Financial Data and Key Metrics Changes - The company reported a core return on assets (ROA) of 1.62% for the quarter and an adjusted ROA of 1.35% with an adjusted efficiency ratio of 64.45% [3][4] - Net interest income increased by 4.7% over the prior quarter, while adjusted non-interest income rose by 8.3% [17] - The tangible common equity (TCE) ratio improved to 8.72%, up from 8.24% in the prior quarter [25] Business Line Data and Key Metrics Changes - The retirement division generated total revenue of $17.3 million, a 4.6% increase over the prior quarter, driven by growth in asset and transaction-based fees [22] - The wealth management business saw revenues increase by 13.4% to $7.4 million, with end-of-quarter assets under management rising by 0.8% [24] - Core revenues from fee income grew by 7% year-over-year, maintaining over 40% of total revenues [9] Market Data and Key Metrics Changes - The company experienced a decline in loans by 1.3% over the previous quarter due to strategic downsizing of the loan portfolio [19] - Deposits decreased by 5%, primarily due to the calling in of broker deposits and other wholesale funding [20] - The loan-to-deposit ratio stood at 96.6%, with a deposit retention rate close to 95% since the acquisition of Home Federal [21] Company Strategy and Development Direction - The company aims for sustainable organic growth and a return to top-tier profitability, focusing on enhancing its commercial bank and improving returns [5][6] - A strategic entry into the mid-market commercial and industrial (C&I) space is expected to drive growth, with strong pipelines entering 2026 [7] - The company plans to double the number of wealth management advisors and invest in technology and AI to enhance scalability and improve margins [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strategic position and momentum as it enters 2026, highlighting strong core financial performance and successful execution of strategic initiatives [3][4] - The company anticipates loan growth in the mid-single digits and deposit growth in the low single digits for 2026, with a projected net interest margin of around 3.5% to 3.6% [26][27] - Management noted that the competitive environment for deposits is expected to remain strong, impacting net interest margin [79] Other Important Information - The company successfully converted its entire wealth business onto a new system, achieving 100% client retention [11] - The allowance for loan losses remained robust at 1.53% of total loans, with net recoveries reported [9] - The company has close to $2.8 billion in liquidity to support loan growth and other liquidity events [25] Q&A Session Summary Question: Balancing dynamics for 2026 regarding loan and deposit growth - Management aims to maintain a loan-to-deposit ratio around 95% to 96%, acknowledging potential seasonal fluctuations [34] Question: Insights on expenses and technology investments - Guidance includes team additions and variable costs related to technology investments [36][37] Question: Loan growth expectations and credit trimming - A significant portion of loan runoff was intentional, focusing on reducing marginal credits and enhancing C&I relationships [42] Question: Non-performing loans and resolution expectations - An increase in non-performing loans was related to a multifamily loan, with expectations for resolution in the first half of the year [45] Question: Margin trajectory and expectations for 2026 - Management expects gradual improvement in net interest margin, influenced by deposit flows [46] Question: Update on capital and acquisition opportunities - The company continues to explore potential acquisitions in the retirement and HSA space while prioritizing organic growth [54] Question: Competition in deposit pricing - The deposit market remains competitive, with rational pricing generally observed [79]

While overall loan growth was described as robust, it was partially offset by $50 million in payoffs during the quarter, primarily in non-owner occupied commercial real estate and residential real estate. For the full year, the company originated $374 million in new loans, including $274 million funded, which management said was 79% higher than the prior year.President and CEO Tim Myers said loan production was one of the company’s strongest quarters in the past decade. Total loan originations were $141 mil ...

Financial Data and Key Metrics Changes - The company reported net income of $7.6 million, or $0.25 per diluted share, compared to a loss of $67.5 million, or $2.22 per share, in the previous quarter [6] - Non-performing loans decreased to $106.8 million, down $12 million from the prior quarter, representing 1.47% of total loans [7] - Total non-performing assets declined by $24 million to $108.9 million, representing 1.04% of total assets, compared to 1.23% in the prior quarter [7] - The allowance for credit losses ended the quarter at $159.6 million, or 2.19% of total loans [8] - Tangible common equity to tangible assets is 10.87%, Tier 1 leverage ratio is 10.17%, and CET1 is 13.83% [10] Business Line Data and Key Metrics Changes - Net interest income grew by $144,000 to $68.3 million, with a net interest margin (NIM) decline of five basis points to 2.38% [9][10] - Non-interest income increased to $12.2 million from $2.5 million in the previous quarter, primarily due to non-recurrent losses and gains from investments [10] - Non-interest expense rose by $17.9 million to $59.8 million, driven by costs associated with the disposition of held-for-sale loans [10] Market Data and Key Metrics Changes - The company experienced a reduction in brokered deposits by $602 million while increasing core deposits by $692 million during 2025 [11] - The concentration ratio for commercial real estate (CRE) loans to total risk-based capital and reserves declined to 322% [9] - The acquisition, development, and construction (ADC) concentration ratio decreased to 88% [9] Company Strategy and Development Direction - The company is transitioning from remediation to execution, focusing on consistent performance and improving returns [4][14] - There is an emphasis on reducing concentration risk and enhancing the quality of the balance sheet to support sustainable earnings [4] - The company aims to expand pre-provision net revenue in 2026, despite a smaller average balance sheet, prioritizing shareholder returns and profitability [12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's direction, highlighting improved asset quality and a stronger foundation [14] - The expectation is for average deposits, loans, and earning assets to decline year-over-year, reflecting deliberate balance sheet repositioning rather than operational pressure [12] - Management is cautious about capital management and will consider changes only after observing continued positive trends over multiple quarters [28] Other Important Information - The company has $4.7 billion in available liquidity, maintaining 2x coverage of uninsured deposits [11] - The company is actively hiring producers in the commercial and industrial (C&I) sector to support growth [72] Q&A Session Summary Question: Can you provide more details on the asset dispositions and the expected timing? - The company has $90.7 million of loans held for sale, with two-thirds scheduled for resolution in the first quarter [19] Question: What is the potential for further moves into held-for-sale loans? - There could be situations where selling loans is deemed the best strategy, but the pace is not expected to match 2025 [21] Question: What trends are being observed in the multifamily sector? - There are signs of stabilization and improvement in multifamily loans, with strong valuations compared to the office market [22] Question: How do you view the current reserves and future provisioning? - The company expects to see a decline in the allowance for credit losses as the criticized classified loan portfolio continues to decrease [35][46] Question: Can you discuss the buyer interest in the secondary market for loans? - Buyer interest is high, with a range of investors involved, including local developers and existing ownership looking to purchase their own debt [37] Question: What is the outlook for loan growth in the C&I sector? - The growth seen in the fourth quarter is not expected to be sustainable at that level, but the C&I platform is expected to continue growing [55] Question: What is the current status of brokered deposits and cash levels? - The company holds $1.56 billion in brokered deposits, with plans to reduce this significantly throughout 2026 [58][60]

Financial Data and Key Metrics Changes - Horizon Bancorp reported an annualized return on average assets above 1.6% and a return on average equity approaching 16% for Q4 2025, with a net interest margin of 4.29% [4][15] - The net interest margin increased by 77 basis points from the previous quarter, marking the ninth consecutive quarter of expansion [15][16] - Total loans reached $4.9 billion, an increase of $60.7 million from the previous quarter, with commercial loans growing by $76 million, representing 9% annualized growth [7][8] Business Line Data and Key Metrics Changes - Commercial relationship lending remains the primary strategy, with modest declines in consumer loans and residential mortgages, which are primarily sold into the secondary market [7][8] - The commercial loan portfolio is well-diversified, with 28% in commercial and industrial and 72% in commercial real estate [7] - Credit quality metrics remain strong, with substandard loans decreasing to 1.22% of total loans, down from 1.31% in the previous quarter [9][10] Market Data and Key Metrics Changes - The deposit portfolio shows strength, with non-interest-bearing balances up year over year, reflecting improved cost structure [12][13] - The company is well-positioned in attractive markets in Michigan and Indiana, with a focus on organic deposit funding to support loan growth [12][14] Company Strategy and Development Direction - Horizon aims to create sustainable long-term value for shareholders through a disciplined operating model and consistent profitable growth [6][24] - The company plans to leverage its community banking model and expand its branch network selectively in key markets [60][61] - The focus remains on organic growth rather than acquisitions, although the company is open to opportunistic talent additions [41][44] Management's Comments on Operating Environment and Future Outlook - Management views the outlook for 2026 as slightly more favorable than previously estimated, with expectations for mid-single-digit growth in loans and deposits [28][21] - The company anticipates stable net interest margins and continued strong performance metrics, with a focus on maintaining a conservative credit culture [15][23] - Economic conditions and credit quality trends will influence future provision expenses [11] Other Important Information - Non-interest income for Q4 was reported at $11.5 million, with a year-over-year increase in total fee income driven by wealth management and mortgage fees [18] - Expenses for the quarter were in line with expectations at $40.6 million, reflecting seasonal increases and legal fees related to legacy items [19] Q&A Session Summary Question: Outlook for 2026 and potential risks - Management sees a more optimistic outlook for net interest income, with organic core deposit growth being a key lever for upside [28][30] Question: Loan growth and consumer loan performance - The company does not plan to push for accelerated growth in consumer loans, focusing instead on commercial lending [31][32] Question: Asset quality and substandard loans - Management indicates that increases in substandard loans are modest and not reflective of sector-wide stress, with overall metrics remaining strong [33][34] Question: Margin drivers and loan pricing - New loan originations are yielding above 6.5%, while cash flows from the portfolio are below 6%, providing a favorable margin environment [37][39] Question: Capital deployment priorities - The company will focus on organic growth opportunities while remaining disciplined in capital deployment decisions [41][42] Question: Fee income drivers for 2026 - Fee income growth is expected to be balanced across various segments, with no single area driving significant changes [50][52] Question: Commercial pipeline and seasonality - The commercial loan pipeline is strong, though seasonality may affect quarterly fluctuations in originations [72]

Core Viewpoint - 1st Summit Bancorp of Johnstown reported stable financial results for Q4 2025, with net income remaining at $1.7 million, reflecting a strategic focus on controlled growth and strengthening core earnings [1]. Financial Performance - Net income for the fourth quarter was $1.7 million, consistent with the previous quarter [1]. - The company has taken steps to intentionally control growth while enhancing its core earnings profile [1]. - Key performance metrics showed stability, particularly in net income, following a balance sheet repositioning earlier in the year [1].

Financial Data and Key Metrics Changes - The company reported a GAAP loss from continuing operations of $0.13 per common share and distributable earnings were a loss of $0.94 per common share, with $0.04 per common share excluding realized losses on asset sales [13][16] - Net interest income declined to $10.5 million due to a $1.4 billion reduction in the CRE portfolio and $40 million of negative credit migration [13][14] - Book value per share was $10.28 at quarter end, down $0.16 from June 30, primarily due to the dividend covered shortfall [17] Business Line Data and Key Metrics Changes - The core portfolio totaled 1,120 loans with an unpaid principal balance of $5.4 billion, with delinquencies increasing to 5.9% of the total [5][6] - In small business lending operations, $175 million of SBA 7(a) loans were originated, which is 50% below the quarterly target [9][10] - The small business lending platform generated $11 million in net income, adding 280 basis points return on equity before realized losses [10] Market Data and Key Metrics Changes - The Portland mixed-use asset represented 14% of quarter-end equity, with a net operating loss of $330,000 for the hotel and occupancy at 48% [7][8] - The office and retail space in the Portland asset is currently 28% leased and has reached break-even [8] Company Strategy and Development Direction - The company is focused on returning to financial health and profitability through portfolio yield rehabilitation, growth in small business lending, and management of 2026 debt maturities [4] - The strategy includes reducing CRE loan exposure and liquidating non-core assets to improve liquidity [4][11] - The company plans to evaluate the dividend in December based on progress in the business plan and liquidity levels [12][28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in refinancing pending debt maturities and emphasized a conservative approach to new investments and dividend policy [11][40] - The company expects to leverage unencumbered assets and additional debt issuance to address maturing obligations [11][28] Other Important Information - The company completed two portfolio sales, netting $85 million from the sale of 21 loans and $24 million from the sale of 196 small balance loans [4][5] - The net increase in provision for loan losses was $38 million, with a decrease in the valuation allowance of $178 million [15][16] Q&A Session Summary Question: What is the right level of leverage for the company going forward? - Management indicated that current gross leverage is around $3.5 million, with a target of less than that on a pro forma basis [19][20] Question: What is the current covenant on the unencumbered asset ratio? - The company confirmed that the unencumbered asset test is well covered within the 1.2 range, with no requirement to be at 1.25 [23][25] Question: What is the rationale for continuing to pay dividends while managing debt maturities? - Management stated that they are adopting an aggressive approach to reposition the balance sheet and will evaluate the dividend in December based on liquidity and business progress [27][28] Question: How is the Portland property being carried on the balance sheet? - The property is carried at fair value for the condos and at cost for the other components [33][34] Question: How does the company view the current market valuations for properties? - Management noted that the Portland asset is unique and not directly comparable to other properties, emphasizing positive trends in hospitality and RevPAR [36][37]

Financial Data and Key Metrics Changes - The merger with First Foundation Inc. was announced, which is expected to significantly enhance the company's growth and risk profile [2][4] - The pro forma CET1 capital level after closing is projected at 10.5%, with no new capital required as part of the deal [18] - The company anticipates a significant improvement in net interest margin (NIM) from a recent run rate of 1.60% to nearly 4% by 2027 [19] Business Line Data and Key Metrics Changes - The merger will allow for a dramatic acceleration of the business plan, particularly in Southern California, enhancing the wealth management platform with over $5.3 billion in assets under management [15][16] - The repositioning plan includes downsizing $3.4 billion in total liabilities, focusing on reducing non-relationship rate-sensitive elements [16][19] Market Data and Key Metrics Changes - The company will operate in eight of the top 10 largest metropolitan statistical areas (MSAs) in the Central and Western regions of the U.S. and five of the top 10 fastest-growing markets [15] - The Southern California market is highlighted as having a better lower-cost mix of deposits compared to other regions [11] Company Strategy and Development Direction - The company aims to transform First Foundation's balance sheet to align more closely with its own, focusing on core funding and enhancing fee income [12][19] - The strategy includes leveraging existing teams in Southern California to drive organic growth and improve the overall business mix [60][61] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the merger's ability to reduce risk while enhancing growth opportunities in attractive markets [22] - The management team noted that the current economic environment presents unique opportunities due to disruptions faced by larger banks, particularly in the middle market [65] Other Important Information - The company expects to achieve a 35% cost savings post-merger, primarily through personnel reductions and professional services [80] - The company is focused on improving its credit risk profile and has a detailed plan to address liquidity, interest rate, and credit risks [17][18] Q&A Session Summary Question: Can you walk us through the mechanics of the $3.4 billion repositioning plan? - The repositioning is expected to be completed around the closing date, with some activities already in progress [25][26] Question: What are the expectations for capital management long-term? - The company anticipates a significant amount of capital accretion, providing flexibility for future growth and M&A opportunities [32][33] Question: How do the EPS projections compare to street estimates? - Internal projections indicate a significant improvement in net interest income (NII) and expense reductions, leading to a positive outlook for EPS [40][42] Question: What gives confidence in the regulatory approval of the merger? - Extensive discussions with regulators have been held, and the company has taken lessons from past experiences to ensure a smoother process this time [46][47] Question: What are the sources of the expected cost savings? - Approximately 70% of the cost savings are expected to come from personnel reductions, with additional savings from professional services and back-office efficiencies [80][82]

Financial Data and Key Metrics Changes - The merger between FirstSun Capital and First Foundation is expected to enhance the profitability profile of the combined organization, with a projected return on assets (ROA) of approximately 145 basis points by 2027 [19] - The common equity tier 1 (CET1) capital level post-closing is projected at a strong 10.5%, with no new capital required as part of the deal [18] - The pro forma company is expected to have a regulatory commercial real estate (CRE) concentration ratio of approximately 238%, significantly improved from First Foundation's current levels [18] Business Line Data and Key Metrics Changes - The merger is anticipated to diversify the fee business mix significantly, particularly through the wealth management platform, which has over $5.3 billion in assets under management [14] - The repositioning plan includes a total downsizing of $3.4 billion, focusing on lowering non-relationship rate-sensitive elements on both sides of the balance sheet [16] - The combined organization aims to improve net interest margin (NIM) from a recent run rate of 1.60% to nearly 4% by 2027 [19] Market Data and Key Metrics Changes - The merger will expand FirstSun's geographic footprint into eight of the top 10 largest metropolitan statistical areas (MSAs) in the Central and Western regions of the U.S. [14] - The Southern California market is highlighted as a significant growth opportunity, with expectations for accelerated hiring and growth in this region [9] Company Strategy and Development Direction - The merger is seen as a strategic move to tackle unloved companies in the industry, which tend to have lower projections and higher upside potential [5] - The company plans to migrate more of First Foundation's balance sheet to its business model, enhancing profitability through improved asset yields and fee income [12] - The focus will be on transforming the combined organization quickly, with a clear plan to reduce risk and improve the credit profile [13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to transform First Foundation's operations rapidly, leveraging existing teams in Southern California [9] - The management team emphasized the importance of maintaining a strong focus on organic growth opportunities while managing capital effectively [31] - There is an expectation of continued improvement in net interest income (NII) and fee income, particularly from the wealth management business [39] Other Important Information - The merger is not expected to be a quick process, as it involves significant due diligence and structuring to ensure success for both parties [4] - The company has a detailed plan in place to accomplish the downsizing actions concurrently with the closing of the deal [15] Q&A Session Summary Question: Can you walk us through the mechanics of the $3.4 billion repositioning plan and its timing? - The repositioning is expected to be accomplished around the closing date, with some progress anticipated in Q4 and Q1 based on existing plans [25][26] Question: What are the sources of the expected 35% cost savings? - Approximately 70% of the cost savings are expected to come from personnel reductions, with additional savings from professional services and back-office opportunities [70][72] Question: How does the company plan to manage capital long-term? - The company expects to see CET1 leveling off beyond 2027, with future capital management strategies being employed to support organic growth and M&A opportunities [31][32] Question: What gives the company confidence regarding regulatory approval for the merger? - Extensive conversations with regulators have been held, and the company has taken lessons from past experiences to ensure a clear and structured approach to the merger [42] Question: Can you provide insights on the credit side and expectations for charge-offs going forward? - The company had a $10 million provision expense in Q3, with expectations for charge-offs to be in the low 40s in terms of basis points for 2025 [44][45]

Financial Data and Key Metrics Changes - Horizon Bancorp Inc. reported net interest margin expansion for the eighth consecutive quarter, with an exit run rate in September above 4% [5][16] - The net interest margin increased by 29 basis points to 3.52% for the quarter, with expectations to expand further in Q4 to a range of 4.15%-4.25% [19][26] - The allowance for credit losses decreased to $50.2 million, representing an allowance to credit loss to loans held for investment of 1.04% [11] Business Line Data and Key Metrics Changes - Net loan total for investment decreased to $162 million, primarily due to a $210 million impact from the runoff and sale of indirect auto loans, while commercial loans grew by $58 million [9][10] - The combined relationship-based fee income categories of service charges, card, and mortgage income increased from the third quarter [5] Market Data and Key Metrics Changes - The core relationship balances in the deposit portfolio remained resilient, with planned outflows in higher-cost non-core transactional accounts [14] - The company anticipates a decline in deposit balances in Q4, primarily due to the targeted reduction of high-cost non-relationship balances [26] Company Strategy and Development Direction - The company is focused on profitable loan growth and maintaining excellent credit quality as a cornerstone of its success [7] - Horizon Bancorp Inc. aims to create durable returns and sustainable long-term value for shareholders through disciplined capital management and potential M&A opportunities [30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in delivering superior community banking performance and capital generation metrics moving into 2026 [6][30] - The company is optimistic about growth opportunities in Michigan and Indiana, leveraging its strong brand reputation and community banking model [40][60] Other Important Information - The company has seen a significant positive increase in performance in September, indicating strong momentum heading into Q4 [7] - Non-interest income was materially impacted by balance sheet actions, including a $299 million loss in the sale of securities [22] Q&A Session Summary Question: Update on the new narrative for Horizon Bancorp Inc. and strategic emphasis - Management highlighted a focus on positive capital stewardship and a more efficient, de-risked balance sheet that will generate capital at a greater pace [36] Question: Potential outlets for capital outside of organic loan growth and M&A - Management indicated that M&A will focus on franchises that add to the current profitable franchise, with potential targets in Michigan and Indiana [39][40] Question: Balance sheet being rate neutral - Management clarified that while the balance sheet is modestly asset-sensitive, they do not expect significant impacts from rate changes [45] Question: Trends in credit quality and areas of stress - Management noted that non-performing loans increased slightly, but overall credit quality remains satisfactory with no significant areas of concern [70][74] Question: Loan growth outlook for 2026 - Management expects mid-single-digit growth primarily from organic commercial growth, without the need for significant additional headcount [87] Question: Capital accretion and buybacks - Management stated that while buybacks are an option for creating shareholder value, they are not a priority in the near term following recent capital raises [91]

Financial Data and Key Metrics Changes - Horizon Bancorp Inc. reported net interest margin expansion for the eighth consecutive quarter, with an exit run rate in September above 4% [5][16] - The net interest margin increased by 29 basis points to 3.52% for the quarter, with expectations to expand further in Q4 to a range of 4.15% to 4.25% [19][26] - The allowance for credit losses decreased to $50.2 million, representing an allowance to credit loss to loans held for investment of 1.04% [11][12] Business Line Data and Key Metrics Changes - Net loan total for investment decreased to $162 million, primarily due to a $210 million impact from the runoff and sale of indirect auto loans, while commercial loans grew by $58 million [9][10] - The combined relationship-based fee income categories of service charges, card, and mortgage income increased from the previous quarter [5] Market Data and Key Metrics Changes - The core relationship balances in the deposit portfolio remained resilient despite planned outflows from higher-rate transactional accounts [14] - The company anticipates a decline in deposit balances in Q4, primarily due to the targeted reduction of high-cost non-relationship balances [26] Company Strategy and Development Direction - The company is focused on creating durable returns and sustainable long-term value for shareholders through disciplined capital management and profitable loan growth [6][30] - Horizon Bancorp Inc. is considering M&A opportunities that are accretive to its community banking platform, with a focus on franchises that enhance profitability [37][40] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in delivering superior community banking performance and capital generation metrics moving into 2026 [6][30] - The company is monitoring economic conditions closely, with future provision expenses driven by anticipated loan growth and credit quality trends [12] Other Important Information - The company executed a balance sheet restructuring that exceeded initial expectations, optimizing securities and loan portfolios [4][6] - Non-interest income was impacted by a $299 million loss in the sale of securities and a $7.7 million loss on the sale of the indirect auto loan portfolio [22] Q&A Session Summary Question: What is the new narrative for Horizon Bancorp Inc.? - Management indicated that the company is positioned to generate capital at a greater pace and will focus on measured deployment strategies for growth, including potential M&A opportunities [35][36] Question: Are there any other potential outlets for capital outside of organic loan growth and M&A? - Management confirmed that M&A will be a focus, targeting franchises that add to the current profitable platform, with potential sizes ranging from $300 million to several billion dollars [38][40] Question: How does the company support its rate-neutral position? - Management explained that while the balance sheet is modestly asset-sensitive, they do not expect significant impacts from rate changes due to their deposit positioning [44][45] Question: What are the trends in credit quality? - Management noted that non-performing loans increased slightly, but overall credit quality remains satisfactory, with no significant areas of stress identified [70][74] Question: What is the outlook for loan growth in 2026? - Management anticipates mid-single-digit growth primarily from organic commercial growth, with no immediate need for significant headcount increases [87][88]