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 (ROTCE) of 16.15% [4] - 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 [5] - The tax equivalent efficiency ratio was 53.98%, with a notable improvement in net interest margin (NIM) to 5.09%, reflecting a 41 basis points increase year-over-year [6][12] 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 [7] - The Powersports portfolio showed higher than expected losses given default, but the contribution margin is at a multi-year high, indicating strong profitability [8] - Non-interest income decreased slightly compared to the prior quarter but increased year-over-year, driven by growth in wealth management fees and service charges on deposits [10] Market Data and Key Metrics Changes - The unemployment and GDP forecast views remained static, with no material changes in assumptions based on recent Federal Reserve projections [9] - The loan-to-deposit ratio increased to 93.9% as of year-end, compared to 91.4% in the previous quarter [6] Company Strategy and Development Direction - The company aims to optimize its balance sheet and reduce reliance on wholesale funding, allowing for a more stable funding profile [11] - Loan growth is targeted in the mid-single digit range for the upcoming year, with a focus on organic growth and integration of recent acquisitions [16][69] - The management is optimistic about future opportunities and believes the bank's performance reflects its strength [17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the bank's performance and the potential for growth in 2026, despite challenges in the Powersports portfolio [8][17] - The company anticipates a modest decline in margins in the first quarter but expects to maintain a NIM above 5% for the full year [14][58] Other Important Information - The efficiency ratio adjusted to exclude certain costs was 51.28%, indicating strong operational efficiency [11] - The company recorded a decrease in acquisition-related costs, contributing to a decline in total non-interest expenses [10] Q&A Session Summary Question: Are cost savings fully captured or is there a tail end into 2026? - Management indicated there is a tail end in 2026, with employee benefits expected to rise due to inflationary trends [19] Question: What is the expected net charge-off pace for Powersports? - Management expects a higher net charge-off rate due to the nature of the Powersports business, with $4.5 million of the $6 million charge-off related to this portfolio [22] Question: What are the expectations for loan growth in the Powersports vertical? - Management anticipates slightly less than mid-single digit growth for the Powersports vertical [36] Question: Can you describe the profile of a typical Powersports borrower? - The average FICO score for the Powersports portfolio is 730, with a busy season from March to the third quarter [44] Question: What is the outlook for share repurchase and M&A? - Management indicated that share repurchase is likely to begin soon, and the M&A environment is favorable, but any potential deals will be carefully considered [45][66]