Financial Data and Key Metrics Changes - The company reported net earnings of $83 million or $0.64 per share for the fourth quarter, with an annualized return on average assets of 1.34% and an adjusted return on average tangible common equity of 17.6% [3][10] - Pre-provision net revenue reached a record $111 million, representing an ROA of 1.78%, and revenue increased to a record $226 million, driven by record net interest income of $197 million and non-interest income of $28.3 million [3][10][14] - Average earning assets increased by $307 million or an annualized 5.4%, while the average yield on assets decreased by 10 basis points to 5.66% [11] Business Line Data and Key Metrics Changes - The commercial loan team generated total new loan production of $3.2 billion in 2025, with net commercial loan growth of 5.5% for the year [4] - Non-interest income increased to $28.3 million, with significant contributions from the insurance agency and SBA loan sales [7][8][14] - The average cost of total deposits decreased by four basis points to 2.1%, while total deposits increased by $182 million for the quarter, or an annualized 3.8% [13] Market Data and Key Metrics Changes - The company experienced favorable trends in both commercial and consumer segments, contributing to a 2% annualized growth in average non-interest-bearing deposits [5] - Non-performing assets improved to 0.32%, with a decline of $22 million or 22% [13] - The company maintains a strong position in the CRE market, with a healthy outlook despite some concerns regarding rent-controlled properties in New York [41][42] Company Strategy and Development Direction - The company plans to continue investing in revenue-producing talent across various platforms, including middle market banking, treasury management, and wealth management [8][72] - A core system conversion is scheduled for Labor Day weekend of 2026, aimed at enhancing scalability and digital capabilities [9][84] - The company is focused on organic growth as its primary strategy, with potential for future dividend considerations and stock buybacks [24][25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustaining growth momentum and improving profitability, with expectations for loans and deposits to grow in the 4%-6% range in 2026 [17] - The competitive landscape for deposits remains challenging, but the company believes it can maintain its market share through effective strategies [35] - Management noted that the CRE market is showing signs of health, with a positive outlook for 2026 [40][41] Other Important Information - The company announced a new share repurchase authorization allowing for the buyback of an additional 2 million shares [8] - The effective tax rate is projected to be approximately 29% for 2026, influenced by tax credit investments [17][22] Q&A Session Summary Question: Inquiry about the effective tax rate and tax credit investments - Management clarified that the $54 million tax credit investments will reduce the effective tax rate in 2026, with benefits spread throughout the year [22][23] Question: Priorities for deploying excess capital - Management indicated that organic growth remains the primary focus, with potential for dividend adjustments and stock buybacks as secondary options [24][25][26] Question: Competition in deposit markets - Management acknowledged heightened competition but emphasized their ability to grow deposits effectively [35] Question: Trends in the CRE market - Management noted a healthier CRE market and expressed no interest in acquiring portfolios from competitors, focusing instead on organic growth [40] Question: Potential for loan yield increases - Management indicated that there is potential for slight improvements in loan yields due to repricing [45] Question: Plans for geographic expansion - Management confirmed interest in expanding into adjacent markets, including Long Island and the Philly suburbs [50] Question: Core systems conversion details - Management provided details on the timeline and expected benefits of the core systems conversion scheduled for 2026 [84]

Financial Data and Key Metrics Changes - The company reported net earnings of $4.85 million, or $0.37 per share for the quarter, with core earnings of $6.29 million, or $0.48 per share excluding merger-related charges [4][11] - The annualized adjusted return on average assets was 1.05%, and the adjusted return on average tangible equity was 15.39% [5][11] - The tangible book value per share grew by $0.34 to $14.71, and the tangible common equity ratio remained at 7.67% [5][11] - The average cost of total deposits decreased by 11 basis points to 2.25%, while the total cost of funds decreased by 14 basis points to 2.48% [6][14] Business Line Data and Key Metrics Changes - The commercial lending team closed approximately $7.13 million in new commercial loans, with a modest growth in the portfolio due to $3.28 million in loan payoffs [7][9] - The production consisted of 53% commercial real estate and 47% commercial and industrial loans, with half of the C&I production from the specialty lending group [7] - Non-interest income decreased to $24 million, primarily due to fewer BOLI benefit claims and seasonal reductions in insurance agency income [15] Market Data and Key Metrics Changes - Deposits grew by $148 million, or an annualized 5.4%, driven by municipal and consumer non-interest bearing and money market balances [13][14] - The non-performing loan ratio decreased by 8 basis points to 39 basis points, which is favorable compared to peers [8][14] - The total loan pipeline decreased to approximately $180 million from $2 billion in the preceding quarter, with a weighted average interest rate of 6.91% [9] Company Strategy and Development Direction - The company aims to build on its culture and team dynamics post-merger, focusing on growth across all sectors, particularly in commercial banking and treasury management [27][28] - The addition of Bill Fink as Chief Lending Officer is expected to enhance the commercial lending growth strategy [7][43] - The company is optimistic about its operating environment and plans to deepen market share across various channels [27][28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to build on solid core performance and profitability, citing excellent asset quality and good deposit growth [4][11] - The company anticipates a net interest margin (NIM) in the range of 3.35% to 3.45% for 2025, factoring in two additional 25 basis point rate reductions [12] - Management noted that all merger-related charges have been recognized, with no further expenses expected in 2025 [11] Other Important Information - The effective tax rate for the quarter fell to 22.6% due to a benefit from the revaluation of deferred tax assets, with an expected effective tax rate of approximately 29.5% for 2025 [16] - The company reclassified $15.13 million of non-relationship equipment lease loans to held for sale, impacting total loans [13] Q&A Session Summary Question: How will the company achieve the $26 million fee projection despite seasonal declines in insurance revenues? - Management indicated that the fee projection is an average over the year, with expected seasonal improvements and contributions from volatile items like loan sales and swap fee income [20][21] Question: What are the key drivers for the expense outlook? - Management noted that typical seasonality and additional investments in core operating expenses would drive the expense outlook, with a range of $112 million to $115 million projected for 2025 [49][50] Question: What is the company's strategy for loan growth? - Management acknowledged elevated payoff activity but expressed confidence in the foundation for growth, citing strong leadership and market strategies [36][41] Question: Can the company provide clarity on the NIM range? - Management stated that the shape of the yield curve is a significant driver for NIM, with expectations for continued efficiency and growth impacting overall returns [76]