Financial Data and Key Metrics Changes - For Q4 2025, the company reported net earnings of $55 million or $0.40 per share, an increase from $52.6 million or $0.38 per share in Q3 2025 and $50.9 million or $0.36 per share in Q4 2024 [3][4] - The return on average tangible common equity was 14.4% and return on average assets was 1.40% for Q4 2025 [3] - Pre-tax income increased by $5.4 million quarter-over-quarter and $6.3 million year-over-year [4] Business Line Data and Key Metrics Changes - Net interest income grew by $7 million, or 6%, from Q3 2025 and by $12.2 million, or 11%, from Q4 2024 [4] - Non-interest income was $11.2 million in Q4 2025, which was $1.8 million lower than Q3 2025 and $1.9 million lower than Q4 2024 [5] - Total loans increased to $8.7 billion, a $228 million, or 2.7%, increase from Q3 2025 and a $163 million, or 2%, increase from the end of 2024 [6][7] Market Data and Key Metrics Changes - Average total deposits were $12.6 billion in Q4 2025, compared to $12.5 billion in Q3 2025 [9] - Non-interest-bearing deposits declined by $122 million compared to Q3 2025, while interest-bearing non-maturity deposits grew by $234 million [9][10] - The cost of deposits decreased to 86 basis points in Q4 2025 from 90 basis points in Q3 2025 [10] Company Strategy and Development Direction - The company is focused on maintaining profitability and has a strong commitment to its mission of serving small to medium-sized businesses [96] - The pending merger with Heritage Bank of Commerce is expected to close in Q2 2026, with integration plans already underway [27][66] - The company aims to leverage the merger to enhance its product offerings and expand into new markets [87] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism for 2026, citing strong loan pipelines and positive customer sentiment [26] - The economic forecast indicates modest growth, with real GDP expected to remain below 1.5% through 2027 [14] - The company is prepared for competitive pressures in the loan market but remains committed to maintaining credit quality [40] Other Important Information - The company incurred $1.6 million in one-time merger-related expenses during Q4 2025 [17] - The allowance for credit losses was $77 million, or 0.89% of gross loans, reflecting a decrease from the previous quarter [12] - The company repurchased 1.96 million shares at an average price of $18.80 during Q4 2025 [16] Q&A Session Summary Question: Non-interest-bearing deposits and customer behavior - Management indicated that the decline in non-interest-bearing deposits was due to normal seasonality and not a significant behavioral change among customers [22][23] Question: Non-dairy and livestock loan growth sustainability - Management noted that loan pipelines remain strong and expressed optimism about stable loan growth moving forward [24][26] Question: Update on the Heritage Bank deal - Management confirmed that the merger is progressing well and is on track for a Q2 2026 close [27] Question: Competitive landscape for deposits - Management stated that they are winning deposit business primarily from operating companies and are not focused on attracting customers with the highest rates [33][35] Question: Loan modifications and outlook for loan growth - Management explained that loan modifications can occur for various reasons, but the overall impact on the loan portfolio remains minimal [85]

Core Insights - Bigbank's total gross loan portfolio reached a record high of 2.44 billion euros, increasing by 141 million euros (+6%) quarter on quarter and 537 million euros (+28%) year on year, primarily driven by business and home loans [1] - The bank's net profit for the first half of 2025 was 18.7 million euros, with a second-quarter profit of 8.9 million euros, reflecting a slight decrease of 0.5 million euros (-5%) compared to the same quarter in 2024 [3][17] - The deposit portfolio grew by 96 million euros (+4%) quarter on quarter and 393 million euros (+17%) year on year, reaching 2.65 billion euros, with significant growth in savings deposits [2][18] Loan Portfolio - The business loan portfolio increased by 54 million euros (+7%) to 862 million euros, while the home loan portfolio rose by 53 million euros (+8%) to 717 million euros [1] - The consumer loan portfolio saw a modest increase of 19 million euros (+2%) to 860 million euros [1] - Business loans became the largest credit product line in terms of portfolio size for the first time in Bigbank's history [1] Deposit Portfolio - The savings deposit portfolio grew by 154 million euros to 1.3 billion euros (+13%), while the term deposit portfolio decreased by 59 million euros to 1.34 billion euros [2] - The current accounts for retail customers in Estonia totalled 3.4 million euros, with all holders earning interest at a competitive rate of 2% [2][19] Financial Performance - Interest income for the second quarter amounted to 45.2 million euros, an increase of 1.8 million euros (+4%) year on year [4] - Net interest income grew by 1.2 million euros (+5%) year on year to 25.7 million euros [4] - The net allowance for expected credit losses decreased to 1.4 million euros, down 4.4 million euros year on year, indicating improved loan portfolio quality [5][17] Operational Developments - Bigbank's employee count reached 613, with salary expenses for the second quarter totaling 8.2 million euros, up 1.8 million euros year on year (+28%) [6] - The bank launched a mobile app for retail customers in Estonia, with plans to expand to Lithuania and Latvia [7][19] - Bigbank issued Additional Tier 1 (AT1) bonds totaling 2.44 million euros and increased the volume of a Tier 2 bond offering from 3 million euros to 6 million euros due to strong investor interest [9][10][20] Asset and Investment Portfolio - The value of the investment property portfolio was 72.3 million euros, with a notable decrease in the value of agricultural land in Estonia by 1.7 million euros (around 5%) [8] - Total assets surpassed 3 billion euros for the first time, reaching 3.1 billion euros as of 30 June 2025 [21]