Financial Data and Key Metrics Changes - The company reported net income of $20.7 million for the quarter, with diluted earnings per share of $2.47, down from previous quarters [9][13] - Return on average assets was 1.87% for the quarter and 2% year to date, while return on average equity was 15.6% for the quarter and 16.6% year to date [13] - Net interest margin (NIM) was 4.49%, down from 4.59% in the linked quarter, resulting in net interest income of $48.8 million for the quarter [14][15] Business Line Data and Key Metrics Changes - The company originated $252 million in loans during the quarter, with a record volume of $576 million in purchased loans at a purchase price of $533 million [8][19] - SBA loan originations totaled $39.8 million, with $25 million sold for a gain of $2.1 million [9][15] - The small business insured loan product saw originations of $70 million during the quarter [16][21] Market Data and Key Metrics Changes - The total assets ended the quarter at $4.95 billion, with loans at $4.4 billion, up from $3.7 billion as of September 30 [13] - The company experienced a 40.3% deposit growth over a three-year period in its seven branches in Maine [5] Company Strategy and Development Direction - The company aims to grow its deposit base in Maine, which is generally less expensive and stickier than brokered deposits [30] - There is a focus on expanding the small balance insured loan program, which is expected to sustain its growth trajectory [21] - The company is also exploring niche opportunities for deposit growth while relying on brokered deposits to fund loan growth [30][31] Management's Comments on Operating Environment and Future Outlook - Management noted that the operating results for the quarter were lower than previous quarters, primarily due to the impact of the government shutdown on SBA loan activity [7][10] - There is an expectation of increased net interest income in subsequent quarters due to a higher loan book [11][12] - The company anticipates a favorable trajectory for SBA loan originations and sales moving forward [15][40] Other Important Information - The allowance for credit losses increased from $46.7 million to $63.8 million during the quarter, reflecting the purchase loan activity [16] - Non-interest expense decreased to $20.8 million, attributed to lower professional fees and reduced loan acquisition costs [17] Q&A Session Summary Question: Did the company buy back stock in the fourth quarter? - The company did not buy back any stock; the decrease in share count was due to stock compensation activity [26] Question: Will net interest margin see a lift going forward? - Management indicated that a lift in net interest margin is expected due to downward liability repricing [28] Question: How does the company view the funding mix as it grows? - The company plans to continue using brokered deposits while also growing its deposit base in Maine [30] Question: What percentage of purchase loans does the company typically retain at maturity? - Management did not have the exact number but indicated that they try to retain many loans, especially when rates are higher [32] Question: Will there be a catch-up in SBA gain on sale income next quarter? - The company expects an increase in SBA loan volume and anticipates that gain on sale percentages will remain around 8%-9% [39][43] Question: How does the company see the growth of the insured small business product? - The company believes the growth rate is sustainable and is focused on selling the originated loans [44][46]

Financial Data and Key Metrics Changes - The company reported a net income of $22.5 million for the quarter, with a net interest margin (NIM) of 4.59%, return on equity (ROE) of 17.64%, and return on assets (ROA) of 2.13% [3][12] - Diluted earnings per share (EPS) were $2.67, and tangible book value was reported at $59.98 [3][12] Business Line Data and Key Metrics Changes - Loan purchases amounted to $152.7 million with an invested amount of $144.6 million, marking one of the largest purchase quarters in recent years [4] - Originations totaled $134 million, with a notable decrease in the originated loan book by $39 million, while the purchase loan book increased by $31 million [6][12] - The SBA activity included funding of $42 million and sales of $53 million, with a significant decrease in gains due to changes in SBA rules [5][14] Market Data and Key Metrics Changes - The company noted a robust origination pipeline, with a strong performance in the real estate and financing markets, despite some loan payoffs [8][10] - The average loan balances decreased by $92 million compared to the previous quarter, impacting interest income [7][12] Company Strategy and Development Direction - The company is optimistic about its new insured small business loan product with NUITY, which has seen a strong start since its launch [9] - There is a focus on maintaining a disciplined credit approach while pursuing growth opportunities in both purchased and originated loans [10][52] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the future loan growth, citing a healthy pipeline and the expectation of increased demand once the government reopens [24][52] - The company is closely monitoring asset quality and has implemented measures to mitigate risks associated with fraud in lender finance [43][45] Other Important Information - The company experienced a decrease in total assets from $4.28 billion to $4.17 billion, attributed to paydowns and payoffs [12] - Capital remains strong with a tier one leverage ratio of 12.21% [13] Q&A Session Summary Question: Changes in cost structure with NUITY - The cost structure changed to a flat fee per loan submitted instead of a split in the gain on sale [20] Question: Expectations for SBA loan gains in Q4 - Uncertainty exists due to variables like the government shutdown, but a ramp-up in activity is expected once operations resume [24] Question: Increase in professional fees - Temporary employees and heightened legal fees related to new products contributed to the increase [25] Question: Health of lender finance portfolio - The company maintains a robust monitoring system to mitigate fraud risks and is comfortable with asset quality [43][45] Question: Visibility on loan payoffs this quarter - A larger amount of payoffs than typical was observed, impacting transactional income [48] Question: Lower tax rate this quarter - Changes in state apportionment laws and stock vesting contributed to the lower tax rate, with expectations of a 31% to 32% effective tax rate going forward [53][54]