Financial Performance - Operating income for Q2 FY26 reached $155.2 million, a 31% increase year-over-year from $118.9 million in Q2 FY25[11]. - Net sales for Q2 FY26 were $728.0 million, up 7.5% from $676.9 million in Q2 FY25, with net sales excluding surcharge revenue at $589.1 million, a 7.5% increase year-over-year[23]. - Adjusted operating margin for Q2 FY26 was 26.3%, up from 21.7% in Q2 FY25, marking the sixteenth consecutive quarter of margin expansion[23]. - Q2 profits increased by 31% year-over-year, with adjusted operating margins now at 33.1%[45]. - FY26 operating income expected to be 30% to 33% higher than record FY25, indicating continued earnings growth[45]. - Adjusted earnings per diluted share excluding special items for Q2-26 was $2.33, compared to $1.66 in Q2-25[52]. Cash Flow and Capital Allocation - The company generated $132.2 million in cash from operating activities and expects to generate at least $280 million of adjusted free cash flow in fiscal year 2026[34]. - The company repurchased $32.1 million of stock in the current quarter, totaling $183.1 million against a $400.0 million authorization[34]. - Adjusted free cash flow expected to be at least $280 million in fiscal year 2026[42]. - Adjusted free cash flow for Q2-26 was $85.9 million, compared to $51.9 million in the same period last year[53]. - Strong balance sheet and cash flow generation enable balanced capital allocation, including dividends and share repurchase programs[45]. Market and Segment Performance - Aerospace and Defense segment saw a 23% sequential increase in bookings, driven by ramping production rates and elevated MRO activity[15]. - Net sales in the Aerospace and Defense segment increased by 60.1% year-over-year, contributing significantly to overall revenue growth[24]. - The company completed negotiations for three additional aerospace long-term agreements (LTAs) with significant pricing increases, indicating strong pricing power in the current market[39]. - Aerospace industry targeting build rate increase of ~50% over 2025 rate and ~35% over pre-COVID high[42]. - Anticipated strengthening in volume, productivity, and favorable pricing actions due to supply-demand imbalance[45]. Future Outlook - Q3 FY26 operating income is expected to be in the range of $195 million to $200 million, reflecting strong demand and productivity efforts[27]. - Management expects FY27 not to be the peak of earnings growth, with market dynamics strengthening[45]. - The effective tax rate for Q2 FY26 was 19.0%, compared to 20.0% in Q2 FY25[23].

Loan Performance - Total loans outstanding increased to $24,776 million in Q2 FY26, up from $23,142 million in Q1 FY26, representing a growth of 7.05%[4] - Non-accrual loans totaled $152 million, representing 0.61% of total loans outstanding as of December 31, 2025, a decrease from 0.74% in September 2025[12] - The single-family mortgage segment reported non-accrual loans of $56 million, or 1.17% of loans outstanding, down from 1.50% in the previous quarter[12] - The commercial real estate segment showed non-accrual loans of $22 million, or 0.26% of loans outstanding, reflecting improved credit quality[12] - The multifamily and commercial mortgage segment had non-accrual loans of $6 million, or 0.24% of loans outstanding, indicating stable performance[12] - The allowance for credit losses increased to $327,043 thousand, up from $307,431 thousand, indicating a rise of 6.0%[15] - The provision for credit losses was $1.2 million, indicating a cautious approach to potential loan defaults[6] - The allowance for credit losses to total loans held for investment was 1.33% in Q1 2025, consistent with 1.34% in Q4 2024[17] Financial Performance - The net interest income for Verdant Commercial Capital was $11.2 million for the three months ended December 31, 2025, with total non-interest income of $18.9 million[6] - Net income for Q1 2025 was $128,397 thousand, up from $112,352 thousand in Q4 2024, indicating a growth of 14.0%[17] - Net income for the quarter ended December 31, 2025, was $128.4 million, an increase from $112.4 million in the previous quarter[19] - Adjusted earnings for the same period were $130.2 million, compared to $120.4 million in the prior quarter, reflecting a growth of approximately 6.8%[19] - Net interest income after provision for credit losses was $306,709 thousand for Q1 2025, up from $273,795 thousand in Q4 2024, reflecting a growth of 12.0%[17] - Non-interest income increased to $53,378 thousand in Q1 2025, compared to $32,340 thousand in Q4 2024, marking a significant rise of 65.0%[17] Asset and Equity Growth - Total assets increased to $28,201,406 thousand as of December 31, 2025, up from $27,431,817 thousand in the previous quarter, representing a growth of 2.8%[15] - Total stockholders' equity increased to $2,930,092 thousand, up from $2,793,121 thousand, marking a growth of 4.9%[15] - Common stockholders' equity rose to $2.93 billion, up from $2.79 billion in the prior quarter, reflecting a growth of 5.0%[19] - Tangible common stockholders' equity (Non-GAAP) reached $2,708,542 thousand, compared to $2,561,131 thousand in the prior quarter, reflecting a significant increase[20] - Book value per common share improved to $51.70, a 4.8% increase from $49.31 in the previous quarter[15] - Tangible book value per common share (Non-GAAP) rose to $47.79, a 5.8% increase from $45.21 in the previous quarter[15] Operational Efficiency - The efficiency ratio for Q1 2025 was 47.93%, slightly improved from 48.32% in Q4 2024[17] - The return on average assets improved to 1.83% in Q1 2025, compared to 1.77% in Q4 2024[17] - The net interest margin for the banking business segment was 5.02% in Q1 2025, up from 4.80% in Q4 2024[17] Strategic Focus - The company continues to enhance its team and expand geographically, focusing on cross-selling banking and securities services[8] - The company plans to continue focusing on core business operations while managing potential losses effectively[19] - The company emphasized the importance of non-GAAP financial measures in providing a clearer picture of its operating performance[19] Other Financial Metrics - Interest and dividend income for Q1 2025 reached $513,845 thousand, an increase from $465,736 thousand in Q4 2024, representing a growth of 6.0%[17] - Loan originations for sale increased to $61,009 thousand in Q1 2025, compared to $47,122 thousand in Q4 2024, a growth of 29.9%[17] - Non-performing assets to total assets decreased to 0.56% in Q1 2025 from 0.64% in Q4 2024, indicating improved asset quality[17] - The company incurred acquisition-related costs of $2.4 million during the quarter, which impacted net income[19] - The company reported a provision for credit losses of $7.8 million in the quarter, which was not present in the previous quarter[19] - Income taxes for the quarter were reported at $(649) thousand, a decrease from $(2,681) thousand in the previous quarter, suggesting improved tax efficiency[20] - Goodwill and intangible assets decreased to $196,119 thousand from $205,747 thousand in the previous quarter, indicating potential asset optimization[20] - The company reported other costs of $(1,879) thousand, which remained consistent with previous quarters, suggesting stable operational expenses[20]

Financial Performance - Fourth quarter net sales increased by 11.4% to $7.2 billion, with organic net sales growth of 11.0%[3] - Full year net sales reached $25.1 billion, reflecting an 11.2% increase, with organic net sales growth of 10.3%[8] - Reported net earnings for the fourth quarter were $0.8 billion, a 55.5% increase, and $3.2 billion for the full year, an 8.5% increase[6] - Adjusted net earnings per diluted share for the fourth quarter increased by 11.5% to $4.47, and for the full year increased by 11.8% to $13.63[7] - The company surpassed $25 billion in revenue, entering 2026 with significant momentum[2] Segment Performance - MedSurg and Neurotechnology segment reported net sales of $4.6 billion for the fourth quarter, up 17.5%, and $15.6 billion for the full year, up 15.7%[4] - Orthopaedics segment net sales were $2.6 billion for the fourth quarter, a 2.2% increase, and $9.5 billion for the full year, a 4.3% increase[5] - The MedSurg and Neurotechnology segment saw a sales growth of 15.7% in 2025, totaling $15.647 billion compared to $13.518 billion in 2024[24] - The Orthopaedics segment reported a sales increase of 4.3% in 2025, totaling $9.469 billion compared to $9.077 billion in 2024[24] Earnings and Margins - Adjusted operating income margin for the fourth quarter increased by 100 basis points to 30.2%[7] - Reported gross profit margin for the fourth quarter was 64.5%[6] - Gross profit margin for Q4 2025 was 64.5%, slightly up from 64.9% in Q4 2024[32] - Total revenue for 2025 was $16,065 million, representing a 64.0% gross profit margin, compared to $14,440 million and 63.9% in 2024[36] Cash Flow and Assets - Net cash provided by operating activities rose to $5.044 billion in 2025, compared to $4.242 billion in 2024, marking a 19% increase[22] - Total assets increased to $47.844 billion in 2025, up from $42.971 billion in 2024, representing a growth of 11.5%[20] - Cash and cash equivalents grew to $4.011 billion in 2025, up from $3.652 billion in 2024, an increase of 9.8%[20] Debt and Liabilities - Long-term debt increased to $14.859 billion in 2025 from $12.188 billion in 2024, reflecting a rise of 21.9%[20] - The company’s total current liabilities rose to $7.794 billion in 2025, compared to $7.616 billion in 2024, an increase of 2.3%[20] Future Outlook - The company expects 2026 organic net sales growth to be in the range of 8.0% to 9.5% and adjusted net earnings per diluted share to be between $14.90 and $15.10[9] - The company anticipates continued growth in revenue and earnings driven by new product launches and market expansion strategies[32] Costs and Adjustments - Acquisition and integration-related costs for 2025 totaled $335 million, significantly higher than $108 million in 2024, driven by employee retention and workforce reductions[38] - Goodwill and other impairments in 2025 amounted to $170 million, a decrease from $977 million in 2024, indicating improved asset management[38] - The effective tax rate for adjusted earnings in 2025 was 15.1%, compared to 14.8% in 2024, indicating a slight increase in tax efficiency[36]

Financial Performance - Net sales for Q4 2025 were $1,541 million, a decrease of 8.7% compared to Q4 2024's $1,708 million[1]. - Gross margin for Q4 2025 was $161 million, down from $304 million in Q4 2024, representing a decline of 47%[1]. - Operating income for Q4 2025 was $251 million, compared to $141 million in Q4 2024, an increase of 78.7%[1]. - Net earnings for Q4 2025 were $74 million, a decrease of 8.4% from $81 million in Q4 2024[1]. - Adjusted EBITDA for Q4 2025 was $140 million, down from $294 million in Q4 2024, a decline of 52.4%[3]. - Earnings per share (diluted) for Q4 2025 was $0.10, compared to $0.11 in Q4 2024, a decrease of 9.1%[2]. - Year-to-date net earnings for 2025 totaled $324 million, down from $396 million in 2024, a decrease of 18.2%[5]. - Total net sales for Q4 2025 reached $487 million, a slight increase from $497 million in Q4 2024, with year-to-date sales of $2,086 million compared to $2,066 million in 2024[11]. - Operating income for Q4 2025 was $316 million, significantly higher than $62 million in Q4 2024, contributing to a year-to-date operating income of $586 million compared to $279 million in 2024[11]. - Total net sales year-to-date for 2025 were $4,957 million, compared to $5,221 million in 2024[21]. Costs and Expenses - Total costs of sales for Q4 2025 were $1,380 million, compared to $1,404 million in Q4 2024, a slight decrease of 1.7%[1]. - The company reported a gain on the sale of timberlands of $(266) million in Q4 2025, impacting net earnings significantly[5]. - Cash flows from operations for the year-to-date 2025 totaled $562 million, a decrease from $1,008 million in 2024, with Q4 2025 showing a net cash outflow of $114 million[9]. - The company reported pension and post-employment costs of $239 million for the year-to-date 2025, up from $63 million in 2024, indicating increased liabilities in this area[9]. - The company reported a net charge to earnings of $(99) million in Q1.2025, compared to $(74) million in Q4.2024, indicating a worsening of 33.8%[27]. Assets and Liabilities - Total assets as of December 31, 2025, were $16,613 million, compared to $16,536 million at the end of 2024, indicating a stable asset base[8]. - Current liabilities increased to $1,278 million in Q4 2025 from $977 million in Q4 2024, reflecting a rise in short-term financial obligations[8]. - Cash and cash equivalents at the end of Q4 2025 were $481 million, down from $684 million at the end of 2024, highlighting a decrease in liquidity[9]. - The company reported a total increase in working capital of $66 million in Q4.2025, compared to a decrease of $35 million year-to-date in 2024[23]. Capital Expenditures and Investments - Capital expenditures for property and equipment in 2025 totaled $423 million, an increase from $364 million in 2024, indicating ongoing investment in infrastructure[9]. - The company plans to continue focusing on timberland acquisitions, with $469 million spent in Q4 2025, reflecting a strategic move to enhance its asset portfolio[9]. - Cash spent for capital expenditures in Q4.2025 was $110 million, with a total of $353 million for the year[23]. Sales and Production Volumes - Total delivered logs for Q4.2025 amounted to 336 thousand tons, up from 306 thousand tons in Q4.2024[15]. - Structural Lumber third-party net sales increased to $527 million in Q1.2025 from $420 million in Q4.2024, representing a 25.6% growth[24]. - Oriented Strand Board third-party net sales decreased to $228 million in Q1.2025 from $230 million in Q4.2024, a decline of 0.9%[24]. - Engineered Solid Section third-party net sales were $161 million in Q2.2025, up from $157 million in Q4.2024, indicating a 2.5% increase[24]. - Medium Density Fiberboard third-party net sales increased to $32 million in Q1.2025 from $28 million in Q4.2024, a rise of 14.3%[24]. - Total production volumes for Structural Lumber in YTD.2025 were 4,547 million board feet, up from 4,404 million board feet in YTD.2024, a growth of 3.2%[24]. Real Estate Performance - Real estate net sales in Q4.2025 were $73 million, an increase from $60 million in Q4.2024[20]. - The price per acre for real estate sold in Q4.2025 was $8,271, significantly higher than $2,806 in Q4.2024[20].

Financial Performance - Net income for 2025 was $36,572,000, an increase of $8,754,000 or 31.5% compared to 2024, driven by higher net interest income [2]. - Total net income for 2025 was $36.6 million, an increase of 31.5% from $27.8 million in 2024 [12]. - Net income for the three months ended December 31, 2025, was $10,483 thousand, up 31.4% from $7,983 thousand in the same period of 2024 [24]. - Basic earnings per share rose to $7.62 in 2025, a 31.4% increase from $5.80 in 2024 [12]. - Annualized return on average assets (GAAP) improved to 1.37% from 1.06% year-over-year [24]. Net Interest Income - Net interest income before the provision for credit losses was $98,001,000 for 2025, a 13.4% increase from 2024, primarily due to increased investment income and decreased interest expense [2]. - Net interest income for 2025 was $98.0 million, up from $86.5 million in 2024, reflecting a net interest margin of 3.50% [14]. - For the three months ended December 31, 2025, net interest income increased to $26,529 thousand, compared to $23,121 thousand for the same period in 2024, reflecting a growth of 10.4% [16]. - Net interest income (fully taxable equivalent) for the three months ended December 31, 2025, was $26,529 thousand, up from $23,121 thousand, a growth of 10.4% [25]. Assets and Loans - Total assets as of December 31, 2025, were $3.06 billion, an increase from $3.03 billion at the end of 2024, with a loan to deposit ratio of 98.89% [7]. - Total assets reached $3.06 billion as of December 31, 2025, compared to $3.03 billion in 2024 [13]. - Net loans increased to $2.33 billion as of December 31, 2025, up $36.3 million from 2024, mainly due to increased commercial loan activity [7]. - Total loans as of December 31, 2025, reached $2,350,622 thousand, an increase from $2,313,242 thousand a year earlier, representing a growth of 1.6% [22]. - The loan to deposit ratio was 98.89% as of December 31, 2025, compared to 97.11% in 2024 [12]. Credit Losses and Non-Performing Assets - The provision for credit losses for 2025 was $2,375,000, a decrease of $212,000 from 2024, influenced by economic forecasts and specific reserves for non-accrual loans [4]. - The allowance for credit losses on loans was $22,806,000 at December 31, 2025, an increase of $1,107,000 from 2024 [7]. - Non-performing assets totaled $29.2 million as of December 31, 2025, an increase of $578,000 since December 31, 2024 [7]. - Non-performing loans increased to $26,831 thousand from $20,560 thousand, representing a rise of 30.5% [23]. - Total non-performing assets increased to $29,189 thousand from $22,994 thousand, a rise of 27.1% [23]. Stockholders' Equity and Dividends - Stockholders' equity increased by $38.3 million to $338.1 million as of December 31, 2025, compared to $299.7 million in 2024 [11]. - A cash dividend of $0.50 per share was declared on December 2, 2025, representing a 3.1% increase over the previous year's dividend [8]. - Cash dividends paid per share increased to $1.980 in 2025 from $1.931 in 2024 [12]. Other Financial Metrics - Return on average equity for 2025 was 11.51%, up from 9.59% in 2024, while return on average tangible equity was 15.94%, compared to 13.84% in 2024 [2]. - Return on average assets (annualized) improved to 1.21% in 2025 from 0.93% in 2024 [12]. - The net interest spread for the year ended December 31, 2025, was 2.97%, up from 2.56% in 2024, indicating improved profitability on interest-earning assets [19]. - The average yield on taxable investment securities increased to 3.26% for the three months ended December 31, 2025, from 2.70% in the same period of 2024 [16]. - The ratio of interest-earning assets to interest-bearing liabilities improved to 125% for the three months ended December 31, 2025, compared to 123% in the same period of 2024 [16].

Revenue and Sales Performance - Net revenue for the year ended December 31, 2025, was $467.6 million, driven by sales of RF receivers, connectivity solutions, and optical interconnect solutions [335]. - Products shipped to Asia accounted for 82% of net revenue in 2025, with significant contributions from Hong Kong (49%) and Vietnam (12%) [336]. - Two customers accounted for 28% of net revenue in 2025, while the top ten customers collectively represented 65% of total revenue [337]. - Net revenue increased by $107.1 million to $467.6 million for the year ended December 31, 2025, compared to $360.5 million for 2024, driven by demand in broadband, connectivity, and infrastructure markets [364]. - Industrial and multi-market revenue decreased by $37.0 million, driven by a reduced volume of shipments, while broadband revenue increased by $87.6 million [364]. Costs and Expenses - The company incurred $24.5 million in restructuring costs during 2025, including $17.1 million related to CAD software licenses and $6.9 million in severance costs [343]. - Gross profit improved to 57% of net revenue in 2025, up from 54% in 2024, with gross profit amounting to $265.8 million, an increase of $71.0 million [366]. - Research and development expenses decreased by $16.6 million to $208.6 million in 2025, representing 45% of net revenue, down from 62% in 2024 [367]. - Selling, general and administrative expenses rose by $21.3 million to $159.6 million in 2025, accounting for 34% of net revenue, compared to 38% in 2024 [369]. - Restructuring charges decreased by $28.9 million to $24.5 million in 2025, representing 5% of net revenue, down from 15% in 2024 [371]. - Cost of net revenue increased by $36.1 million to $201.8 million in 2025, representing 43% of net revenue, down from 46% in 2024 [366]. Cash Flow and Financial Position - As of December 31, 2025, the company had cash and cash equivalents of $72.8 million, restricted cash of $28.6 million, and net accounts receivable of $46.1 million [380]. - The company's working capital as of December 31, 2025, was $62.8 million, a decrease from $141.2 million in 2024 [390]. - Net cash provided by operating activities for the year ended December 31, 2025, was $19.6 million, compared to a net cash used of $45.3 million in 2024 [392]. - The company recorded net cash used in investing activities of $19.8 million for the year ended December 31, 2025, down from $23.4 million in 2024 [393]. - Net cash used in financing activities was $18.7 million for the year ended December 31, 2025, primarily due to common stock repurchases of $20.0 million [394]. - As of December 31, 2025, the company's total indebtedness was $125.0 million under a senior secured term B loan facility [390]. - The company has a senior secured revolving credit facility of up to $100.0 million, which remained undrawn as of December 31, 2025 [382]. - The company anticipates that its cash, cash equivalents, and restricted cash of $101.4 million will be sufficient to fund projected operating requirements for at least the next twelve months [390]. Tax and Valuation - The income tax benefit for 2025 was $4.2 million, compared to a provision of $6.5 million in 2024, reflecting a change of $10.7 million [375]. - The company recorded a full valuation allowance against its Singapore deferred tax assets, resulting in no income tax provision recorded in Singapore for the year ended December 31, 2024 [379]. Market and Operational Insights - The company is experiencing growth in sales demand across broadband and connectivity markets, driven by new product wins and recovery from excess inventory [335]. - The company continues to innovate with new products in advanced semiconductor process nodes such as 16nm and 5nm [335]. - The sales cycle for the company's products is lengthy, with product life cycles varying from 24 to 84 months depending on the market [338]. - Revenue recognition estimates involve significant uncertainty, particularly regarding price adjustments and returns based on historical data [349]. - The company expects revenue to fluctuate in the future, consistent with the cyclical nature of the industry [365]. Interest Rate and Currency Risks - The company may face substantial variable interest rate risk due to its term loans, which could adversely affect its operating results if interest rates increase significantly [383]. - The company is subject to variable interest rates on credit agreements and could be adversely impacted by high interest rates in the future [399]. - A 10% increase in SOFR interest rates would result in an immaterial increase in interest expense [399]. - The company believes its operating cash is sufficient to cover interest obligations but is monitoring the impact of high interest rates on financing and business operations [399]. - The company has limited exposure to foreign currency exchange rates as most international agreements are denominated in United States dollars [398]. - A hypothetical change of 100 basis points in foreign currency exchange rates would result in a translation gain change of approximately $0.9 million [398].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ______________ ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended December 31, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition Period From to Commission File Number 1-5397 __________________________ AUTOMATIC DATA PROCESSING, INC. (Exact name of registrant as specified in its charter) ____ ...

Exhibit 99.1 TFS Financial Corporation Announces First Quarter Fiscal Year 2026 Results (Cleveland, OH - January 29, 2026) - TFS Financial Corporation (NASDAQ: TFSL) (the "Company"), the holding company for Third Federal Savings and Loan Association of Cleveland (the "Association"), today announced results for the quarter ended December 31, 2025. "We have had a positive start to our fiscal year as we quickly adapted to three recent Fed rate cuts," said Chairman and CEO Marc A. Stefanski. "Our net interest i ...

Exhibit 99.1 Sandisk Reports Fiscal Second Quarter 2026 Financial Results News Summary MILPITAS, Calif. — January 29, 2026 — Sandisk Corporation (Nasdaq: SNDK) today reported fiscal second quarter financial results. "This quarter's performance underscores our agility in capitalizing on better product mix, accelerating enterprise SSD deployments, and strengthening market demand dynamics, all at a time when the critical role that our products play in powering AI and the world's technology is being recognized, ...

Financial Performance - Net income for Q4 2025 was $5.3 million, with diluted EPS of $0.60, while adjusted net income was $5.6 million and adjusted diluted EPS was $0.64[4]. - Net income for the three months ended December 31, 2025, was $5,289,000, a significant improvement from a net loss of $41,593,000 in the previous quarter[17]. - Earnings per share (diluted) increased to $0.60 for the three months ended December 31, 2025, compared to a loss of $4.76 in the prior quarter[17]. - Diluted earnings per share for 2026 are anticipated to be in the range of $2.35 to $2.45[13]. - Adjusted diluted earnings per share for Q4 2025 was $0.64, compared to a loss of $1.43 in Q3 2025[27]. Revenue and Income - Total revenue for Q4 2025 was $41.7 million, with adjusted total revenue increasing 21% year-over-year to $42.1 million[4]. - Total interest income for the three months ended December 31, 2025, was $78,054,000, a decrease from $84,388,000 in the previous quarter[19]. - Noninterest income for the three months ended December 31, 2025, was $11,375,000, a recovery from a loss of $24,647,000 in the previous quarter[19]. - Adjusted total revenue for the twelve months ended December 31, 2025, is $154,706,000, up from $129,989,000 in the previous year[25]. Assets and Loans - Total assets decreased to $5,571,647,000 as of December 31, 2025, from $5,639,174,000 at the end of the previous quarter[18]. - Total loan balances reached $3.7 billion, up $143.2 million, or 4%, from Q3 2025, driven by strong production in single tenant lease financing and construction[6]. - Total loans amounted to $3,746,728 thousand as of December 31, 2025, a decrease of 10.2% from $4,170,646 thousand in December 2024[22]. Deposits and Ratios - Total deposits were $4.8 billion, a slight decrease from $4.9 billion in Q3 2025, with a loans to deposits ratio of 77.4%[6]. - Total deposits decreased to $4,839,813,000 as of December 31, 2025, from $4,915,434,000 at the end of the previous quarter[18]. - Interest-bearing demand deposits increased to $1,120,850 thousand, representing 23.2% of total deposits as of December 31, 2025, up from 18.2% in December 2024[22]. Credit Losses and Provisions - Provision for credit losses for Q4 2025 was $12.0 million, down 66% from Q3 2025, with net charge-offs to average loans improving to 1.68%[6]. - Provision for credit losses increased significantly to $11,984,000 for the three months ended December 31, 2025, from $7,201,000 in the same period last year[19]. - The allowance for credit losses on loans was 1.49% as of December 31, 2025, compared to 1.66% in the previous quarter[17]. Margins and Returns - Net interest income rose 29% year-over-year to $30.3 million, with a fully-taxable equivalent net interest margin of 2.30%, an increase of 55 basis points from the prior year[4]. - The net interest margin increased to 2.22% for the three months ended December 31, 2025, up from 2.04% in the previous quarter[17]. - Return on average assets improved to 0.37% for the three months ended December 31, 2025, compared to a negative return of (2.71%) in the previous quarter[17]. - Return on average shareholders' equity was 5.79% for the three months ended December 31, 2025, compared to (42.11%) in the previous quarter[17]. Future Outlook - The company expects continued loan growth of 15% to 17% in 2026, with FTE net interest margin projected to expand to 2.75% to 2.80% by Q4 2026[13]. - The outlook for FTE net interest income in 2026 is between $155 million and $160 million, with noninterest income expected to be $33 million to $35 million[13]. - Operating expenses for 2026 are projected to be between $111 million and $112 million, with a provision for credit losses expected to be $50 million to $53 million[13].