Financial Data and Key Metrics Changes - The company reported record revenue of $655 million for the full year 2025, with GAAP EPS for Q4 at $0.31 and adjusted EPS at $0.33, reflecting a quarter-over-quarter improvement from $0.29 [4][12] - Net interest income grew by $6.2 million or 4.6% quarter-over-quarter, with net interest margin improving to 3.69% [12][17] - Non-interest income increased by $5.5 million or 17% quarter-over-quarter, contributing to a total revenue increase of $11.8 million or 7% [12][18] Business Line Data and Key Metrics Changes - Average loans grew by $414 million quarter-over-quarter, with end-of-period loans increasing by $66 million, totaling $13 billion [13][14] - Commercial loans increased by $162 million or 7.1% quarter-over-quarter and $509 million or 26% year-over-year [14] - The company introduced a new franchise finance vertical and significantly grew its SBA lending activity, ranking among the top 50 originators in the U.S. [8] Market Data and Key Metrics Changes - Average total deposits grew by $475 million quarter-over-quarter, with customer non-brokered average deposits increasing by $507 million [15][16] - The company has a diversified deposit book with an average balance of $19,000 across over 723,000 accounts [16] - The cost of deposits decreased by 2 basis points to 1.53%, benefiting from proactive management and late-year rate cuts [16] Company Strategy and Development Direction - The company aims for continued growth in 2026, focusing on optimizing operations, expanding its financial center network, and enhancing consumer and commercial lines of business [9][22] - The successful integration of the Penns Woods acquisition has positioned the company among the top 100 banks in the U.S. by assets [5][9] - The company is committed to returning more than half of its profits to shareholders through dividends, maintaining a strong focus on organic growth [9][22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the trajectory for 2026, providing guidance for revenues between $710 million and $730 million and net interest margin in the low 3.70s [22] - The company anticipates loan growth in the low-to-mid single digits and deposit growth in the low single digits for 2026 [22] - Management noted a focus on reducing classified assets and maintaining strong credit quality metrics [20][21] Other Important Information - The company has been recognized by Newsweek as one of America's best regional banks for three consecutive years [7] - The adjusted efficiency ratio improved to 59.5% in Q4, reflecting ongoing expense management discipline [19] Q&A Session Summary Question: Can you comment on the trend line with expenses? - Management indicated that expenses typically see increases in Q1 due to seasonal factors, but overall guidance suggests a lower level than Q4 [27][28] Question: Is there a non-recurring element in Q4 performance? - Management confirmed that there was a lift in Q4 due to year-end adjustments in incentive plans [29] Question: What is the impact of purchase accounting on NIM? - Management clarified that the guidance includes normal purchase accounting accretion and that they expect to maintain NIM even with potential rate cuts [30][31] Question: Can you provide details on the SBA business growth expectations? - Management highlighted the flexibility in balancing fee income and retaining loans on the balance sheet, with a focus on quality business and customer retention [44][46] Question: What is the appetite for future M&A? - Management stated that while they are open to conversations, the focus remains on executing the current acquisition and driving organic growth [83][84]