Financial Data and Key Metrics Changes - For Q4 2025, the company reported a core earnings per share (EPS) of $1.43, a core return on assets (ROA) of 1.42%, and a core return on tangible common equity of 18%, all showing significant year-over-year increases [3][4] - The full-year core EPS for 2025 was $5.21, reflecting a 19% increase from the previous year, while Q4 core EPS increased by 29% year-over-year [4] - The net interest margin (NIM) for the quarter was 3.83%, down 8 basis points from the previous quarter but up 3 basis points year-over-year [4][5] Business Line Data and Key Metrics Changes - Core fee revenue increased by 2% linked quarter and 8% year-over-year, driven by strong growth in Wealth and Trust, capital markets, and home lending [5] - The Wealth and Trust business grew by 13% year-over-year, with WSFS Institutional Services experiencing a 29% growth [5] - Total gross loans grew by 2% linked quarter and 9% annualized, with commercial loans leading the growth at 4% linked quarter [6] Market Data and Key Metrics Changes - Total client deposits increased by 2% linked quarter and 10% annualized, with non-interest-bearing deposits growing by 6% linked quarter [6] - The company maintained a 32% share of non-interest-bearing deposits within total client deposits [6] Company Strategy and Development Direction - The company aims for mid-single-digit loan growth overall and expects continued broad-based deposit growth across its businesses in 2026 [9][10] - The strategy includes maintaining a high level of buybacks while being open to adjusting based on macroeconomic conditions and investment opportunities [9][10] - The company is focused on enhancing its fee businesses, which contribute approximately one-third of total revenue, and expects fee revenue to grow in the mid-single digits [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in delivering another year of high performance and growth, with expectations for a core ROA of approximately 1.40% and double-digit growth in core EPS for 2026 [9] - The management noted that while the path of future rate cuts remains uncertain, they are prepared to manage margins through deposit repricing and other strategies [10] - The company highlighted the importance of maintaining strong expense discipline while also investing in growth opportunities [12] Other Important Information - Non-performing assets decreased significantly, down approximately 40% compared to year-end 2024, indicating improved asset quality [7] - The company returned $119 million in capital during the quarter, including $109 million in buybacks, representing 3.7% of outstanding shares [8] Q&A Session Summary Question: Can you discuss the better commercial trends and what is driving strong originations? - Management noted that improved economic clarity led to strong originations and fundings in the commercial sector, with a pipeline exceeding $300 million [15][17] Question: What are the parameters for capital return and buybacks? - The company focuses on CET1 and TCE ratios, with a capital return philosophy primarily through buybacks, aiming to return roughly 100% of net income annually [19][20] Question: What is the outlook for Cash Connect revenue and profitability? - Management indicated that while revenue may be impacted by interest rates, margin improvements are expected due to pricing strategies and operational efficiencies [25][28] Question: What is the anticipated mix of deposit growth? - The company aims to match fund loan growth and is focused on growing non-interest-bearing deposits, particularly from institutional services and small business contributions [35][80] Question: Are there any ongoing evaluations of business segments for profitability? - Management confirmed ongoing evaluations of business segments to ensure strategic fit and profitability, with a focus on shedding low-profitability partnerships [44][46] Question: What are the expectations around M&A activity? - Management remains open to M&A opportunities that could strengthen their market position, while also focusing on organic growth [50][51]

Financial Data and Key Metrics Changes - The net interest margin (NIM) for Q4 2025 was 3.74%, an increase of 20 basis points from Q4 2024, while the full-year NIM was 3.69% compared to 3.57% in 2024 [4] - Return on average assets for Q4 2025 was 1.21%, up from 1.10% in Q4 2024, and return on tangible common equity improved to 12.58% from 11.82% [4] - Net income for Q4 2025 was $12.3 million, or 49 cents per diluted share, with total loans declining by $81 million from the end of Q3 2025 [11] Business Line Data and Key Metrics Changes - Small business loan performance was disappointing, with delinquency and charge-off levels exceeding acceptable limits, prompting changes in credit parameters [5] - Non-interest income increased by almost $2 million year-over-year, with gains from SBA loan sales higher in 2025, although residential mortgage sales remained muted [5][6] - The non-interest expense to average asset ratio improved to 1.97% for 2025 from 2.01% in 2024, reflecting effective expense management [6] Market Data and Key Metrics Changes - Deposit balances decreased by $21 million in Q4 2025, primarily due to a $27.1 million decline in broker deposits, but new customer acquisition was strong [11] - The bank's focus on relationship-based customers helped grow interest-bearing demand deposits by $47 million, or 33% annualized, compared to September 30 [19] - The lending pipeline at year-end stood at $284 million, with C&I loans making up 61% of the pipeline [27] Company Strategy and Development Direction - The company aims to close the gap with peers in cost of funds, increase non-interest income generation, and reduce non-interest expense to average asset ratio [10] - The strategy includes optimizing the deposit portfolio by lowering costs while deepening high-quality relationships [22] - The company is evolving into a middle-market commercial bank, focusing on profitability rather than growth for its own sake [22] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for 2026, expecting to achieve a $200 million net loan growth goal, driven by growth in asset-based lending and community banking [9] - The company anticipates stabilization of credit costs in the small business portfolio due to implemented changes [7] - Management noted that while there were challenges, overall credit quality in core CRE and community banking divisions remained strong [7] Other Important Information - The efficiency ratio improved to 49.46%, remaining below 60% for the 26th consecutive quarter, and tangible book value per share grew more than 12% annualized to $15.81 [17] - The company announced a 50% increase in its quarterly cash dividend, reflecting strong capital ratios [17] - A new share repurchase plan was approved for up to 1.2 million shares, totaling $20 million, although no buybacks were executed in Q4 [48] Q&A Session Summary Question: Discussion on loan growth outlook - Management acknowledged the unpredictability of payoffs but noted that high payoff activity was not indicative of broader macro conditions, expecting a return to strong growth [34][35] Question: Details on downgraded C&I credit - The downgraded loan was from a multi-location consumer-based business facing performance declines, with management closely monitoring the situation [41] Question: Thoughts on expense run rate - Management indicated a focus on keeping expense growth limited while driving revenue growth to improve efficiency ratios [42][45] Question: Status of share buyback plan - A new share buyback plan was approved, but no activity occurred in Q4 due to timing issues with regulatory approvals [46][48]

Financial Data and Key Metrics Changes - The company reported net earnings of $6.8 million and earnings per share of $0.28 for the third quarter, compared to core income of $2 million and $0.08 per share in the same quarter of 2024 [4] - Return on Assets (ROA) improved to 70 basis points, and Return on Tangible Common Equity (ROTCE) improved to 9.45% [4] - Core ROA adjusted for certain non-permanent items is closer to 90 basis points, aligning with the target of 1% ROA [5] - Net interest margin for the third quarter was 3.18%, up from 2.86% in the previous quarter and 2.97% in the same period last year [19] Business Line Data and Key Metrics Changes - The mortgage division's production increased from approximately $20 million per month to $100-$120 million per month, with pre-tax earnings of about $1.9 million for the quarter [10] - The Mortgage Warehouse division showed average balances of $210 million, ending balances of $327 million, and pre-tax earnings of about $1.6 million [11] - Panacea Financial Division's loan balances increased to $530 million, with deposits growing to $132 million, a 50% increase year-over-year [12] Market Data and Key Metrics Changes - Non-interest-bearing checking accounts grew by about 16% compared to a year ago, improving the deposit mix and reducing the cost of deposits by almost 20% [7] - Average earning assets increased by 10% annualized in the third quarter, positioning the company to replace earning assets sold a year ago [18] - Non-interest income was $12 million in the quarter, up from $10.6 million in the previous quarter, driven primarily by increased mortgage revenue [21] Company Strategy and Development Direction - The company is focused on increasing the proportion of non-interest-bearing deposits to around 20% of total deposits, which is currently about 20% in the core bank [34] - The strategy emphasizes core funding through checking accounts rather than relying on brokered CDs or institutional borrowings [42] - The company aims to maintain a competitive edge by driving checking account growth at rates better than 10% [42] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving a 1% ROA target, citing strong margins and a favorable deposit mix [5][23] - The company anticipates continued growth in profitability with minimal operating expense increases, despite inflationary pressures [22] - Management noted that the current quarter's results reflect a trend towards improved profitability, with fewer one-time items affecting core earnings [23] Other Important Information - The company has a pipeline of new opportunities in the Mortgage Warehouse division, with over $1 billion of uncommitted lines approved [11] - The company is actively managing credit quality, with a focus on resolving non-accrual loans and maintaining strong debt coverage ratios [15][50] Q&A Session Summary Question: Thoughts on overall loan growth for the fourth quarter and into 2026 - Management indicated potential runoff in the Mortgage Warehouse division but expressed confidence in sustaining levels and achieving 6-8% growth in the core bank [30][31] Question: Timing for reaching a 3.30% margin - Management expects to reach a 3.30% margin by the first quarter of next year, focusing on increasing non-interest-bearing deposits [32][34] Question: Impact of interest rates on deposit costs - Management noted that while competition may drive rates down, their growth in checking accounts allows for competitive positioning on deposit rates [41][42] Question: Evidence of customer stickiness in digital banking - Management confirmed that digital customers are stickier than expected, with over 90% having multiple accounts or referrals [43][44] Question: Resolution of asset quality issues - Management indicated that some loans may be resolved in the near term, potentially improving margins [49][50]

Financial Data and Key Metrics Changes - Year-to-date net income totaled $167.5 million, an increase of $31.9 million or 23.5% from the nine months ended February 2024 [6] - Earnings per share totaled $2.90, an increase of $0.59 or 25.5% during the same period [6] - Return on assets (ROA) was 1.22%, consistent with year-to-date performance [4] - Efficiency ratio was 55%, reflecting high performance [4] - Total revenues in Q3 showed meaningful growth with net interest income increasing by $700,000 and non-interest income increasing by $1.2 million [16] Business Line Data and Key Metrics Changes - Commercial loan growth for the quarter was $268 million, over 10% annualized, with year-to-date growth of $699 million, over 9% annualized [10] - Consumer segment contributed $21 million in loan growth for the quarter, driven by residential mortgage, HELOC, and private banking relationships [11] - Total loan portfolio yield increased to 6.4%, driven by loan originations and refinances at an average yield of 6.84% [19] Market Data and Key Metrics Changes - Total deposits increased by $96 million during the quarter, with non-maturity categories growing at nearly 5% annualized [11] - Maturity deposit balances decreased by $198 million year-to-date, while non-maturity deposit balances increased by $178 million [12] Company Strategy and Development Direction - The company announced the acquisition of First Savings Financial Group, adding approximately $2.4 billion in assets and expanding into Southern Indiana [4] - The strategy remains focused on commercial lending across Indiana, Michigan, and Ohio, with an emphasis on enhancing fee income through SBA loans and other products [9] - The company aims to build on the acquired deposit franchise to create a community bank model similar to previous successful acquisitions [4] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining loan growth and increasing market share activities into the fourth quarter [10] - The company anticipates a mid-first quarter closing for the acquisition and a mid-second quarter integration [5] - Management noted that the Midwest economies continue to expand, contributing to positive business outlooks [10] Other Important Information - The tangible common equity ratio increased to 9.18%, providing meaningful capital flexibility [6] - The company repurchased 162,474 shares totaling $6.5 million during the quarter, with total share repurchases year-to-date reaching $36.5 million [23] Q&A Session Summary Question: Expense outlook for Q4 and 2026 - Management expects Q4 core expenses to be in line with Q3, with no meaningful increase anticipated [33][34] Question: Impact of potential rate cuts on margins - Management predicts a few basis points of margin compression if rate cuts occur, but they are actively managing deposit rates to mitigate this [35][36] Question: Deposit cost increase during the quarter - The increase was primarily due to competitive pressures requiring higher rates on specials [38] Question: Future M&A ambitions - Management indicated that while they are busy with the current acquisition, they are not prioritizing additional M&A at this time [51] Question: Sustainability of loan growth - Management believes the current loan growth is sustainable, driven by normal business activity and strong pipelines [59][62] Question: Capital generation and uses of excess capital - Management plans to continue using capital for asset generation, dividends, and share buybacks, while optimizing the balance sheet [106][108] Question: Asset quality and reserve levels - Management maintains a conservative approach to reserves, reflecting a higher coverage ratio compared to peers [109] Question: Progression of net interest income (NII) - Management is confident in the ability to grow NII dollars even with anticipated rate cuts, due to effective management of deposit costs [113]

Financial Data and Key Metrics Changes - First quarter net income declined to $2.3 million or $0.13 per share, primarily due to strategic actions taken to address non-performing assets [3] - Non-performing assets were reduced by 20% and net exposure to non-performing loans decreased by 32% to $51 million [3] - Net interest income before provisions increased for the third consecutive quarter to $26.2 million [8] - Net interest margin increased by 12 basis points to 2.88% due to a decline in the cost of interest-bearing deposits [6][10] Business Line Data and Key Metrics Changes - Loans held for investment grew by $90 million or 12% on an annualized basis, driven by growth in commercial, SBA, and SFR balances [5] - Total first quarter loan originations amounted to $201 million at a blended yield of 6.77% [6] - Non-interest income declined by $4.34 million to $2.3 million due to lower gains on the sale of loans [10] Market Data and Key Metrics Changes - Total deposits increased at an 8% annualized rate to $3.14 billion, with growth in money market accounts and CDs offsetting a decline in non-interest bearing accounts [13] - The loan portfolio yield remained stable at 6.03% [12] Company Strategy and Development Direction - The company is focusing on resolving non-performing loans quickly while minimizing the impact on earnings and capital [3] - There is an ongoing effort to reduce reliance on wholesale funding, with a successful CD campaign in the first quarter [46] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in resolving remaining non-performing assets and expects to report additional progress in upcoming quarters [4] - The company anticipates continued loan growth, albeit at a more moderate pace than the first quarter [6] - Management believes that by the second half of 2025, there could be a target for reducing non-performing loans to a normal baseline [54] Other Important Information - The company’s tangible book value per share increased to $24.63 [13] - Capital ratios remain strong, with all capital ratios above regulatory well-capitalized levels [14] Q&A Session Summary Question: Thoughts on potential share repurchase - Management recognizes that a buyback is one of the best uses of excess capital and is working to put a buyback in place [19] Question: Dynamics within the margin and FHLB advances - The FHLB advances are fully priced into the March net interest margin, and the net interest margin is slightly below the quarter's average [21] Question: Margin drag from non-accrual loans - There is a drag on net interest margin from non-accrual loans, with $20 million potentially returning to accrual status [24] Question: Appetite for more problem loan sales - Management is open to sales but believes they are well reserved for future write-offs [29] Question: Exposure to tariff impacts - Management has reached out to top customers and does not observe any potential financial impact from tariffs at this time [34] Question: Loan growth expectations and deposit trends - Management expects to fund loan growth organically and noted some migration into higher-yielding products [46] Question: Non-interest expenses outlook - Management estimates operating expenses to be around $17.5 million to $18 million, with some moderation expected [66]