Financial Data and Key Metrics Changes - Net income for Q4 2025 was $28.8 million, or $0.54 per diluted share, with a return on assets (ROA) of 1.64% and a return on average tangible common equity (ROATCE) of 16.15% [3] - Excluding certain adjusting items, net income was $30.8 million, or $0.58 per diluted share, with tangible book value per share increasing to $14.12 [4] - The tangible equity ratio increased to 11.02%, and Common Equity Tier 1 was 12.99%, up from 12.44% in the previous quarter [4] Business Line Data and Key Metrics Changes - Total loans decreased by $12.4 million from the previous quarter, with tax equivalent loan yields declining by 11 basis points [6] - Non-performing loans increased by $4.8 million, while classified assets rose by $10 million [6] - The allowance for credit losses on loans was $72.3 million, or 1.38% of total loans, down from $75 million [8] Market Data and Key Metrics Changes - The net interest margin (NIM) was exceptionally strong at 5.09%, a 41 basis point increase year-over-year [5] - The total cost of deposits decreased to 115 basis points from 133 basis points in the prior quarter [5] - Average loans increased by $60 million, or 1.2%, over the linked quarter, while average deposits declined by approximately $200 million [13] Company Strategy and Development Direction - The company aims for mid-single digit loan growth in 2026, with a focus on optimizing the balance sheet and reducing reliance on wholesale funding [16][11] - Integration of the Evergreen acquisition is nearly complete, and the company is prioritizing organic growth [56][58] - The management is optimistic about the performance in 2026, particularly in the power sports segment, which has shown a high contribution margin [8][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the bank's performance and the strength of its operations, despite challenges in the economic environment [17] - The company anticipates a stable margin trend, with potential modest declines in the first quarter of 2026 [15] - The management noted that the unemployment and GDP forecasts remain static, with no significant changes expected [9] Other Important Information - Non-interest income showed a slight decrease compared to the prior quarter but performed well year-over-year, driven by increases in wealth management fees and service charges [10] - Total non-interest expenses decreased by $10.2 million from the prior linked quarter, with a significant reduction in acquisition-related costs [10] Q&A Session Summary Question: Are the cost savings fully captured or is there a tail end at 2026? - Management indicated there is a tail end at 2026, with employee benefits expected to rise due to inflationary trends, but overall expense growth is projected to be around 3% [19] Question: What is the expectation for net charge-off rates in the power sports portfolio? - Management expects a higher net charge-off rate due to the nature of the power sports business, with $4.5 million of the $6 million charge-off related to this segment [21] Question: Can you provide insights on the margin expectations for the first quarter? - Management expressed confidence in maintaining a margin around 5% for the full year, despite potential modest headwinds [27] Question: What is the current status of the West Suburban loan portfolio? - Approximately $285 million remains in the West Suburban portfolio, with expectations of continued runoff [44] Question: What is the company's approach to capital management and potential buybacks? - Management indicated that share repurchases are expected to begin soon, with no price sensitivity at this point [53]