Financial Data and Key Metrics Changes - The company reported net income available to common shareholders of $19.6 million or $0.96 per diluted share for Q4 2025, and $73.4 million or $3.61 per diluted share for the full year [4] - Return on average assets was 120 basis points for the year, while return on average equity was 12.38%, both exceeding annual guidance [4] - The efficiency ratio for the year was 58% [4] Business Line Data and Key Metrics Changes - Total loans increased by 1.5% in Q4 and 4% year-over-year to $4.66 billion, driven by strong demand in commercial lending [6] - Commercial business loans were down modestly on a linked-quarter basis but up 11% year-over-year [7] - Residential lending grew modestly, up 1% during both the 3 and 12 months ended December 31, 2025 [8] - Consumer indirect loans decreased by 3.7% in Q4 and 4.5% for the year to $807 million [9] Market Data and Key Metrics Changes - Year-end total deposits were $5.21 billion, down 2.8% from September 30, driven by seasonal public deposit outflows [10] - Deposits were up 2% year-over-year despite the ongoing wind down of the banking-as-a-service line of business [10] - The company expects low single-digit deposit growth year-over-year amid a highly competitive landscape [17] Company Strategy and Development Direction - The company is focused on organic growth, credit discipline, and maintaining a strong capital position to deliver long-term value to shareholders [24] - The strategic plan emphasizes deep relationships, prudent expense management, and balancing investments in people and technology [24] - The company aims to drive sustainable growth through its community bank and wealth management firm [25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the durability and growth potential of Upstate New York markets, particularly with the recent investment by Micron Technology [8] - The company anticipates stronger residential production in 2026, supported by new producers building their clientele [9] - Management expects a targeted return on average assets of at least 122 basis points and return on average equity exceeding 11.9% for 2026 [13] Other Important Information - The company approved a more than 3% increase to its quarterly dividend and a new share repurchase plan in 2025 [5] - The company completed an $80 million subordinated debt offering with a favorable fixed rate of 6.5% [5] - The company reported a BBB- rating from Kroll with a stable outlook, reflecting improved profitability and capital position [6] Q&A Session Summary Question: Margin outlook and expected cadence - Management indicated that margins were impacted by the sub debt raise and expect incremental expansion throughout the year [28] Question: Loan growth outlook and indirect auto portfolio - Management confirmed intentional management of the indirect auto portfolio and expressed confidence in commercial loan growth opportunities [32] Question: Share buyback strategy - Management stated that share buybacks remain an attractive capital allocation option, with a focus on maintaining Common Equity Tier 1 above 11% [36] Question: ROA improvement potential - Management noted that accelerated asset originations could impact ROA, but they prioritize profitability over growth [41] Question: Deposit growth initiatives - Management emphasized a focus on core deposit acquisition and the success of treasury management offerings in driving commercial deposit growth [44]