Financial Data and Key Metrics Changes - The company recorded earnings per diluted share of $1.58 for the fourth quarter, representing a 32% increase from the third quarter of 2025 and a 33% increase from the fourth quarter of 2024 [9] - Full year earnings per share was $5.25 on an operating basis and $5.06 on a GAAP basis [9] - Net income available to common shareholders was $86.4 million for the quarter and $276.5 million for the year [9] - The return on average assets was 1.62% for the year, and the return on common equity was nearly 17% [9] - The tangible book value grew 4% to $33.62 per share [9] - The net interest margin rose from 2.92% in the first quarter to 3.38% in the fourth quarter [10] Business Line Data and Key Metrics Changes - Loan growth for the quarter was annualized at 12%, with a significant increase in the loan pipeline, which rose by 11% quarter-over-quarter [3] - The C&I book experienced nearly 10% growth during the year, marking the highest growth rate in that segment in several years [7] - Non-interest revenue saw a 26% growth from the full year 2024 to 2025, driven by service charge increases [12] Market Data and Key Metrics Changes - The company has expanded its correspondent banking relationships to 388, including 145 that settle at the Federal Reserve Bank [5] - The new Texas banking team is expected to drive growth, with a focus on C&I lending rather than commercial real estate [49] Company Strategy and Development Direction - The company is focused on organic growth, particularly through the expansion in Texas, which is expected to contribute significantly to loan balances and deposits in 2026 [49] - The company aims to maintain a best-in-class efficiency ratio while managing costs and increasing operating leverage [10][15] - The company is optimistic about the opportunities in the Texas market and plans to hire more personnel to support growth [49][60] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about loan demand, particularly in the C&I sector, indicating a positive trend compared to previous quarters [24] - The company is prepared for potential economic fluctuations and is focused on maintaining strong liquidity levels without relying on brokered deposits [15] - Management acknowledged the challenges posed by rising interest rates but remains confident in their ability to manage loan pricing effectively [30] Other Important Information - The company paid down $30 million of subordinated debt at a cost of 4.5% [14] - The efficiency ratio is expected to remain in the low 30s for 2026, reflecting the anticipated expenses associated with the Texas expansion [51] Q&A Session Summary Question: Loan Payoff Trends - Management noted that projected payoffs have dropped significantly quarter-over-quarter, leading to a more optimistic outlook for loan growth [21] Question: Commercial Loan Demand - Management rated current commercial loan demand as slightly better than before, indicating a positive trend in C&I growth [23] Question: Margin Expectations - The December margin is expected to serve as a good starting point for 2026, with continued margin expansion anticipated [30] Question: Charge-Off Details - The $5 million charge-off was related to a healthcare asset, which was anticipated and largely reserved for [36] Question: Tax Rate for 2026 - The company plans to continue leveraging tax credits, particularly around solar credits, to manage the tax rate going forward [44] Question: Texas Expansion Growth - The budgeted growth for the Texas team is expected to be higher than any other region, with a focus on C&I lending [49]