax pre-provision revenue to $32.3 million, up 76% year-over-year and net income available to common shareholders to $18.5 million. Diluted earnings per share were $0.99, up 15% on a linked quarter basis. This forward momentum marks 10 consecutive quarters of revenue and 6 consecutive quarters of earnings growth. And I'll add that during the quarter, Moody's affirmed our investment grade rating with a stable outlook.

So how did we get here? Let me put that in context. In 2023, the banking industry went through a real stress Three large bank failures and a significant dislocation. We saw that dislocation as an opportunity and we acted. In May 2023, we hired our first experienced New York City team. By April 2024, we had 13 teams in the leadership in place. In January 2025, we rebranded to Peapack Private. That April, we opened our flagship branch on 300 Park Avenue. And over the past year, we expanded to Long Island and added wealth, commercial real estate and equipment finance talent. This past quarter, our annualized pretax pre-provision revenue reached $129 million, which was approximately 2.7x the trough that we saw in the third quarter of 2024.

We made the investment. We built the teams and repositioned our brand, and now these investments are showing up in higher core earnings. So what do we see this quarter? Our net interest margin continued to improve despite funding cost pressure our efficiency ratio improved even further. That positive operating leverage is in its simplest form, revenues are up, our expenses are down and improved earnings following. During the quarter, loans grew $403 million. Deposits grew $301 million. Now as we've said before, growth is never going to be linear, and we don't expect that to ever be the fact. But our quarterly operating objectives remain $200 million of loan growth, $200 million of deposit growth and $2 million in core earnings growth.

Q3 exceeded the loan and deposit objectives and delivered $2 million of core earnings growth. We began Q4 with a strong loan and deposit pipeline. And the quality of that growth has been meaningful. We continue to see growth in noninterest-bearing operating relationships, which have increased 18% year-over-year. On the loan side, commercial and industrial lending grew $409 million year-over-year, up 15%, and we're seeing growth across virtually every asset category. That healthy margin expansion, combined with strong balance sheet growth, as you would expect, are improving our returns, our return on average tangible equity was 11.4%, up 587 basis points since the third quarter of 2024. So despite the large growth and some isolated headwinds, our capital and credit have remained very solid.

Our capital position continues to provide buffers that give us the capacity to support continued growth, and we're managing that capacity thoughtfully. Our focus is on balancing attractive growth opportunities with capital discipline as earnings improve. Frank is going to cover capital position and the current offering under our voluntary dividend reinvestment program which will supplement organic capital generation as we support anticipated growth. Credit quality also improved sequentially with lower nonperforming assets and early-stage delinquencies declining. As a result, our allowance coverage for nonperforming loans improved to 126% in the quarter.

Our new rent-regulated multifamily portfolio is down 12% year-over-year and now represents 11% and of total loans versus 18% at September 30, 2024. We expect that this will continue into the future. Wealth management remains a foundational aspect of our company, who we are and how we act as a private bank. We ended the quarter with $13.6 billion in assets under management and administration, down slightly from the second quarter. Gross inflows remained solid Wealth revenue was $17.3 million, up 9% year-over-year and $51 million year-to-date. This is a scaled, long-established franchise. It deepens relationships across generations, it gives us real scarcity value through fiduciary expertise, specialist investment talent, sell-side advisory for business owners. It is the corner stop of what it is that we do.

Client trust in this space is very hard to replicate. It takes decades of performance and the highest level of professionals to build. Wealth Management, as you would expect, Anchor is the entire strategy, customized banking spoke credit and treasury delivered through one coordinated team providing a high level of customer service, a single point of contact, solving the complex needs of affluent families and business owners one client at a time. So to summarize, our differentiated model is driving growth and improved profitability. Momentum is strong, and we're very constructive about our company's future. We have an established platform and are building an enviable differentiated franchise across Metro New York, experienced teams, specialist capabilities, scaled infrastructure and an integrated client relationship, wealth and fiduciary advice, private commercial banking, credit treasury solutions, all coordinated and made easy through a single point of contact. Our long-term objectives remain unchanged, a 125 plus return on assets and a 14% plus return on equity or better. We are not there yet but we're moving forward, achieving both benchmarks incrementally in a very thoughtful manner.

So with that, I want to thank you again for your confidence and support. And at this point, I'm going to turn it over to Frank, who will give you a detailed overview of the quarter.

Frank Cavallaro

Thanks, Doug, and good morning, everyone. I'll begin with earnings and then take you through the balance sheet, credit quality and wrap up with a few comments on capital. Net income available to common shareholders increased 17% sequentially to $18.5 million or $0.99 per diluted share compared with $15.8 million or $0.86 in the second quarter. Total revenue was $88 million, up 2% sequentially and 24% year-over-year. That growth was primarily driven by net interest income, which increased to $68 million, up $3.6 million, which is 6% growth sequentially and 33% year-over-year. Net interest margin was 3.34%, an increase of 2 basis points from the second quarter. This change is consistent with our expectations and aligns with our prior guidance.

Pricing on new business remained attractive. Loans originated during the quarter carried yields of approximately 6.4%, while new deposits came in, in the mid-2% range. However, rapid loan growth and increased competition for deposits required us to use more borrowings than in recent quarters, tempering the margin benefit of that growth. Noninterest income totaled $20 million, down $2.1 million or approximately 10% sequentially. A loss on the sale of an ORE property in addition to a fair value mark on a CRA equity security were responsible for approximately half of the linked quarter decline. As revenue continues to grow, expense growth is moderate. We supported substantial new business during the third quarter using the infrastructure we have built while holding expenses essentially flat.

Operating expenses totaled $55 million, down 1% sequentially and up 5% year-over-year. Combined with the 24% year-over-year increase in revenue, this is producing strong positive operating leverage and contributing to earnings growth. Core earnings or pre-provision net revenue totaled $32.3 million, up approximately $2 million or 6% on a linked-quarter basis. Our efficiency ratio improved to 63%, which is down approximately 1.7 percentage points sequentially and nearly 16 full percentage points lower than the third quarter of 2024. The effective tax rate in the quarter was approximately 20.5% compared to 28.4% in the second quarter. The third quarter rate includes a discrete benefit of approximately $1.8 million related to the purchase of production tax credits, resulting in a lower tax provision. We consider this a onetime item and do not expect that benefit to recur next quarter.

Turning to the balance sheet. Growth was strong across the company during the third quarter. Total loans increased $403 million sequentially to $7.1 billion, up 17% year-over-year. Growth was diversified across the franchise with C&I and commercial real estate showing particularly strong results. At the same time, our New York rent-regulated multifamily portfolio continued to run off and become a smaller portion of the overall balance sheet. Deposits increased $301 million or 4% quarter-to-quarter to $7.4 billion. Deposits increased approximately $800 million or 12% year-over-year. Deposit growth continues to come from across the franchise with a focus on delivering core relationships with significant operating account balances.

Over the past 5 quarters, we have opened an average of more than 600 noninterest-bearing operating accounts per quarter. We also monitor how those accounts fund and develop over time to assess the depth and the economics of each relationship. Noninterest-bearing demand deposits ended the third quarter at approximately $1.6 billion, which reflects 18% growth year-over-year. We remain confident in our comprehensive relationship strategy as it continues to deliver fully banked relationships, supporting growth and managing our funding mix over time.

Turning to credit. Nonperforming assets declined by $14 million or 20% sequentially to $58 million, representing 0.68% of total assets compared to 1.13% a year ago. Loans 30 to 89 days past due declined $9 million or 18% sequentially to $39 million, representing 0.56% of total loans. The provision for credit losses was $8.5 million compared to $8.1 million in the second quarter. Of that amount, $5 million of it was attributable to loan growth. Loan losses associated with loan workouts were lower than anticipated during the current quarter. Net charge-offs were $4.7 million compared with $5.9 million in the second quarter 2026. These improvements are encouraging, and we continue to actively manage individual problem credits. Within the New York rent-regulated multifamily portfolio, balances declined to $775 million as of September 30. That portfolio represented approximately 11% of total loans compared to 18% 2 years ago. The reduction of flexible portfolio runoff and growth elsewhere in the loan portfolio.

Turning to capital. As Doug noted, we maintain buffers above regulatory capital thresholds. Our strong balance sheet growth has reduced some of those buffers even as earnings have improved. While we are managing capital proactive to support attractive relationship growth while observing an appropriate cushion. To support our growth, we issued the remaining $20 million of convertible preferred equity in July of this year. This supported capital at both the bank and the holding company levels. As profitability improves, we expect retained earnings to support a greater portion of our capital growth internally. In the meantime, we are actively managing the capital needed to support the business we are generating today. We launched our voluntary dividend reinvestment program in the fourth quarter, which is scheduled to close in mid-November. This program has successfully increased common equity in the past and provides a supplemental source of capital as earnings improve.

Going forward, we continue to evaluate capital in the context of business opportunities risk and the interest of existing shareholders. We entered the fourth quarter with a stronger earnings base, continued relationship growth and expense discipline are supporting earnings and our priority is to translate that progress into higher returns while maintaining funding, credit and capital discipline.

With that, we are happy to answer your questions.

Operator

[Operator Instructions] Our first question from Christopher Marinac with Brean Capital, LLC.

Phần hỏi đáp

Christopher Marinac

Frank and Doug and team, can you talk a little bit about where you see deposit pricing going from here? And do you see any further mix shift beyond what we've seen in the last few quarters?

Douglas Kennedy

Chris, this is Doug. I would say, listen, we absolutely have seen a little bit of pressure. We've been sort of trying to gate at sort of that $200 million, $200 million range. And if you look at sort of the $200 million that we gotten core during the quarter. The pricing and the spread between that and what we're lending out at was north of that 4% target that we set for each other. So I think that the pricing will it's been more competitive, I think it's not -- certainly, it's not gotten out of hand. Maybe Frank...

Frank Cavallaro

Yes, I was just looking at the quarter-to-quarter the interest-bearing liabilities went up 10 basis points. So we expected that because of the 25 basis point move by the Fed during the quarter. In addition, we were borrowing a little bit of money from the Federal Loan Bank. So putting some pressure there. But I think to answer your question, we do expect to see upward pricing pressure on the cost of deposits. But it's -- if we've managed the overall beta to 50% to 60%, we think that's a comfortable level for us to manage the overall interest rate risk.

Douglas Kennedy

In terms of NIM, we invest in Q1, we've guided sort of 6 to 9 basis points for the year. We're kind of right in that range now. We expect that will play out this year between the back book repricing even with the added pressure on funding costs, we think that we can still sort of get 2 to 3 basis point improvement in NIM in each of the quarters going into '27.

Christopher Marinac

Great. And then just a follow-up for -- on the credit side. Do you see any further shift on multifamily values for you in terms of how you've calibrated it at this point?

Douglas Kennedy

Lisa Chalkan is here, so we'll have Lisa respond to that.

Lisa Chalkan

Values on the underlying collateral or value of the actual loans in a trade?

Christopher Marinac

Well, it's actually just the collateral. And would you have to make additional reserve additions and/or write-downs from here?

Lisa Chalkan

Yes. As we're getting updated appraisals, and again, we only have to get an updated appraisal if something is nonperforming and the first time ago substandard we do. And then if it's nonperforming, we get them annually. And I would say that we're seeing a mix. We are seeing some properties where there seems to be some softening of value. But at the same time, we are seeing some properties that are either holding up or actually have an improvement in value over the appraisal that was obtained a year ago. So I don't think that there's anything pervasive. Could there be one-offs? Absolutely. But it doesn't seem to be that we're seeing it across the board or systemically.

Frank Cavallaro

Additional provisioning to your question, we're absorbing it in our normal provision run rate. So like Lisa said, there's going to be one-offs we're dealing with them as they come up and -- but we don't see a landslide of deals coming our way. So we're pretty comfortable with how it's been performing to date.

Operator

Your next question from the line of Steve Moss with Raymond James.

Stephen Moss

Maybe just following up here on the multifamily. Just kind of curious how to think about the cadence of potential paydowns over the next 4 to 5 quarters. I'm just curious like what percentage of those loans may be repriced over that time period as well.

Lisa Chalkan

Do you want to take the repricing?

Frank Cavallaro

Yes. So the repricing, I think we looked at -- we've got over the next 5 quarters, so let's say, through the end of next year, we think there's $0.5 million in rent-regulated multifamily that reprices. I think the $1 billion is the -- yes. But on the -- I think he's asking specifically rent regulated. Yes. So $500 million we're comfortable with that. And as far as -- you can answer the second...

Lisa Chalkan

Yes. I mean the normal amortization on the portfolio, the New York rent regulated is, I would say, $5 million or $6 million a quarter. We have seen some small payoffs. I'm anticipating more than not. Many of the loans will either reprice or be looking for some that repricing in the document is over market. so they may be looking for some level of modification to make it a little bit more in line with what a current market rate might be.

Frank Cavallaro

Yes. It's declining. Not as quickly as we would hope it. But the important thing is it's not increasing. We're doing -- we're not originating anything new in that space. And then we continue to let pay downs happen obviously on monthly P&I payments. But anytime we see a relationship that's just transactional, we kind of encourage them to seek other funding when their maturity date comes up, correct?

Stephen Moss

Okay. So just kind of curious in terms of like the potential modification like would it be a new 5-year loan at maybe 6% kind of you're got to be thinking about it? Or just as a $500 million comes through in the next 5 quarters, what does that kind of refi process like our borrowers able to put up equity?

Lisa Chalkan

Yes. It runs a gamut. I wish there was -- I wish there was a menu of here's the 2 or 3 scenarios. Every single one is something different. Sometimes, we look for a pay down. We have had clients who have actually posted collateral accounts with us. We've had clients who have given us guarantees. We have done something that's maturing on a 1-year IO to give them time to be able to refinance it or sort out how they want to move forward. We have reset the interest rate and reset the amortization for a 2-year period, a 3-year period, nothing more than a 5-year period. But it really -- every single loan is looked at individually discussed and negotiated.

Frank Cavallaro

But the important thing is, we're agreeing to a modification. We're conceding something to the borrower, but we're getting something in return. And that's -- we're open to discussion on what that something is in every case.

Stephen Moss

Okay. Great. Now I appreciate that color there. And then just in terms of the margin here, I guess a couple of things, and I apologize, Frank, I had a hard time hearing you on your margin comments. But just curious in terms of where were new loan originations this quarter? And just in terms of just thinking about what percentage of loans are variable rate as well?

Frank Cavallaro

So the origination question I think we announced that the originations were at about 6.4%. So mid-6s on the new loans. The mix I mean overall, the mix of the variable rate is about 2/3 fixed, 1/3 -- 25% -- I'm sorry, 75% fixed, 25% variable is probably the answer to the question on the mix.

Stephen Moss

Okay. Great. And then in terms of just the pipeline here, rates have moved up. Just kind of curious like have -- as we head to the fourth quarter, you have origination yield stepped up from there? Or are they holding steady?

Douglas Kennedy

So the tenure as you know, Steve, is just bouncing around. So right now, in every business, including real estate, which is recent, everything we're quoting is a spread to like [indiscernible]. We don't like the right until we get to a closing. And those spreads are pretty much constant. It's 2% to 2.5%, depending on the bat business. So the spreads to the 5-year or it's typically the 5-year -- 3 or 5 years, somewhere in there. That has been very consistent with the spread.

Stephen Moss

Okay. I appreciate that. And then in terms of just kind of thinking -- the other thing I was curious on here, in terms of loan growth, good loan growth overall, the consumer book definitely shot up this quarter. I'm just kind of curious on the drivers there.

Lisa Chalkan

Yes. Some of it was growth in the residential loan origination. We -- I think we've raised before that we have this professional line of credit that we are offering to count attorneys and accountants. We've seen more volume there. We also have had a pool of loans that we purchased from a third party. We had been doing that. And so that was all the case of it. And so those are the 3 drivers. We also are seeing a lot more volume in the investment credit lines tied to the growth in John's business. We offer a product that margin allows people to borrow against their margin collateral. And we are definitely seeing a lot more volume there, although I would say many of those lines remain unused, their liquidity lines, but there's a lot more volume.

Douglas Kennedy

And we've also closed out a couple of yacht loans as well.

Lisa Chalkan

Correct. I think that we -- probably in these results, there were probably 3 yacht loans that we closed.

Stephen Moss

Okay. Great. Appreciate that. Maybe just in terms of expenses here, efficiency ratio has steadily improved. And Doug, I hear you on operational improvement. Just kind of curious here, and I definitely can first one from your net income color. But how you guys are thinking about the cadence of expense growth into '27 and any investments you may have to make?

Douglas Kennedy

So we've really leaned into AI across the enterprise. I've got a meeting actually this afternoon. It's literally -- we've got AI champions in every area of the bank. We've actually stood up 100 agents across the institution. They're right now in final testing, for example, loan closings, which was a very complicated sort of do. So I would say that the inclination is probably going to be more towards technology, the investment going into '27 that it will be people. And the idea is to take a lot of what we do that's I'll call it like an arts and crafts business, getting our processes very consistent and then being able to scale and set ourselves up to scale going forward, leveraging technology. So -- we also -- we've got ordinary raises, health care, we're expecting to have an increase. So Frank, I think it's coming mid to upper single digit is probably where we'll land for next year.

Frank Cavallaro

Yes. I mean...

Douglas Kennedy

The operating expense line.

Frank Cavallaro

If you look at the last 3 quarters, we've held it flat, which we're very pleased with. There's a natural in Q1, there's kind of that natural merit increases and resets for leases and things like that, that will step up. But we're targeting when we look at our multiyear projection for next year, mid- to single-digit growth on the expense line. The last couple of years, you've seen us higher teens and the full year run rate is carried into the following year. that will trickle off and we'll get back to kind of a normalized growth rate as we look into '27 and beyond.

Douglas Kennedy

Steve, let me just say the last commentary is that -- and I've said before, we're really focused on Q4 of '27 to get the returns. It won't be a destination return, but it will be it sort of gets us to the dip code that we want to be in based on the investments that we've made. So we're very focused on executing through the end of next year.

Operator

Your next question from the line of Manuel Navas with Piper Sandler.

Manuel Navas

Could you quantify the pipeline a little bit more. Just thoughts on how the fourth quarter looks versus the targets because you've exceeded them so much here in the third quarter? And how long can this kind of accelerated pace go into next year?

Douglas Kennedy

Our pipelines are very strong. The only way I'll describe it. In terms of visibility on the 2-2-2, we have absolute visibility in the fourth quarter. And I would say that we have enough strength that we could actually see the first quarter of next year as well.

Frank Cavallaro

I was just going to add to that, that will it be as strong as Q3 and Q3 was probably abnormally strong. So we expect the overall growth to some a little bit as we go into the coming quarters, probably closer to the 2-2-2 plan.

Douglas Kennedy

I would say us managing to the 2-2-2 in this quarter. noise some stuff may fall into January that could, if we pulled it forward, could happen. So we're managing to a 2-2-2, but not because we're leaning in to get stuff closed. It's kind of trying to manage a pipeline into the next quarter. So we feel very comfortable about this quarter and next quarter too.

Manuel Navas

And as we think about getting closer to $200 million, $200 million, the NIM benefit should increase since you're getting an accretive margin on those new loans and deposits. So that could bode well into next year, correct?

Frank Cavallaro

Yes. The volume, clearly, the volume plus the back book repricing that we talked about earlier, those 2 things are really were going to help us with the NIM the next year as we kind of face the pressure of the funding cost increasing.

Douglas Kennedy

So 2-2-2, it's $200 million loans, $200 million deposits and $2 million in pretax pre-provision. That's what we're focused on.

Manuel Navas

On the back book repricing, am I missing -- can you just quantify that a bit more. I don't know if I misheard, I enter a dollar amount outside of the New York City multifamily piece. But just overall back book repricing and kind of where -- what yield is it going from and what it could potentially reprice to?

Frank Cavallaro

Yes. So I think the earlier question was just focused on the rent regulated. So we kind of give just an answer there. If we step back and look at the whole portfolio, over the next 2 years, about 20% of our book are about $1.4 billion in fixed rate assets will reprice the weighted average coupon on that is just -- it's around [ 3 90 ], and we think that we could pick up somewhere between 150 to 200 bps on a repricing over that time period.

Douglas Kennedy

Getting back to the earlier discussion, I was going to say that would completely mitigate the pressure that we're feeling on the funding side.

Manuel Navas

Over the next few years, is that pretty steady? Or is it lumpier in any particular half of a year or anything like that?

Frank Cavallaro

I would say, I think we look at it quarterly, I think in the middle of next year, like Q2 and Q3, it's a little lumpy outside of that, I think it kind of smooths out.

Manuel Navas

Okay. Any impact to pricing so far from the September rate hike and just thoughts about future hikes and impact on under originations, lows and deposits?

Douglas Kennedy

Higher for longer is not good for us. That's the executive summary. Folks, the longer we sit in the ZIP code the more time people have to sort of talk about getting a higher rate. And so higher for longer is not good. Where it ultimately ends up. There was a flurry of folks that we had to reprice Frank mentioned that we're up 10 basis points. I think those conversations have winded down a little bit. So we're not seeing a lot of follow-on from there. But another rate increase in December. Something we get through today. I think we'll just -- it will add a little bit more pressure. So 2 more rate increases sort of hanging -- having the 10-year hang at 5 over the next -- where Fed funds are right now, I would say we'll continue to bring pressure.

Frank Cavallaro

Yes. Look, we've talked about before that our -- we see ourselves as a kind of neutral position on the balance sheet, asset and liabilities neutral. But the pressure always seems like it feels like it comes from the deposit side faster and more rapidly. A lot of the loans that reset and reprice 25% that we mentioned earlier, it takes 30 days or the end of a period to a little bit longer. So we're optimistic. But overall, don't kind of give you the guidance and we reiterated that 2 to 3 basis points per quarter, an increase in margin is what we're expecting, and that's what we think will carry into next year.

Douglas Kennedy

Even with the uncertainty is, we believe that we will get that.

Manuel Navas

Yes. I appreciate that. Could you give some color on recent initiatives on the fee side and how that could progress into next year Wealth Management was a little bit flat this quarter, but it's definitely up year-over-year. Just kind of a recent initiative and where the opportunities are and what could that produce in terms of growth next year?

Frank Cavallaro

0 So I'll say that in this quarter, if you look at our fee revenue, it was running at about -- overall at about $22 million a quarter. And this quarter, it dipped down to $20 million. There were 2 things in there that we would call onetime events. There was a loss on the disposition of an ORE property that runs through that line. And then there was also a fair value, a negative fair value adjustment on a CRA equity security in there. So those 2, that's about half of the decline. We see them as onetime and should not repeat going forward. The other decline was attributable to the SBA. We used to capture gains on SBA sales. And we've exited that business. So that was -- that's probably more of a longer-term decline. I don't know that we have any anticipation of stepping back into that or replacing it. But if you took $22 million a quarter down to $21 million a quarter, that's probably where I would say I'd be comfortable looking at it into the future. I don't know, John, if there's any color on the fee revenue for wealth, which is a big component of that, that you'd like to add?

Douglas Kennedy

No. Look, I mean, the third quarter was interesting in the markets. While the S&P was up a couple of percent. The Russell 2000, which probably looks more like many of our portfolios was down 7.5% in the quarter. So our flows were when you kind of mix it all up pretty flat. We had some inflows and outflows and trying to separate kind of the fee impact of those inflows and outflows, that was about flat as well. So -- but I'll tell you, we booked some good business in October. I'm really encouraged with our pipeline. I think we'll have a good fourth quarter, and that also includes New York, where we continue to build momentum, working with the bankers there in New York as well as with outside COIs and self-source to business. So I think we're on track. It was just one of those quarters.

Operator

Your next question from the line of David Konrad with KBW.

David Konrad

Most of my questions have been asked and answered, so I appreciate that. But one comment, Doug made about 4Q '27. I think Frank, historically, you've talked about maybe 90 bps ROA of protein 1 is maybe a goal. But on a core basis, you're already around 86 bps this quarter. So it feels like you're ahead of schedule. So maybe any updated thoughts on ROA at the end of next year.

Frank Cavallaro

I think what we've kind of guided to 90 bps now, maybe getting to 1% early next year is what we're targeting. As we look to the fourth quarter of jumping a year ahead, we put it in our investor deck that our target is really closer to $125 million. We want to get to -- we're not just striving to get to 1%. We want to get into the upper kind of in the upper tier of returns. So -- so if you just continue to look at the string that we've been on for the last 5 or 6 quarters and just keep stacking those quarters together, I would say that we're right around the pace that we expected. And hopefully, as we flip into we get back above 1% of a quarterly run rate and then continue that upward trend through the end of next year.

Douglas Kennedy

The idea is to control expenses as tight as we can, continue to build revenue. And here's the chart, I call it the smile chart, but if you look at the annualized core earnings of the company, which is about $130 million. The goal is to get that to about $180 million, and that will drive all the results that Frank just described. So we know exactly what number were and the timing of all of that. And the 2-2-2, if you model that with the margins that we discussed, you you'll land right in that ZIP code.

Frank Cavallaro

Not a crystal ball, change of the yield curve or asset quality headwinds. But if we continue on the track that we're on, we're pretty comfortable that we can get to that destination.

Douglas Kennedy

Yes. So it's a realistic plan, let's put it that way.

Operator

[Operator Instructions] There are no further questions at this time. I will now turn the call back to Doug for closing remarks.

Douglas Kennedy

Well, thank you very much all, and a special thanks to all of our employees who have really committed themselves to delivering outstanding performance on behalf of our shareholders. We've got a tremendous franchise that we've been able to build based on those people, and we've got all the product. And as you can see, based on results, we're executing in a way that is exceeding what we thought we could reasonably achieve when we set out on this course a couple of years ago. Our wealth franchise continues to be rarefied air. There's a lot of institutions that would love to have what we have. It is anchoring a private banking sort of business model, and we are truly delivering a differentiated service model to the Greater New York area and have a very viable plan as we just discussed that we're executing on that we think is going to give great returns over time for our shareholders.

So with that, again, thanks for dialing in, listening and thanks for your commitment and patience and we'll continue to deliver results as we move forward in executing our strategy. Thanks all, be well, and great to see you again.

Operator

This concludes today's call. Thank you for attending. You may now disconnect.