Financial Data and Key Metrics Changes - Adjusted net income for Q4 2025 was $26.9 million, with adjusted diluted EPS of $0.95 and adjusted ROA of 1.27% [5] - Revenue growth was up 10.8% annualized over the previous quarter, with a net interest margin of 4.18%, marking a strong performance [5][12] - Total deposits increased by over $400 million, or approximately 6.5%, for the full year, with a loan-to-deposit ratio of approximately 93.9% [11][17] Business Line Data and Key Metrics Changes - Average loan growth was 8.5% annualized, with new loan fundings totaling approximately $350 million in Q4, up 30% from the previous year [9][10] - Non-interest income accounted for 24.3% of total revenue, with service fee revenue totaling $26.7 million, up almost 24% year-over-year [5][14] - Adjusted non-interest expense in Q4 was up approximately $1 million from the previous quarter, with an adjusted efficiency ratio of 63.36% [15] Market Data and Key Metrics Changes - The company operates in 7 of the 10 fastest-growing MSAs in the Southwest, indicating strong growth potential across all markets [7] - The company plans to continue investing in growth markets and expanding its portfolio of products and services [6] Company Strategy and Development Direction - The company emphasizes relationship-based banking and aims to generate operating leverage while maintaining a healthy revenue mix [5][6] - There is a focus on reinvesting in the franchise and adding to the C&I teams in higher growth markets [10][12] - The pending merger with First Foundation is expected to enhance growth opportunities and operational synergies [8][35] Management's Comments on Operating Environment and Future Outlook - Management remains optimistic about the company's performance and growth potential, despite some credit challenges in specific sectors [6][16] - The company expects mid-single digit growth in net interest income for 2026, with stable net interest margins [13][41] - Management acknowledges competitive pressures in deposit pricing but believes they can maintain margins through relationship management [39][47] Other Important Information - The company reported a provision expense of $6.2 million for Q4, with an allowance for credit losses at 1.27% of loans [16] - The tangible book value per share improved by $3.89, or roughly 11.5%, over the previous year [17] Q&A Session Summary Question: Insights on deposit costs and pricing strategy - Management noted a decrease in interest-bearing costs by about 21 basis points and plans to remain flexible in deposit pricing [19][20] Question: Commentary on loan pricing and competition - Credit spreads have held steady, with no significant changes in trends across markets [33] Question: Impact of interest rate changes on the pending acquisition - Management remains optimistic about the merger's prospects and does not foresee any significant changes in expectations due to recent rate cuts [35][36] Question: Trajectory of net interest margin - Management expects net interest margin to remain stable, with some competitive pressures on deposit pricing [39][41] Question: Opportunities in Texas and Southern California - Management sees increased opportunities in Texas due to M&A activity and plans to continue building teams in both regions [43][49]