Summary of Zomedica's Investor Webinar Company Overview - **Company**: Zomedica - **Industry**: Animal Health - **Focus**: Advancing animal health through technology and digital innovation, enhancing veterinary practices, and improving clinical outcomes for pets and their owners [2][3] Core Points and Arguments 1. **Technological Advancements** - The animal health industry is experiencing significant changes due to advancements in diagnostics, connectivity, and artificial intelligence (AI) [3] - Zomedica is investing in connected devices, cloud platforms, and AI to enhance veterinary care [3][6] 2. **Five Pillars of Zomedica's Mission** - **Quality of Care**: Improve pet care quality [5] - **Pet Parent Satisfaction**: Enhance confidence and comfort for pet owners [5] - **Veterinarian Workflow**: Streamline daily operations for veterinarians [5] - **Veterinarian Cash Flow**: Ensure financial accessibility of offerings [5] - **Profitability**: Increase profitability for veterinary clinics [5] 3. **Market Trends** - Investment in AI in animal health is projected to grow from $1.57 billion in 2024 to nearly $7 billion by 2033, with an 18% CAGR [9] - The global pet technology market is expected to rise from $7.6 billion in 2024 to over $17 billion by 2033 [9] - The veterinary telehealth market is forecasted to grow from approximately $620 million in 2024 to $3.2 billion by 2034, also an 18% CAGR [10] 4. **Digital Transformation Journey** - Zomedica has launched several platforms, including MyZomedica and TRUFORMA, to enhance customer experience and product integration [12][14] - The company has developed a mobile app to support training and maximize revenue from its products [13] 5. **AI Integration and Data Utilization** - Zomedica is leveraging AI for improved diagnostics and clinical decision support, enhancing the veterinarian-pet parent relationship [11][24] - The company is building a data foundation to support AI solutions, which will drive long-term value [24][25] 6. **PIMS Integration** - Zomedica plans to integrate its products with Patient Information Management Systems (PIMS) by the end of Q2 2026, enhancing workflow and convenience for veterinary clinics [41][43] 7. **Financial Outlook** - Zomedica anticipates reaching break-even with an annualized revenue of $55 million by 2027 [36][56] - The company expects to report its first revenue from a collaboration with Rahm Sensor in Q1 2026 [30][31] Other Important Content - Zomedica's manufacturing capacity is sufficient to meet demand without requiring additional capital expenditure [32] - The company is focused on maintaining margins while driving revenue growth and reducing operating expenses [56][57] - Zomedica is exploring partnerships with larger companies and expanding its presence in the equine market [40][62] Conclusion Zomedica is positioned to capitalize on the growing trends in the animal health industry through its innovative technology and digital strategies. The company's focus on improving veterinary practices and enhancing pet care is expected to drive long-term growth and shareholder value.

Financial Data and Key Metrics Changes - The company generated net income of $3.3 million, or $0.34 per diluted share in Q4 2025, which was higher than the prior quarter [6] - Gross revenue increased by 1.5% from the prior quarter and 12.2% from Q4 2024 [10] - Net interest income rose by 5.6% from the prior quarter and 21.7% from Q4 2024, with net interest margin (NIM) increasing to 2.71% [10][11] - Tangible book value per share increased by 1.6% this quarter [6] Business Line Data and Key Metrics Changes - Loans held for investment increased by $59 million from the end of the prior quarter, with new loan production of $146 million in Q4 [7] - Total deposits increased by $102 million from the end of the prior quarter, with average deposits up 10% compared to Q4 2024 [8][9] - Assets under management in Trust and Investment Management decreased by $155 million, primarily due to net withdrawals [9] Market Data and Key Metrics Changes - The company experienced solid loan production diversified across markets, industries, and loan types, supported by healthy economic conditions [6] - The market remains competitive in terms of pricing on loans and deposits, but the company focuses on service quality rather than competing on rates [4] Company Strategy and Development Direction - The company aims to maintain a conservative approach to new loan production with disciplined underwriting and pricing criteria [4] - There is a focus on organic growth and leveraging market disruption to recruit talent and new clients [14][87] - The company is investing in technology infrastructure, product teams, and marketing to enhance efficiency and value [91] Management's Comments on Operating Environment and Future Outlook - Management sees healthy economic conditions in their markets and expects continued loan and deposit growth in 2026 [14] - Positive trends in net interest margin and fee income are anticipated, with a goal of achieving a 1% return on assets (ROA) [43][94] - The company does not foresee any meaningful deterioration in asset quality based on current portfolio trends [15] Other Important Information - A one-time $1.4 million write-down on an OREO property impacted non-interest expenses, but excluding this, expenses decreased by $100,000 [12] - The company has shifted its focus in Trust and Investment Management from investment management to fiduciary and planning-driven services [26] Q&A Session Summary Question: Margin outlook and loan repricing - Management expects further NIM expansion through 2026, with $250 million in fixed-rate loans maturing over the next year providing repricing opportunities [22][23] Question: Asset management and mortgage banking trends - AUM decline was due to net withdrawals in lower-yielding categories, but higher-yielding categories are improving [25] - Mortgage production is expected to be stronger in Q2 and Q3 of 2026, with a focus on building the MLO team [28] Question: Expense growth rate in 2026 - The company aims to keep expenses below $20 million per quarter while investing in growth opportunities [38] Question: Profitability improvement potential in 2026 - The company targets a 1% ROA, with expectations for continued NIM improvement and operating growth [43] Question: Deposit competition and loan pipeline - Both loan and deposit pipelines are strong, with a focus on optimizing the balance sheet [47] Question: Tax rate outlook - The effective tax rate is expected to stabilize around 23%-24% moving forward [76][77] Question: Mortgage market expectations for 2026 - The company is well-positioned for future mortgage opportunities as market conditions improve [82][83]

Financial Data and Key Metrics Changes - The company generated net income of $3.3 million, or $0.34 per diluted share in the fourth quarter, which was higher than the prior quarter [6] - Gross revenue increased by 1.5% from the prior quarter and 12.2% from the fourth quarter of 2024 [10] - Net interest income increased by 5.6% from the prior quarter and 21.7% from the fourth quarter of 2024, with a net interest margin (NIM) of 2.71%, up 17 basis points from the prior quarter [10][11] Business Line Data and Key Metrics Changes - Loans held for investment increased by $59 million from the end of the prior quarter, with new loan production of $146 million in the fourth quarter [7] - Total deposits increased by $102 million from the end of the prior quarter, with average deposits up 10% compared to the fourth quarter of 2024 [8][9] - Assets under management decreased by $155 million, primarily due to net withdrawals in low-fee product categories [9] Market Data and Key Metrics Changes - The company experienced a solid level of loan production diversified across markets, industries, and loan types, with a focus on maintaining conservative underwriting standards [6][8] - The market remains competitive in terms of pricing on loans and deposits, but the company continues to generate new loans and deposits through superior service [4] Company Strategy and Development Direction - The company is focused on organic growth and leveraging market disruption to recruit talent and new clients, particularly in the Colorado banking market [14][33] - A new market presence in Arizona is expected to provide growth opportunities, with strong loan and deposit pipelines anticipated for 2026 [14][33] - The company aims to maintain a disciplined approach to expense management while investing in business growth [38][39] Management's Comments on Operating Environment and Future Outlook - Management noted generally healthy economic conditions in their markets and expressed optimism about continued growth in loans and deposits in 2026 [14][33] - The company expects positive trends in net interest margin and fee income, with a goal of achieving a 1% return on assets (ROA) [14][43][94] - Management highlighted the importance of maintaining a stable local team of experts to attract clients amid ongoing market disruptions [14][33] Other Important Information - The company reported a one-time $1.4 million write-down on an OREO property, which impacted non-interest expenses [12] - The allowance coverage remained unchanged at 81 basis points of total loans, with stable trends in loan portfolio quality [13] Q&A Session Summary Question: Margin outlook and loan repricing - Management expects further NIM expansion through 2026, with about $250 million in fixed-rate loans maturing over the next year, providing opportunities for repricing [22][23] Question: Asset management and fee income growth - Management noted a decline in AUM due to net withdrawals in lower-yielding categories but sees positive trends in higher-yielding categories [25][26] Question: Expense growth rate in 2026 - The company aims to keep expenses below $20 million per quarter while remaining open to strategic investments that could enhance revenue growth [38][39] Question: Profitability improvement potential in 2026 - Management indicated a target of achieving a 1% ROA, with expectations for continued improvement in NIM and operating growth [43][94] Question: Deposit competition and loan pipeline - Management reported strong feedback on both loan and deposit pipelines, indicating confidence in their ability to attract deposits as needed [47][49] Question: Mortgage market expectations - The company is building its mortgage production capability and expects pent-up demand to create opportunities in the future [81][82]

Financial Data and Key Metrics Changes - The company generated net income of $3.3 million, or $0.34 per diluted share in Q4 2025, which was higher than the prior quarter [5] - Tangible book value per share increased by 1.6% this quarter [5] - Gross revenue increased by 1.5% from the prior quarter and 12.2% from Q4 2024 [10] - Net interest income increased by 5.6% from the prior quarter and 21.7% from Q4 2024 [10] - Non-interest income decreased by approximately $800,000 from the prior quarter [11] Business Line Data and Key Metrics Changes - Loans held for investment increased by $59 million from the end of the prior quarter, with new loan production of $146 million in Q4 [6][7] - Total deposits increased by $102 million from the end of the prior quarter, with average deposits up 10% compared to Q4 2024 [8][9] - Assets under management decreased by $155 million in Q4, primarily due to net withdrawals in low-fee and fixed-fee product categories [9] Market Data and Key Metrics Changes - The market remains competitive in terms of pricing on loans and deposits, but the company continues to generate new loans and deposits through superior service [4] - The company has seen good opportunities to add new clients and talent due to ongoing disruption from M&A activity in the Colorado banking market [13] Company Strategy and Development Direction - The company maintains a conservative approach to new loan production with disciplined underwriting and pricing criteria [4] - The focus is on organic growth, leveraging market disruption to recruit talent and acquire new clients [82] - The company is investing in technology infrastructure, product teams, and internal processes for efficiency [86] Management's Comments on Operating Environment and Future Outlook - Management sees healthy economic conditions in their markets and expects loan and deposit growth in 2026 to be similar to 2025 [13] - Positive trends in net interest margin and fee income are anticipated, with a focus on disciplined expense control [14] - Management does not foresee any meaningful deterioration in asset quality [15] Other Important Information - The company had a one-time $1.4 million write-down on an OREO property, which impacted non-interest expenses [11] - The allowance coverage remained unchanged at 81 basis points of total loans [12] Q&A Session Summary Question: Margin outlook and loan repricing - Management expects further net interest margin expansion through 2026, with about $250 million in fixed-rate loans maturing over the next year [21][22] Question: Asset management and wealth management business trends - The decline in assets under management was due to net withdrawals in lower-yielding categories, but higher-yielding categories are showing improvements [24][25] Question: Expense outlook for 2026 - The company aims to keep expenses below $20 million per quarter while investing in growth opportunities [36] Question: Profitability improvement potential in 2026 - The near-term objective is to achieve a 1% return on assets, with a current operating run rate of about $2 per share [41] Question: Matching loan pipeline with core deposits - Both loan and deposit pipelines are reported as strong, with a focus on bringing in deposits as needed [42][45] Question: Tax rate outlook - The effective tax rate is expected to stabilize around 23%-24% going forward [72] Question: Mortgage market expectations for 2026 - The company is building production capability in the mortgage sector and expects pent-up demand to create opportunities [77][78]

Financial Data and Key Metrics Changes - For Q4 2025, the company reported a GAAP net income of $21 million and an adjusted net income of $50 million, while the full year net income was $100 million and adjusted net income was $293 million [3][10] - Adjusted EPS for Q4 was $0.43, and for the full year, it was $2.44, both exceeding revised guidance [10][31] - Total revenues for Q4 were $3.6 billion, up 2.8% year-over-year, while full year revenues reached $14.2 billion, up 3.3% year-over-year [13][15] Business Line Data and Key Metrics Changes - Premium cabin revenues increased by 7.1% year-over-year in Q4, representing 36% of total revenue, while main cabin revenues decreased by 2.4% [15][16] - Managed corporate revenues rose by 9% in Q4, with a 20% year-over-year increase in forward-looking business bookings for Q1 2026 [17][18] - Loyalty revenues, including bank cash and member redemptions, were up 12% year-over-year in Q4, with bank cash remuneration for the full year at $2.1 billion, up 10% [18] Market Data and Key Metrics Changes - Hawaii was the strongest region in the network year-over-year, demonstrating the benefits of the Alaska and Hawaiian merger [8] - The company is expanding its international service, launching flights to London, Rome, and Reykjavik, with strong demand observed in these new markets [23][24] Company Strategy and Development Direction - The company is focused on its "Alaska Accelerate" vision, aiming for long-term growth through synergies and initiatives, including a significant aircraft order from Boeing [5][7] - The strategy includes enhancing premium experiences, expanding international routes, and improving loyalty programs [11][20] - The company aims to achieve $10 of earnings per share by 2027, with a focus on executing its $1 billion profit unlock plan [11][37] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's future, citing strong demand momentum and a constructive macroeconomic backdrop [30][37] - The company anticipates modest growth in 2026, with full-year adjusted EPS expected to be in the range of $3.50-$6.50 [11][34] - Management acknowledged the challenges faced in 2025 but emphasized the progress made in integration and operational efficiency [25][32] Other Important Information - The company achieved a single operating certificate just 13 months post-merger, facilitating a seamless guest experience [9] - The company has invested in technology infrastructure to address past IT outages and improve operational resilience [9][74] Q&A Session Summary Question: On the increase in managed corporate travel, what drives the 20% growth? - Management indicated that the growth aligns with overall bookings and reflects increased penetration into corporate contracts [39][40] Question: Are all integration milestones complete, or are there specific ones expected in 2026? - Management confirmed that major guest-facing systems are integrated, with the final milestone occurring in April 2026 [42] Question: What are the risks associated with the 2026 guidance? - Management highlighted macroeconomic factors and potential fuel price spikes as risks that could impact earnings [47][49] Question: How is the company addressing cost management and unit revenue? - Management noted that cost performance improved in Q4, with expectations for a favorable cost trajectory as the year progresses [73][78] Question: How does the company rank in terms of loyalty program profitability? - Management expressed confidence that the loyalty program is among the top in the industry, emphasizing its value and growth potential [61][64] Question: What is the outlook for capacity growth and its impact on revenue? - Management indicated that capacity growth is aligned with economic growth, which should positively influence unit revenue [89][93]

Financial Data and Key Metrics Changes - For Q4 2025, the company reported GAAP net income of $21 million and adjusted net income of $50 million, while for the full year, GAAP net income was $100 million and adjusted net income was $293 million [3][9] - Adjusted EPS for Q4 was $0.43 and for the full year was $2.44, both exceeding revised guidance [9][30] - Full-year total revenues reached $14.2 billion, up 3.3% year-over-year, with unit revenues increasing by 1.4% [12][14] Business Line Data and Key Metrics Changes - Premium cabin revenues increased by 7.1% year-over-year in Q4, while main cabin revenues decreased by 2.4% [14][15] - Managed corporate revenues rose by 9% in Q4, with a 20% year-over-year increase in forward-looking business bookings for Q1 2026 [16][17] - Loyalty revenues, including bank cash and member redemptions, were up 12% year-over-year in Q4 [17] Market Data and Key Metrics Changes - Hawaii was the strongest region in the network, demonstrating the benefits of the merger with Hawaiian Airlines [7] - The company is expanding its international footprint, launching flights to Tokyo, Seoul, London, Rome, and Reykjavik [7][22] - Advanced bookings for the network have been robust, with several of the highest booking days in the company's history occurring recently [23] Company Strategy and Development Direction - The company is focused on its "Alaska Accelerate" vision, which aims to strengthen its competitive position and drive long-term growth [5][10] - The largest aircraft order in the company's history with Boeing supports growth through 2035, with a total of 261 aircraft if all options are exercised [6] - The company aims to build Seattle into a world-class global hub with at least 12 destinations [6] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving $10 of earnings per share by 2027, driven by the execution of the Alaska Accelerate plan [10][34] - The macroeconomic environment is expected to improve, with a closer alignment between economic growth and capacity growth anticipated for 2026 [28][87] - The company is optimistic about the demand recovery and expects solidly positive unit revenue growth in Q1 2026 [24][29] Other Important Information - The company achieved a single operating certificate just 13 months post-merger, which is expected to enhance operational efficiency [8] - The company repurchased $570 million of its stock in 2025, reducing the diluted share count to 117 million shares [30][31] - The company plans to invest in technology infrastructure to improve operational resilience and customer experience [8][72] Q&A Session Summary Question: On the increase in managed corporate travel, what drives the 20% growth? - Management indicated that the growth is in line with bookings and driven by volumes, particularly in technology and other industries [37][38] Question: Are all integration milestones complete, or are there specific ones expected in 2026? - Management confirmed that major guest-facing systems are in place, with the final milestone being the operational cutover in April [40] Question: What are the risks associated with the 2026 guidance? - Management highlighted that macroeconomic factors and fuel price volatility could impact the lower end of the guidance range [46][48] Question: How is the company addressing cost management and unit revenue? - Management noted that cost performance was strong in Q4, with expectations for improved cost trajectory as the year progresses [71][100] Question: What is the outlook for unit revenue growth in Q1? - Management expressed optimism for solidly positive unit revenue growth in Q1, supported by strong demand and easier comparisons [96][99]

Financial Data and Key Metrics Changes - Alaska Air Group reported a fourth quarter GAAP net income of $21 million and a full year net income of $100 million, with adjusted fourth quarter and full year net income of $50 million and $293 million respectively [2][3] - Adjusted EPS for the fourth quarter was $0.43, and for the full year, it was $2.44, both exceeding revised guidance [8][26] - Full year adjusted pre-tax margin was 2.8%, down about one point compared to 2024 on a pro forma basis [27] Business Line Data and Key Metrics Changes - Total revenues for the fourth quarter were $3.6 billion, up 2.8% year-over-year, with capacity growth of 2.2% [11] - Premium cabin revenues increased by 7.1% year-over-year, representing 36% of total revenue, while main cabin revenues decreased by 2.4% [12][13] - Managed corporate revenues in the fourth quarter were up 9%, with forward-looking business bookings for 2026 up 20% year-over-year for Q1 [14][15] Market Data and Key Metrics Changes - Hawaii was the strongest region in the network on a year-over-year basis, demonstrating the benefits of the merger with Hawaiian Airlines [6] - Advanced bookings across the network have been robust, with several of the highest booking days in Air Group's history occurring recently [21] - The company expects first-quarter capacity to be up 1%-2%, with full-year capacity projected to be up between 2%-3% [18] Company Strategy and Development Direction - The company is focused on executing its Alaska Accelerate vision, which includes significant aircraft orders and expanding its global presence [4][5] - The launch of the Atmos Rewards loyalty program and the Atmos Summit Card has driven unprecedented increases in card spend and new card members [15][16] - The company aims to build Seattle into a world-class global hub, with new international routes and enhanced customer experiences [6][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving $10 of earnings per share by 2027, driven by the execution of the Alaska Accelerate plan [9][32] - The macroeconomic environment is expected to improve, with a closer alignment between economic growth and capacity growth anticipated for 2026 [53] - The company acknowledges the challenges faced in 2025 but sees strong demand momentum building into 2026 [23][26] Other Important Information - The company repurchased $570 million of its stock in 2025, reducing the diluted share count to 117 million shares [28][29] - The company is investing in technology infrastructure to address past IT outages and improve operational efficiency [7][47] - The company expects to generate positive free cash flow in 2026 with planned CapEx of $1.5 billion [31] Q&A Session Summary Question: On the increase in managed corporate travel, what drives the 20% growth? - Management noted that the growth is driven by volumes and the expanded network, which has improved corporate contract penetration [33][34] Question: What remaining integration milestones are expected for 2026? - Management confirmed that all major guest-facing systems are now unified, with the final integration milestone occurring in April [41][42] Question: What are the risks associated with the guidance for 2026? - Management indicated that risks include macroeconomic factors and potential spikes in fuel prices, which could impact earnings [36][37] Question: How is the company addressing cost management and IT improvements? - Management highlighted strong performance in cost management across various categories and ongoing investments in IT resilience [46][47] Question: What is the outlook for unit revenue growth in Q1? - Management expects solidly positive unit revenue growth in Q1, supported by strong demand and easier year-over-year comparisons [56][59] Question: What is driving the volatility in West Coast fuel prices? - Management stated that stabilization of West Coast refineries is needed to reduce volatility and improve fuel pricing [60][61]

Financial Data and Key Metrics Changes - The company reported earnings per share of $0.23 on a fully diluted GAAP basis and $0.41 on a core basis for Q4 2025 [3] - Net interest income grew by $5 million, or 5%, compared to the prior quarter, and increased by 14% year-over-year [4] - The net interest margin declined modestly to 2.87% compared to the previous quarter [4] - Total loans increased by $474 million, representing an 18% annualized growth rate, driven by $1 billion in originations [4] Business Line Data and Key Metrics Changes - The C&I business grew by 42% for the year, contributing significantly to loan growth [9] - Non-interest income decreased by $3.3 million to $9 million during the quarter, primarily due to lower title fees and a reduction in the gain on sale of loans [11] - Total deposits increased by $528 million, with $323 million driven by organic growth across various business lines [10] Market Data and Key Metrics Changes - The company’s asset quality remained strong, with total loans classified as special mention and substandard decreasing by 10% to $112 million, or just 1% of total loans [5] - Non-performing loans to total loans stood at 0.2%, and non-performing assets to total assets were at 0.22% [14] Company Strategy and Development Direction - The company announced a merger agreement with Flushing Financial Corporation, which is expected to enhance organic growth initiatives in New York and improve profitability [7] - The focus remains on continued organic growth efforts, which have shown success in the current quarter [8] Management's Comments on Operating Environment and Future Outlook - Management expects high single-digit growth in net interest income for the year, despite the typical seasonal slowdown in Q1 [22] - The effective tax rate is expected to remain in the 23%-25% range quarterly, absent any changes in tax policy [16] - The company anticipates continued growth in loans and deposits, with net interest income and margin expected to improve throughout the year [16] Other Important Information - The company did not repurchase any shares this quarter, as capital was utilized to support loan growth [7] - The quarterly cash dividend of $0.20 per common share was approved, marking the 116th consecutive quarterly cash dividend [7] Q&A Session Summary Question: Clarity on net interest income guidance - Management indicated that net interest income growth is expected to outpace loan balance growth due to the compounding effect of the balance sheet [21][22] Question: Commentary on loan sales post-merger - Management stated it is too early to provide precise figures on loan sales after the merger, but they expect to improve margins and reduce credit risk over time [23] Question: Expense line clarification - The recurring CRT premium expense is categorized under other expenses, similar to insurance premium expenses [24][25] Question: C&I growth expectations for 2026 - Management expects C&I growth rates to remain in the 7%-9% range, with a strong focus on talent recruitment [35] Question: Deposit growth outlook for Premier Banking - Management confirmed that the target for $2 billion-$3 billion in deposits by the end of 2027 remains intact, despite some seasonal fluctuations [38] Question: Deposit costs outlook - Management expects deposit costs to decrease over the year, with a lag in repricing relative to rate cuts [73]

Financial Data and Key Metrics Changes - Total assets reached $2.8 billion, up 8.1% year-over-year [2] - Loans grew by $216 million, or 11%, reflecting strong commercial activity [2] - Deposits increased to $171 million, or 7.9%, demonstrating continued franchise growth [2] - Net interest income expanded to 3.27%, improving from 3.16% in the prior year [2] - Non-performing loans stood at 0.14% of total loans, indicating excellent credit quality [3] - Tangible book value per share increased 10.8% year-over-year to $11.97 [3] - GAAP-diluted EPS was $0.07, with operational diluted EPS at $0.44, consistent with the previous quarter [4] Business Line Data and Key Metrics Changes - Average loans increased $31.9 million, or 6.02% annualized compared to the prior quarter [10] - Gross loan production totaled $196 million in Q4, with $83.5 million from correspondent banking [12] - Net interest income increased $933,000 on a linked quarter basis, representing 17.4% annualized growth [13] - Portfolio yield declined modestly to 6.16% due to Federal Reserve rate cuts [11] Market Data and Key Metrics Changes - Average deposits were stable, down $3.9 million compared to the prior quarter but up $314.6 million year-over-year [10] - Interest-bearing deposit rates decreased 27 basis points to 3.02% [10] - Total deposit costs improved 25 basis points quarter-over-quarter [10] Company Strategy and Development Direction - The company aims to expand and strengthen its deposit base, focusing on multi-vertical and relationship-driven strategies [26] - Key business lines include Business Banking, Private Client Group, Association Banking, and Correspondent Banking, each with clear growth plans [27][28][29] - The strategy emphasizes building sticky, relationship-anchored deposits and expanding production capacity [27][28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the bank's ability to execute its plans for 2026, focusing on profitability and shareholder value [26] - The company anticipates further NIM improvement supported by rate cuts and disciplined deposit pricing strategies [14] - Management highlighted the importance of maintaining a healthy loan-to-deposit ratio between 90% and 95% [40] Other Important Information - The board approved a 25% increase in quarterly cash dividends to $0.12 per share [5] - The bank's capital ratios exceed regulatory requirements comfortably [5] - The company executed a $40 million subordinated debt issuance, primarily used for share repurchase [3] Q&A Session Summary Question: Deposit trends and shrinkage at year-end - Management noted a significant deposit move of over $100 million from a long-term client, which is expected to rebuild over time [36] - A $50 million swing in correspondent banking deposits was also identified, which has been recovered in January [37] Question: Loan-to-deposit ratio expectations - Management prefers a loan-to-deposit ratio between 90% and 95%, indicating a desire for liquidity [40] Question: SBA vertical opportunity - The SBA initiative has been growing prudently, with plans to increase annual volume to $40 million or $50 million over the next three years [42] Question: Capital strategy and priorities - The focus remains on building capital and returning it to shareholders, with no significant plans for additional actions beyond producing good earnings [48]

Financial Data and Key Metrics Changes - The company reported earnings per share of $0.23 on a fully diluted GAAP basis and $0.41 on a core basis for Q4 2025 [3] - Net interest income grew by $5 million, or 5%, compared to the prior quarter, and increased by 14% year-over-year [4] - The net interest margin declined modestly to 2.87% compared to the previous quarter [4] - Total loans increased by $474 million, representing an 18% annualized growth rate, driven by $1 billion in originations [4] Business Line Data and Key Metrics Changes - The C&I business grew by 42% for the year, benefiting from talent recruitment and favorable borrower conditions [9] - Non-interest income decreased by $3.3 million to $9 million during the quarter, primarily due to lower title fees and a reduction in loan sale gains [11] - Total deposits increased by $528 million, with $323 million driven by organic growth across various business lines [10] Market Data and Key Metrics Changes - The company’s asset quality remained strong, with total loans classified as special mention and substandard decreasing by 10% to $112 million, or just 1% of total loans [5] - Non-performing loans to total loans stood at 0.2%, and non-performing assets to total assets were at 0.22% [14] Company Strategy and Development Direction - The company announced a merger agreement with Flushing Financial Corporation, which is expected to enhance organic growth initiatives in New York and improve profitability and operating scale [7] - The company aims to maintain a loan-to-deposit ratio under 100, with a focus on opportunistic earnings and robust deposit verticals [68] Management's Comments on Operating Environment and Future Outlook - Management expects high single-digit growth in net interest income for the year, despite the typical seasonal slowdown in Q1 [22] - The effective tax rate is expected to remain in the 23%-25% range quarterly, absent any changes in tax policy [16] - Management remains optimistic about continued organic growth efforts, as evidenced by the results of the current quarter [8] Other Important Information - The company did not repurchase any shares this quarter, as capital was utilized to support loan growth [7] - The quarterly cash dividend of $0.20 per common share marks the company's 116th consecutive quarterly cash dividend [7] Q&A Session Summary Question: Clarity on net interest income guidance - Management indicated that net interest income growth is expected to exceed loan balance growth due to the compounding effect of the larger balance sheet [21][22] Question: Commentary on loan sales post-merger - Management stated it is too early to provide precise figures on loan sales, but they expect to improve margins and reduce credit risk over time [23] Question: Expense line clarification - The recurring CRT premium expense is categorized under other expenses, similar to insurance premium expenses [24][25] Question: C&I growth expectations for 2026 - Management anticipates growth rates in the 7%-9% range for C&I, with a focus on talent recruitment and strong deposit growth [35] Question: Deposit growth outlook for Premier Banking - Management confirmed that the target for $2 billion-$3 billion in deposits by the end of 2027 remains intact, despite some seasonal fluctuations [38] Question: Deposit costs outlook for the year - Management expects deposit costs to continue decreasing, lagging behind rate cuts, and anticipates a steady improvement in margins [73][74]