Management also addressed taxes. Harrison said the effective tax rate in the fourth quarter was 24.8% due to the reversal of a previously accrued tax benefit, and said the company expects the effective tax rate to return to about 23.2% going forward.On results, Harrison said the company posted “another strong quarter,” pointing to net interest margin (NIM) expansion, growth in net interest income, contained expenses, and strong credit quality. He said return on average tangible equity was 15.8% in the fourt ...

Financial Data and Key Metrics Changes - The company reported an increase in operating net income of $675,000 compared to the third quarter, driven by strong operating performance and the completion of the TC Federal acquisition [3][15] - Operating return on assets (ROA) achieved 1% for the fiscal year 2025, with a target of reaching 1.20% in 2026 [4][15] - Net interest margin increased by 15 basis points to 3.32% in the fourth quarter, with net interest income rising approximately $3.2 million compared to the prior quarter [15][16] Business Line Data and Key Metrics Changes - Core loan growth for 2025 was 10.5%, with expectations for 2026 to be closer to the lower end of the 8%-12% target due to increased competition [5][23] - Non-interest income for the fourth quarter was $11.1 million, reflecting strong performance in mortgage and SBSL lines [17] - Operating non-interest expenses increased to $24.4 million, primarily due to the TC Federal acquisition [19] Market Data and Key Metrics Changes - Deposits increased for the quarter, with organic growth being flat year-over-year, excluding the TC Federal acquisition [7][24] - The company is focused on building a deposit-first culture, with a strategy to grow core customer relationships [7][24] - The Southeast regional economy remains strong, contributing to competitive pricing in the market [44] Company Strategy and Development Direction - The company is actively pursuing M&A opportunities, with plans to announce another transaction in 2026 [14] - The transition to a dual-employee model for financial advisors is expected to enhance income opportunities and improve earnings power [11] - The company aims to maintain disciplined expense management while executing strategic initiatives to improve operating efficiency [20] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, citing strong operating performance and the successful integration of TC Federal [3][14] - The competitive landscape is becoming more challenging, but the company is focused on maintaining margin improvement while pursuing growth [44][48] - Management expects to see improvements in non-interest income and deposit growth as rates stabilize [7][52] Other Important Information - The board declared an increase in the quarterly dividend to $0.12 per share, marking another consecutive year of dividend increases [12] - The company was recognized as one of American Banker's Best Banks to Work For in 2025, reflecting its commitment to culture and team members [13] Q&A Session Summary Question: Insights on small business lending and charge-offs - Management acknowledged that small business lending is high-risk but can yield better returns, with expectations for improvement in the coming years [31][32] Question: M&A competition and strategy - Management hopes for negotiated transactions rather than competitive bids, focusing on partnerships that align with their strategic goals [34][36] Question: Organic growth and competitive environment - Management noted that while organic growth may slip towards the lower end of guidance, they are focused on maintaining margin improvement despite increased competition [44][46] Question: Deposit growth and funding loan growth - Management is optimistic about organic deposit growth, emphasizing a focus on non-interest-bearing accounts and relationship building [52][53] Question: Geographic expansion and target size for M&A - Management is open to expanding into contiguous states and is prepared to pursue larger transactions, although smaller deals may be more frequent due to market conditions [58][60]

Financial Data and Key Metrics Changes - The net interest margin (NIM) for Q4 2025 was 3.74%, an increase of 20 basis points from Q4 2024, while the full-year NIM was 3.69% compared to 3.57% in 2024 [4] - Return on average assets for Q4 2025 was 1.21%, up from 1.10% in Q4 2024, and return on tangible common equity improved to 12.58% from 11.82% [4] - Net income for Q4 2025 was $12.3 million, or 49 cents per diluted share, with total loans declining by $81 million from the end of Q3 2025 [11] Business Line Data and Key Metrics Changes - Small business loan performance was disappointing, with delinquency and charge-off levels exceeding acceptable limits, prompting changes in credit parameters [5] - Non-interest income increased by almost $2 million year-over-year, with gains from SBA loan sales higher in 2025, although residential mortgage sales remained muted [5][6] - The non-interest expense to average asset ratio improved to 1.97% for 2025 from 2.01% in 2024, reflecting effective expense management [6] Market Data and Key Metrics Changes - Deposit balances decreased by $21 million in Q4 2025, primarily due to a $27.1 million decline in broker deposits, but new customer acquisition was strong [11] - The bank's focus on relationship-based customers helped grow interest-bearing demand deposits by $47 million, or 33% annualized, compared to September 30 [19] - The lending pipeline at year-end stood at $284 million, with C&I loans making up 61% of the pipeline [27] Company Strategy and Development Direction - The company aims to close the gap with peers in cost of funds, increase non-interest income generation, and reduce non-interest expense to average asset ratio [10] - The strategy includes optimizing the deposit portfolio by lowering costs while deepening high-quality relationships [22] - The company is evolving into a middle-market commercial bank, focusing on profitability rather than growth for its own sake [22] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for 2026, expecting to achieve a $200 million net loan growth goal, driven by growth in asset-based lending and community banking [9] - The company anticipates stabilization of credit costs in the small business portfolio due to implemented changes [7] - Management noted that while there were challenges, overall credit quality in core CRE and community banking divisions remained strong [7] Other Important Information - The efficiency ratio improved to 49.46%, remaining below 60% for the 26th consecutive quarter, and tangible book value per share grew more than 12% annualized to $15.81 [17] - The company announced a 50% increase in its quarterly cash dividend, reflecting strong capital ratios [17] - A new share repurchase plan was approved for up to 1.2 million shares, totaling $20 million, although no buybacks were executed in Q4 [48] Q&A Session Summary Question: Discussion on loan growth outlook - Management acknowledged the unpredictability of payoffs but noted that high payoff activity was not indicative of broader macro conditions, expecting a return to strong growth [34][35] Question: Details on downgraded C&I credit - The downgraded loan was from a multi-location consumer-based business facing performance declines, with management closely monitoring the situation [41] Question: Thoughts on expense run rate - Management indicated a focus on keeping expense growth limited while driving revenue growth to improve efficiency ratios [42][45] Question: Status of share buyback plan - A new share buyback plan was approved, but no activity occurred in Q4 due to timing issues with regulatory approvals [46][48]

Financial Data and Key Metrics Changes - The company reported net income of $22.8 million, or $1.40 per diluted share, for Q4 2025, compared to $19.6 million, or $1.22 per diluted share, for Q4 2024, reflecting a year-over-year EPS growth rate of 11% [10][9] - For the full year 2025, net income totaled $88.8 million, or $5.47 per diluted share, compared to $79.6 million, or $4.93 per diluted share, for 2024 [10] - The return on average assets was 1.4% and return on average equity was 14.1% for 2025 [9] Business Line Data and Key Metrics Changes - Interest income on loans decreased by 26 basis points in Q4 2025 compared to Q4 2024, while average loans increased by $62 million to $4.63 billion [11] - Service charges on accounts increased by 19% during 2025, driven by growth in commercial deposit relationships [8] - Mortgage banking income grew by 6% compared to 2024, indicating a strong performance in the mortgage segment [8] Market Data and Key Metrics Changes - The loan-to-deposit ratio improved to 91% as of December 31, 2025, down from 98% a year earlier, indicating better liquidity management [5] - Average deposits increased by $302 million to $4.83 billion in Q4 2025 compared to Q4 2024 [12] Company Strategy and Development Direction - The acquisition of Eastern Michigan Bank was completed on December 31, 2025, aimed at enhancing deposit and loan growth while maintaining margin stability [4] - The company plans to continue focusing on deposit growth, with a compounded annual growth rate of 9.2% over the last five years [7] - The company is targeting loan growth in the range of 5%-7% for 2026, supported by a strong commercial loan pipeline [24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating challenges and uncertainties in the financial sector, emphasizing a strong capital position with a total risk-based capital ratio of 13.8% [23] - The company anticipates a stable net interest margin in 2026, despite potential fluctuations in the interest rate environment [25] - Management highlighted the importance of maintaining strong asset quality, with past due loans at low levels of 11 basis points of total loans [5] Other Important Information - Non-interest expenses increased by $2.9 million in Q4 2025 compared to the prior year, primarily due to higher salary and benefit costs [20] - The company did not repurchase shares during 2025 but has $6.8 million available in its current repurchase plan [24] Q&A Session Summary Question: Margin guidance and purchase accounting impact - Management confirmed that margin guidance includes the December rate cut and indicated a steady margin going into 2026, with purchase accounting contributing approximately $125,000 net per quarter [34] Question: Loan growth outlook - Management expects loan growth to remain in the 5%-7% range for 2026, supported by a strong backlog and anticipated stabilization of loan payoffs [64] Question: Capital management and buyback appetite - Management expressed a stronger appetite for buybacks moving forward, contingent on stock price and market conditions [66]

Financial Data and Key Metrics Changes - The company reported net income of $22.8 million, or $1.40 per diluted share, for Q4 2025, compared to $19.6 million, or $1.22 per diluted share, for Q4 2024, reflecting a year-over-year increase [10] - For the full year 2025, net income totaled $88.8 million, or $5.47 per diluted share, compared to $79.6 million, or $4.93 per diluted share, for 2024, indicating growth driven by increased net interest income and non-interest income [10] - The return on average assets was 1.4% and return on average equity was 14.1% for 2025, with an 11% year-over-year growth in EPS [9] Business Line Data and Key Metrics Changes - The loan-to-deposit ratio improved to 91% from 98% in 2024 and 110% in 2023, indicating better liquidity management [5] - The compounded annual growth rate for deposits over the last five years was 9.2%, while total loans grew at 8.6% [7] - Service charges on accounts increased by 19% in 2025, driven by growth in commercial deposit relationships [8] Market Data and Key Metrics Changes - The company maintained a strong asset quality with past due loans at 11 basis points of total loans and non-performing loans averaging 12 basis points over the last six years [5] - The allowance for credit losses stood at 1.21% of total loans as of December 31, 2025, providing strong coverage relative to past due and non-performing loans [5] Company Strategy and Development Direction - The acquisition of Eastern Michigan Bank was completed on December 31, 2025, aligning with the company's strategic objectives for deposit and loan growth [4] - The company aims to maintain a stable net interest margin through effective balance sheet management and match-funding practices [16] - Future loan growth is projected to be in the mid-single digits, with a strong commercial loan pipeline expected to support this growth [24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating challenges and uncertainties in the financial sector, highlighting a strong capital position with a total risk-based capital ratio of 13.8% [23] - The company anticipates a stable net interest margin in 2026, despite potential fluctuations in the interest rate environment [24] - Management noted that the integration of Eastern Michigan Bank is progressing well, with positive cultural alignment observed [9] Other Important Information - Non-interest expenses increased by $2.9 million and $10.2 million in Q4 and all of 2025, primarily due to higher salary and benefit costs [20] - The company did not repurchase shares in 2025 but has $6.8 million available in its current repurchase plan [24] Q&A Session Summary Question: Margin guidance and purchase accounting impact - Management confirmed that the December rate cut is included in margin guidance, with purchase accounting contributing approximately $125,000 net per quarter [34] Question: Loan growth expectations - Management expects loan growth to remain in the 5%-7% range, with commercial loans projected to grow at 6%-7% [38] Question: Impact of Eastern Michigan Bank on liquidity and margin - Management indicated that not all excess liquidity from Eastern will be utilized immediately, but it will contribute positively to the loan-to-deposit ratio over time [44] Question: Capital management and buyback appetite - Management expressed a stronger appetite for buybacks moving forward, contingent on stock price and market conditions [66] Question: Cost savings from Eastern acquisition - Management stated that significant cost savings from the Eastern acquisition are expected to materialize in 2027, with current investments focused on growth [52]

Financial Data and Key Metrics Changes - The company reported net income of $22.8 million, or $1.40 per diluted share, for Q4 2025, compared to $19.6 million, or $1.22 per diluted share, for Q4 2024, reflecting a year-over-year increase [9] - For the full year 2025, net income totaled $88.8 million, or $5.47 per diluted share, compared to $79.6 million, or $4.93 per diluted share, for 2024, indicating growth driven by increased net interest income and non-interest income [9] - The return on average assets was 1.4% and return on average equity was 14.1% for 2025, with an 11% increase in tangible book value per share over the last four quarters [8] Business Line Data and Key Metrics Changes - The loan-to-deposit ratio improved to 91% from 98% in Q4 2024 and 110% in Q4 2023, supported by a deposit mix that includes 25% non-interest-bearing deposits [5] - Service charges on accounts increased by 19% in 2025, driven by growth in commercial deposit relationships [7] - Mortgage banking income grew by 6% compared to 2024, reflecting market share gains and a high portion of saleable loans [7] Market Data and Key Metrics Changes - Average loans totaled $4.63 billion in Q4 2025, an increase of $62 million from Q4 2024, while average deposits grew by $302 million to $4.83 billion during the same period [10][11] - The company expects loan growth in 2026 to fall within the range of mid-single digits, with a strong commercial loan pipeline [22] Company Strategy and Development Direction - The acquisition of Eastern Michigan Bank was completed on December 31, 2025, aligning with the company's strategic objectives for deposit and loan growth [4] - The company aims to maintain a stable net interest margin through effective balance sheet management and match-funding practices [15] - There is a focus on expanding operations in Southeast Michigan, with plans to add more lending teams to capitalize on market opportunities [32] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating challenges and uncertainties in the financial sector, highlighting a strong capital position with a total risk-based capital ratio of 13.8% [21] - The company anticipates a stable net interest margin in 2026, projecting loan growth of 5%-7% annually, supported by a robust commercial loan pipeline [22][23] - Management noted that the integration of Eastern Michigan Bank is progressing well, with positive cultural alignment observed [8] Other Important Information - The company recorded a negative provision expense of $0.7 million in Q4 2025, reflecting an improved economic forecast and changes in loan mix [17] - Federal income tax expense was reduced by $0.4 million in Q4 2025, largely due to the acquisition of transferable energy tax credits [20] Q&A Session Summary Question: Margin guidance clarification - Management confirmed that the December rate cut is included in the margin guidance, with expectations for a stable margin going into 2026 [25][26] Question: Loan growth outlook - Management expressed optimism for 5%-7% loan growth in 2026, citing a historically high backlog and expectations for payoffs to stabilize [40] Question: Capital management and buyback appetite - Management indicated a stronger appetite for buybacks moving forward, contingent on stock price and market conditions [42] Question: Impact of Eastern Michigan Bank on liquidity and margin - Management noted that not all excess liquidity from Eastern will be utilized immediately, with a gradual increase in the loan-to-deposit ratio expected [30] Question: Cost savings from Eastern acquisition - Management stated that significant cost savings from the Eastern acquisition are anticipated to materialize in 2027, with current investments focused on personnel and market expansion [33][46]

Core Insights - Columbia Banking System (COLB) is positioning itself for growth through its 2026 plan, focusing on margin, cost, capital, and fee income following the completion of the Pacific Premier deal in August [1] Current Position of Columbia Banking System - COLB's network now includes approximately 350 branches across eight Western states, with total deposits of $55.8 billion, loans and leases of $48.5 billion, and total assets of $67.5 billion as of September 30, 2025 [2] Margin and Interest Income - COLB's net interest margin (NIM) improved to 3.84% in Q3 2025 from 3.56% a year earlier, with expectations of NIM reaching approximately 3.90% in Q4 2025 and Q1 2026 [3] - A shift in deposit mix towards core customers and proactive repricing is expected to stabilize core net interest income (NII) into early 2026 [4] Fee Income Growth - Fee income from treasury management, commercial cards, and wealth/financial services has grown, with these services nearing 30% of non-interest income as of September 30, 2025 [5] - New platforms from the Pacific Premier acquisition are anticipated to enhance fee income through deeper customer relationships [5] Cost Management - Management aims for $127 million in annualized cost savings from the merger, with $48 million already realized by September 30, 2025 [6] - Operating expenses are projected to be between $330 million and $340 million per quarter for several quarters, with a full system conversion planned for Q1 2026 [6] Capital Position - Columbia Banking System's capital ratios improved, with a Common Equity Tier 1 (CET1) ratio of 11.6% and a total risk-based ratio of 13.4% as of Q3 2025 [7] - The board has authorized up to $700 million in share repurchases through November [7] Future Outlook for 2026 - Management anticipates a high-teens operating Return on Tangible Common Equity (ROTCE) framework for 2026, with earnings per share expected to cluster in the low $3s [10] - Execution will depend on successful integration and a shift in loan focus towards relationship-based lending [11] Integration and Cost Dynamics - Integration and restructuring costs may lead to volatility in near-term expenses until synergies are fully realized [12] - The company's office exposure was 8% of loans as of September 30, 2025, with non-performing assets increasing to nearly $200 million [12] Competitive Landscape - Competitive pricing pressures from larger banks and digital competitors could impact COLB's deposit costs, although management is actively working to defend core funding [13]

Financial Data and Key Metrics Changes - The company reported net earnings of $6.8 million and earnings per share of $0.28 for the third quarter, compared to core income of $2 million and $0.08 per share in the same quarter of 2024 [4] - Return on Assets (ROA) improved to 70 basis points, and Return on Tangible Common Equity (ROTCE) improved to 9.45% [4] - Core ROA adjusted for certain non-permanent items is closer to 90 basis points, aligning with the target of 1% ROA [5] - Net interest margin for the third quarter was 3.18%, up from 2.86% in the previous quarter and 2.97% in the same period last year [19] Business Line Data and Key Metrics Changes - The mortgage division's production increased from approximately $20 million per month to $100-$120 million per month, with pre-tax earnings of about $1.9 million for the quarter [10] - The Mortgage Warehouse division showed average balances of $210 million, ending balances of $327 million, and pre-tax earnings of about $1.6 million [11] - Panacea Financial Division's loan balances increased to $530 million, with deposits growing to $132 million, a 50% increase year-over-year [12] Market Data and Key Metrics Changes - Non-interest-bearing checking accounts grew by about 16% compared to a year ago, improving the deposit mix and reducing the cost of deposits by almost 20% [7] - Average earning assets increased by 10% annualized in the third quarter, positioning the company to replace earning assets sold a year ago [18] - Non-interest income was $12 million in the quarter, up from $10.6 million in the previous quarter, driven primarily by increased mortgage revenue [21] Company Strategy and Development Direction - The company is focused on increasing the proportion of non-interest-bearing deposits to around 20% of total deposits, which is currently about 20% in the core bank [34] - The strategy emphasizes core funding through checking accounts rather than relying on brokered CDs or institutional borrowings [42] - The company aims to maintain a competitive edge by driving checking account growth at rates better than 10% [42] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving a 1% ROA target, citing strong margins and a favorable deposit mix [5][23] - The company anticipates continued growth in profitability with minimal operating expense increases, despite inflationary pressures [22] - Management noted that the current quarter's results reflect a trend towards improved profitability, with fewer one-time items affecting core earnings [23] Other Important Information - The company has a pipeline of new opportunities in the Mortgage Warehouse division, with over $1 billion of uncommitted lines approved [11] - The company is actively managing credit quality, with a focus on resolving non-accrual loans and maintaining strong debt coverage ratios [15][50] Q&A Session Summary Question: Thoughts on overall loan growth for the fourth quarter and into 2026 - Management indicated potential runoff in the Mortgage Warehouse division but expressed confidence in sustaining levels and achieving 6-8% growth in the core bank [30][31] Question: Timing for reaching a 3.30% margin - Management expects to reach a 3.30% margin by the first quarter of next year, focusing on increasing non-interest-bearing deposits [32][34] Question: Impact of interest rates on deposit costs - Management noted that while competition may drive rates down, their growth in checking accounts allows for competitive positioning on deposit rates [41][42] Question: Evidence of customer stickiness in digital banking - Management confirmed that digital customers are stickier than expected, with over 90% having multiple accounts or referrals [43][44] Question: Resolution of asset quality issues - Management indicated that some loans may be resolved in the near term, potentially improving margins [49][50]

Core Viewpoint - Landsbankinn reported strong performance in the first nine months of 2025, with significant growth in young customer engagement and a solid financial standing despite a challenging economic environment [1][5]. Financial Performance - After-tax profit for the first nine months of 2025 was ISK 29.5 billion, with ISK 11.1 billion earned in the third quarter [5]. - Return on equity (ROE) increased to 12.2%, up from 11.7% in the same period last year [5]. - The net interest margin was 2.9% of average total assets, with net interest income at ISK 49.4 billion and net fee and commission income at ISK 9.2 billion [5]. - The cost-income ratio was 33.2%, slightly higher than 32.3% for the same period in 2024 [5]. - The total capital ratio stood at 24.0%, exceeding the Financial Supervisory Authority's requirement of 20.4% [5]. Customer Engagement - Young customers aged 18-24 trading in Landsbréf funds increased by 45% compared to the previous year [5]. - There was a 31% growth in young customers entrusting the Bank with their supplementary pension savings [5]. Corporate Actions - Landsbankinn sold properties at Austurstræti 11 and connected buildings for ISK 2.85 billion, marking a significant milestone in the Bank's history [3][5]. - The Bank has reduced its square meter footprint by approximately 40% in recent years [3]. Market Position - Landsbankinn remains the largest lender in the housing loan market, focusing on competitive terms for housing mortgages [2]. - The Bank is reviewing terms on variable interest rates for new housing mortgage loans following a Supreme Court ruling [2].

Financial Data and Key Metrics Changes - Operating net income increased by $252,000 from the prior quarter, attributed to higher net interest income and operating non-interest income, offset by increased provision and operating non-interest expenses [14] - Net interest income rose by $314,000 compared to the prior quarter, driven by continued asset repricing and loan growth [14] - Net interest margin increased by five basis points from the prior quarter, with expectations for further growth due to the Fed rate cuts [15][14] - Tangible book value per share increased to $14.20 from $12.76 a year ago, reflecting consistent growth in tangible capital [23] Business Line Data and Key Metrics Changes - Non-interest income increased over $1 million from the prior quarter, with significant contributions from service charge and fee income, as well as interchange income [6][16] - Mortgage and government-guaranteed lending (SBSL) activity slowed, with mortgage production down slightly compared to the second quarter [23] - Pre-tax income for both merchant services and Colony Wealth Advisors increased significantly from the prior quarter, indicating strong performance in these business lines [24] Market Data and Key Metrics Changes - Loan growth for the quarter was around 9% annualized, lower than the first and second quarters, but still around a 14% annualized growth rate for the year [5] - Total deposits increased by $28.1 million during the quarter, reflecting strategic use of brokered funding [21] Company Strategy and Development Direction - The company is focused on strategic investments for future growth while maintaining margin improvement [5] - The pending merger with TC Bancshares, Inc. and TC Federal Bank is progressing as planned, with expectations for closure in the fourth quarter [9][10] - The company is optimistic about future M&A opportunities and is actively seeking strategic fits [10][11] Management's Comments on Operating Environment and Future Outlook - Management does not foresee a material impact from the government shutdown on the business or credit quality, although they are monitoring the situation closely [8][28] - The company expects loan growth to moderate but remain within the long-term target of 8% to 12% annually [5][6] - Management expressed confidence in balancing cost control with strategic investments for long-term growth [17] Other Important Information - Operating expenses increased by $624,000 quarter over quarter due to investments in talent and growth initiatives [16] - A wire fraud incident resulted in a recognized loss of $1.25 million related to disputed insurance coverage [18] Q&A Session Summary Question: Given the disruption in D.C., are there any impacts on borrowers and the local economy? - Management does not see a significant impact at this time and has provided resources to customers to mitigate potential issues [28] Question: What is the average roll-on versus roll-rate this quarter, and how does the NIM outlook look? - The roll-off yields were in the 5% range, with a new and renewed rate of 7.83% for the quarter, indicating potential for net interest margin growth [29][30] Question: Is there any NDFI loan exposure? - Management confirmed there is no meaningful exposure to NDFI loans, focusing instead on relationship-based lending [31]