Question · Q3 2025
Terence James McEvoy questioned the decline in loan yields from Q2 to Q3, asking if it was due to mix shift or pricing competition, and if there's an opportunity to expand core loan yields in Q4. He also inquired about the timing of cost savings from the Farmers acquisition, specifically if they would be fully realized in the second half of 2026.
Answer
Ian Whinnem, SVP and CFO, clarified that a non-recurring item in Q2 interest income distorted the Q2-Q3 yield comparison, making Q3 appear lower; excluding it, yields are more normalized. Dennis Shaffer, President and CEO, highlighted that $225 million in adjustable-rate loans are set to reprice over the next 12 months, which should lead to a yield pickup. Ian Whinnem confirmed that cost savings, including contract expenses and staffing reductions, are expected to follow the early February system conversion, with a full run rate anticipated in the second half of 2026.