Total net revenue of $162.0 million beat the API Ninjas estimate of $160.9 million by $1.1 million, or 0.7%; core earnings per share of $1.58 beat the $1.49 estimate by $0.09, or 6.0%.
No financial outlook was given. The CIBC Caribbean closing is reaffirmed for the first half of 2027 and the quarterly dividend is held at $0.50 per common share.
Both revenue engines moved higher. Net interest income rose to $97.2 million from $92.7 million as the investment book yield reached 2.87% against 2.67% a year ago, and non-interest income rose to $64.8 million from $61.2 million on trust revenue from the new R&H Guernsey business.
Credit is the pressure point. Provision expense was $0.2 million for the quarter while gross non-accrual loans reached $119.6 million, up $28.3 million from $91.3 million at December 31, 2025, or 2.7% of gross loans against 2.1%.
The one thing that matters: revenue growth of 5.2% was almost entirely absorbed by 8.7% core expense growth, leaving core net income up just 1.4% to $64.2 million. The core EPS beat rests on a 3.4% smaller diluted share count, and the buyback that produced it has been paused since May.
Key metrics
Metric
Reported
Prior year
Change
Core net income
$64.2 million
$63.3 million
—
Net interest income
$97.2 million
$92.7 million
+$4.4 million
Non-interest income
$64.8 million
$61.2 million
+$3.6 million
Net interest margin
2.76%
2.73%
+3 basis points
Core efficiency ratio
57.8%
56.2%
—
Tangible book value per share
25.32
26.41
—
Guidance changes
Item
New guidance
Prior guidance
CIBC Caribbean acquisition closing
first half of 2027
—
Quarterly cash dividend per common share
$0.50
—
Quality of earnings
The beat is thinner than the per-share line suggests. Core revenue before other gains and provisions grew 5.2% to $161.9 million from $153.9 million while core non-interest expenses grew 8.7% to $96.2 million from $88.5 million, so core net income rose only 1.4% to $64.2 million; the core efficiency ratio widened to 57.8% from 56.2%.
The sequential jump in reported earnings is deal accounting, not operations. GAAP EPS of $1.50 against $1.16 last quarter is mostly the drop in non-core acquisition expense to $3.2 million from $16.9 million, while core EPS was unchanged at $1.58 in both quarters.
Capital is building on the regulatory measure and eroding on the book measure. The total capital ratio rose to 29.6% from 27.8% at December 31, 2025, while tangible book value per share fell to $25.32 from $26.41 as available-for-sale unrealized losses widened to $187.3 million from $89.4 million.
Gotchas & watch items
Credit is deteriorating faster than the provision admits: gross non-accrual loans of $119.6 million are 2.7% of gross loans against 2.1% at December 31, 2025, and the allowance of $27.0 million covers less than a quarter of them, yet the quarter carried a provision of only $0.2 million.
The per-share tailwind has already stopped: no shares were repurchased in the quarter with the programme paused since the May 28, 2026 acquisition announcement, and the diluted count rose sequentially to 40,523 thousand from 40,447 thousand.
A fee engine the release buries: trust assets under administration rose $20.5 billion to $155.2 billion from $134.7 billion at December 31, 2025, the clearest evidence yet that the R&H Guernsey addition is scaling, while custody assets slipped to $30.9 billion from $32.3 billion.
Part of the fee step-up does not recur: the $1.4 million sequential rise in non-interest income includes a non-recurring contractual incentive inside a $0.8 million banking-fee increase.