Financial Data and Key Metrics Changes - For the year ended December 31, 2025, net income was $543 million, an increase of $63 million or 13.2% compared to $480 million for the same period in 2024 [6] - Net income per diluted common share was $5.72 for the year ending December 31, 2025, compared to $5.05 for the same period in 2024, an increase of 13.3% [6] - The net income for the three months ending December 31, 2025, was $139.9 million, compared to $130 million for the same period in 2024, an increase of $9.8 million or 7.6% [7] - The annualized return on average assets was 1.49% and on average tangible common equity was 13.61% for the three months ending December 31, 2025 [7] - The efficiency ratio was 43.6% for the three months ending December 31, 2025 [7] Business Line Data and Key Metrics Changes - Net interest income before provision for credit losses for the three months ended December 31, 2025, was $275 million, an increase of $7.2 million compared to $267.8 million for the same period in 2024 [15] - The net interest margin on a tax-equivalent basis was 3.30% for the three months ended December 31, 2025, an increase of 25 basis points compared to 3.05% for the same period in 2024 [16] - Non-interest income was $42.8 million for the three months ended December 31, 2025, compared to $39.8 million for the same period in 2024 [17] - Non-interest expense was $138.7 million for the three months ended December 31, 2025, compared to $141.5 million for the same period in 2024 [18] Market Data and Key Metrics Changes - Deposits were $28.4 billion at December 31, 2025, an increase of $700 million from $27.7 billion at September 30, 2025 [9] - Nonperforming assets totaled $150 million, or 46 basis points of quarterly average interest-earning assets at December 31, 2025, compared to $119 million, or 36 basis points at September 30, 2025 [10] Company Strategy and Development Direction - The company completed a merger with American Bank on January 1, 2026, and expects to finalize the merger with Southwest Bancshares on February 1, 2026 [11][12] - The acquisition of Stellar Bancorp is seen as a significant milestone, enhancing the company's Texas footprint and deposit rank [14] - The company aims to deliver shareholder value through low-cost core deposits, operational efficiency, sound credit quality, and growth via opportunistic M&A [14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth momentum from the second half of 2025 into 2026, with expectations for improved net interest margins and earnings [32][34] - The company anticipates a minimum net interest margin of 3.5% for 2026, with potential upside from the acquisition of Stellar Bank [79][80] - Management highlighted a strong capital position and plans for capital deployment, including potential stock buybacks and dividend increases [48][49] Other Important Information - The company repurchased approximately $157 million, or 2.34 million shares of its common stock at an average weighted price of $67.04 under its 2025 stock repurchase program [8] - The allowance for credit losses on loans was $333 million, with a strong coverage ratio of 2.21 times non-performing assets [10] Q&A Session Summary Question: Can you discuss the Stellar acquisition and the difference in earnings estimates? - Management noted that the earnings estimates are influenced by Stellar's recent performance and expressed confidence in the projected earnings from the acquisition [28][32] Question: Why is this acquisition different from past ones? - Management emphasized the familiarity and alignment between the two banks, which reduces risk and enhances growth potential [35][37] Question: Can you elaborate on the capital deployment strategy post-acquisition? - Management indicated a focus on integration of the three banks and potential for opportunistic buybacks, with a strong capital position allowing for flexibility [48][50] Question: How will you manage multiple bank integrations simultaneously? - Management assured that designated teams are in place for integration, allowing core operations to continue without distraction [53][56] Question: What is the outlook for nonperforming assets and credit quality? - Management acknowledged an increase in nonperforming assets but expressed confidence in the overall credit quality of the portfolio [108][109]

Loans totaled $2.7 billion at December 31, 2025, up $38.1 million, or 1%, (an increase of 6% on an annualized basis), from September 30, 2025. Deposits totaled $3.0 billion at December 31, 2025, down $2.7 million, or less than 1% for the quarter and on an annualized basis, from September 30, 2025. Core deposits increased $24.5 million, or 1% during the fourth quarter of 2025 to $2.2 billion (an increase of 5% on an annualized basis). Net interest income in the fourth quarter of 2025 totaled $34.0 million, d ...

We've always maintained loan structure discipline and have prioritized risk-adjusted returns over growth, and we don't intend to abandon our principles now. On a high note, deposits increased 9% annualized in the third quarter with good growth and relatively low-cost money market accounts. Thanks to a concerted effort and a focus on building franchise value, we've increased deposits by 17% in the last 9 quarters versus loans, which also grew a respectable 8%. Most of this increase has been in core deposits ...

Core Insights - Preferred Bank reported a net income of $34.8 million for Q4 2025, translating to $2.79 per share, and a total annual income of $134 million or $10.41 per share, positioning it among the top tier of the banking industry [1][3] - The bank experienced a decline in interest margin due to federal rate cuts, impacting its floating rate loan portfolio, which constitutes 70% of its loans [1][4] - Despite challenges, loan demand is strengthening, with total loan growth of $182 million (over 12%) and deposit growth of $115 million (7.4%) for the quarter [4] Financial Performance - The bank's profitability metrics indicate a strong performance, with a full-year net income of $134 million [1] - Nonperforming assets saw a slight decline, while criticized assets increased by $97 million due to a large loan being classified [5] - The loan loss provision for the quarter was $4.3 million, reflecting a cautious approach to credit risk management [5] Market Conditions - The cost of deposits remains high, with a total cost of deposits at 3.17% for December, slightly down from previous months [7] - The bank anticipates a stable growth environment for 2026, with customers expressing improved outlooks [5] - The competitive landscape for deposits remains strong, with large money center banks actively promoting CDs [16] Loan and Deposit Growth - Loan growth for the year was reported at 7.3%, while deposit growth was at 7.2% [4] - The bank is budgeting for higher loan growth in 2026, focusing on commercial real estate and C&I loans [20] - Approximately $1.3 billion in CDs are maturing in Q1 at a weighted average rate of 3.96%, with new CDs expected to come in at around 3.70% to 3.80% [12] Credit Quality and Risk Management - The bank is closely monitoring classified loans, with a significant relationship under scrutiny due to litigation with other banks [24][33] - The bank's reserve for credit losses is deemed adequate, with a Q factor reserve around 42.5% [36] - Management is optimistic about resolving credit issues within the next two quarters [38]

Financial Data and Key Metrics Changes - Total assets reached $10.4 billion as of Q3 2025, with total investment securities increasing by $336.8 million to $2.3 billion [14][15] - Net interest income was $94.2 million, up $3.7 million, driven by higher average rates on loans and securities [17] - Non-performing assets increased to $140 million, or 1.3% of total assets, compared to $98 million, or 0.9% in the prior quarter [21] Business Line Data and Key Metrics Changes - Loans declined by 3.4% quarter over quarter, with a total gross loan amount of $6.9 billion, primarily due to increased prepayments and the sale of a large substandard loan [9][15] - Core deposits increased by $59.4 million, while total deposits remained stable at $8.3 billion [15] - Non-interest income was $17.3 million, while non-interest expense was $77.84 million, leading to an efficiency ratio of 69.84% [17][19] Market Data and Key Metrics Changes - International banking strengthened its presence across LATAM, with approximately 50% of new accounts opened in Q3 originating from countries like Argentina and Guatemala [8] - The company expects loan production and purchases of syndications to be partially offset by reductions in criticized assets and payoffs, with net loan growth projected between $125 million to $175 million for Q4 [25] Company Strategy and Development Direction - The primary focus for the quarter was on asset quality over loan growth, with plans to address the increase in non-performing asset levels [6][10] - The company launched an expense reduction initiative aiming for savings of $2 million to $3 million per quarter starting in 2026 [28] - Leadership changes in commercial banking were announced to strengthen market presence and business development efforts [30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strength of the franchise and the opportunities ahead, emphasizing a proactive approach to credit risk management [34] - The company anticipates a decrease in expenses in Q4, projecting non-interest expenses to be in the range of $74 million to $75 million [26] - Management highlighted the importance of timely identification and resolution of credit issues, indicating a more aggressive stance on downgrades [88] Other Important Information - The Board declared a quarterly cash dividend of $0.09 per share, reinforcing confidence in the company's long-term outlook [13] - The company intends to resume share buybacks post-earnings when the blackout period ends [13] Q&A Session Summary Question: What is the outlook on credit and when can the company expect to return to a sustainable ROA? - Management indicated that Q3 was the peak for portfolio evaluations and expects a better path for resolution in Q4, with a focus on early identification of credit issues [39][41] Question: What will drive the expected decrease in net interest margin for Q4? - The decrease is attributed to the impact of recent rate cuts and the timing of asset repricing, with expectations for a normalized net interest margin [45][46] Question: Is the company considering strategic alternatives given the current M&A market? - Management stated the focus remains on executing current strategies and achieving desired returns, with evaluations of opportunities as they arise [50] Question: What is the expected loan growth and syndication activity moving forward? - Management expects organic loan growth to be between $125 million to $175 million in Q4, with a focus on participating in syndications [25][56] Question: What is the outlook for realized loss content over the next couple of quarters? - Management anticipates charge-off activity to stabilize, with specific reserves already established for potential losses [63][64]

Core Insights - Southside Bancshares reported a net income of $21.8 million for Q2 2025, reflecting a 1.4% increase from the previous quarter [2][26] - The company experienced growth in net interest margin and net interest income, while lowering loan growth expectations due to elevated payoffs in core portfolios [12][32] Financial Performance - Diluted earnings per share reached $0.72, up $0.01 from Q1 2025 [3][26] - Annualized return on average assets was 1.07%, and return on average tangible common equity was 14.38% [3][26] - Net interest margin increased by nine basis points to 2.95% [3][32] - Net interest income rose to $54.3 million, a 0.8% increase over the prior quarter [3][32] Loan Production and Growth - New loan production totaled $293 million, with $228 million funded during the quarter [4][21] - Total loans reached $4.6 billion, a 0.8% increase from the prior quarter, driven by growth in commercial real estate and construction loans [5][26] - Loan growth guidance was reduced to 3%-4% year-over-year due to moderated expectations [6][23] Asset Quality - Nonperforming assets remained stable at 0.39% of total assets, concentrated in a single large construction loan [7][24] - Classified loans decreased from $67 million to $55.4 million, indicating improved asset quality [7][25] Securities and Deposits - The securities portfolio was valued at $2.73 billion, a slight decrease from the previous quarter [8][28] - Deposits increased by $41.1 million, attributed to broker deposits and commercial/retail deposits, despite a decrease in public fund deposits [9][30] Operational Efficiency - Noninterest income rose by 12.7% to $1.4 million, primarily from swap fee and services income [10][32] - Noninterest expense increased by 5.8% to $39.3 million, influenced by a write-off from branch demolition [10][33] - The efficiency ratio improved to 53.7% from 55.04% in the previous quarter [11][33] Management Outlook - Management expressed optimism for 2025, citing strong second-quarter results and a solid loan pipeline [12][49] - The company anticipates continued competition from debt funds impacting credit spreads, particularly in commercial real estate [12][41]

Financial Data and Key Metrics Changes - The company reported GAAP fully diluted earnings per share of $0.87, which represents a 135% increase compared to the fourth quarter and an 81% increase year-over-year [6] - Pre-provision net revenue for the first quarter was $9.4 million, or $1.22 per share, an 11% increase from the previous quarter [12] - The net interest margin for the quarter was 281 basis points, a 21 basis point increase from the linked quarter [12] Business Line Data and Key Metrics Changes - SBA originations grew to $10 million in the first quarter, with gain on sale margins exceeding 10% [9] - Noninterest income increased by 56% to $1.5 million, driven largely by SBA gain on sale income [16] - The first quarter provision expense was $463,000, significantly lower than $4.5 million in the prior quarter [18] Market Data and Key Metrics Changes - Core deposits grew by $43 million, including $28 million in noninterest-bearing deposits, while broker deposits declined by $81 million [10] - The company expects low single-digit loan growth for the full year despite a slower first quarter [9] Company Strategy and Development Direction - The company successfully disposed of two nonperforming credits, which reduced nonperforming assets as a percentage of total assets to 83 basis points [7] - The management emphasized the importance of attracting talented professionals and has added two deposit teams in the New York Metro Area [20] - The company plans to continue expanding its net interest margin and reaffirmed its net interest income guidance for the full year 2025 of $93 million to $95 million [16] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the SBA gain on sale activity accelerating in Q2 2025 [9] - The management noted that credit trends were benign and highlighted the company's strong balance sheet and liquidity [19] - The company is cautious about potential changes in the SBA environment that could impact growth [52][54] Other Important Information - The company repurchased 29,924 shares at a weighted average price of $30.46 during the quarter, with 220,000 shares remaining on its authorization [19] - The efficiency ratio for the quarter was 59.9%, with expectations for improvement as net interest margin expands [18] Q&A Session Summary Question: Update on new teams and their focus - The focus of the new teams is primarily on deposits, with some loans mixed in, and both teams have prior books over $100 million [26] Question: Update on loan pipeline and growth outlook - The company still expects low single-digit growth, with a robust pipeline despite some unexpected payoffs in Q1 [30][31] Question: Core loan yield for the quarter - The core loan yield for the quarter was approximately 6.40%, reflecting a 10 basis point expansion over the fourth quarter [38] Question: Thoughts on interest-bearing costs and margin - Timing issues affected the interest-bearing costs, with some callable brokered CDs called in Q1 leading to a one-time drag [41][42] Question: Expectations for SBA originations and fee income - Originations were better than expected, with the strongest quarter anticipated in Q4 2025 [50] Question: Share repurchase strategy - The company aims to balance share repurchases with the need to build consolidated CET1 capital, currently at 11% [72]