Financial Data and Key Metrics Changes - The company reported a quarterly revenue increase of 21% year-over-year, with net interest income growing by 30% year-over-year [4][20] - Adjusted total revenue for the fourth quarter was $42.1 million, reflecting a 21% increase over the same period in 2024 [20] - Net income for the fourth quarter was $5.3 million, or $0.60 per diluted share, with adjusted net income at $5.6 million, or $0.64 per diluted share [20][21] Business Line Data and Key Metrics Changes - The banking-as-a-service (BaaS) initiatives generated over $1.3 billion in new deposits for 2025, more than tripling the amount from the prior year [6] - The SBA business maintained its position as a top 10 SBA 7(a) lender with nearly $580 million in funded originations during 2025 [7] - The company processed over $165 billion in payments volume, an increase of over 225% from 2024 [6] Market Data and Key Metrics Changes - Total loans as of December 31, 2025, were $3.7 billion, an increase of $143 million or 4% compared to the linked quarter [25] - Total deposits as of December 31, 2025, were $4.8 billion, representing a decrease of $76 million, or 2%, compared to September 30, 2025 [25] Company Strategy and Development Direction - The company is focusing on a digital-first banking model, emphasizing operational efficiency and disciplined expense management [4][10] - A strategic sale of approximately $850 million in single-tenant lease financing loans was completed to strengthen capital position and enhance rate risk profile [6] - The company plans to prioritize credit quality over volume in its SBA production, anticipating a more measured approach in 2026 [12][13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to deliver strong financial performance while building long-term shareholder value through disciplined execution of strategic priorities [10][30] - The company expects continued loan growth in the range of 15%-17% for 2026, driven by strong pipelines across commercial lending verticals [27] - A higher provision for credit losses is anticipated for 2026 to address problem loans, with expectations for gradual credit improvement in the second half of the year [9][29] Other Important Information - The company recognized a provision for credit losses of $12 million in the fourth quarter, with non-performing loans increasing to $58.5 million [23][24] - The company executed a share buyback program, purchasing 27,998 shares at an average price of $18.64 per share [8] Q&A Session Summary Question: What is the expected impact of SBA loans on the balance sheet? - Management indicated that they expect to retain a greater percentage of guaranteed originations on the balance sheet, priced at prime plus 1.5 [41] Question: What are the expectations for deposit repricing? - Management expects continued decreases in deposit costs throughout the year, particularly benefiting from maturing CDs [40] Question: What is the outlook for net charge-offs and provisions? - Management expects that about half of the provision for credit losses will be related to charge-offs, with expectations for elevated levels in the first half of the year [60][61]