Financial Data and Key Metrics Changes - For the fourth quarter, the company reported net income of $21 million, an increase of $16.1 million or 327.2% compared to the previous quarter [9] - Diluted earnings per share for the fourth quarter were $0.70, an increase of $0.54 per share linked quarter [9] - The company reported net income of $69.2 million for 2025, a decrease of $19.3 million or 21.8% compared to $2.91 for 2024 [10] - The net interest margin expanded to 2.98%, an increase of 4 basis points from the previous quarter [16] Business Line Data and Key Metrics Changes - Fourth quarter new loan production totaled approximately $327 million, compared to $500 million in the third quarter [4] - Loans as of December 31st were $4.18 billion, a linked-quarter increase of $52.7 million or 1.1% [10] - Non-performing assets increased by $2.6 million during the fourth quarter but remained low at 0.45% of total assets [7][11] Market Data and Key Metrics Changes - The Texas economy is anticipated to grow at a faster pace than the overall projected U.S. growth rate [8] - The loan pipeline rebounded to just over $2 billion after dipping to $1.5 billion mid-quarter [6] Company Strategy and Development Direction - The company is focused on restructuring its available-for-sale securities to enhance future net interest income and provide balance sheet flexibility [3] - There is an ongoing initiative to build out a data platform to improve insights into raw data across multiple systems [24] - The company remains open to strategic acquisitions, particularly in areas where it has a limited presence [29][30] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about 2026, anticipating loan production to exceed 2025 levels despite headwinds from payoffs [41] - The company is actively monitoring market conditions for potential opportunities arising from M&A activity in Texas [51] Other Important Information - The company plans to redeem $93 million of subordinated notes due in 2030, which is expected to positively impact net interest margin [15] - The efficiency ratio improved to 52.28% as of December 31st, down from 52.99% [18] Q&A Session Summary Question: Details on 2026 expense growth and software projects - Management indicated that the 7% expense growth includes costs related to software initiatives and hiring strategies [21][22] Question: Thoughts on M&A activity in Texas - Management confirmed that they are open to strategic acquisitions, particularly in Dallas and Houston, to expand their presence [29][30] Question: Expectations for first quarter margin - Management expects a positive margin outlook for the first quarter, with improvements anticipated as the year progresses [36][39] Question: Fee income outlook for 2026 - The company is budgeting for a $1.5 million increase in fee income, primarily driven by trust income and brokerage services [47][48] Question: Thoughts on disruption from recent M&A activity - Management is actively looking for opportunities arising from employee and customer displacement due to recent acquisitions in the market [51]