Financial Data and Key Metrics Changes - The company reported net earnings of $83 million or $0.64 per share for the fourth quarter, with an annualized return on average assets of 1.34% and an adjusted return on average tangible common equity of 17.6% [3][10] - Pre-provision net revenue reached a record $111 million, representing an ROA of 1.78% [3][10] - Revenue increased to a record $226 million, driven by record net interest income of $197 million and non-interest income of $28.3 million [10] Business Line Data and Key Metrics Changes - The commercial loan team generated total new loan production of $3.2 billion in 2025, with net commercial loan growth of 5.5% for the year [4] - Average non-interest-bearing deposits grew by 2% annualized, contributing to the overall growth in core deposits, which increased by $260 million or 6.6% annualized [5] - Non-interest income increased to $28.3 million, with significant contributions from the insurance agency and SBA loan sales [7][8][15] Market Data and Key Metrics Changes - The company experienced a favorable improvement in non-performing assets, which declined to 0.32% of total assets [6][14] - The average cost of total deposits decreased to 2.1%, while the total cost of funds decreased to 2.34% [13] Company Strategy and Development Direction - The company plans to continue investing in revenue-producing talent across various platforms, including middle market banking, treasury management, SBA, wealth management, and insurance [8][9] - A core system conversion is scheduled for the fall of 2026 to enhance scalability and digital capabilities [9][84] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustaining growth momentum and improving profitability, with expectations for loans and deposits to grow in the 4%-6% range for 2026 [18] - The competitive landscape for deposits remains challenging, but the company is focused on maintaining its core model and capturing market share [36] Other Important Information - The company announced a new share repurchase authorization allowing for the buyback of an additional 2 million shares [8] - The tangible book value per share increased by 3.8% to $15.70, and the tangible common equity ratio rose to 8.48% [17] Q&A Session Summary Question: Inquiry about the effective tax rate and tax credit investments - Management clarified that the effective tax rate is projected to be approximately 29% for 2026, with benefits from tax credit investments realized throughout the year [23][25] Question: Discussion on capital deployment priorities - Management indicated that organic growth remains the primary focus, with potential considerations for dividends and investments in insurance and wealth platforms [26][27] Question: Insights on deposit competition and its impact - Management acknowledged heightened competition for deposits but emphasized their strong performance in core deposits and the ability to capture market share [36] Question: Trends in the commercial real estate (CRE) market - Management noted a healthier CRE market and expressed no interest in acquiring portfolios from competitors, focusing instead on organic growth [40] Question: Potential for loan yields to increase - Management indicated that there is potential for yields to improve as the pipeline yield increases and backflow repricing occurs [45] Question: Plans for geographic expansion - Management expressed interest in expanding into adjacent geographies, including Long Island and the Philadelphia suburbs, while already having teams in those areas [50]

Financial Data and Key Metrics Changes - The company reported a GAAP net income of $20.8 million for Q2 2025, which included a $3.36 million gain from the sale of a branch and various acquisition-related expenses [10][19] - The core net income, excluding non-core items, was $19.5 million, translating to an EPS of $0.66 [10][19] - The return on average assets (ROAA) was maintained at 1% [5] Business Line Data and Key Metrics Changes - Total loans held for investment increased by 4.5% annualized, amounting to an increase of $66.7 million from Q1 [12] - New loan production was $432 million, with significant growth in commercial and industrial (C&I) loans and commercial real estate (CRE) loans, which increased by $98.8 million and $61.6 million respectively [12] - Total deposits decreased by $38.5 million, primarily due to a net decrease in interest-bearing deposits [13] Market Data and Key Metrics Changes - The weighted average cost of deposits decreased to 2.62%, down six basis points from the previous quarter [17] - Non-interest bearing deposits increased by $102 million or 7.8% on a linked quarter basis [14] Company Strategy and Development Direction - The company is focused on maintaining a diversified loan portfolio while reducing concentration risk, particularly in construction loans [43] - A partnership with Progressive Bank, a $750 million community bank, was announced, which is expected to enhance earnings accretion [7][8] - The company is committed to improving operational efficiency through a core processing system upgrade, which is anticipated to facilitate future growth [6][54] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate through current credit challenges, with a focus on resolving non-performing loans [21][30] - The sentiment in the market is improving, with increased loan demand and a more optimistic outlook for the remainder of the year [70] Other Important Information - The company achieved a tangible book value growth of almost 15% annualized [5] - The net charge-offs remained low at 0.01%, indicating strong asset quality management [8] Q&A Session Summary Question: Excess liquidity related to core conversion - Management indicated that excess liquidity will be maintained until the core conversion with Oakwood is completed [26][27] Question: Credit migration and reserves - Management confirmed that the increase in non-performing loans (NPLs) was due to migration from substandard to non-accrual, with adequate reserves in place [28][29] Question: Expense outlook - The company expects a modest increase in core expenses in Q3, with a run rate in the low $50 million range [36] Question: Loan growth outlook - Management anticipates mid-single-digit loan growth for the remainder of the year, with a focus on maintaining discipline in lending practices [41][43] Question: Fee income growth - The company is optimistic about growth in fee income from SBA loan services and derivatives, with expectations for continued momentum [72][75]