Financial Data and Key Metrics Changes - For Q4 2025, the company reported net income of $21 million, an increase of $16.1 million or 327.2% compared to the previous quarter [9] - Diluted earnings per share for Q4 were $0.70, an increase of $0.54 per share linked quarter [9] - For the full year 2025, net income was $69.2 million, a decrease of $19.3 million or 21.8% compared to 2024 [10] - The net interest margin expanded to 2.98%, up 4 basis points from the previous quarter [15] - Non-interest income, excluding the net loss on the sale of AFS securities, increased by $494,000 or 4% for the linked quarter [16] Business Line Data and Key Metrics Changes - New loan production in Q4 totaled approximately $327 million, down from $500 million in Q3 [5] - Loans as of December 31 were $4.18 billion, a linked-quarter increase of $52.7 million or 1.1% [10] - The average rate of loans funded during Q4 was approximately 6.6% [10] - Non-performing assets increased by $2.6 million but remained low at 0.45% of total assets [7][11] Market Data and Key Metrics Changes - The Texas economy is anticipated to grow at a faster pace than the overall projected U.S. growth rate [8] - The loan pipeline rebounded to just over $2 billion after dipping to $1.5 billion mid-quarter [6] Company Strategy and Development Direction - The company is focused on restructuring its available-for-sale securities to enhance future net interest income and provide balance sheet flexibility [4] - There is an ongoing initiative to move core systems to OutLink and build a data platform to improve operational efficiency [22][23] - The company remains open to strategic acquisitions, particularly in targeted areas like Dallas and Houston [29][30] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about 2026, anticipating a good year for loan growth despite some headwinds from payoffs [43] - The company is actively monitoring market conditions for potential opportunities arising from M&A activity in Texas [51] Other Important Information - The company plans to redeem $93 million of subordinated notes on February 15, 2026, which is expected to positively impact net interest margin [14] - The efficiency ratio improved to 52.28% as of December 31, down from 52.99% [18] Q&A Session Summary Question: Details on 2026 expense growth and software projects - Management indicated a 7% increase in expenses for 2026, with a portion related to software initiatives aimed at improving efficiency [21][22] Question: Expectations for first quarter margin - Management expects a positive margin in Q1, though muted, with improvements anticipated as the year progresses [35][40] Question: Loan growth expectations - Management is optimistic about exceeding loan production targets, despite potential payoffs impacting growth [41][43] Question: Buyback strategy - The company will continue to be opportunistic with stock buybacks, balancing this with potential acquisitions [45] Question: Fee income outlook - An increase of approximately $1.5 million in fee income is budgeted for 2026, driven by trust income and brokerage services [48][49] Question: M&A activity and target asset size - The company is looking for opportunities in the lower asset size range, with a focus on strategic acquisitions that could help cross the $10 billion threshold [56]

Financial Data and Key Metrics Changes - The company reported net income of $22.7 million or $0.79 per share for Q4 2025, a 21.5% increase compared to Q4 2024, resulting in record earnings per share for the year of $3.13 [3] - Loan outstandings grew by $129.3 million during Q4 2025, with a solid loan growth after pressures from early payoffs eased [3][4] - The reported net interest margin (NIM) decreased by 7 basis points to 3.10% compared to Q3 2025, while core NIM increased by 4 basis points to 3.37% [5] Business Line Data and Key Metrics Changes - Loans grew by $129.3 million during Q4 2025, or 7.6% annualized, while total loans for the full year increased by $88.2 million, or 1.3% [5][6] - Non-interest expense increased by $2.1 million, or 4.1% compared to Q4 2024, with total expenses for the year rising by $5 million, or 2.5% [6][7] - The company repurchased approximately 400,000 shares of common stock at an average cost of $32.17 per share during Q4 2025, with a total of 1.1 million shares repurchased in 2025 [7][8] Market Data and Key Metrics Changes - Deposits decreased by $130.8 million in Q4 2025, primarily due to a $198.8 million decrease in public funds, partially offset by an $84 million increase in consumer balances [6] - Total deposits grew by $328.1 million, or 4.9%, for the full year of 2025 [6] Company Strategy and Development Direction - The company expects loan growth of approximately 2%-3% and modest NIM expansion for 2026, targeting net interest income growth of approximately 4%-6% [8][9] - The provision for credit losses is expected to be in the range of $11 million-$13 million for 2026, driven by changes in economic forecasts and credit performance [9] - The company is focusing on deposit initiatives, including small business outreach and specific programs to capture deposits from various sectors [41][42] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about carrying momentum from 2025 into 2026, with expectations for continued strong performance [48] - The company anticipates a relatively stable environment with potential Fed rate decreases, which are not expected to materially impact net interest income due to overall asset-liability management neutrality [9] Other Important Information - The effective tax rate is expected to be in the range of 20%-21% based on current statutory rates [10] - The company has 2.3 million shares available for repurchase under the share repurchase plan, with a target of $10 million-$12 million in repurchases per quarter for 2026 [8] Q&A Session Summary Question: What is the seasonality for deposits in Q1? - The company expects $100 million-$150 million in public funds to flow out in Q1 and Q2, with significant portions of excess liquidity deployed over that time [15] Question: What is the expected trajectory for NIM over the year? - NIM is expected to be relatively in line to slightly up compared to Q4 2025, with overall expansion anticipated for 2026 [16] Question: What is the current state of deposit competition? - Competition remains, with slight increases noted, but the company has been successful in retaining CDs and managing deposit costs effectively [20] Question: Can you review the ag farmland portfolio? - The ag portfolio consists of smaller family farms with a conservative underwriting approach, and the company has a diversified business model supporting these loans [22] Question: What is the outlook for loan growth and prepayment activity? - The company anticipates a more stable prepayment environment similar to Q4 2025, with growth expected primarily in the commercial loan sector [30] Question: How is the buyback pace tied to balance sheet movements? - The buyback activity is guided by earnings and balance sheet growth, aiming to avoid significant growth in regulatory capital ratios [38]

Financial Data and Key Metrics Changes - For Q4 2025, the net income was $34.8 million, or $2.79 per share, while the full year net income was $434 million, or $10.41 per share, indicating strong profitability within the banking industry [4] - The net interest margin for Q4 declined due to federal rate cuts, with a margin of 3.66% in December, slightly below the quarterly average [11][12] - Total loan growth for the quarter was $182 million, or over 12%, while deposit growth was $115 million, or 7.4% [5] Business Line Data and Key Metrics Changes - The bank's loan portfolio is 70% floating-rate, which was impacted by federal rate cuts, reducing loan interest income [4] - Non-performing assets slightly declined, but criticized assets increased by $97 million due to a large nine-loan relationship being classified [5] Market Data and Key Metrics Changes - Economists forecast 2026 to be a year of relative growth and stability, with improved customer outlooks for the year [6] Company Strategy and Development Direction - The company aims to grow loan demand, budgeting for higher numbers than the previous year, particularly in commercial real estate and C&I loans [37] - The management is cautious about share repurchases, indicating that funds will likely be reserved for loan growth and deposit situations [39] Management Comments on Operating Environment and Future Outlook - Management expressed optimism for 2026, expecting it to be a growth year barring sudden changes in government policy [6] - The competitive landscape for deposits remains strong, with local and large money center banks actively promoting CDs [29] Other Important Information - The bank sold two large pieces of OREO, resulting in a net gain of $1.8 million, which was reported in non-interest income [5] - The provision for loan losses was $4.3 million for the quarter, reflecting a combination of loan growth and specific reserves for certain loans [70] Q&A Session Summary Question: What is the spot rate on deposits and average margin for December? - The margin for December was 3.66%, and the total cost of deposits was 3.17% [11] Question: What are the expectations for deposit beta going forward? - Deposit beta is expected to remain around five to six basis points a month, depending on rate cuts and competition [12] Question: What is the forecast for non-interest expenses? - The forecast for non-interest expenses is expected to grow in the mid to high single digits [38] Question: What is the status of the classified loans? - The classified loans are currently behind in interest service, primarily due to litigation involving other banks [68] Question: What is the outlook for M&A activity? - The company is reviewing a few potential M&A deals but is cautious about pricing structures [61]

Financial Data and Key Metrics Changes - The company reported net income of $4,900,000, a decrease of $16,900,000 or 77.5% compared to the previous quarter [13] - Diluted earnings per share were $0.16 for the third quarter, down from $0.56 per share linked quarter [13] - Net interest income increased by $1,450,000 or 2.7% compared to the linked quarter [19] - The tax equivalent net interest margin was 2.94%, a decrease of one basis point from 2.95% [19] - Non-interest expense was $37,500,000, a decrease of $1,700,000 or 4.4% on a linked quarter basis [19] Business Line Data and Key Metrics Changes - Loans increased to $4,770,000,000, a linked quarter increase of $163,400,000 or 3.5% [13] - The increase in loans was driven by $82,600,000 in commercial real estate loans, $49,300,000 in commercial loans, and $49,100,000 in construction loans [14] - Non-performing assets increased by approximately $2,700,000, remaining at 0.42% of total assets [11][14] Market Data and Key Metrics Changes - The Texas economy is anticipated to grow at a faster pace than the overall U.S. growth rate [6] - The loan pipeline rebounded to approximately $1,800,000,000, indicating strong market conditions [10] Company Strategy and Development Direction - The company is focusing on repositioning its available-for-sale securities portfolio to enhance future net interest income and provide balance sheet flexibility [4][5] - There is an interest in potential acquisitions and hiring due to market disruptions caused by larger banks acquiring smaller institutions [27] - The company plans to explore wealth management opportunities in metro markets, aiming for double-digit revenue growth in trust fees [45][46] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about net interest income growth due to favorable market conditions and loan growth expectations [6][24] - The company anticipates a slight increase in net interest margin for the fourth quarter, driven by loan growth and securities restructuring [23][24] - Future rate cuts are expected, with management anticipating at least two cuts in the next year [47][48] Other Important Information - The company repurchased 26,692 shares of common stock at an average price of $30.24 during the third quarter [18] - The allowance for credit losses increased to $48,500,000, while the allowance for loan losses as a percentage of total loans decreased to 0.95% [14] Q&A Session Summary Question: What is the expected margin for the fourth quarter considering the recent restructuring? - Management expects the net interest margin to be up slightly in the fourth quarter, with loan growth anticipated [23][24] Question: Any updates on potential acquisitions or hiring opportunities? - Management indicated interest in a few institutions potentially for sale and mentioned ongoing hiring efforts due to market disruptions [27] Question: How is the loan pipeline looking entering the fourth quarter? - The loan pipeline is strong, rebounding to $1,800,000,000, with a good pull-through rate expected [10][34] Question: What is the pricing competition like in the current market? - There is significant competition in both commercial real estate and commercial loans, but the company is maintaining a disciplined pricing approach [35] Question: What are the expectations for trust fee growth? - Management anticipates double-digit revenue growth in trust fees due to a strong team and new client acquisitions [45][46]