Financial Data and Key Metrics Changes - The company reported distributable earnings (DE) of $160 million or $0.42 per share for Q4 2025, with adjusted DE expected to be $0.49 after accounting for timing issues [4][6] - For the full year 2025, the company reported DE of $616 million or $1.69 per share, with adjusted DE of $1.95 compared to a full-year dividend of $1.92 [6][7] - The company ended the year with a debt to undepreciated equity ratio of 2.4x, significantly lower than peers, and current liquidity stands at $1.4 billion [16][30] Business Line Data and Key Metrics Changes - Commercial and residential lending contributed DE of $176 million or $0.46 per share in Q4, with a funded loan portfolio growth to $16.6 billion [8][9] - Infrastructure lending contributed DE of $27 million or $0.07 per share, with a record $2.6 billion in new loan commitments for the year [10][11] - The property segment recognized DE of $49 million or $0.13 per share, with a net unrealized fair value increase of $17 million in the affordable multifamily portfolio [12][14] Market Data and Key Metrics Changes - The company’s commercial lending now constitutes 54% of its asset base, with a focus on stable assets like multifamily and industrial, which accounted for 72% of 2025 originations [8][20] - The company expects the loan portfolio to exceed $17 billion in Q1 2026, indicating a positive trend in origination activity [48][50] Company Strategy and Development Direction - The company aims to resolve legacy credit issues, maintain a conservative balance sheet, and selectively grow high-return businesses to restore full earnings power [17][18] - The acquisition of the net lease business is expected to add long-term accreted assets with annual rent escalations of 2.3%, contributing to future distributable earnings [18][28] - The company is focused on improving operational efficiency through technology and data analytics to enhance productivity and reduce costs [31][46] Management's Comments on Operating Environment and Future Outlook - Management noted that while the credit markets are stabilizing, real estate performance remains uneven across sectors and geographies, with expectations for improved transaction activity as liquidity returns [17][18] - The company anticipates a robust origination year in 2026, supported by lower rates and increased transaction volumes [19][50] - Management expressed confidence in the future earnings power of the business, particularly as the multifamily market is expected to recover [43][41] Other Important Information - The company executed a record $4.4 billion in corporate debt and equity transactions in 2025, enhancing liquidity and extending debt maturities [15][16] - The company’s insider ownership stands at approximately 6% or $380 million, indicating strong alignment with shareholder interests [30] Q&A Session Summary Question: Can you talk about the pace of CRE loan portfolio growth in 2026? - The company expects the loan portfolio to exceed $17 billion in Q1 2026, with a target of at least $6.5 billion in CRE lending for the year [48][50] Question: What is the expectation for credit migration in the near term? - The company is focused on individual asset management and expects to resolve most of the $1 billion in non-accruals this year, with a bespoke approach to each asset [52][56] Question: Is there a point where the residential portfolio could be sold to free up capital? - The residential portfolio has shown significant recovery, and the company is monitoring market conditions for potential strategic decisions [69][71]

Financial Data and Key Metrics Changes - Earnings per share increased by 30% year-over-year, with a return on tangible equity of 20% [3] - Net interest income rose to $600 million, up $22 million from the previous quarter, driven by a tax equivalent margin of 4.06% [6][8] - Charge-offs were reported at 27 basis points for the quarter, with year-to-date charge-offs at 12 basis points [4][8] Business Line Data and Key Metrics Changes - Loan production reached nearly $3.4 billion, with a 67% increase in loan production in Texas and Colorado since the first quarter [3] - Commercial and industrial lending saw a 9% linked quarter annualized growth, while residential growth was about 6% [19][20] - Non-interest income increased to $99 million from $87 million, with capital markets contributing significantly [36] Market Data and Key Metrics Changes - The company identified approximately $90 billion in overlapping deposits in the Southeast, Texas, and Colorado, indicating potential growth opportunities [5] - The loan pipeline in Texas grew from $800 million to $1.2 billion, with Florida and Atlanta also showing significant pipeline growth [20] Company Strategy and Development Direction - The company is focused on organic growth and recruiting efforts in response to market disruptions, rather than pursuing M&A opportunities [63] - Strategic planning is underway, considering deregulation and market opportunities, with a focus on enhancing the sales force [4][5] Management's Comments on Operating Environment and Future Outlook - Management anticipates mid-single-digit loan growth for the remainder of 2025, with potential acceleration into 2026 [19] - The company is optimistic about capitalizing on market disruptions and is focused on recruiting talented bankers [5][22] Other Important Information - The company redeemed $405 million in subordinated debt late in the quarter, which is expected to positively impact net interest margin [6][7] - The tangible book value per share increased to $54.48, reflecting strong capital levels despite the merger's dilutive impact [8] Q&A Session Summary Question: Margin dynamics and future rate cuts - Management discussed the impact of higher accretion and the expectations for future rate cuts, indicating a potential deposit beta of around 27% [11][12][43] Question: Loan growth environment - Management guided for mid-single-digit growth, with a focus on commercial and industrial lending as the primary growth driver [19][20] Question: Credit quality and charge-offs - A significant charge-off was attributed to a specific credit, with management expressing confidence in the overall portfolio quality [27][28] Question: Capital management and buyback strategy - The company is maintaining a CET1 ratio of 11.5% and is considering share repurchases as part of its capital management strategy [29] Question: Non-interest income outlook - Management provided insights into the strong performance of correspondent banking services and projected a more stable run rate for non-interest income [36][37] Question: Future expense guidance - The company expects expenses to remain in the $345 million-$350 million range for the fourth quarter, with a focus on cost control [71]