Financial Data and Key Metrics Changes - The company reported earnings per share of $0.52 for Q4 2025, with a net interest margin of 3.51% and 2% loan growth [8] - Pre-provision net revenue and return on tangible common equity reached 15% in the second half of 2025 [5][6] - Net interest income grew by approximately $2 million, with a net interest margin compression of four basis points, but an expansion of two basis points when excluding notable items [8][9] Business Line Data and Key Metrics Changes - Loans to mortgage companies increased by $776 million quarter over quarter, contributing significantly to loan growth [10] - The commercial and industrial (C&I) portfolio saw a period-end balance increase of $727 million from the prior quarter [10] - Fee income increased by $3 million from the prior quarter, driven by elevated activity in equipment finance lease businesses [11] Market Data and Key Metrics Changes - Period-end balances for deposits increased by $2 billion compared to the prior quarter, with the average rate paid on interest-bearing deposits decreasing to 2.53% [9] - The cumulative deposit beta has been maintained at 64% since rates began to fall in September 2024 [9] - The company expects mid-single-digit balance sheet growth and total revenue growth of 3%-7% year-over-year for 2026 [12][13] Company Strategy and Development Direction - The company aims to deepen client relationships and enhance profitability through treasury management and wealth management services [18] - A strategic plan has been distilled into a five-page framework to clarify differentiation in the marketplace and foster long-lasting client relationships [16] - The focus remains on expense discipline while investing in technology and personnel to enhance operational efficiency [17] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about improving profitability and continued earnings growth in 2026, citing positive signs in loan growth pipelines [7][16] - The company is confident in its diverse business model and robust footprint to meet revenue growth targets across various economic scenarios [17] - Management highlighted the importance of macroeconomic conditions and the Fed's balance sheet in determining deposit pricing and growth [35] Other Important Information - The company returned just under $900 million in capital through stock repurchases and over $300 million in dividends in 2025 [6] - A new repurchase program of $1.2 billion was announced at the end of October, with nearly $1 billion of authorization remaining [12] Q&A Session Summary Question: Revenue outlook and key drivers - Management indicated that the revenue outlook of 3%-7% growth is based on the current forward curve, with loan growth being a significant factor [21][22] Question: Expense growth normalization - Management expects expenses to align with inflation, estimating a growth rate of 2.5%-3% in the absence of heavy tech investments [23][24] Question: Loan growth expectations across products - Management anticipates mid-single-digit loan growth, with positive momentum in C&I and mortgage warehouse lending [29][31] Question: Net interest income trajectory - Management expects net interest income growth to be in the low single digits, influenced by deposit betas and loan growth [42][44] Question: M&A considerations - Management is open to small acquisitions to enhance the branch franchise but prioritizes organic growth and profitability [50][51] Question: Credit quality and reserve outlook - Management is confident in current reserve levels and expects net charge-offs to remain stable, reflecting strong credit performance [61][107]

Financial Data and Key Metrics Changes - The company reported earnings per share of $0.52 for Q4 2025, with a net interest margin of 3.51% and 2% loan growth [6][8] - Pre-provision net revenue and return on tangible common equity reached 15% in the second half of 2025, with net interest income growth of approximately $2 million [4][6] - The average interest-bearing cost of deposits decreased by 25 basis points to 2.53% [6][7] Business Line Data and Key Metrics Changes - Loans to mortgage companies increased by $776 million quarter over quarter, contributing significantly to loan growth [8][9] - The commercial and industrial (C&I) portfolio saw a period-end balance increase of $727 million, indicating strong origination volume [9] - Fee income increased by $3 million from the prior quarter, driven by elevated activity in equipment finance lease businesses [9] Market Data and Key Metrics Changes - The average rate paid on interest-bearing deposits decreased from 2.78% in Q3 to 2.53% in Q4 [7] - The company maintained a cumulative deposit beta of 64% since rates began to fall in September 2024 [7] - The interest-bearing spot rate at the end of the quarter was 2.34% [7] Company Strategy and Development Direction - The company aims to continue returning capital to shareholders while investing in growth opportunities, with a focus on improving profitability and earnings growth in 2026 [5][12] - The strategic plan emphasizes differentiating in the marketplace and building long-lasting client relationships [15][16] - The company is focused on expense discipline and efficiency while investing in technology and tools to enhance associate effectiveness [16][17] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about loan growth and profitability, citing positive signs in current pipelines, especially in commercial lending [15][16] - The company expects year-over-year PPNR growth with mid-single-digit balance sheet growth and positive operating leverage [12][15] - Management highlighted the importance of managing capital and credit to maximize returns for shareholders [13][17] Other Important Information - The company returned just under $900 million in capital through stock repurchases and over $300 million in dividends in 2025 [4] - A new repurchase program of $1.2 billion was announced at the end of October, with nearly $1 billion of authorization remaining [11] Q&A Session Summary Question: Revenue outlook and key drivers - Management indicated that the revenue outlook of 3% to 7% growth is based on the current forward curve, with loan growth being a significant factor [19][20] Question: Expense growth normalization - Management expects expenses to grow in line with inflation, with a base case of 2.5%-3% growth, excluding past heavy tech investments [21][22] Question: Loan growth expectations across products - Management anticipates mid-single-digit loan growth, with positive momentum in C&I and mortgage warehouse lending [25][26] Question: Capital return strategy - Management confirmed a commitment to returning capital while focusing on organic growth opportunities, with a long-term target CET1 ratio of 10%-10.5% [52][53] Question: Commercial real estate expectations - Management expects an inflection in the CRE business due to increased construction starts and a healthy build in the CRE pipeline [70][71]

Financial Data and Key Metrics Changes - The company reported net income of $109.8 million or $1.6 per diluted share in the second quarter, a notable 21% increase year-over-year [10] - Return on assets (ROA) improved to 1.65%, and return on tangible common equity rose to 15.8% [11] - Efficiency ratio improved to 51.63% from 52.83% in the previous quarter, indicating better operating leverage [10][11] - Tangible book value per share increased to $41.32, reflecting a strong 15.5% annualized growth [11] Business Line Data and Key Metrics Changes - Loan growth was primarily driven by commercial and industrial (C&I) loans, with a total loan production of $1.9 billion, up from $1.5 billion in the previous quarter [16] - Non-interest income increased by approximately $4.9 million, largely due to a 36% growth in mortgage production [14] - Total non-interest expense rose by $4.2 million, mainly due to higher salaries and employee benefits related to increased mortgage production [14] Market Data and Key Metrics Changes - Non-interest bearing deposits grew over 3% annualized, increasing their share to 31% of total deposits from 30.8% in the previous quarter [17] - The company experienced a seasonal decline in cyclical municipal deposits, offset by an increase in broker deposits [17] Company Strategy and Development Direction - The company remains focused on organic growth, with plans to utilize excess capital for growth opportunities, stock buybacks, and dividends [28][29] - Management emphasized the importance of maintaining a strong core deposit base and leveraging growth in attractive Southeastern markets [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for the remainder of 2025 and into 2026, citing a robust margin, strong capital, and liquidity [9] - There is a cautious but positive outlook on loan growth, with expectations for mid-single-digit growth in loans and deposits [18] Other Important Information - The company repurchased approximately $12.8 million in common stock during the quarter [11] - The provision for credit losses was $2.8 million, with reserves remaining strong at 162% of loans [15] Q&A Session Summary Question: Loan growth trends and competition - Management noted a resurgence in loan activity and expected third-quarter activity to be similar to the second quarter, with increased competition [24][25] Question: Future growth opportunities and capital deployment - The company plans to focus on organic growth first, with stock buybacks and dividends as secondary options, while being cautious about M&A [27][29] Question: Deposit growth and margin outlook - Management indicated that deposit growth would continue, with a focus on non-interest bearing deposits, and anticipated some pressure on deposit costs [44][46] Question: Mortgage segment trends and capacity - The company is prepared for a potential refinancing wave and has the capacity to handle increased production without needing additional hires [66][67] Question: Overall competitive landscape and charge-offs - Management observed increased competition beyond pricing, with a focus on treasury management and deposit growth [55][56]