Fourth Quarter Earnings Conference Call February 26, 2026 #FF6C0C #0DD3AD #58595B Font: #7D868C #58595B Font: #4C5B69 #7D868C #4C5B69 Foward Looking Statements Certain statements in this presentation constitute "forward-looking statements" within the meaning of, and subject to the protection of, the Private Securities Litigation Reform Act of 1995. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities A ...

Market Overview - U.S. stock futures show a mixed picture with Dow Jones and S&P 500 futures up by approximately 0.3% and 0.2% respectively, while Nasdaq 100 futures are down by 0.2%, indicating cautious sentiment towards technology stocks [1][2] - Major U.S. indexes experienced a significant retreat, with Nasdaq Composite down 1.4%, S&P 500 down 0.8%, and Dow Jones down 0.3%, largely due to a sell-off in technology shares [3] Economic Data - ADP payrolls data revealed weaker-than-expected private-sector job growth in January, with only 22,000 jobs added, less than half of the anticipated amount, which may impact Federal Reserve policy decisions [4] Corporate News - Advanced Micro Devices (AMD) shares fell approximately 10% in premarket trading despite better-than-expected quarterly results, due to a disappointing outlook for Q1 [5] - Uber Technologies (UBER) saw a drop of 5.9% in premarket trading after missing EPS estimates and providing a lower-than-expected Q1 adjusted EPS forecast [6] - Alphabet (GOOGL) is up 1% in premarket ahead of its quarterly results, while Amazon (AMZN) shows a modest gain of 0.3% ahead of its earnings report [7] - Texas Instruments (TXN) announced the acquisition of Silicon Laboratories (SLAB) for approximately $7.5 billion, leading to a 25% increase in Silicon Labs stock, while Texas Instruments shares declined by 3% [8] - PayPal Holdings Inc. (PYPL) experienced a steep decline of nearly 19% after missing earnings expectations, while Palantir Technologies Inc. (PLTR) rose 7% after exceeding analyst expectations with strong results [9] Analyst Recommendations - Several companies received upgrades, including Airbnb Inc. (ABNB) to Outperform, Cloudflare Inc. (NET) to Buy, and Devon Energy Corp. (DVN) to Overweight [10] Market Sentiment - The market is expected to continue exhibiting a tug-of-war between tech sector concerns and a broader market seeking new leadership, with a focus on incoming economic data and corporate performance [11]

Core Insights - Cullen/Frost Bankers, Inc. (CFR) reported strong fourth-quarter 2025 adjusted earnings per share of $2.57, exceeding the Zacks Consensus Estimate of $2.47, and up from $2.36 in the prior-year quarter [1][9] - The results were driven by increased net interest income and non-interest income, supported by growth in loan and deposit balances, although elevated non-interest expenses posed a challenge [1][14] Financial Performance - The company reported net income available to common shareholders of $164.6 million for Q4 2025, a 7.4% increase from $153.2 million in Q4 2024 [2] - For the full year 2025, adjusted earnings per share reached $9.92, surpassing the Zacks Consensus Estimate of $9.84, and increased from $8.88 in the previous year [2] - Total revenues for Q4 2025 were $603.4 million, exceeding the Zacks Consensus Estimate by 3% and improving from $556.44 million year-over-year [3] - Annual revenues for 2025 were $2.32 billion, beating the Zacks Consensus Estimate of $2.30 billion and up from $2.15 billion in 2024 [3] Income Breakdown - Net interest income (NII) rose 8.6% year-over-year to $471.2 million, with the net interest margin (NIM) expanding 13 basis points to 3.66% [4] - Non-interest income increased 7.6% year-over-year to $132.2 million, driven by higher trust and investment management fees, service charges, and increased income from derivatives trading [5] Expense Analysis - Non-interest expenses totaled $371.7 million, a 10.6% increase year-over-year, primarily due to higher salaries, employee benefits, and one-time expenses [6] - The increase in expenses was partially offset by a reversal related to a special FDIC insurance assessment [6] Loan and Deposit Growth - Total loans for Q4 2025 were $21.9 billion, reflecting a 2.1% increase from the prior quarter, while deposits were $43.3 billion, up nearly 1% sequentially [7] Credit Quality - Credit loss expenses for Q4 2025 were $11.2 million, down from $16.2 million in the prior-year quarter, with net charge-offs decreasing to $5.8 million from $14.0 million [8] - The allowance for credit losses on loans was 1.29% of total loans, slightly down from 1.30% a year ago [8] Capital and Profitability Ratios - As of December 31, 2025, the common equity Tier 1 risk-based capital ratio was 14.06%, up from 13.62% year-over-year [11] - Return on average assets was 1.24%, compared to 1.16% in the prior-year quarter, while return on average common equity was 15.66%, down from 15.81% [12] Shareholder Returns - The company declared a first-quarter cash dividend of $1.00 per common share, payable on March 13, 2026 [13] - In Q4, CFR repurchased 653,913 shares for $80.7 million, completing its $150 million share repurchase authorization for 2025 [13]

Core Insights - Polaris Capital Management disclosed a sale of 204,200 shares of Popular (NASDAQ:BPOP) in the fourth quarter, valued at approximately $24.13 million based on average pricing [1][2] - Following the sale, Polaris holds 682,330 shares of Popular, valued at $84.96 million, with a net position value decrease of $27.63 million due to both share sales and market price changes [2] Company Overview - Popular is a leading regional financial institution with a diversified portfolio of banking and financial services, leveraging an extensive branch and ATM network to serve a broad customer base [6] - The company offers a comprehensive suite of retail, mortgage, and commercial banking products, generating revenue primarily through net interest income from lending activities and fee-based income from investment banking, insurance, and leasing services [8] Financial Performance - As of January 28, Popular shares were priced at $131.54, reflecting a 31.9% increase over the past year, outperforming the S&P 500 by 16.89 percentage points [3] - The company reported a revenue of $3.05 billion and a net income of $833.16 million for the trailing twelve months (TTM), with a dividend yield of 2.3% [4] Investment Implications - Despite the sale, Popular remains the largest holding in Polaris's portfolio, indicating that the conviction in the stock has been recalibrated rather than diminished [9] - The company has demonstrated strong fundamentals, with resilient net interest income, stable credit quality, and capital ratios exceeding regulatory minimums, contributing to the stock's nearly 32% increase over the past year [10] - The sale appears to be a risk-management decision rather than a bearish call, as the position still represents over 7% of reported assets, maintaining its status as one of the portfolio's highest-conviction ideas [11]

Group 1 - RBC Capital analyst Gerard Cassidy raised the price target on Popular (BPOP) to $141 from $137 and maintains an Outperform rating after the company's Q4 earnings beat [1] - The company has a strong capital position with a 15.7% common equity tier 1 ratio, providing flexibility for growth opportunities [1] - The Puerto Rican economy is benefiting from U.S. Government disaster relief spending and U.S. economic growth, positioning it well for the "on-shoring" trend [1]

Core Insights - Popular reported a total loan growth of $2.2 billion for 2025, marking a 6% increase, with significant contributions from commercial loans and construction loans [1] - The company achieved a net income of $833 million for the full year 2025, a 36% increase compared to 2024, and a fourth-quarter net income of $234 million, reflecting strong performance driven by higher net interest income and lower operating expenses [2][3][6] Financial Performance - For Q4 2025, Popular's earnings per share reached $3.53, an increase of $0.38 from the previous quarter, with a return on tangible common equity (ROTCE) exceeding 14% [2][6] - The net interest income (NII) for Q4 was $658 million, up $11 million from Q3, and for the full year, NII increased by $259 million, or 11% [6][7] - The fourth-quarter net interest margin expanded by 10 basis points to 3.61% on a GAAP basis, driven by higher loan balances and lower interest expenses [7] Loan and Deposit Trends - Loans grew by $641 million in Q4, with $497 million from Banco Popular de Puerto Rico (BBPR) and $144 million from Popular Bank, while management anticipates a consolidated loan growth of 3%-4% for 2026 [7][8] - Ending deposit balances decreased by $323 million in Q4, primarily due to expected outflows in Puerto Rico public deposits, which ended the quarter at $19.4 billion [10] Capital Management and Shareholder Returns - Popular repurchased approximately $500 million of common stock in 2025 and increased its quarterly dividend to $0.75 per share [5][18] - The Common Equity Tier 1 (CET1) ratio stood at 15.7% at year-end 2025, with tangible book value per share rising by 21% to $82.65 [17] Expense Management and Guidance - Operating expenses for Q4 were $473 million, down $22 million from Q3, with management expecting a 3% increase in GAAP expenses for 2026 [14][15] - For 2026, Popular guided to a net interest income growth of 5%-7% and a modest increase in expenses, while anticipating continued margin expansion albeit at a slower pace than in 2025 [4][8] Credit Quality - Credit metrics remained stable, with non-performing loans decreasing to 1.27% of total loans, and net charge-offs for the full year 2025 improved to 52 basis points [16]

Core Viewpoint - USCB Financial Holdings, Inc. reported quarterly earnings of $0.44 per share, missing the Zacks Consensus Estimate of $0.51 per share, but showing an increase from $0.34 per share a year ago, indicating a -13.73% earnings surprise [1] Financial Performance - The company posted revenues of $25.53 million for the quarter ended December 2025, which was 2.24% below the Zacks Consensus Estimate, compared to $22.99 million in the same quarter last year [2] - Over the last four quarters, USCB Financial has surpassed consensus EPS estimates two times and topped consensus revenue estimates just once [2] Stock Performance - USCB Financial shares have increased approximately 10.6% since the beginning of the year, outperforming the S&P 500's gain of 0.4% [3] Future Outlook - The company's earnings outlook is crucial for investors, with current consensus EPS estimates at $0.51 for the coming quarter and $2.17 for the current fiscal year, alongside expected revenues of $26.63 million and $111.61 million respectively [7] - The Zacks Rank for USCB Financial is currently 1 (Strong Buy), indicating expectations for the stock to outperform the market in the near future [6] Industry Context - The Zacks Industry Rank for Banks - Southeast is in the top 32% of over 250 Zacks industries, suggesting that companies in this sector are likely to perform better than those in the bottom 50% [8]

Group 1 - Top Wall Street analysts have revised their outlook on several prominent stocks, indicating potential shifts in investment strategies [1] - The article suggests that investors consider buying STT stock based on analysts' recommendations [1]

Group 1 - The Charles Schwab Corporation (SCHW) has outperformed the Finance sector with a year-to-date performance increase of 25.2%, compared to the sector average gain of 14.2% [4] - The Zacks Consensus Estimate for SCHW's full-year earnings has increased by 3.7% over the past quarter, indicating improved analyst sentiment and a stronger earnings outlook [4] - SCHW currently holds a Zacks Rank of 2 (Buy), suggesting a favorable investment outlook based on earnings estimates and revisions [3] Group 2 - The Charles Schwab Corporation is part of the Financial - Investment Bank industry, which has an average gain of 29.9% this year, indicating that SCHW is slightly underperforming its industry [6] - The Finance group includes 863 companies, with SCHW being a member of the top-ranked sector at 1 in the Zacks Sector Rank [2] - Another Finance stock, Popular (BPOP), has also shown strong performance with a year-to-date return of 23.7% and a Zacks Rank of 2 (Buy) [5][7]

Core Insights - UMB Financial Corp. (UMBF) reported third-quarter 2025 operating earnings per share of $2.70, exceeding the Zacks Consensus Estimate of $2.48 and up from $2.25 in the same quarter last year [1][10] Financial Performance - The company achieved net income (GAAP basis) of $180.4 million, a significant increase of 64.5% year over year [3] - Quarterly revenues (FTE) reached $686.7 million, a surge of 66.4% year over year, surpassing the Zacks Consensus Estimate by 4.2% [4] - Net interest income (NII) on an FTE basis was $483.4 million, a jump of 90.3% from the prior-year quarter, with a net interest margin of 3.04%, up 58 basis points year over year [4] - Non-interest income was $203.3 million, reflecting a year-over-year increase of 28.1, primarily driven by trust and securities processing, and service charges on deposit accounts [5] - Non-interest expenses totaled $419.3 million, up 66.1% year over year, including $35.6 million in acquisition-related and non-recurring costs [5] Efficiency and Capital Ratios - The efficiency ratio improved to 58.1%, down from 61.7% in the prior-year quarter, indicating increased profitability [6] - As of September 30, 2025, the Tier 1 risk-based capital ratio was 11.3%, slightly up from 11.2% a year ago, while the Tier 1 leverage ratio decreased to 8.3% from 8.6% [11] Loan and Deposit Growth - Average loans and leases as of September 30, 2025, were $37.1 billion, up 2% sequentially, and average deposits increased 2% year over year to $56.7 billion [7] Credit Quality Concerns - The ratio of net charge-offs to average loans was 0.20%, up from 0.14% in the prior-year quarter, with total non-accrual and restructured loans rising to $131.9 million from $19.3 million [8] - The provision for credit losses was $22.5 million in the third quarter of 2025, compared to $18 million in the prior-year quarter [8] Dividend Announcement - The company announced a quarterly dividend of 43 cents per share, marking a 7.5% increase from the prior quarter and the 23rd increase in the past 20 years [13] Overall Assessment - UMB Financial's robust third-quarter results were driven by strong NII and non-interest income growth, alongside improving margins, with the Heartland Financial acquisition contributing to loan and deposit growth [14]