Financial Data and Key Metrics Changes - Core EPS for Q4 2025 was $0.79, representing an 88% increase year-over-year, driven by record total revenues of $124 million [5][23] - NIM increased by 10 basis points to 311 basis points, with average earning assets up over $650 million on a linked-quarter basis [6][24] - Core deposits rose by $1.2 billion year-over-year, with a significant liquidity position allowing for future lending opportunities [6][7] Business Line Data and Key Metrics Changes - Business loans grew by over $175 million on a linked-quarter basis and over $500 million year-over-year, with approximately $400 million of this growth coming from new specialized industries [8][44] - Non-interest income for Q4 was $11.5 million, exceeding guidance [28] - The loan loss provision declined to $10.9 million, with the allowance to loans increasing to 91 basis points [28] Market Data and Key Metrics Changes - The company reported strong deposit growth across all channels, with total deposits up approximately $800 million versus the prior quarter [24] - Non-interest-bearing deposits reached nearly 31% of total deposits, with a goal to increase this ratio over time [66][68] Company Strategy and Development Direction - The company is focused on organic growth, with a strategy to build out its commercial banking platform and industry verticals [10][11] - Plans for 2026 include significant loan repricing opportunities and a target to operate at a sub-50% efficiency ratio [12][13] - The company aims to diversify its balance sheet and loan portfolio, expecting significant growth in both areas [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong organic growth environment and the execution of their strategy, anticipating continued momentum into 2026 [11][14] - The company highlighted a target-rich environment for lending opportunities and expects to see a path to a structurally higher NIM and enhanced earnings power over time [34][31] Other Important Information - The company has a total capital ratio of more than 16%, positioning it favorably against local peers [10][28] - The Manhattan branch is operational, with additional locations expected to open by the end of the first year [11] Q&A Session Summary Question: What industries accounted for the growth in business loan balances? - Approximately $400 million of the $500 million year-over-year growth in business loans came from new specialized industries, particularly healthcare [44] Question: What is the current loan and deposit situation in New Jersey? - About 8% to 10% of the loan portfolio is in Northern New Jersey, with a deposit-to-loan ratio of 15%-20% [46] Question: How is the deposit pipeline looking and what are the pricing strategies? - New customer acquisition requires offering high twos to low threes on money market accounts, with an overall cost of deposits around 168 basis points [51][52] Question: What is the status of the rent-regulated loan book? - The 100% rent-regulated book is around $350 million, down from $500 million two years ago, with maturities and repricings expected to be around $250 million for 2026 [58] Question: What is the strategy for deploying cash and securities? - The company is not rushing to deploy cash but is looking for opportunities in the market, with a focus on maintaining a flexible balance sheet [72][75]

Financial Data and Key Metrics Changes - Core EPS for Q4 2025 was $0.79, representing an 88% increase year-over-year, driven by record total revenues of $124 million for the quarter [5][23] - NIM increased by 10 basis points to 311 basis points, with average earning assets up over $650 million on a linked-quarter basis [6][24] - Core deposits rose by $1.2 billion year-over-year, with strong growth across all channels [6][24] Business Line Data and Key Metrics Changes - Business loans grew over $175 million on a linked-quarter basis and over $500 million year-over-year, with significant contributions from new specialized industry verticals [8][44] - Non-interest income for the quarter was $11.5 million, exceeding guidance [28] - The loan loss provision declined to $10.9 million, with the allowance to loans increasing to 91 basis points [28] Market Data and Key Metrics Changes - The company reported a total capital ratio of over 16%, indicating strong capital levels compared to local peers [10][28] - Non-interest-bearing deposits reached nearly 31% of total deposits, with a goal to increase this ratio over time [66][68] Company Strategy and Development Direction - The company is focused on organic growth, with plans to expand its commercial banking platform and industry verticals [10][11] - A significant amount of repricing assets is expected in the next two years, providing a tailwind for revenue growth [12][30] - The company aims to operate at a sub-50% efficiency ratio by growing revenues faster than expenses [13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong organic growth environment and the ability to capitalize on lending opportunities [11][14] - The company anticipates modest NIM expansion in the first half of 2026, with more substantial growth expected in the latter half due to loan repricing [30][34] - The management highlighted the importance of maintaining a strong liquidity position to support future growth [31][75] Other Important Information - The company has added new capabilities in various commercial banking sectors, including Fund Finance and Lender Finance, to enhance its service offerings [18][21] - The Manhattan branch is operational, with additional locations expected to open by the end of the first year [11] Q&A Session Summary Question: What industries accounted for the growth in business loan balances this quarter? - The growth primarily came from new specialized industries, with healthcare being a significant contributor [44] Question: How much business do you have in New Jersey? - Approximately 8% to 10% of the loan portfolio is in Northern New Jersey, with a deposit-to-loan ratio of about 15%-20% [46] Question: Are you caught up on the SBA loan pipeline? - The company is caught up on the pipeline, but Q1 activity levels may not match Q4 due to the previous quarter's backlog [47] Question: What does the deposit pipeline look like? - The company is seeing strong inflows, with new customers requiring competitive rates to attract deposits [50][51] Question: What is the current status of the rent-regulated loan book? - The rent-regulated book is stable, with maturities and repricings expected to be around $250 million for 2026 [58] Question: What is the strategy for deploying cash and securities? - There is no rush to deploy cash; the company is focused on maintaining flexibility and will consider opportunities as they arise [72][74] Question: What is the current percentage of floating-rate loans? - Floating-rate loans currently make up about 35%-40% of the balance sheet, with expectations for this to increase as new business is generated [76]

Core Insights - The company reported a strong loan pipeline exceeding $1.3 billion with a weighted average interest rate between 6.25% and 6.5% [1] - Core EPS for Q4 was $0.79, marking an 88% increase year-over-year, driven by record total revenues of $124 million [3][13] - The company is focused on organic growth strategies and has successfully reduced its cost of funds while increasing non-interest-bearing deposits to 31% of total deposits [2][40] Financial Performance - Total deposits increased by approximately $800 million compared to the previous quarter, with core deposit growth of around $400 million when excluding seasonal and municipal deposits [15][40] - The net interest margin (NIM) rose to 3.11%, benefiting from a 10 basis point increase and a significant back book loan repricing opportunity [3][19] - Core cash operating expenses for Q4 were below guidance at $62.3 million, while noninterest income exceeded expectations at $11.5 million [17][24] Strategic Initiatives - The company is expanding its commercial banking platform and industry verticals, with a focus on healthcare, lender finance, and sponsor finance [8][12] - A new chief credit officer has been appointed to enhance the management of diversified commercial portfolios [10] - The company aims to reduce its commercial real estate (CRE) concentration ratio to the mid-350% area while continuing to grow business loans [22][24] Future Outlook - The company anticipates modest NIM expansion in the first half of 2026, with more substantial growth expected in the latter half due to loan repricing [18][21] - Loan growth is projected to be in the low single digits for 2026, with a flat balance sheet expected in the first half and growth in the second half [22][23] - The company is targeting a core cash operating expense range of $255 million to $257 million for 2026, reflecting the impact of new locations and banking teams [23]

Financial Data and Key Metrics Changes - Core EPS for Q4 2025 was $0.79, representing an 88% increase year-over-year, driven by record total revenues of $124 million [3][14] - NIM increased by 10 basis points to 311 basis points, with average earning assets up over $650 million on a linked-quarter basis [4][14] - Core deposits rose by $1.2 billion year-over-year, with total deposits up approximately $800 million compared to the prior quarter [4][15] Business Line Data and Key Metrics Changes - Business loans grew over $175 million on a linked-quarter basis and over $500 million year-over-year, with significant contributions from new industry verticals [5][27] - Non-interest income for Q4 was $11.5 million, exceeding guidance [16] - The loan loss provision declined to $10.9 million, with the allowance to loans increasing to 91 basis points [16] Market Data and Key Metrics Changes - The company has a strong liquidity position, with a total capital ratio exceeding 16% and a common equity tier 1 ratio of 11.66% [6][17] - The company is focused on reducing its CRE concentration ratio to the mid-350% area [21] Company Strategy and Development Direction - The company is committed to organic growth, focusing on building out its commercial banking platform and industry verticals [6][10] - Plans for 2026 include modest NIM expansion in the first half and more substantial growth in the second half due to loan repricing opportunities [17][20] - The company aims to operate at a sub-50% efficiency ratio and continue attracting talented bankers to support growth [8][9] Management's Comments on Operating Environment and Future Outlook - Management noted a strong environment for organic growth, with a target-rich marketplace [6] - The company expects to see significant growth in both revenues and loan portfolios in 2026, driven by loan repricing and core deposit growth [8][19] - Management expressed confidence in the company's ability to navigate market disruptions and capitalize on lending opportunities [6][9] Other Important Information - The company has added new capabilities in various sectors, including Fund Finance and Lender Finance, to enhance its commercial banking offerings [11][12] - The company is focused on geographic expansion, particularly in Manhattan and New Jersey [12] Q&A Session Summary Question: What industries accounted for the growth in business loan balances this quarter? - Approximately $400 million of the $500 million year-over-year growth in business loans came from new specialized industries, with healthcare being a significant contributor [27] Question: How much business do you have in New Jersey? - About 8% to 10% of the loan portfolio is in Northern New Jersey, with a deposit-to-loan ratio of 15%-20% [28] Question: How do you view the deposit growth pipeline and pricing? - The company is offering high twos to low threes on money market accounts to attract new customers, with an overall cost of deposits at $168 [33][34] Question: What is the current status of the rent-regulated loan book? - The 100% rent-regulated book is around $350 million, with maturities and repricings expected to be about $250 million for 2026 [36][38] Question: What is the strategy for deploying cash and securities? - The company is not rushing to buy securities and prefers to maintain flexibility on the balance sheet, with cash expected to be used for loans starting in the second half of the year [48][49]

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