Financial Data and Key Metrics Changes - The company ended 2025 with a tangible book value per share growth of 10% and a CET1 capital ratio of 14.89% [5] - For the fourth quarter, net income was $22.7 million or $0.60 per diluted share, while the full year adjusted net income was $117.6 million or $3.06 per diluted share [9] - The net interest margin for the full year was 3.94%, with a fourth quarter margin of 3.97% [8][11] Business Line Data and Key Metrics Changes - The company originated $591 million in total loans during the fourth quarter, with $429 million coming from commercial loan originations, marking a record for the company [24] - The loan portfolio is projected to grow approximately 10% in 2026, starting with a combined portfolio of about $9.4 billion [10] - Non-interest income for the fourth quarter was $14.4 million, while full-year non-interest income is projected to be between $75 million and $80 million for 2026 [12][13] Market Data and Key Metrics Changes - The non-performing asset ratio improved by 11 basis points to 36 basis points of total loans by the end of 2025 [11] - The criticized loan ratio improved by 73 basis points during the year, indicating better asset quality [11] Company Strategy and Development Direction - The company aims to focus on profitable growth following the Vista Bank acquisition, which is expected to enhance service offerings and market presence [6][19] - The strategy includes expanding services such as wealth management and trust services, and enhancing treasury management offerings [19] - The company is optimistic about growth opportunities in Texas and various resort markets, which are becoming primary residences for wealthy clients [20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in entering 2026 with a clean slate and a focus on growth, despite a noisy fourth quarter due to one-time costs [6][9] - The company anticipates earnings exceeding $1 per share in the fourth quarter of 2026 and full-year earnings exceeding $4 per share in 2027 [17] - Management highlighted the importance of maintaining strong credit quality and a disciplined approach to loan origination [25][84] Other Important Information - The company expects to incur one-time expenses related to the acquisition and rebranding, with a projected non-interest expense of $320 million to $330 million for 2026 [13][15] - The effective tax rate for 2026 is expected to be around 20% due to the integration of Vista and changes in income mix [16] Q&A Session Summary Question: Confirmation of loan growth and margin expectations - Management confirmed a projected 10% loan growth in 2026, a margin near 4%, and earnings expectations of over $1 in Q4 2026 and over $4 in 2027 [37] Question: 2UniFi revenue and expense guidance - Management projected $2 million to $4 million in 2UniFi revenue for 2026, with expenses held flat at $22 million [39][55] Question: Credit quality and charge-offs - Management addressed that the decision to charge off certain loans was made to ensure a clean slate for 2026, emphasizing a proactive approach to problem loans [43] Question: Growth drivers for 2026 - Management indicated that growth would be driven by strong production in all markets, particularly Texas and resort areas, with confidence in achieving targets [46][49] Question: Partnership developments for 2UniFi - Management acknowledged delays in finalizing a partnership for 2UniFi but emphasized a strong focus on client activation and scaling the business [66] Question: Share buyback appetite - Management expressed strong interest in share buybacks, having announced a $100 million buyback authorization [72]

Financial Data and Key Metrics Changes - The company reported a 10% growth in tangible book value per share and a CET1 capital ratio of 14.89% for the end of 2025 [5][9] - The net interest margin for the fourth quarter was 3.97%, with a full-year net interest margin of 3.94% [7][8] - Fourth quarter net income, excluding one-time items, was $22.7 million or $0.60 per diluted share, while full-year adjusted net income was $117.6 million or $3.06 per diluted share [9][12] Business Line Data and Key Metrics Changes - The company originated $591 million in total loans during the fourth quarter, with $429 million coming from commercial loan originations, marking a record for the company [24] - The commercial loan portfolio grew nearly 8% annualized, while there was a decline in commercial real estate loan balances due to accelerated payoffs [24][25] - The company expects loan growth of approximately 10% in 2026, starting with a combined loan portfolio of about $9.4 billion [10][37] Market Data and Key Metrics Changes - The non-performing asset ratio improved by 11 basis points to 36 basis points of total loans by the end of 2025 [11] - The criticized loan ratio improved by 73 basis points during the year, indicating better asset quality [12] - The company is focusing on expanding its presence in Texas and resort markets, which are expected to drive growth [20][49] Company Strategy and Development Direction - The company aims to enter 2026 with a clean slate and a focus on profitable growth following the Vista Bank acquisition [6][10] - The strategy includes enhancing service offerings such as wealth management and trust services, and expanding mortgage products [19] - The company is committed to maintaining a loan-to-deposit ratio of approximately 90% and holding about 15% of total assets in cash and investments [10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, projecting earnings exceeding $1 per share in Q4 2026 and over $4 per share in 2027 [17] - The management acknowledged challenges in 2025 but emphasized a strong focus on credit quality and prudent growth strategies for 2026 [43][80] - The integration of Vista Bank is expected to enhance the company's growth profile and market presence [19][21] Other Important Information - The company incurred $4.1 million in after-tax acquisition costs and a $2.6 million after-tax loss on the strategic sale of investment securities in Q4 2025 [8][12] - Non-interest income for the fourth quarter was $14.4 million, with projections for total non-interest income in 2026 to be between $75 million and $80 million [13] - The effective tax rate for 2025 was 18%, with an expected increase to approximately 20% for 2026 due to changes in income mix [16] Q&A Session Summary Question: Confirmation of loan growth and margin guidance - Management confirmed a projected 10% loan growth in 2026, a margin near 4%, and earnings over $1 in Q4 2026 and over $4 in 2027 [37] Question: 2UniFi revenue and expense guidance - The projected revenue for 2UniFi in 2026 is $2 million to $4 million, with expenses held flat at $22 million [39][55] Question: Credit quality and charge-offs - Management addressed that the charge-offs were due to a few problem loans and emphasized a clean slate for 2026 [43][80] Question: Growth drivers in Texas and resort markets - Management highlighted strong loan production and growth potential in Texas and resort markets, supported by the Vista acquisition [46][49] Question: Margin performance and interest reversals - Management clarified that there were no interest reversals in Q4 and that the margin was managed well despite rate cuts [52][53] Question: Partnership developments for 2UniFi - Management acknowledged delays in partnership discussions but emphasized a strong focus on client activation and scaling the business [66][67]

Financial Data and Key Metrics Changes - The company reported a 10% growth in tangible book value per share and a CET1 capital ratio of 14.89% for the year [4] - The net interest income margin for the fourth quarter was 3.97%, with a full-year net interest margin of 3.94% [6][10] - Fourth quarter net income was $22.7 million, or $0.60 per diluted share, while full-year adjusted net income totaled $117.6 million, or $3.06 per diluted share [7][8] Business Line Data and Key Metrics Changes - The company originated $591 million in total loans during the fourth quarter, with $429 million coming from commercial loan originations, marking a record for the company [22] - The loan portfolio at the end of the year was approximately $9.4 billion, with projected loan growth of about 10% for 2026 [9] - Non-interest income for the fourth quarter was $14.4 million, while full-year non-interest income is projected to be between $75 million and $80 million for 2026 [12] Market Data and Key Metrics Changes - The non-performing asset ratio improved by 11 basis points to 36 basis points of total loans by year-end [10] - The criticized loan ratio improved by 73 basis points during the year [10] - The company expects to maintain a loan-to-deposit ratio of approximately 90% [9] Company Strategy and Development Direction - The company aims to focus on profitable growth following the acquisition of Vista Bank, which is expected to enhance its service offerings and market presence [5][18] - The strategic sale of securities and addressing problem loans were part of the company's efforts to enter 2026 with a clean slate [5] - The company is committed to expanding its services, including wealth management and enhanced treasury management offerings [18] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about entering 2026 with strong growth potential, driven by the Vista acquisition and a focus on client activation [25][26] - The company anticipates a strong economic environment in Texas and various resort markets, which are expected to provide growth opportunities [19] - Management expects to deliver earnings exceeding $1 per share in the fourth quarter of 2026 and full-year earnings exceeding $4 per share in 2027 [15] Other Important Information - The company completed the initial phase of its 2UniFi project, which aims to revolutionize small business banking [27][29] - The effective tax rate for 2025 was 18%, with an expected increase to approximately 20% for 2026 due to the integration of Vista [14] - The company plans to hold 15% of total assets in cash and investments [9] Q&A Session Summary Question: Confirmation of loan growth and margin expectations - Management confirmed a projected 10% loan growth in 2026, a margin near 4%, and earnings over $1 in the fourth quarter of 2026 [35] Question: 2UniFi revenue and expense guidance - Management projected $2 million to $4 million in 2UniFi revenue for 2026, with expenses held flat at $22 million [36] Question: Credit quality and charge-offs - Management addressed that the charge-offs were due to specific problem loans and expressed confidence in improving credit metrics in 2026 [41] Question: Growth drivers for 2026 - Management indicated that growth would be driven by strong production in Texas and resort markets, with a focus on commercial loans [44][46] Question: Margin performance and deposit costs - Management clarified that the December margin was 3.97%, with a lag in deposit pricing compared to asset repricing [50][62] Question: Partnership developments for 2UniFi - Management acknowledged delays in finalizing a partnership for 2UniFi but emphasized a strong focus on client activation and scaling the business [63] Question: Loan growth confidence and payoffs - Management expressed confidence in achieving 10% loan growth in 2026, with reduced scheduled maturities compared to the previous year [79]