Executive Summary

Record profitability: net income $8.44M and diluted EPS $0.61; ROA 1.89% and ROE 23.28% in Q3 2020, driven by strength across Commercial Bank, OpenSky credit cards, and Mortgage banking .
Net interest margin improved 29 bps sequentially to 5.01% (core NIM ex credit cards and SBA-PPP 3.84%); cost of interest-bearing liabilities fell to 1.18% from 1.38% in Q2 .
OpenSky® momentum and normalization in cardholder behavior produced record credit card fees ($5.77M), 148K new accounts, and +$44.9M noninterest secured deposits; mortgage originations hit a record $431.1M with mortgage banking revenue $14.36M and gain-on-sale 3.13% .
Credit provisioning increased ($3.5M) as macro uncertainty persisted, but loan deferrals dropped 79% q/q to 2.0% of loans, and allowance rose to 1.49% of total loans (1.77% ex-PPP) .
Estimates context: Wall Street consensus (S&P Global) for Q3 2020 EPS and revenue was unavailable at time of request; beat/miss vs estimates cannot be assessed (S&P Global data unavailable).

What Went Well and What Went Wrong

What Went Well

“Our diversified business model has demonstrated resiliency in a difficult economic environment and continues to perform well as shown by our record earnings in the third quarter.” — Ed Barry, CEO .
OpenSky® scaled faster than expected: 148K new accounts; credit card fees $5.77M; secured deposits +$44.9M; card balances up to $85.0M as behavior normalized .
Mortgage banking outperformance: originations $431.1M, revenue $14.36M, gain-on-sale 3.13%, reflecting optimized pricing and mix .

What Went Wrong

NIM down 82 bps YoY to 5.01% due to lower loan yields, PPP mix and excess liquidity; core NIM (ex cards/PPP) 3.84% also down YoY .
Nonperforming assets rose to $14.8M (0.79% of assets) on two past-due construction loans totaling $4.7M; management does not anticipate losses, but NPAs increased q/q .
Operating expense pressure: noninterest expense up 54.3% YoY on mortgage commissions, data processing tied to card growth, and higher operating costs (marketing, credit, professional fees, FDIC insurance) .

Financial Results

Metric	Q3 2019	Q2 2020	Q3 2020
Net Interest Income ($USD Millions)	$18.18	$18.62	$22.04
Noninterest Income ($USD Millions)	$7.22	$13.83	$21.15
Provision for Loan Losses ($USD Millions)	$1.07	$3.30	$3.50
Net Income ($USD Millions)	$4.48	$4.76	$8.44
Diluted EPS ($USD)	$0.32	$0.34	$0.61
Net Interest Margin (%)	5.83%	4.72%	5.01%
Efficiency Ratio (%)	71.75%	69.74%	65.17%
ROA (%)	1.42%	1.19%	1.89%
ROE (%)	14.04%	13.70%	23.28%

Income Statement Components (quarterly):

Metric	Q1 2020	Q2 2020	Q3 2020
Total Interest Income ($USD Millions)	$21.74	$22.00	$25.19
Interest Expense ($USD Millions)	$4.06	$3.38	$3.15
Net Interest Income ($USD Millions)	$17.69	$18.62	$22.04
Provision for Loan Losses ($USD Millions)	$2.41	$3.30	$3.50
Noninterest Income ($USD Millions)	$6.58	$13.83	$21.15
Noninterest Expense ($USD Millions)	$17.84	$22.63	$28.12
Income Before Taxes ($USD Millions)	$4.01	$6.52	$11.57

Segment/KPI Breakdown:

Metric	Q1 2020	Q2 2020	Q3 2020
Mortgage Originations ($USD Millions)	$180.42	$315.17	$431.06
Mortgage Banking Revenue ($USD Millions)	$4.02	$10.12	$14.36
Gain-on-Sale (%)	2.21%	2.97%	3.13%
OpenSky Active Accounts (000s)	244.02	400.53	529.11
Credit Card Loans ($USD Millions)	$41.88	$54.73	$84.96
Secured Credit Card Deposits ($USD Millions)	$84.69	$131.85	$176.71
Credit Card Fees ($USD Millions)	$2.01	$2.91	$5.77

Balance Sheet KPIs:

Metric	Q1 2020	Q2 2020	Q3 2020
Total Assets ($USD Millions)	$1,507.85	$1,822.37	$1,879.03
Total Deposits ($USD Millions)	$1,302.91	$1,608.73	$1,662.21
Noninterest Bearing Deposits ($USD Millions)	$363.42	$563.99	$596.24
Portfolio Loans Receivable ($USD Millions)	$1,187.80	$1,441.12 (incl. PPP)	$1,244.61 (ex-PPP)
Allowance for Loan Losses ($USD Millions)	$15.51	$18.68	$22.02
Nonperforming Assets / Total Assets (%)	0.61%	0.50%	0.79%
Nonperforming Loans / Total Loans (%)	0.49%	0.41%	0.78%

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue, EPS, NIM, Efficiency Ratio, Loan Growth, Credit Costs	FY/Q4 2020	None provided	None provided	Maintained (no formal guidance disclosed)

Note: Q3 2020 earnings materials did not include formal quantitative guidance ranges; management discussed focus areas (expense control, core deposits, PPP relationships) but no explicit ranges were provided .

Earnings Call Themes & Trends

Topic	Q1 2020 (Prior-2)	Q2 2020 (Prior-1)	Q3 2020 (Current)	Trend
OpenSky® card growth	Record 43K new accounts; deposits +8% q/q; card balances seasonal dip	Record 172K new accounts; deposits $131.9M; fees +$0.94M YoY	148K new accounts; fees $5.77M; deposits +$44.9M; card balances $85.0M	Accelerating growth; revenue normalization resuming
Mortgage banking	Originations $180.4M; gain-on-sale 2.21%	Originations $315.2M; revenue $10.1M; expansion hires	Originations $431.1M; revenue $14.36M; gain-on-sale 3.13%	Strengthening on refi and pricing mix
PPP and deposits	Early PPP participation; 597 approvals $172.6M; NIBD mix improved	1,220 PPP loans; $236.3M balances; NIBD +$200.6M	PPP loans $233.35M; NIBD +$32.2M q/q; focus on core deposits	PPP outstanding stable; core deposits rising
Net interest margin (core)	NIM 5.16%; core NIM ex cards 3.96%	NIM 4.72%; core 3.96%; asset yields down; costs lower	NIM 5.01%; core 3.84%; costs cut to 1.18%	Sequential improvement; YoY pressure persists
Credit provisioning/deferrals	Provision $2.41M; elevated due to COVID-19	Provision $3.30M; deferrals 10.0% of loans	Provision $3.50M; deferrals 2.0% (−79% q/q)	Provision elevated but deferrals sharply down
Asset quality	NPAs 0.61% of assets	NPAs 0.50% of assets	NPAs 0.79% of assets; two construction loans ($4.7M) drove increase	Mixed: uptick on isolated credits
Capital ratios	CET1 12.19% (HoldCo)	CET1 12.39% (HoldCo)	CET1 12.75% (HoldCo)	Strengthening capital position

Management Commentary

“We look to maintain momentum by focusing on expense control, increasing core deposits and expanding relationships with PPP borrowers in the quarters to come.” — Ed Barry, CEO .
“Our consumer strategy is scaling more quickly than expected… robust growth in OpenSky® accounts, secured deposits, and related revenues as customer behavior began to normalize.” — Ed Barry .
“Asset quality remains strong, with loans in deferral status decreasing 79% percent over the quarter to 2 percent of loans outstanding.” — Ed Barry .

Q&A Highlights

The Q3 2020 earnings call transcript was not available in the document repository; highlights could not be extracted. Reference press release for management priorities and operational commentary .

Estimates Context

Wall Street consensus estimates (S&P Global) for Q3 2020 EPS and revenue were unavailable at the time of request; as a result, beat/miss vs consensus cannot be determined. Values retrieved from S&P Global were unavailable due to access limitations.

Key Takeaways for Investors

Diversified engines (Commercial Bank, OpenSky®, Mortgage) drove record earnings; noninterest income surged to $21.15M on mortgage and card momentum .
Sequential NIM improvement and lower funding costs support near-term NII; core NIM remains pressured by low rates and PPP mix .
Credit normalization signals: deferrals fell to 2.0% of loans (−79% q/q); allowance strengthened to 1.49% (1.77% ex-PPP) with modest charge-offs .
Watch asset quality: NPAs rose to 0.79% on two construction loans ($4.7M), which are well-secured per management; monitor resolution trajectory .
OpenSky® scale is a structural tailwind: 529K active accounts, $176.7M secured deposits, $5.77M fees — supports low-cost funding and fee income diversity .
Mortgage banking remains a high-velocity driver with record originations and elevated gain-on-sale, but rate/volume sensitivity warrants vigilance as macro shifts .
With formal guidance absent, focus near term on operating leverage and deposit mix improvements cited by management (expense control, core deposit growth, PPP relationships) .

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