Financial Data and Key Metrics Changes - Orrstown achieved a record annual net income of $80.9 million, or $4.18 per diluted share, with a return on average equity of 14.76% and return on average assets of 1.49% [3] - For Q4 2025, net income was $21.5 million, or $1.11 per diluted share, with a net interest margin of 4.00%, down from 4.11% in Q3 [9][10] - Fee income for the quarter was $14.4 million, contributing to 22% of total revenues, marking the third consecutive quarter above 20% [5][11] Business Line Data and Key Metrics Changes - Loan growth was steady at 4% during Q4, with a balanced mix across commercial and real estate lending [6][15] - Non-interest income increased to $14.4 million in Q4 from $13.4 million in Q3, driven by growth in wealth management and treasury management services [11][12] - The bank recorded minimal provision expense of $0.1 million and net charge-offs of $0.5 million, with classified loans decreasing by $5.7 million from the prior quarter [7][14] Market Data and Key Metrics Changes - Deposits were relatively flat, declining slightly by $5 million, with a loan-to-deposit ratio of 89% [16] - The cost of deposits was 1.98% for Q4, with expectations for reductions in funding costs starting in Q1 2026 [16][10] Company Strategy and Development Direction - The company continues to focus on enhancing fee income and investing in talent, with recent hiring of a Chief Wealth Officer to drive growth in wealth management [5][6] - Orrstown is strategically investing in the middle-market commercial lending platform and expanding its presence in growth markets [38] - The company remains committed to organic growth, with M&A being a lower priority unless suitable opportunities arise [41] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining strong profitability and anticipates continued growth in loan production and fee income [19] - The company expects net interest margin to stabilize around 4% despite anticipated rate cuts in 2026 [10][31] - Management remains optimistic about the future, citing a robust loan pipeline and strong credit quality [7][19] Other Important Information - The board approved a quarterly dividend increase from $0.27 to $0.30 per share, marking a 50% increase since the merger date [8] - The investment portfolio yield decreased to 4.58% from 4.67% due to declining rates, but the portfolio is positioned well for earnings growth [17] Q&A Session Summary Question: What drove the increase in guidance for non-interest income and expenses? - Management clarified that the increase reflects ongoing strategy to invest in talent to drive future earnings, not a change in strategy [24][25] Question: Can you clarify the NIM trajectory for the year? - Management indicated that core NIM is expected to increase in Q1, with a decline in purchase accounting accretion of about 2-3 basis points each quarter [28][30] Question: What is the current AUM or AUA and success in onboarding Codorus Valley customers? - Total AUM was over $3 billion, with no significant decline in the portfolio from Codorus Valley customers [36][37] Question: What areas is the company focusing on for hiring? - The company is focusing on building out the middle-market commercial lending platform and enhancing wealth management in growth markets [38] Question: What is the current thinking around share buybacks? - Management is monitoring share buyback opportunities but has not found the current stock price favorable for repurchases [46] Question: What yields were achieved on recent securities purchases? - The average yield on recent purchases was 4.92%, with expectations for continued benefits from the investment portfolio [47]

Core Insights - SouthState Bank reported strong financial performance in Q4 2025, with pre-provision net revenue (PP&R) of $323 million and earnings per share (EPS) of $2.47, contributing to a full-year PP&R of $1.27 billion and EPS of $9.50 for 2025 [2][5] Financial Performance - Loans and deposits grew at an annualized rate of 8% during the quarter, with cash and Fed Funds Sold levels increasing by nearly $500 million [1] - Excluding merger costs, 2025 EPS increased by over 30%, and tangible book value per share rose at a double-digit rate [3] - The company achieved record quarterly production of $3.9 billion in Q4, a 16% increase from Q3, with a loan pipeline of approximately $5 billion at year-end [11][12] Integration and Growth - The integration of Independent Financial, which expanded SouthState into Texas and Colorado, was characterized as "well-choreographed," with management noting reduced risk profile and positive momentum heading into 2026 [4][5] - Texas and Colorado markets produced $888 million in loans in Q4, a 15% increase from Q3, with full-year production in these markets up 10% compared to 2024 [13] Capital Management - The company was more aggressive with share repurchases in Q4, buying back 2 million shares at an average price of $90.65, and authorized an additional 5 million shares for repurchase [15][16] - The total payout ratio for the quarter was just shy of 100%, though management indicated this level is not expected to be sustained long term [16] Expense Management - Non-interest expenses rose due to performance-driven incentives and increased marketing and business development spending, but the efficiency ratio remained below 50% [6][9] - Management expects non-interest expenses to rise about 4% in 2026 from the 2025 base of $1.407 billion, reflecting inflationary pressures and growth initiatives [9] Outlook - The company anticipates net interest margin (NIM) to remain stable in the range of 3.80% to 3.90% for 2026, with average interest-earning assets expected to be between $61 billion and $62 billion [7][8] - Management forecasts loan accretion income of $125 million for 2026 and a deposit beta assumption of 27% to support loan growth [8]

Financial Data and Key Metrics Changes - Operating net income increased by $252,000 from the prior quarter, attributed to higher net interest income and operating non-interest income, offset by increased provision and operating non-interest expenses [18] - Net interest income rose by $314,000 compared to the prior quarter, driven by continued asset repricing and loan growth [19] - Tangible book value per share increased to $14.2 from $12.76 a year ago, reflecting consistent growth in tangible capital [31] Business Line Data and Key Metrics Changes - Non-interest income increased over $1,000,000 from the prior quarter, with significant increases in fee income and interchange income [9][20] - Mortgage and SBSL activity slowed, with mortgage production down slightly compared to the second quarter due to changes in SBA lending guidelines and a slower housing market [32] - Marine and RV lending showed improvement, with pretax income up $100,000 quarter over quarter [33] Market Data and Key Metrics Changes - Loan growth for the quarter was around 9% annualized, lower than the first and second quarters, but still around a 14% annualized loan growth rate for the year [8] - Total deposits increased by $28,100,000 during the quarter, partly due to strategic use of brokered funding [29] Company Strategy and Development Direction - The company is focused on strategic investments in talent acquisition to support growth and solidify market position [16] - The pending merger with TC Bancshares is progressing as planned, with expectations for closure in the fourth quarter [14] - The company remains optimistic about future M&A opportunities and is actively engaging with potential strategic fits [15] Management's Comments on Operating Environment and Future Outlook - Management does not expect material adverse impacts from the federal government shutdown, having prepared by identifying affected customers [12][38] - The company anticipates a modest growth in net interest margin, expecting it to be in the single digits going forward [41] Other Important Information - Operating non-interest expenses increased by $624,000 quarter over quarter due to investments in people and growth initiatives [21] - A wire fraud incident resulted in a recognized loss of $1,250,000 related to disputed insurance coverage [25] Q&A Session Summary Question: Given the disruption in DC, are there any impacts on borrowers and the local economy? - Management does not foresee a material impact at this time and has provided resources to assist customers [37][38] Question: What is the average roll on versus roll rate this quarter and how does the NIM outlook look? - The new and renewed loan rate was 7.83%, with expectations for modest growth in net interest margin [39][41] Question: Is there any NDFI loan exposure? - Management confirmed there is no meaningful exposure to NDFI loans [42]

Financial Performance & Metrics - The company's adjusted Return on Average Assets (ROA) was 2.37%[12,32] - The adjusted Return on Tangible Common Equity (ROTCE) reached 18.89%[12,32] - The company boasts an industry-leading Net Interest Margin (NIM) of 6.04%[15] - The efficiency ratio is strong at 48.9%[15] Loan & Deposit Portfolio - Approximately 90% of the company's variable rate commercial loan portfolio has interest rate floors in place[26,41] - Commercial loans, substantially all variable rate, total $1.05 billion, representing approximately 68% of the loan portfolio[41] - DDA and escrow-based NOW/IOLTA accounts represent 32% and 55% of total deposits, respectively[26] - Litigation and payment processing deposits account for 76% and 8% of total deposits, respectively[59] Revenue & Fee Income - Fee income, primarily from payment processing, constitutes 17% of total revenue[16,63] - The company's payment processing vertical services 93,000 merchants nationally[16,63] Market Opportunity - The litigation vertical represents a $529 billion total addressable market[67,78] - The payment processing vertical represents a $11.7 trillion market[67,83]

Financial Data and Key Metrics Changes - The company reported net income of $65.6 million and diluted earnings per share of $1.20, representing an 18% increase from the same quarter last year [11] - Pre-provision net revenue was $88.3 million, with a return on average assets of 1.47% and a return on common equity of 14.9% [11] - The book value grew by an annualized 14% from the previous quarter, ending at $32.37 per share [13] - Net interest income was reported at $133.4 million, with a normalized net interest income of $137.8 million, resulting in a net interest margin of 3.09% [13][14] Business Line Data and Key Metrics Changes - Loan growth was below expectations, with loan paydowns increasing by $500 million over the prior two quarters [4] - The loan pipeline increased by over 10% in October compared to September and is 40% higher than a year ago [4][5] - Non-performing assets increased by approximately $96 million during the quarter, primarily due to a relationship with a large merchant developer [9] Market Data and Key Metrics Changes - The company hired seven new producers across its markets, achieving profitability in all markets for the first time [7] - The company is managing down total deposit costs as the Federal Reserve reduces the Fed funds rate [6] Company Strategy and Development Direction - The company aims to focus on organic loan and deposit growth while managing non-interest expenses [18] - There is a strategic emphasis on non-interest income growth through credit cards, merchant services, and treasury management products [16] - The company is exploring opportunities in Texas, aiming to attract local talent and customers [62] Management's Comments on Operating Environment and Future Outlook - Management noted that lending activity softened in Q3 but has been robust moving into Q4 [8] - The company expects continued margin expansion due to anticipated rate cuts from the Federal Reserve [14][33] - Management expressed confidence in the loan pipeline and expects a good close in loan growth for Q4 [6][41] Other Important Information - The company recognized a loss of $7.8 million on the sale of bonds and invested in a solar tax credit, benefiting from a $2.4 million tax provision [12][19] - The company has a total NDFI exposure of $71 million, which is less than 1% of its loan portfolio, indicating a cautious approach to lending in riskier categories [21] Q&A Session Summary Question: What pushed the borrower to nonperforming status? - Management indicated that additional collateral was obtained, but a large payment expected before quarter-end did not materialize, leading to the non-accrual status [28][29] Question: What is the loan-to-value ratio on the loans? - Management stated that while the loan-to-value is elevated, it is believed to be below one-to-one, with adequate security to cover the loans [31] Question: What are the expectations for margin improvement? - Management expects a 7 to 10 basis point improvement in margin each quarter, with a normalized spot rate for September at 3.28% [33][34] Question: What is the outlook for loan demand? - Management noted that loan demand is currently okay, with commercial real estate being a stronger area, but overall demand is not great [41] Question: What is the effective tax rate going forward? - The effective tax rate is expected to remain around 18.9% for the year, with efforts to keep it below 20% in the future [54]

Core Insights - Shift4 Payments, Inc. (NYSE: FOUR) is a fintech company focused on providing merchant services to restaurants, hotels, and discretionary leisure sectors [1] - The company's stock does not reflect a guaranteed growth outlook despite existing consumer risks [1] Company Overview - Shift4 Payments specializes in merchant services tailored for the hospitality and leisure industries [1] - The company operates in a sector that is sensitive to consumer spending patterns, which can introduce volatility [1] Investment Perspective - The analysis is based on value investing principles, emphasizing an owner's mindset and a long-term investment horizon [1] - The author does not engage in short-selling or provide sell recommendations, indicating a bullish outlook on the stock [1]

Company Overview - Shift4 Payments (NYSE: FOUR) is a fintech company that specializes in merchant services for restaurants, hotels, and other discretionary leisure sectors [1] Market Position - Despite evident consumer risks, Shift4 Payments does not trade as if growth is guaranteed, indicating a potential undervaluation in the market [1] Investment Perspective - The analysis is based on value investing principles, emphasizing an owner's mindset and a long-term investment horizon [1]

Core Insights - Affirm (NASDAQ: AFRM) stock has experienced a decline of 17.5% over the past five trading days, primarily influenced by insider selling, particularly a significant share sale by CEO Max Levchin [1][3] Company Overview - Affirm is a leading American financial technology company specializing in buy now, pay later (BNPL) services, offering a digital and mobile-first commerce platform that includes point-of-sale payment solutions, merchant services, and a consumer app, serving approximately 29,000 merchants in the U.S. and Canada [5] Financial Performance - The company is currently valued at $25 billion with a revenue of $3.2 billion, trading at $76.03 per share [7] - Affirm has reported a revenue growth of 38.8% over the last 12 months and an operating margin of 10.5% [7] - The stock has a high P/E multiple of 476.3 and a P/EBIT multiple of 51.0, indicating it may be overvalued [7] Historical Performance - Since its peak of $168.52 on November 4, 2021, Affirm's stock has plummeted by 94.7% to $8.91 by December 27, 2022, while the S&P 500 experienced a peak-to-trough decline of only 25.4% during the same period [8] - The highest price reached since the decline was $92.18 on September 21, 2025, with the current trading price at $76.03, indicating that the stock has not yet recovered to its pre-crisis high [8] Market Resilience - Affirm's stock has historically performed worse than the S&P 500 during economic downturns, both in terms of the magnitude of decline and the speed of recovery [4]

Core Viewpoint - Walmart Inc. reported second-quarter results that included a miss on adjusted earnings per share but an increase in annual guidance, indicating a mixed performance with strong sales growth [1][2]. Financial Performance - Adjusted earnings per share for the second quarter were 68 cents, below the analyst consensus estimate of 74 cents [1]. - Quarterly sales reached $177.40 billion, reflecting a year-over-year increase of 4.8%, surpassing the expected $176.16 billion [2]. - Total revenues on a constant currency basis increased by 5.6% [2]. Guidance and Analyst Reactions - Walmart raised its fiscal year 2026 adjusted earnings per share guidance to a range of $2.52–$2.62, up from the previous $2.50–$2.60, compared to the analyst estimate of $2.62 [2]. - Analyst Joseph Feldman raised the price forecast from $115 to $118, citing strong e-commerce growth of 26% and solid food sales [3]. - Analyst Christopher Horvers maintained an Overweight rating but lowered the price forecast from $130 to $127, emphasizing that Walmart's outlook remains stable despite competition [5]. Growth Drivers - Walmart's expansion into higher-margin areas such as digital ads and merchant services is expected to drive faster income growth [4]. - Analyst Robert F. Ohmes noted that Walmart's gross margin is benefiting from higher-margin businesses, which have made U.S. e-commerce profitable [7]. - Analyst Steven Shemesh highlighted strong sales momentum in grocery, predicting further market share gains due to widening price gaps [10]. Future Projections - Analysts expect continued growth in earnings per share, with estimates for fiscal year 2027 raised from $2.90 to $2.94 [9]. - Walmart's sales growth projections for 2025 and 2026 have been adjusted to 4.6% and 5.0%, respectively [10][11]. - Analyst Kate McShane raised the price forecast from $101 to $114, indicating confidence in Walmart's value strategy and market share gains [12].

Financial Data and Key Metrics Changes - The company's second quarter operating results increased by 14% compared to the same quarter last year, driven by profitability focus and operational efficiency initiatives [5][6] - Earnings per share (EPS) for the second quarter was reported at $0.73, with operating EPS at $0.76, reflecting a strong performance [16] - The net interest margin (NIM) expanded by 15 basis points to 3.75%, attributed to rising earning asset yields and lower costs of interest-bearing liabilities [17][18] - The tangible book value per share increased by 3%, and regulatory capital ratios improved, with Tier one common at 10.8% and total risk-based capital ratio at 13% [18] Business Line Data and Key Metrics Changes - The loan portfolio saw slight growth, with commercial loan growth offsetting a decline in transactional real estate loans [6] - Core fee income increased significantly, with operating non-interest income up by $8 million or 14% from the previous quarter, driven by strong growth in card-based fees and other banking services [19][22] - Deposit balances declined due to seasonal activities, but a recent campaign generated over $450 million in new core deposits [21] Market Data and Key Metrics Changes - The company noted macroeconomic uncertainties affecting customer borrowing behavior, with some companies opting to use cash for investments or debt repayment [7] - The integration of Pacific Premier is expected to enhance the company's market presence and operational capabilities, particularly in technology and fee income generation [12][23] Company Strategy and Development Direction - The company is focused on profitability and credit quality over mere growth, emphasizing a disciplined approach to business operations [6][8] - The upcoming acquisition of Pacific Premier is a strategic priority, with integration planning on track and expected to close by September 1 [9][26] - Investment in technology and human capital is a key focus, with ongoing enhancements to AI capabilities and leadership development initiatives [10][13] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about navigating the current economic environment and capitalizing on strategic opportunities, including the Pacific Premier acquisition [8][25] - The company is committed to enhancing long-term shareholder value and optimizing financial performance [25][26] Other Important Information - The company unified its brand under the Columbia name, with Umpqua Bank changing its legal name to Columbia Bank effective July 1 [14] - The company is actively expanding its branch network, with new locations opened in Arizona and Eastern Oregon [23][24] Q&A Session Summary Question: What is driving the increase in loan originations? - Management indicated that the increase is due to a combination of client demand and improved productivity among bankers, with strong activity levels noted in commercial lending [31][34] Question: What are the plans for optimizing Pacific Premier's balance sheet? - Management plans to take advantage of day one fair value marks and has already made some pre-purchase adjustments to securities [38] Question: What initiatives are in place to increase fee revenue contributions? - The company has been focusing on full relationship banking and has seen significant year-over-year growth in various fee income lines, including treasury management and merchant services [42][44] Question: What is the outlook for deposit growth and pricing strategy? - Management noted that deposit growth has been seasonal, with a focus on winning new accounts and maintaining competitive pricing [55][58] Question: What is the appetite for cleaning up the capital stack? - Management expressed a strong desire to maintain a clean capital stack and optimize it, especially with the expected excess capital generation from the Pacific Premier acquisition [60]