Financial Data and Key Metrics Changes - The company reported a return on average assets of 1.20%, up from 1.04% in the third quarter, and a return on average common equity of 11.27%, an increase from 10.14% [7] - The efficiency ratio improved to 55.5 from 58.1 in the third quarter and 61.8 a year ago [7] - Reported net income for the fourth quarter was $209.5 million or $2.74 per share, a 16.1% increase from the third quarter [7] - For the full year, net income was $684.6 million or $9.29 per share [8] Business Line Data and Key Metrics Changes - Fourth quarter net interest income totaled $522.5 million, a 10% increase from the third quarter, driven by double-digit growth in loans and demand deposit accounts (DDAs) [8] - Trust and securities processing income increased by $4.5 million or 5.1% linked-quarter, driven by new business activities from fund services and private wealth teams [9] - Total non-interest income was impacted by market-related variances, with a decrease in fee income of $11.2 million from the third quarter [18] Market Data and Key Metrics Changes - The company experienced a 13% linked-quarter annualized growth in average loans and a 5.6% growth in average deposits [9] - Quarterly top-line loan production reached $2.6 billion, with commercial and industrial (C&I) loans showing a 27% annualized growth over the third-quarter average balances [9] - Total non-performing loans were $145 million, or 37 basis points of loans, with total criticized loan levels improving by 9.1% from the prior quarter [10] Company Strategy and Development Direction - The company aims to prioritize organic growth, stating that it does not need to pursue mergers and acquisitions (M&A) to generate assets [12] - The management expressed confidence in capitalizing on opportunities in newly acquired markets and expanding in existing markets [13] - The company is cautious about M&A, indicating a preference for tuck-in acquisitions that make financial and strategic sense [14][15] Management's Comments on Operating Environment and Future Outlook - Management remains optimistic about maintaining strong asset quality metrics and expects trends of loan growth to continue [10][13] - The company anticipates achieving positive operating leverage in 2026, despite expected lower contractual purchase accounting accretion benefits [21] - The effective tax rate for the fourth quarter was 20.3%, with expectations for 2026 to be between 20%-22% [25][26] Other Important Information - The company reported $39.7 million in acquisition expenses for the fourth quarter, compared to $35.6 million in the previous quarter [8] - The net interest margin for the fourth quarter was reported at 3.29%, with a core margin of 2.96%, increasing 18 basis points sequentially [21][22] - The company has a common equity Tier One ratio of 10.96%, a 26 basis point increase from September [12] Q&A Session Summary Question: Can you provide more detail on the drivers of commercial loan growth in the quarter? - Management noted strong performance across all markets and verticals, with 50% of growth coming from new customer acquisition and market share gains [33] Question: Can you touch on the NPL increase and the timeline for working through acquired credits? - Management indicated the increase was specific to one fully secured credit and expressed confidence in maintaining historical charge-off norms [36] Question: How should we think about average DDA growth quarter over quarter? - Management expects a slight pickup in DDA growth, driven by new client acquisitions and seasonal trends [44] Question: Can you discuss potential revenue synergies from the Heartland acquisition? - Management highlighted opportunities in mortgage products, credit cards, and corporate trust business as key areas for revenue synergies [79] Question: What are the lessons learned from the Heartland acquisition? - Management emphasized the importance of culture and maintaining control over the integration process, noting the transaction went exceptionally well [96][101]

Financial Data and Key Metrics Changes - The company reported a return on average assets of 1.20%, up from 1.04% in the third quarter, and a return on average common equity of 11.27%, an increase from 10.14% [5] - The efficiency ratio improved to 55.5 from 58.1 in the third quarter and 61.8 a year ago [5] - Reported net income for the fourth quarter was $209.5 million or $2.74 per share, a 16.1% increase from the third quarter [5] - For the full year, net income was $684.6 million or $9.29 per share [6] Business Line Data and Key Metrics Changes - Fourth quarter net interest income totaled $522.5 million, a 10% increase from the third quarter, driven by double-digit growth in loans and demand deposit accounts (DDAs) [6] - Trust and securities processing income increased by $4.5 million or 5.1% linked-quarter, driven by new business activities from fund services and private wealth teams [7] - The company experienced a 13% linked-quarter annualized growth in average loans and a 5.6% growth in average deposits [7] Market Data and Key Metrics Changes - The company reported a 3.9% rate of net payoffs and pay downs as a percentage of total loans [9] - Total non-performing loans were $145 million, or 37 basis points of loans, with total criticized loan levels improving by 9.1% from the prior quarter [9] - Industry-wide non-performing loans for banks reported so far were a median of 55 basis points [9] Company Strategy and Development Direction - The company aims to focus on organic growth as its top capital priority, while also being open to tuck-in acquisitions that make financial and strategic sense [12] - The management emphasized the importance of maintaining strong asset quality metrics while continuing to build capital [11] - The company is excited about opportunities in newly acquired markets and plans to capitalize on these in 2026 [13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to generate assets organically and take market share ahead of peers [11] - The company expects trends of loan growth to continue, especially in newly acquired markets [12] - Management remains cautious about M&A, focusing instead on organic growth and maintaining the company's culture and business model [12] Other Important Information - The effective tax rate was 20.3% for the fourth quarter and 19.7% for the full year, with expectations for 2026 to be between 20%-22% [24][25] - The company reported a net interest margin of 3.29%, with a core margin of 2.96%, increasing 18 basis points sequentially [20] Q&A Session Summary Question: Can you provide more detail on the drivers of commercial loan growth in the quarter? - Management noted that growth comes from new customer acquisition and market share gains, with strong performance across all markets and verticals [31] Question: Can you touch on the NPL increase and timeline for working through acquired credits? - Management indicated that the increase was specific to one fully secured credit and expressed confidence in maintaining historical charge-off norms [36] Question: How should we think about average DDA growth quarter over quarter? - Management expects a slight pickup in DDA growth, driven by new client acquisitions and seasonal inflows [42] Question: Are all cost savings realized, and where are incremental dollars being invested? - Management confirmed that all identified cost savings have been realized and emphasized disciplined investment in sales activities [55] Question: Can you discuss potential revenue synergies from the Heartland acquisition? - Management highlighted opportunities in mortgage products, credit cards, and corporate trust business as key areas for revenue synergies [78] Question: What are the expectations for loan and deposit growth? - Management stated that they focus on building a strong deposit base and expect exceptional growth in both loans and deposits without specific guidance on loan-to-deposit ratios [117]

Goldman Sachs raised the firm’s price target on American Express (AXP) to $420 from $400 and keeps a Buy rating on the shares. Regional banks underperformed the market by 200-300 basis points in 2025, weighed by macro concerns and credit worries, though stocks rallied 13% late in the year, the analyst tells investors in a research note. Looking to 2026, solid loan growth, net interest income momentum, positive operating leverage, and improving returns support continued multi-year fundamental improvement, w ...