Financial Data and Key Metrics Changes - GAAP diluted EPS for Q4 2025 was $1.12, and full-year GAAP diluted EPS was $3.46, an increase from $2.68 in 2024 [7] - Private education loan originations for Q4 2025 were $1.02 billion, totaling $7.4 billion for the full year, representing a 6% increase over 2024 [7][8] - Net charge-offs for the private education loan portfolio were $98 million in Q4 2025 and $346 million for the full year, equating to 2.15% of average private education loans in repayment, down four basis points from 2024 [8][14] Business Line Data and Key Metrics Changes - The company reported a net interest margin (NIM) of 5.21% for Q4 2025, up 29 basis points year-over-year, and 5.24% for the full year, an increase of five basis points [9] - The total allowance as a percentage of private education loan exposure (reserve rate) was 6% at the end of 2025, up from 5.93% in the previous quarter and 5.83% at the end of 2024 [12] Market Data and Key Metrics Changes - College enrollment trends for Tier 1 schools are up, indicating continued value seen in higher education by students and parents [5] - The company anticipates that the recent federal student lending reforms could contribute an estimated $5 billion in annual originations, representing approximately 70% growth over 2025 [6] Company Strategy and Development Direction - The company is focused on supporting school partners and students as education evolves due to technological changes, emphasizing the importance of acquiring necessary skills for future competitiveness [5][6] - The strategic partnership with KKR aims to enhance capital efficiency and risk transfer benefits, with expectations of significant growth in private education loan originations [7][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the private student lending sector's robustness and a strong outlook for 2026, expecting private education loan origination growth of 12%-14% [18] - The company is prepared for potential economic uncertainties and believes that its strategic initiatives will lead to significant value creation opportunities [22] Other Important Information - The company repurchased 3.8 million shares for $106 million in Q4 2025, totaling 12.8 million shares for $373 million over the full year [9] - Non-interest expenses for the full year were $659 million, a modest increase of 2.6% year-over-year, reflecting disciplined expense management [16] Q&A Session Summary Question: Impact of postponement of wage garnishment on performance - Management indicated that while some customers have federal loans, most do not have Sallie Mae private student loans, and the postponement is not expected to significantly impact the business [24] Question: Modeling 1H vs 2H growth related to Grad PLUS - Management expects modest incremental volume in the first year of phase-in, with growth stepping up over the next two to three years [25][26] Question: Volumes for partnerships and loan sales in 2026 - The first strategic partnership has a minimum commitment of $2 billion in new originations, with expectations of designating about 30% of originations for sale [30] Question: ROI measurement for increased investment - Management emphasized the significant market opportunity for growth and the disciplined approach to measuring ROI on investments [40][41] Question: Confidence level on credit guidance for 2026 - Management expressed confidence in the performance of borrowers in modification programs, with positive payment habits indicating a strong likelihood of success [50][51]

Financial Data and Key Metrics Changes - GAAP diluted EPS for Q4 was $1.12, and full-year GAAP diluted EPS was $3.46, compared to $2.68 in 2024, indicating a significant increase [8][10] - Private education loan originations for Q4 of 2025 were $1.02 billion, and for the full year, $7.4 billion, representing a 6% increase over 2024 [8][10] - Net charge-offs for the private education loan portfolio were $98 million in Q4 and $346 million for the full year, representing 2.15% of average private education loans in repayment, down four basis points from 2024 [9][15] Business Line Data and Key Metrics Changes - The company delivered its inaugural private credit strategic partnership, which is expected to contribute significantly to future originations [7][8] - The net interest margin was 5.21% for Q4, up 29 basis points year-over-year, and 5.24% for the full year, up five basis points [10] - Non-interest expenses for the full year were $659 million, a 2.6% increase year-over-year, reflecting disciplined expense management [17] Market Data and Key Metrics Changes - College enrollment trends for Tier 1 schools are up, indicating continued value in higher education [5] - The company anticipates that the recent federal student lending reforms could contribute an estimated $5 billion in annual originations, representing approximately 70% growth over 2025 [7] Company Strategy and Development Direction - The company plans to invest ahead of anticipated volume growth, with expected non-interest expenses for 2026 between $750 million and $780 million [20] - The strategic partnership business is expected to grow, with a gradual increase in the bank portfolio by one to two percentage points per year post-2026 [22] - The company aims to improve its efficiency ratio each year, targeting a return to the low 30s by 2030 [20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the private student lending sector's robustness and the importance of education in the evolving job market [5][6] - The company expects private education loan origination growth of 12%-14% for 2026, driven by the new PLUS caps [19] - Management acknowledged the challenges in the job market for new graduates but emphasized the effectiveness of their support programs [56] Other Important Information - The company announced a new two-year $500 million share repurchase authorization [10] - The total allowance as a percentage of private education loan exposure was 6% at the end of 2025, up from 5.93% in the previous quarter [14] Q&A Session Summary Question: Impact of wage garnishment postponement on loan performance - Management indicated that the postponement would likely have a net benefit but not a significant impact on their business due to the difference in customer bases [26] Question: Modeling growth from Grad PLUS changes - Management expects modest incremental volume in the first year, with growth stepping up over the next two to three years [28] Question: Loan sales and partnership volumes in 2026 - The strategic partnership has a minimum commitment of $2 billion in new originations, with expectations of selling approximately 30% of originations [32] Question: ROI measurement for increased investments - Management emphasized the significant market opportunity and the disciplined approach to measuring returns on investments [42][44] Question: Confidence in credit outlook for 2026 - Management expressed confidence in the performance of borrowers in modification programs and the overall credit outlook [53][56]

Financial Data and Key Metrics Changes - GAAP diluted EPS for Q4 2025 was $1.12, and full-year GAAP diluted EPS was $3.46, an increase from $2.68 in 2024 [8] - Private education loan originations for Q4 2025 were $1.02 billion, totaling $7.4 billion for the full year, a 6% increase over 2024 [8][9] - Net charge-offs for the private education loan portfolio were $98 million in Q4 2025 and $346 million for the full year, representing 2.15% of average private education loans in repayment, down four basis points from 2024 [9][14] Business Line Data and Key Metrics Changes - The company reported a net interest margin of 5.21% for Q4 2025, up 29 basis points year-over-year, and 5.24% for the full year, up five basis points [10] - The total allowance as a percentage of private education loan exposure (reserve rate) was 6% at the end of 2025, up from 5.93% in the previous quarter [13] - Private education loans delinquent 30 days or more represented 4% of loans in repayment as of year-end, unchanged from Q3 and up from 3.7% at the end of 2024 [14] Market Data and Key Metrics Changes - College enrollment trends for Tier 1 schools are up, indicating continued value seen in higher education [5] - The company anticipates that the recent federal student lending reforms could contribute an estimated $5 billion in annual originations, representing approximately 70% growth over 2025 [6][7] Company Strategy and Development Direction - The company is focused on supporting school partners and students as education evolves due to technological changes [5][6] - A new two-year $500 million share repurchase authorization was announced, reflecting a commitment to returning capital to shareholders [10] - The company expects private education loan origination growth of 12%-14% in 2026, driven by the new PLUS caps [19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the private student lending sector's robustness and the company's strategic positioning for future growth [5][19] - The company is prepared for potential economic uncertainties and believes that improvements in collections effectiveness will mitigate risks associated with early-stage delinquencies [16][51] - Management anticipates EPS acceleration beginning in 2027, with high teens to low 20% growth expected as the PLUS opportunity materializes [22] Other Important Information - Non-interest expenses for the full year were $659 million, a modest 2.6% increase year-over-year, reflecting disciplined expense management [17] - The company ended the quarter with liquidity of 18.6% of total assets and total risk-based capital of 12.4% [18] Q&A Session Summary Question: Impact of wage garnishment postponement on loan performance - Management indicated that while many customers have federal loans, most federal loan customers do not have Sallie Mae private student loans, and the postponement is expected to have a minimal impact on business [25] Question: Modeling growth from Grad PLUS changes - Management expects modest incremental PLUS volume in the first year, with growth stepping up over the next two to three years [26] Question: Volumes for partnerships and loan sales in 2026 - The strategic partnership includes a minimum commitment of $2 billion in new originations, with approximately 30% of originations expected to be sold [30] Question: ROI measurement for increased investment - Management emphasized the significant market opportunity for growth, estimating a potential 70% increase in originations over the next few years [38] Question: Confidence in credit outlook for 2026 - Management expressed confidence in the performance of borrowers in modification programs, with 75% of the 2023 cohort current at the end of 2025 [46][48]

Financial Data and Key Metrics Changes - The company reported net income of $35.2 million and earnings per diluted share of $1.57, representing increases of 17% and 28% respectively compared to the previous year [16] - Return on average assets was 1.87% and return on average tangible equity was 26.7%, compared to 1.61% and 25.5% respectively during the same quarter last year [16] - Deposits totaled $6.4 billion, a decrease of $170 million year-over-year, primarily due to an increase in custodial deposits [16][17] - Average deposits during the quarter were approximately $90 million higher than the previous year [17] Business Line Data and Key Metrics Changes - Net interest income from commercial finance increased by $9.2 million due to higher balances and slightly higher yields [14] - Non-interest income showed solid results, particularly in core card and deposit fees, with growth attributed to new partners [15] - The company originated $1.9 billion in loans during the quarter, with $678 million in commercial finance and $1.2 billion in consumer finance [17] Market Data and Key Metrics Changes - The company experienced favorable deposit balances at multiple partners due to a strong holiday season and continued partner growth [17] - The government shutdown impacted secondary market revenues, but this is expected to normalize in subsequent quarters [15][46] Company Strategy and Development Direction - The company aims to optimize its balance sheet by rotating from securities to loans, increasing net interest income without growing overall asset size [9] - The focus is on generating fee income from balance sheet velocity and originating loans while maintaining a steady balance sheet [10] - The company is committed to enhancing the client experience through an evolved operating model that supports partner growth and scalability [8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in revenue growth from new partnerships and the upcoming tax season, which is expected to drive more consumers into tax preparation offices [11][45] - The company is optimistic about the impact of new partner announcements and the normalization of pricing in the industry [41][42] - Management highlighted the importance of monitoring the performance of new partners and the potential for increased revenue from tax-related financial products [43][45] Other Important Information - The company repurchased approximately 652,000 shares at an average price of $72.07, leaving 4.3 million shares available for repurchase [21] - The fiscal year 2026 guidance for EPS has been raised to a range of $8.55-9.05, assuming no additional rate cuts and an effective tax rate of 18-22% [21] Q&A Session Summary Question: What is the trajectory of the adjusted NIM for Q2? - Management indicated that the adjusted NIM for Q2 is expected to be around 5.31%, with potential for it to be flat to up depending on the macroeconomic environment [25][26] Question: Can you quantify the recovery recorded within the net charge-offs? - Management did not provide specific figures but mentioned that the details would be available in the earnings release [27] Question: How does the company view the threat of FinTechs obtaining their own bank charters? - Management believes that while some FinTechs may pursue bank charters, the complexity and scale required to operate effectively will limit their competitive pressure [29][30] Question: What is the current partner pipeline and expectations for future announcements? - Management reported a full partner pipeline and expressed optimism about future announcements, indicating that the number of partnerships is increasing [42] Question: What factors will influence the updated guidance for the fiscal year? - The timing of new partner contributions and the success of the tax season are key factors that will influence the guidance range [43][45]

Financial Data and Key Metrics Changes - Revenue increased by 15% sequentially to $3.4 billion, with the alumina segment's third-party revenue rising by 3% and the aluminum segment's third-party revenue increasing by 21% [9][10] - Net income attributable to Alcoa was $226 million, slightly down from $232 million in the prior quarter, with earnings per share at $0.85 [9][10] - Adjusted EBITDA was $546 million, reflecting a sequential increase of $276 million primarily due to higher metal prices [11][12] Business Line Data and Key Metrics Changes - In the alumina segment, adjusted EBITDA decreased by $36 million due to lower alumina prices, despite higher shipping volumes [11] - The aluminum segment's adjusted EBITDA increased by $213 million, driven by higher metal prices and lower alumina costs [12] Market Data and Key Metrics Changes - FOB Western Australia alumina prices remained stable but slightly lower than the third quarter average, putting pressure on higher-cost refineries [21] - LME aluminum prices increased by 8% sequentially, reaching $3,200 per metric ton, supported by strong demand and constrained supply [23] Company Strategy and Development Direction - The company is focused on safety, stability, and operational excellence while advancing strategic initiatives to create value in 2026 [30] - Alcoa is working on monetizing remediation sites in the U.S. and expects to reach agreements in the first half of 2026 [7][8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving 2026 production guidance, citing strong operational performance and ongoing smelter restarts [33][34] - The company anticipates challenges in the alumina segment due to pricing pressures but maintains a low-cost position on the cost curve [42][43] Other Important Information - The company ended the year with a strong cash balance of $1.6 billion and free cash flow of $594 million for the year [13][15] - Capital expenditures for 2026 are estimated at $750 million, with a focus on sustaining capital and potential growth opportunities [17][18] Q&A Session Summary Question: Confidence in 2026 production guidance - Management believes the 2026 guidance is attainable based on ongoing smelter restarts and strong production performance [33][34] Question: Domestic supply of alumina and gallium project updates - Alcoa is open to considering U.S.-based alumina supply to reduce transportation costs and is making progress on the gallium project in Western Australia [36][37] Question: Alumina profitability and cost reduction initiatives - Management acknowledges the current cycle's challenges and emphasizes a commitment to cost management without jeopardizing future plant viability [42][43] Question: Update on idle sites and monetization - Negotiations for a primary site are ongoing, with a focus on maximizing value through complex arrangements rather than simple land sales [45][46] Question: Current status of Alumar Smelter - Alumar Smelter faced power interruptions but is expected to maintain similar production levels in the first quarter [51][53] Question: Capital return and net debt considerations - The company aims to maintain a strong balance sheet while balancing debt repayment and potential shareholder returns [70][72]

Financial Data and Key Metrics Changes - The company reported earnings of $0.80 per share in Q4 and $2.77 per share for the full year, marking the strongest net income in its history [7][8] - Total loans grew by 1% quarter-over-quarter and 5% year-over-year, with C&I loans being a primary growth driver [7][8] - Net interest income (NII) reached a record $310 million in Q4, up 15% for the year, with a net interest margin (NIM) of over 3% for the year [8][10] - The return on average tangible common equity increased to over 15% in Q4 [9] Business Line Data and Key Metrics Changes - C&I loans grew by over $1.2 billion in 2025, with a 2% increase in Q4 alone [7][8] - Core customer deposits increased by nearly $700 million in Q4 and $1 billion for the year, representing a 3.5% growth rate [8][20] - Non-interest income for Q4 was $79 million, down slightly from Q3 but up from the previous year, driven by growth in wealth management and card fees [25] Market Data and Key Metrics Changes - The company is expanding its presence in major metropolitan markets, including Omaha and the Twin Cities, with a focus on organic growth [6][14] - The acquisition of American National Corporation is expected to enhance market share and growth opportunities in these regions [5][6] Company Strategy and Development Direction - The company aims to maintain a focus on organic growth while managing a low-risk profile, with plans for additional investments in 2026 [6][14] - Strategic investments since 2021 have transformed the company's return profile, with a significant increase in C&I loans and a decrease in low-yielding mortgage loans [10][11] - The company plans to increase marketing spend by over 100% in key markets to accelerate household growth [16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth momentum heading into 2026, supported by strong loan pipelines and a disciplined credit approach [7][10] - The economic outlook remains resilient despite higher interest rates, with expectations of continued loan growth and profitability [29][30] Other Important Information - The company has maintained a disciplined approach to credit, with low charge-off rates and improving asset quality [9][30] - Capital ratios increased, with the tangible common equity ratio at 8.29% and the CET1 ratio at 10.49% [28] Q&A Session Summary Question: Can you provide thoughts on non-interest income guidance? - Management indicated that they are still in the approval process for the American National acquisition and will provide updates once more information is available [36][38] Question: What are the expected impacts of investments in 2026? - Management expects a 3% growth in expenses while making strategic investments to support growth in major metropolitan markets [40][41] Question: How is the company managing its loan and deposit growth? - Management noted that the company is seeing significant loan growth and deposit production, particularly in C&I loans, and expects this trend to continue [52][55] Question: What is the outlook for capital management and potential buybacks? - The primary focus remains on organic growth, with capital reserved for growth opportunities rather than buybacks at this time [75][78] Question: Are there any stressed portfolio verticals or geographies? - Currently, there are no significant concerns, and the company is monitoring the economic environment closely [78][80]

Financial Data and Key Metrics Changes - The company reported net income of $35.2 million, an increase of 17% year-over-year, and earnings per diluted share of $1.57, up 28% compared to the previous year [16] - Return on average assets was 1.87%, compared to 1.61% in the same quarter last year, while return on average tangible equity was 26.7%, up from 25.5% [16] - Deposits totaled $6.4 billion, a decrease of $170 million year-over-year, primarily due to an increase in custodial deposits [16][17] Business Line Data and Key Metrics Changes - Net interest income from commercial finance increased by $9.2 million due to higher balances and slightly higher yields [14] - Non-interest income showed solid results, particularly in core card and deposit fees, with growth attributed to new partners [15] - Loans and leases increased to $5 billion, driven by a $531 million increase in commercial finance loans, partially offset by a $148 million decrease in consumer finance loans [17] Market Data and Key Metrics Changes - Average deposits during the quarter were approximately $90 million higher than the previous year, with favorable deposit balances due to a strong holiday season [17] - The company originated $1.9 billion in loans during the quarter, with $678 million in commercial finance and $1.2 billion in consumer finance [17] Company Strategy and Development Direction - The company aims to optimize its balance sheet by rotating from securities to loans, increasing net interest income without growing overall asset size [9] - The focus is on generating fee income from balance sheet velocity and originating loans while maintaining a steady balance sheet [10] - The company is committed to enhancing the client experience through an evolved operating model that supports partner growth and scalability [8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in revenue growth from new partnerships and the upcoming tax season, which is expected to drive more consumers into tax preparation offices [11][21] - The company anticipates that the changes in tax code for 2025 will positively impact consumer engagement [11] - Management remains optimistic about the pipeline of new partners and the normalization of pricing in the industry [44] Other Important Information - The company repurchased approximately 652,000 shares at an average price of $72.07, leaving 4.3 million shares available for repurchase [21] - The fiscal year 2026 guidance for earnings per share has been raised to a range of $8.55-$9.05, based on several assumptions including no additional rate cuts [21] Q&A Session Summary Question: What is the trajectory for adjusted NIM in Q2? - Management indicated that the adjusted NIM has shown an upward trajectory, with a starting point of 5.49% for Q2, assuming no rate cuts [25][26] Question: Can you quantify the recovery recorded within net charge-offs? - Management did not provide specific figures but mentioned that the details would be available in the earnings release [27] Question: How does the company view the threat of FinTechs obtaining their own bank charters? - Management believes that while there may be some competition, the scale and complexity of operations will limit the impact of new charters on their business [30][31] Question: What is the current partner pipeline and expectations for new announcements? - Management reported a full pipeline and expressed optimism about future partner announcements, indicating that the number of opportunities is increasing [44] Question: What factors will influence the updated guidance? - The timing of new partner contributions and the success of the tax season are key factors that could affect the guidance range [49][50]

Financial Data and Key Metrics Changes - 2025 was a record-breaking year for the company, achieving new full-year record levels in revenue, net interest income, fees, non-interest income, earnings per share, loans, and deposits [5] - End-of-period deposits grew by 6% year-over-year, with significant traction in both non-interest-bearing and time deposits [5] - End-of-period loans also increased by 6%, driven by growth in commercial and industrial (C&I) and residential mortgage lending [5] - Tangible book value per share grew by 17%, and the company generated a 17% return on tangible common equity [6] Business Line Data and Key Metrics Changes - Fee income grew by 12% in 2025, achieving record levels driven by strong performance in wealth management, derivatives, foreign exchange, deposit fees, and lending fees [11] - C&I loan growth in Q4 was primarily driven by new relationships, with expectations for continued strength in 2026 [9] - Residential mortgage lending also performed well, with a strong pipeline expected to contribute consistently to growth [9] Market Data and Key Metrics Changes - The company reported a fourth-quarter net interest income of $658 million, benefiting from short-term liability sensitivity and favorable deposit mix shifts [10] - The cost of deposits decreased by 23 basis points quarter-over-quarter, with a total reduction of 105 basis points since the start of the cutting cycle [10] Company Strategy and Development Direction - The company remains committed to disciplined capital management and delivering top-tier returns for shareholders through prudent growth and robust risk management [7] - A focus on deposit growth through dedicated business checking campaigns is planned to continue into 2026 [8] - The company aims to maintain a balanced growth strategy across multiple loan categories, including C&I, CRE, and residential mortgages [36] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the economic outlook for 2026, anticipating stronger loan growth compared to 2025 [20] - The company is focused on maintaining high performance relative to peers, regardless of economic conditions [22] - Management expects net interest income growth to be in the range of 5%-7% for 2026, driven by balance sheet growth [11] Other Important Information - The board declared a $0.20 increase to the quarterly dividend, raising it to $0.80 per share, a 33% increase [7] - The company’s regulatory capital ratios remain well above regulatory requirements, with a Common Equity Tier 1 capital ratio of 15.1% [16] Q&A Session Summary Question: Loan growth expectations for 2026 - Management acknowledged strong loan growth in Q4 but emphasized caution in projecting future growth due to potential economic volatility [21] Question: Areas of expense growth - The company is investing in technology, hiring for wealth management, commercial banking, and risk management, with a focus on supporting future growth [25][26] Question: Fee income growth trends - Management aims to continue double-digit growth in fee income, supported by investments in various business areas [33] Question: Commercial real estate (CRE) growth opportunities - Management expects to see increased activity in CRE lending, focusing on long-term relationships with experienced operators [34][36] Question: Capital management and buyback strategy - The company will continue to be opportunistic with buybacks, focusing on creating value for shareholders [100] Question: Credit charge-off guidance for 2026 - The increase in charge-off guidance reflects potential individual credit issues, despite overall strong credit metrics [46][48] Question: Net interest margin outlook - Management expects to offset declining rates with balance sheet growth, maintaining a focus on dollar net interest income [52] Question: Deposit costs and trends - The company has been disciplined in managing deposit costs and expects to maintain a beta exceeding 0.5 [45] Question: Blockchain and cryptocurrency integration - Management is monitoring developments in blockchain technology but sees it as still early for significant integration into their services [70]

Financial Data and Key Metrics Changes - The company reported a GAAP net income of $21.71 per share for the fourth quarter, with a core net income of $23.579 per share after excluding non-core items [10][11] - The core return on average assets (ROAA) was 1.16% for the fourth quarter, exceeding the stated goal of 1% [7][10] - Earnings per share (EPS) increased by 14% year-over-year, with a 20% improvement in the fourth quarter alone [8][10] - The tangible common equity ratio increased by 90 basis points, and consolidated CET1 capital rose by 50 basis points year-over-year [6] Business Line Data and Key Metrics Changes - Total loans held for investment increased by $168.4 million, or 11.1% annualized on a linked quarter basis, driven by improved demand and reduced paydowns [11] - Total deposits rose by $191.7 million, primarily due to a net increase in interest-bearing deposits [12] - The non-interest income for the fourth quarter was approximately $13.2 million, with swap fee revenue exceeding expectations [18][62] Market Data and Key Metrics Changes - Texas-based loans slightly declined from 39% of total loans, expected to decrease further to approximately 36% following the acquisition of Progressive Bank [12] - The company noted a balanced growth in loan production across different regions, particularly in Southwest and North Louisiana [27][66] Company Strategy and Development Direction - The company plans to focus on optimizing existing systems and deepening market presence rather than pursuing new major projects in 2026 [9][42] - There is an emphasis on sustainable ROAA, tangible book value accretion, and enhancing EPS through improved operational efficiency [9][44] - The company aims to deepen relationships with existing clients and enhance profitability before considering further M&A opportunities [43][45] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, indicating that 2026 could be even more fruitful following a pivotal 2025 [8][9] - The company is prepared to manage credit risks more effectively, learning from recent experiences with non-performing loans [30][33] - Management highlighted the importance of maintaining a balanced loan portfolio to mitigate concentration risks [33] Other Important Information - The company successfully completed two major core conversions and implemented new software platforms to enhance operational capabilities [4][5] - The acquisition of Progressive Bank is expected to contribute positively to the company's growth and operational efficiency [21] Q&A Session Summary Question: Insights on loan growth and outlook - Management noted that improved pipeline demand and reduced payoffs contributed to strong loan growth in the fourth quarter, with expectations of mid-single-digit growth for 2026 [24][25] Question: Details on non-performing loans - A significant commercial real estate loan in Houston was identified as non-performing, with management indicating it is one of the largest exposures [30][32] Question: Focus on daily execution versus M&A - Management clarified that the focus for 2026 will be on optimizing existing operations rather than pursuing new acquisitions, allowing for deeper relationship building with current clients [40][43] Question: Capital management and buyback strategy - The company plans to continue share buybacks opportunistically, with a focus on attractive pricing below $120 [46][48] Question: Opportunities for hiring in the current market - Management expressed readiness to hire selectively, focusing on acquiring the right talent to support growth without needing to hire aggressively [52][54]

Financial Data and Key Metrics Changes - The company reported earnings of $0.80 per share in Q4 and $2.77 per share for the full year, marking the strongest net income in its history [7][8] - Total loans grew by 1% quarter-over-quarter and 5% year-over-year, with C&I loans being a primary growth driver [7][8] - Net interest income (NII) reached a record $310 million in Q4, up 15% for the year, while the net interest margin (NIM) was above 3% for the year, 50 basis points higher than 2020 [8][10] Business Line Data and Key Metrics Changes - C&I loans grew by over $1.2 billion in 2025, with a 2% increase in Q4 alone [7][8] - Core customer deposits increased by nearly $700 million in Q4 and $1 billion for the year, representing a 3.5% growth rate year-over-year [8][20] - Non-interest income for Q4 was $79 million, down slightly from Q3 but up from the previous year, supported by growth in wealth management and card fees [25][26] Market Data and Key Metrics Changes - The company is expanding its presence in major metropolitan markets, including Omaha and the Twin Cities, where it aims to deepen its market share [6][14] - The acquisition of American National Corporation is expected to enhance growth prospects in these markets [5][6] Company Strategy and Development Direction - The company completed major investments from its strategic plan in March 2025, positioning it for growth in 2026 and beyond [3][4] - Plans for 2026 include significant investments in marketing and hiring to accelerate organic growth in key markets [16][17] - The focus remains on high-quality commercial relationships and maintaining a low-risk profile [6][7] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's momentum heading into 2026, citing strong organic growth and profitability [7][33] - The company anticipates continued loan growth of 5%-6% and core customer deposit growth of 5%-6% in 2026, excluding the impact of the American National acquisition [21][19] Other Important Information - The efficiency ratio improved, decreasing by over 700 basis points from 2020 to 2025, indicating better cost management [11] - The company maintained a strong capital position, with a TCE ratio of 8.29% and a CET1 ratio of 10.49% [28] Q&A Session Summary Question: Non-interest income guidance - Management indicated that they do not have updates on financials related to the American National acquisition but are optimistic about the strategic alignment of the franchises [36][38] Question: Investments in key cities for 2026 - Management confirmed a 3% expense growth target and emphasized the importance of maintaining a balance between investments and cost reductions [40][41] Question: Loan and deposit growth expectations - Management expects significant loan growth from new hires and a strong pipeline, with a forecast of $1.2 billion in C&I growth for 2026 [44][45] Question: Capital management and buybacks - The primary focus remains on organic growth, with capital reserved for business investments rather than buybacks at this time [75][78] Question: Credit quality concerns - Management reported no significant stress in portfolios currently, with positive signs in commercial real estate paydowns [79][80] Question: Deposit mix changes - Management anticipates a shift towards demand deposit accounts as they focus on acquiring more households and commercial relationships [92][93]