Q3 2026 State of the Market: California community and regional banking

November 3, 2026 · Jon Ward · 4 min read

Every quarter I read the earnings releases and call transcripts from the banks doing business in California with under $100B in assets. This is the Q3 2026 edition: 58 banks that reported Q3 numbers, 23 earnings calls, and the latest filings from 12 private banks that don't publish results.

36 of 49Banks that widened their net interest margin from Q2

1.59%Median cost of total deposits, from 0.79% to 3.08%

5Deals touching California since July, plus 1 bank failure

Get the full report (PDF, 12 pages)

Charts on margins, deposit costs and loan growth, a bank-by-bank data table, the deal and leadership timeline, and what California bank CEOs said on the record.

Download the PDF

The 5 things that mattered in Q3

Margins widened almost everywhere. The median NIM landed at 3.88%. The Fed's September 16 hike, its first since 2023, helped loan yields move faster than deposit costs.
Deposits are the fight. 37 of 45 banks grew deposits, and CEOs at Banc of California, Preferred and Mechanics said on the record that it's getting harder.
C&I is where the growth and the hiring are. Cathay's commercial loans grew 11.9% in the quarter while its CRE grew 0.6%. Hanmi and Hope are adding C&I and middle-market bankers.
Consolidation is putting bankers in play. First Hawaiian and TriCo, WaFd and EverBank, UMB and El Dorado Savings, and Hope's purchase of MANUBANK's commercial unit.
Hiring is targeted. Five Star went from 45 to 50 business development officers in one quarter. California Bank of Commerce, RBB and Redwood Capital opened loan production offices. Others cut headcount.

“Deposit pressure is real. I think all banks have been talking about it.” Jared Wolff, Chairman & CEO, Banc of California, on the Q3 call

If you're a banker

If you run a real C&I book, know what it's worth right now. If you bring operating deposits, you're the hire every CEO in this report wants. And if your bank is in the middle of a merger, nothing has to change tomorrow, but integration decisions get made over the next few quarters.

If you're hiring

Four integrations touch California right now, and that's probably where the next group of available bankers comes from. CRE pricing discipline is back, so hire CRE producers who win on structure and service. And credit trouble this quarter showed up one loan at a time. If your credit bench is thin, fix it before Q4 closes.

I'll publish this every quarter after earnings season. The next edition covers Q4 2026, after the January reports. If you want to talk about what it means for your team or your career, reach out.

Sources

Q3 2026 earnings releases and investor presentations (SEC filings, company sites and wire services).
Published Q3 2026 earnings call transcripts.
FDIC, California DFPI and Federal Reserve releases. Private bank figures are June 30, 2026 call report data.

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