Origin Bancorp (NYSE:OBK) Q4 2025 Earnings call January 29, 2026 09:00 AM ET Speaker0Good morning and thank you for joining us today. We issue our earnings press release every afternoon, a copy of which is available on our website, along with a slide presentation that we will refer to during this call. We're at page 2 of our slide presentation, which includes our safe harbor statements regarding forward-looking statements and use of non-GAAP financial measures. For those of you joining by the phone, please ...

Key Takeaways WBS posted Q4 adjusted EPS of $1.59, beating estimates, while the stock lost 3.2% after results.Webster Financial benefited from higher NII and non-interest income, plus rising loan and deposit balances.WBS faced headwinds from higher expenses, a lower net interest margin, and a weaker efficiency ratio.Webster Financial Corporation (WBS) reported fourth-quarter 2025 adjusted earnings per share (EPS) of $1.59, which beat the Zacks Consensus Estimate of $1.52. Also, the reported figure compared ...

Financial Data and Key Metrics Changes - The company reported a GAAP net income of $21.71 per share for the fourth quarter, with a core net income of $23.579 per share after excluding non-core items [10][11] - The core return on average assets (ROAA) was 1.16% for the fourth quarter, exceeding the stated goal of 1% [7][10] - Earnings per share (EPS) increased by 14% year-over-year, with a 20% improvement in the fourth quarter alone [8][10] - The tangible common equity ratio increased by 90 basis points, and consolidated CET1 capital rose by 50 basis points year-over-year [6] Business Line Data and Key Metrics Changes - Total loans held for investment increased by $168.4 million, or 11.1% annualized on a linked quarter basis, driven by improved demand and reduced paydowns [11] - Total deposits rose by $191.7 million, primarily due to a net increase in interest-bearing deposits [12] - The non-interest income for the fourth quarter was approximately $13.2 million, with swap fee revenue exceeding expectations [18][62] Market Data and Key Metrics Changes - Texas-based loans slightly declined from 39% of total loans, expected to decrease further to approximately 36% following the acquisition of Progressive Bank [12] - The company noted a balanced growth in loan production across different regions, particularly in Southwest and North Louisiana [27][66] Company Strategy and Development Direction - The company plans to focus on optimizing existing systems and deepening market presence rather than pursuing new major projects in 2026 [9][42] - There is an emphasis on sustainable ROAA, tangible book value accretion, and enhancing EPS through improved operational efficiency [9][44] - The company aims to deepen relationships with existing clients and enhance profitability before considering further M&A opportunities [43][45] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, indicating that 2026 could be even more fruitful following a pivotal 2025 [8][9] - The company is prepared to manage credit risks more effectively, learning from recent experiences with non-performing loans [30][33] - Management highlighted the importance of maintaining a balanced loan portfolio to mitigate concentration risks [33] Other Important Information - The company successfully completed two major core conversions and implemented new software platforms to enhance operational capabilities [4][5] - The acquisition of Progressive Bank is expected to contribute positively to the company's growth and operational efficiency [21] Q&A Session Summary Question: Insights on loan growth and outlook - Management noted that improved pipeline demand and reduced payoffs contributed to strong loan growth in the fourth quarter, with expectations of mid-single-digit growth for 2026 [24][25] Question: Details on non-performing loans - A significant commercial real estate loan in Houston was identified as non-performing, with management indicating it is one of the largest exposures [30][32] Question: Focus on daily execution versus M&A - Management clarified that the focus for 2026 will be on optimizing existing operations rather than pursuing new acquisitions, allowing for deeper relationship building with current clients [40][43] Question: Capital management and buyback strategy - The company plans to continue share buybacks opportunistically, with a focus on attractive pricing below $120 [46][48] Question: Opportunities for hiring in the current market - Management expressed readiness to hire selectively, focusing on acquiring the right talent to support growth without needing to hire aggressively [52][54]

Core Insights - Zions Bancorporation (ZION) reported better-than-expected fourth-quarter 2025 results, with adjusted earnings per share (EPS) of $1.75, surpassing the Zacks Consensus Estimate of $1.57 and reflecting a 30.5% increase from the previous year [1][9]. Financial Performance - The growth in earnings was primarily driven by higher net interest income (NII) and non-interest income, supported by increases in loan and deposit balances, although rising non-interest expenses posed a challenge [2][12]. - For the full year 2025, Zions reported earnings of $6.01 per share, exceeding the Zacks Consensus Estimate of $5.93 and marking a 21.4% increase from the prior year [4]. - Net revenues for the fourth quarter were $902 million, an 8.4% year-over-year increase, and also beat the Zacks Consensus Estimate of $864.4 million [5]. - For the full year, net revenues reached $3.43 billion, up 8.1% year over year, surpassing the Zacks Consensus Estimate of $3.38 billion [5]. Income and Expenses - NII for the fourth quarter was $683 million, reflecting an 8.9% increase from the prior year, attributed to lower funding costs and a favorable mix of interest-earning assets [6]. - Non-interest income rose to $208 million, a 7.8% increase year over year, driven by higher retail and business banking fees [7]. - Adjusted non-interest expenses increased by 7.6% year over year to $548 million [7]. Asset Quality and Capital Ratios - The ratio of non-performing assets to loans and leases was 0.52%, a slight increase of 2 basis points from the previous year [9]. - Net loan and lease charge-offs decreased significantly to $7 million from $36 million in the year-ago quarter [9]. - As of December 31, 2025, the common equity tier 1 capital ratio improved to 11.5% from 10.9% a year ago, and the Tier 1 risk-based capital ratio rose to 11.6% [11]. Future Outlook - The modest loan growth and improving fee income, along with relatively higher interest rates, are positive indicators for Zions' future performance [12].

Core Viewpoint - First Horizon Corporation (FHN) reported better-than-expected fourth-quarter 2025 results, with adjusted earnings per share of 52 cents, exceeding the Zacks Consensus Estimate of 47 cents and up from 43 cents in the same quarter last year [1][9] Financial Performance - The company's net income available to common shareholders (GAAP basis) was $257 million, a 63% increase year over year, benefiting from higher net interest income (NII) and a significant rise in non-interest income, with no provision for credit losses recorded [2][11] - For the full year 2025, adjusted earnings per share reached $1.89, surpassing the Zacks Consensus Estimate of $1.84, and reflecting a 22% increase from the previous year [3] - Total quarterly revenues were $888 million, a 22% year-over-year increase, exceeding the Zacks Consensus Estimate by 2.9% [4] Revenue and Expenses - Total revenues for 2025 were $3.42 billion, growing 7% year over year and also surpassing the Zacks Consensus Estimate of $3.39 billion [4] - NII increased by 7% year over year to $676 million, with the net interest margin rising 18 basis points to 3.51% [4] - Non-interest income was reported at $212 million, more than double the year-ago level, primarily due to the absence of securities portfolio restructuring losses [5] Efficiency and Cost Management - The efficiency ratio improved to 61.33%, down from 61.98% in the same quarter last year, indicating enhanced profitability [6] - Non-interest expenses rose 7% year over year to $545 million, driven by higher personnel costs and other operational expenses [5] Loan and Deposit Growth - Total period-end loans and leases were $64.16 billion, a 3% increase from the year-ago quarter, while total period-end deposits rose to $67.47 billion, also up 3% year over year [7] Credit Quality - Non-performing loans and leases totaled $604 million, slightly up from the previous year, while the allowance for credit losses to loans and leases ratio decreased to 1.31% from 1.43% [8] - Net charge-offs increased to $30 million from $13 million in the year-ago quarter, with no provision for credit losses recorded in the fourth quarter [8][9] Capital Ratios - As of December 31, 2025, the common equity tier 1 ratio was 10.6%, down from 11.2% a year ago, and the total capital ratio decreased to 13.4% from 14.2% [10]

Summary of Key Points from the Conference Call Industry Overview - The conference call focuses on the banking industry, discussing macroeconomic conditions, monetary policy, and the outlook for bank performance in 2026 [1][2]. Core Insights and Arguments - **Monetary Policy**: The monetary policy is expected to remain accommodative, with a low interest rate environment continuing. A reduction in interest rates by 10-20 basis points and a reserve requirement ratio cut of 25-50 basis points is anticipated for 2026 [1][2]. - **Loan Growth**: New RMB loans are projected to be between 15.7 trillion and 16.8 trillion, with a balance growth rate of 5.8%-6.2%. Social financing growth is expected to be between 7.9%-8.2%, primarily supported by government bonds [1][5]. - **Asset Quality**: The overall asset quality of listed banks remains stable, with a low probability of large-scale credit risk. However, retail risks related to household income, especially in micro-business and consumer loans, need attention [3][9]. - **Net Profit Growth**: A 2.4% year-on-year increase in net profit for listed banks is expected in 2026, driven by improvements in interest margin business and recovery in intermediary income [3][11]. - **Non-Interest Income**: Non-interest income, particularly from intermediary business and wealth management, is showing signs of recovery, with an 8.2% year-on-year growth in intermediary income as of Q3 [8]. Important but Overlooked Content - **Deposit Costs**: The cost of deposits is expected to decrease as the adjustment of deposit rates lags behind the market rate changes. By mid-2025, the deposit cost is projected to drop by 32 basis points to 1.78% [6]. - **Wealth Management Impact**: Wealth management services are crucial for retail banks, providing alternative funding sources and supporting non-interest income. The recovery in capital markets is expected to enhance profitability for retail banks [16]. - **Stock Selection Strategy**: Investment strategies should focus on dividend-based stocks with earnings elasticity. The banking sector is becoming a key target for insurance funds due to its high dividend characteristics [12]. - **Capital Supplementation**: Large commercial banks are progressing well in capital supplementation, while smaller banks face greater pressure due to faster expansion rates compared to internal capital growth [15]. Conclusion The banking industry is navigating a challenging environment with a focus on maintaining asset quality and profitability amidst low interest rates and regulatory support for consumer credit. The outlook for 2026 suggests cautious optimism, driven by strategic growth in key areas such as green loans and wealth management.

Summary of Key Points from the Conference Call Industry Overview - The conference call involved 21 China financial companies, including banks, brokers, and fintech firms, discussing the financial services industry in China, particularly focusing on the third quarter results and outlook for the future [1][2]. Key Insights on Banks 1. **Net Interest Margins (NIMs) Outlook**: - Commercial bank NIM was flat quarter-on-quarter in 3Q25, indicating signs of stabilization. Banks expect NIMs to stabilize in 1H26, driven by slower declines in loan yields and ongoing repricing of time deposits [4][6]. - NIMs may face downward pressure due to concentrated loan repricing in 1Q26, but banks generally believe the decline will continue to narrow [4][6]. 2. **Credit Demand**: - Year-to-date, bank loan growth has been primarily driven by corporate loans, contributing 92% of new loans. Credit demand remains weak, particularly in retail loans, with expectations of further slowdown in 4Q25 [12][18]. - Mortgage demand is weak due to a sluggish property market, and while non-mortgage retail loans are growing slightly faster, banks remain cautious in lending [13][14]. 3. **Asset Quality Risks**: - Banks report a year-on-year decrease in new non-performing loan (NPL) formation for corporate loans, but property loans remain a significant source of new corporate NPLs. Banks have made sufficient provisions for property loans, providing a buffer against NPL ratios [19][20]. - Retail loan NPL formation has increased year-on-year, but risks are considered manageable due to low proportions of non-mortgage consumer loans and low loan-to-value ratios [25][27]. 4. **Non-Interest Income Growth**: - Fee income showed strong performance in 3Q25, driven by capital market activities and corporate loan growth. Banks expect continued positive trends in fee income despite potential impacts from fee cuts in mutual funds [32][35]. 5. **Capital Adequacy and Shareholder Returns**: - Some banks experienced a decline in CET-1 ratios due to rising bond market rates and new loans with higher risk weightings. However, capital adequacy is improving overall, supporting asset growth and risk absorption [40][41]. - Banks are gradually increasing dividend payout ratios, attracting long-term investors despite a decline in dividend yields from previous highs [41][43]. Regulatory Impacts 1. **Loan Facilitation Platforms**: - New regulations require clear disclosure of loan costs, impacting pricing and risk. Loan volumes are expected to contract in 4Q25 and 1Q26, with a potential recovery in 2Q26 if risks stabilize [46][47]. - Consumer finance companies are required to lower average loan interest rates, but the impact is expected to be manageable for top-tier platforms [48][51]. 2. **Consumer Finance**: - Banks are shrinking their internet loan portfolios and focusing on self-operated loans due to rising retail risks. This shift may suppress retail credit growth in the short term [50][51]. Capital Markets Insights 1. **Broker Performance**: - Brokers experienced higher trading volumes in 3Q25, with expectations of sustained performance due to ongoing bank deposit migration and strong investor sentiment [53][54]. - CICC is focusing on institutional business but sees rising wealth management income due to strong demand in IPO subscriptions [53][54]. 2. **Financial Software Companies**: - Financial software companies may benefit from capital market recovery, but outcomes vary. Brokers are increasing IT budgets due to trading activity, while fund companies are cautious due to declining AUM and fee rates [59][61]. Conclusion - The financial services industry in China is navigating a complex landscape with stabilizing NIMs, weak credit demand, manageable asset quality risks, and evolving regulatory impacts. The outlook for banks and brokers remains cautiously optimistic, with potential growth in non-interest income and capital markets activity.

Core Insights - Valley National Bancorp (VLY) reported better-than-expected quarterly results, with adjusted earnings per share of 28 cents, surpassing the Zacks Consensus Estimate of 26 cents, and a year-over-year increase of 55.6% [1][10] Financial Performance - The third-quarter 2025 net income reached $163.4 million, a 66.9% increase from the previous year, driven by higher net interest income (NII) and non-interest income, despite higher expenses and lower loan balances [2][10] - Total revenues on a fully-taxable-equivalent (FTE) basis were $512.4 million, an 8.4% year-over-year increase, although slightly below the Zacks Consensus Estimate of $513.9 million [3] - NII on an FTE basis was $447.5 million, up 8.7% year over year, with a net interest margin of 3.05%, expanding by 19 basis points [3] - Non-interest income rose 6.9% year over year to $64.9 million, primarily due to increases in various fee income components [4] Expense Management - Non-interest expenses totaled $282 million, a 4.6% increase year over year, while adjusted non-interest expenses rose 3.5% to $272.8 million [4] - The adjusted efficiency ratio improved to 53.37%, down from 56.13% in the prior-year quarter, indicating enhanced profitability [5] Loan and Deposit Trends - As of September 30, 2025, total loans were $49.3 billion, showing a slight decline, while total deposits increased to $51.2 billion, up approximately 1% from the previous quarter [6] Credit Quality - Total non-performing assets increased to $427.3 million, a 40.1% rise year over year, with the allowance for credit losses as a percentage of total loans at 1.21%, up 7 basis points [7] - Provision for credit losses was $19.2 million, down 74.4% year over year [7] Profitability and Capital Ratios - Adjusted annualized return on average assets improved to 1.04%, up from 0.62% in the previous year, while adjusted annualized return on average shareholders' equity rose to 8.62%, up from 5.64% [8] - The tangible common equity to tangible assets ratio was 8.79%, an increase from 7.68% in the corresponding period of 2024, and the Tier 1 risk-based capital ratio improved to 11.72% from 10.29% [9]

Core Insights - Bank of America (BAC) reported third-quarter 2025 earnings of $1.06 per share, exceeding the Zacks Consensus Estimate of 94 cents and up from 81 cents in the prior-year quarter [1][10] - The stock gained 4.9% in early trading following the positive earnings report [1] Revenue and Earnings Performance - Total revenues for BAC were $28.09 billion, surpassing the Zacks Consensus Estimate of $27.28 billion and increasing 10.8% year over year [6] - Net interest income (NII) grew 9% year over year to $15.39 billion, exceeding the estimate of $15.29 billion [6] - Non-interest income rose 13% from the prior-year quarter to $12.86 billion, driven by higher fees and commissions [7] Trading and Investment Banking - BAC experienced a 14th consecutive quarter of improvement in trading revenues, which grew 8.3% year over year to $5.35 billion [2] - Investment banking fees in the Global Banking division increased 47.5% year over year to $1.16 billion, with equity and debt underwriting income rising 47% and 42.2%, respectively [3] Expenses and Efficiency - Non-interest expenses increased 5.2% year over year to $17.34 billion, attributed to rising costs across most components [7] - The efficiency ratio improved to 61.39%, down from 64.64% in the year-ago quarter, indicating enhanced profitability [8] Credit Quality - Provision for credit losses was $1.30 billion, down 16% from the prior-year quarter, indicating improved credit quality [9] - Net charge-offs declined 10.9% year over year to $1.37 billion, with non-performing loans as a percentage of total loans decreasing to 0.46% from 0.53% [11] Capital Position and Share Repurchase - Book value per share increased to $37.95 from $35.37 a year ago, while tangible book value per share rose to $28.39 from $26.25 [12] - The company repurchased shares worth $5.3 billion during the reported quarter [13] Strategic Outlook - BAC's focus on digitization, loan growth, and relatively higher interest rates is expected to support future growth, although elevated expenses and a challenging operating environment present headwinds [14]

Core Viewpoint - U.S. Bancorp is expected to report strong third-quarter earnings, with an EPS of $1.11 and revenue of $7.18 billion, driven by rising net interest income and solid lending activities [1][6]. Financial Performance - The anticipated net interest income (NII) for the third quarter is projected to be between $4.1 billion and $4.2 billion, supported by stable funding costs and strong loan demand [2][6]. - Non-interest income is expected to rise by 1.9% sequentially, reaching approximately $3 billion, highlighting the company's diversified revenue streams [3][6]. Historical Performance - U.S. Bancorp has a history of exceeding earnings expectations, with an average surprise of 2.93% over the past four quarters, indicating potential for surpassing the consensus EPS estimate of $1.11 [4]. Valuation Metrics - The company has a price-to-earnings (P/E) ratio of approximately 10.64 and a price-to-sales ratio of about 1.73, suggesting it is attractively valued [5]. - The enterprise value to sales ratio is around 2.23, and the earnings yield is about 9.4%, while the debt-to-equity ratio stands at approximately 1.29 and the current ratio at around 0.28, indicating areas for improvement in leverage and liquidity [5].