Financial Data and Key Metrics Changes - Total assets exceeded $30 billion, ending the year at $32 billion, a record for the company [3] - Net income for 2025 was $239 million, an increase of $48.9 million, or 26% from the prior year [3][4] - Diluted earnings per share for 2025 was $1.99, an increase of $0.31 per share, or 18% from the prior year [4] - Pre-tax, pre-provision net revenues of $362 million for 2025 increased $107 million, or 42% over the prior year [4] - Net interest income for 2025 was $889 million, an increase of $184 million, or 26% from the prior year [4] Business Line Data and Key Metrics Changes - The loan portfolio increased to $21 billion at the end of 2025, up $3.7 billion, or 21% from the prior year [4] - Total deposits reached $24.6 billion, an increase of $4 billion, or 20%, during 2025 [4] - Non-interest income for the quarter totaled $40 million, an increase of $5 million, or 14%, over the prior quarter [7] Market Data and Key Metrics Changes - The net interest margin for the quarter was 3.58%, an increase of 19 basis points from the prior quarter [5] - The loan yield for the quarter was 6.09%, an increase of 12 basis points from the prior quarter [5] - The cost of funding decreased to 1.52%, down 6 basis points from the prior quarter [6] Company Strategy and Development Direction - The company successfully closed two strategic acquisitions in 2025, expanding its footprint in Idaho and Texas [2] - The focus is on integrating Guaranty Bank & Trust and leveraging its market position for future growth [65] - The company aims to achieve a net interest margin of 4% by the second half of 2026, driven by structural repricing [19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in growth despite a slower organic growth rate of about 1% annualized [13] - The company anticipates low- to mid-single-digit growth for 2026, with a record level of loan pipeline early in the year [15] - Management highlighted a strong capital position and a commitment to shareholder returns through consistent dividends [8] Other Important Information - Non-performing assets remained low at 22 basis points of total assets, reflecting strong credit quality [8] - The efficiency ratio improved from 66.7% at the beginning of the year to 63% [7] - The company declared its 163rd consecutive quarterly dividend of $0.33 per share [8] Q&A Session Summary Question: Organic growth and loan side performance - Management acknowledged a slower organic growth rate but expressed confidence in future growth, particularly with the Guaranty integration [13][15] Question: Margin trajectory and Fed dependency - Management confirmed that margin growth is not dependent on Fed actions and expects to reach a 4% margin by late 2026 [19] Question: Expense run rate and investments - The core non-interest expense for the first quarter is guided at $189 million - $193 million, with expectations for moderation in subsequent quarters [21][31] Question: Integration of Guaranty Bank & Trust - Integration is proceeding smoothly, with a focus on maintaining leadership and minimizing disruption [65][66] Question: Future M&A outlook - Management is optimistic about future M&A opportunities while remaining disciplined in their approach [55] Question: Loan pricing and competition - Current loan pricing is favorable, with good spreads observed, and management is optimistic about maintaining this trend [35][44] Question: Cash flow from securities - Expected cash flow from the securities book is approximately $425 million per quarter for 2026 [45] Question: Net charge-offs and credit quality - Net charge-offs are considered normal for year-end cleanup, with no unusual items reported [78]

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 [3] - Net interest income grew by $5 million, or 5%, compared to the prior quarter, and increased by 14% compared to the prior year quarter [4] - The net interest margin declined modestly to 2.87% compared to the third quarter [4] - Total loans increased by $474 million, representing an 18% annualized growth rate, driven by $1 billion in originations [4][10] - Asset quality remained strong, with non-performing loans to total loans at 0.2% and non-performing assets to total assets at 0.22% [13] Business Line Data and Key Metrics Changes - The C&I business grew by 42% for the year, benefiting from talent recruitment and favorable conditions for borrowers [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 Premier Bank team grew deposits by $90 million, or 37%, from the linked quarter, with a weighted average cost of their deposit portfolio declining by 36 basis points to 2.28% [10] - Approximately 21% of the new deposits are in non-interest-bearing DDA accounts [10] 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 [6][7] - The merger is anticipated to improve profitability and increase operating scale, providing meaningful upside to shareholders [7] - The company remains focused 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 [21] - 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 strong asset quality, with low levels of criticized and classified loans [13] Other Important Information - The company did not repurchase any shares this quarter, as capital was utilized to support loan growth [6] - The quarterly cash dividend of $0.20 per common share was approved, marking the 116th consecutive quarterly cash dividend [6] Q&A Session Summary Question: Clarity on net interest income guidance - Management indicated that net interest income growth will likely exceed loan balance growth due to the compounding effect of the larger balance sheet [21] Question: Commentary on loan sales post-merger - Management stated it is too early to provide precise figures on loan sales, as they are currently reviewing portfolios [22] Question: Expense line clarification - The recurring CRT premium expense is categorized under other expenses, similar to insurance premium expenses [23] Question: C&I growth expectations for 2026 - Management expects C&I growth rates to remain in the 7%-9% range, with strong deposit growth anticipated [35] Question: Deposit growth outlook for Premier Banking - Management confirmed the target of $2 billion-$3 billion in deposits by the end of 2027 remains intact [39] Question: Deposit costs outlook for the year - Management expects deposit costs to decrease, lagging behind rate cuts, and anticipates steady improvement in margins [76]

Financial Data and Key Metrics Changes - Total assets exceeded $30 billion, ending the year at $32 billion, a record for the company [3] - Net income for Q4 was $63.8 million, with a total net income of $239 million for 2025, an increase of $48.9 million, or 26% from the prior year [3][4] - Pre-Tax Pre-Provision Net Revenues for 2025 were $362 million, an increase of $107 million, or 42% over the prior year [4] - Diluted Earnings Per Share for Q4 was $0.49, and for 2025 was $1.99, an increase of $0.31 per share, or 18% from the prior year [4] - Net Interest Income for Q4 was $266 million, up $41 million, or 18% from the prior quarter, and for 2025 was $889 million, an increase of $184 million, or 26% from the prior year [4] Business Line Data and Key Metrics Changes - The loan portfolio at the end of 2025 was $21 billion, increasing $3.7 billion, or 21% for the year [4] - Total deposits reached $24.6 billion, increasing $4 billion, or 20% during 2025 [4] - Non-interest income for Q4 totaled $40 million, an increase of $5 million, or 14% over the prior quarter, and up 28% over the prior year [6] Market Data and Key Metrics Changes - Non-Performing Assets remained low at 22 basis points of total assets, with a slight increase from the prior quarter [7] - Net charge-offs were 6 basis points of total loans for the year, compared to 8 basis points in the prior year [7] Company Strategy and Development Direction - The company successfully closed two strategic acquisitions in 2025, expanding its footprint in Idaho and Texas, which are seen as markets with strong growth potential [2][3] - The company aims to continue its disciplined approach to increasing net interest margin and improving efficiency ratios [6][8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in future growth, citing a record level of loan pipeline early in 2026 and expectations for low- to mid-single-digit growth for the year [15] - The company anticipates achieving a net interest margin of 4% by the second half of 2026, driven by structural repricing drivers [18][70] Other Important Information - The efficiency ratio improved from 66.7% at the beginning of the year to 63% [6] - Tangible stockholders' equity increased by $609 million, or 29%, in 2025, with tangible book value per share rising to $21, up 12% year-over-year [8] Q&A Session Summary Question: Organic growth and loan side performance - Management acknowledged a slower organic growth rate of about 1% annualized but noted a record level of loan pipeline early in 2026, with expectations for growth to improve as the year progresses [13][15] Question: Margin trajectory and expectations - Management confirmed that the net interest margin is on track to reach 4% by the second half of 2026, with confidence in continued growth independent of Federal Reserve actions [18][70] Question: Expense run rate and trends - The core non-interest expense for Q1 is guided at $189-$193 million, with expectations for moderation in subsequent quarters [31][74] Question: Integration of Guaranty Bank & Trust - Management reported a smooth integration process for Guaranty Bank & Trust, emphasizing the retention of leadership and culture, which is expected to enhance performance in the Texas market [66][68]

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 reported at $0.07, with operational diluted EPS at $0.44 [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 43% from correspondent banking [12] - Average deposits were stable, down $3.9 million compared to the prior quarter but up $314.6 million year-over-year [10] - Non-interest income was $3.3 million for Q4, consistent with prior quarters, excluding the securities loss [21] Market Data and Key Metrics Changes - The bank's loan portfolio increased to just under $2.2 billion, with commercial real estate representing 57% [19] - The average interest-bearing deposit rates decreased to 3.02%, down from 3.29% in the third quarter [10] - The bank's balance sheet is liability sensitive, with 61% of the loan portfolio being variable-rate or hybrid [15] Company Strategy and Development Direction - The company aims to expand and strengthen its deposit base, focusing on relationship-driven growth rather than rate-driven [26] - Key business lines include Business Banking, Private Client Group, Association Banking, and Correspondent Banking, each with clear plans for growth [26][27] - The strategy for 2026 includes launching a new lending and deposit gathering team in targeted markets [26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the bank's ability to build back deposits lost at year-end and emphasized the importance of deposit growth for 2026 [36] - The company anticipates further NIM improvement supported by rate cuts and ongoing execution of its deposit strategy [13] - The tax expense is expected to be modeled at 26.4% going forward, reflecting compliance with state tax liabilities [9][57] Other Important Information - The board approved a 25% increase in the quarterly cash dividend to $0.12 per share [5] - The company completed a $40 million subordinated debt issuance, primarily used for share repurchase [3] Q&A Session Summary Question: Deposit trends and year-end shrinkage - Management noted a significant deposit move of over $100 million from a long-term client, which is expected to rebuild over time [36] Question: Loan-to-deposit ratio preferences - Management prefers a loan-to-deposit ratio between 90-95% for optimal liquidity [39] Question: SBA vertical expansion - The SBA initiative has been growing prudently, with plans to increase annual volume to $40-50 million over the next three years [42] Question: Capital strategy and priorities for 2026 - The focus remains on building capital and returning it to shareholders, with no significant plans for new initiatives beyond organic growth [47] Question: Margin expectations for the first quarter - Management expects NIM to be flat to slightly up in the first quarter, influenced by deposit runoff and potential rate cuts [54] Question: Expense outlook and new hires - The expense base is expected to gradually increase with new hires, targeting a low 50% efficiency ratio [66] Question: Fee income outlook - Non-interest income is anticipated to build around $3.5-$3.8 million for 2026, driven by various fee-generating activities [68]

Financial Data and Key Metrics Changes - For the full year 2025, net income was $130.1 million, or $2.89 per diluted share, on revenue of $446 million, representing a 9.7% year-over-year increase [13] - The pre-tax pre-provision ROA was 219 basis points, ROA was 136 basis points, and ROTCE was 13.5% [14] - For Q4 2025, net income was $34.5 million, or $0.76 per diluted share, on revenue of $117 million, with revenue up 1.1% from the prior quarter and 12% year-over-year [15] - Tangible book value per share grew by approximately 17% [12] Business Line Data and Key Metrics Changes - Year-on-year loan growth was 8.9%, while deposits grew by 2.5% [14] - In Q4, loans grew by 3% linked quarter, with origination activity consistent at $323 million, primarily from commercial and leasing businesses [15] - Total loans stood at $7.5 billion at year-end, with origination activity up 22% compared to the prior quarter [18] Market Data and Key Metrics Changes - The company is positioned as the largest local community bank and the second largest local commercial bank in Chicago, with significant growth opportunities in the market [6][8] - The Chicago banking market offers substantial opportunities for growth and development, with Byline well-positioned to lead [6] Company Strategy and Development Direction - The company aims to become the preeminent local commercial bank, focusing on organic growth and maintaining a disciplined credit approach [9][24] - A new commercial payments business was launched, with six customers onboarded and additional customers in the pipeline [23] - The company is preparing to cross the $10 billion asset threshold in 2026 while monitoring the regulatory environment closely [23] Management's Comments on Operating Environment and Future Outlook - Management noted that the operating environment has evolved with elevated interest rates and increased macroeconomic uncertainty, but they remained focused on serving customers and executing their strategy [12] - The company expressed optimism about its competitive position and ability to capitalize on opportunities, emphasizing a strong team and operational leverage [24] Other Important Information - The board approved a 20% increase in the quarterly dividend, reflecting confidence in the company's financial performance [5][17] - The company repurchased approximately 346,000 shares and authorized a new repurchase program for up to 5% of outstanding shares [16] Q&A Session Summary Question: Areas of growth and efficiency - Management highlighted excitement around the commercial payments team and the potential for growth in the commercial banking space in Chicago [30][32] Question: Capital return strategy - Management indicated a focus on maintaining flexibility with capital, returning excess capital to shareholders through dividends and share repurchases [33][35] Question: Loan growth outlook - Management expects mid-single-digit loan growth, primarily driven by commercial lending, with real estate growth dependent on transaction activity [44] Question: Net interest income outlook - Management noted that while the first quarter typically sees lower activity, they expect stable to growing net interest income throughout the year [46][48] Question: Credit quality outlook - Management indicated no material changes in credit quality, maintaining a consistent guidance range for net charge-offs [50][98]

Financial Data and Key Metrics Changes - For the full year 2025, net income was $130.1 million, or $2.89 per diluted share, on revenue of $446 million, representing a 9.7% year-over-year increase [12] - The pre-tax pre-provision ROA was 219 basis points, ROA was 136 basis points, and ROTCE was 13.5% [12] - For Q4 2025, net income was $34.5 million, or $0.76 per diluted share, on revenue of $117 million, with profitability metrics remaining solid [13] Business Line Data and Key Metrics Changes - Year-on-year loan growth was 8.9%, while deposits grew by 2.5% [12] - In Q4, loans grew by 3% linked quarter, with origination activity consistent at $323 million, primarily from commercial and leasing businesses [14] - Non-interest income increased, contributing to a 12% year-over-year revenue growth [14] Market Data and Key Metrics Changes - The company is positioned as the largest local community bank and the second largest local commercial bank in Chicago, with significant growth opportunities in the market [5][7] - The company is preparing to cross the $10 billion asset threshold in 2026, which will enhance its competitive position [22] Company Strategy and Development Direction - The company aims to become the preeminent local commercial bank, focusing on organic growth and maintaining a disciplined credit approach [22][23] - A new commercial payments business was launched, with six customers onboarded and additional customers in the pipeline [22] - The company emphasizes a people-first banking approach, which has contributed to low employee turnover and high engagement [6][8] Management's Comments on Operating Environment and Future Outlook - Management noted that the operating environment has been characterized by elevated interest rates and macroeconomic uncertainty, but the company remained focused on serving customers and executing its strategy [11] - The outlook for net interest income is based on a forward curve that assumes a 50 basis point decline in the Fed funds rate for 2026 [18] - Management expressed confidence in the company's ability to generate sustainable growth and return capital to shareholders through dividends and share repurchases [34] Other Important Information - The board approved a 20% increase in the quarterly dividend, reflecting strong financial performance [4][16] - The company repurchased approximately 346,000 shares during the quarter and authorized a new repurchase program for up to 5% of outstanding shares [15][34] Q&A Session Summary Question: Areas of growth and efficiency - Management highlighted excitement around the commercial payments team and the potential for growth in the commercial banking space in Chicago [30] Question: Capital return strategy - Management indicated a focus on maintaining flexibility with capital, returning excess capital to shareholders through dividends and share repurchases [32][34] Question: Loan growth outlook - Management expects mid-single-digit loan growth, primarily driven by commercial lending, with real estate activity dependent on transaction volume [43] Question: Net interest income outlook - Management noted that while the first quarter typically sees lower activity, they expect stable to growing net interest income throughout the year [45][46] Question: Credit quality outlook - Management maintained guidance for net charge-offs in the range of 30-40 basis points, with no material changes in credit quality expected [49] Question: Commercial payments business - Management clarified that the commercial payments team is focused on onboarding clients such as payroll processing companies and fintechs, with a deliberate approach to growth [70][72]

Financial Data and Key Metrics Changes - In the fourth quarter of 2025, GAAP net income was $75.3 million, with diluted earnings per share at $1.52, resulting in a 1.20% return on assets and an 8.38% return on average common equity [12] - Adjusted operating net income for the quarter was $84.4 million, or $1.70 diluted EPS, representing a 1.34% return on assets and a 9.38% return on average common equity [12] - Operating EPS increased by 60% and operating ROAA rose by 40 basis points compared to the first quarter of 2025 [2] Business Line Data and Key Metrics Changes - C&I loans increased 9% organically in 2025, now representing 25% of total loans, up from 22% at year-end 2024 [6] - Total commercial loans closed were $789 million in the fourth quarter, up from $754 million in the previous quarter [6] - Non-time deposits grew organically by 4.2% in 2025, with DDAs representing 28% of overall deposits [7] Market Data and Key Metrics Changes - The cost of total deposits was 1.46% in the fourth quarter, reflecting the value of the deposit franchise [7] - Legacy Rockland Trust branches generated record new business relationships, totaling 6,921, with 97% of branches achieving positive net new growth in business relationships [8] Company Strategy and Development Direction - The company aims to focus on organic growth, expense management, and capital optimization moving into 2026 [10] - Plans include hiring more commercial lenders and aligning incentive structures to emphasize both loan and deposit growth [9] - The company is not currently focused on M&A, prioritizing organic growth and successful integration of the enterprise acquisition [32] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's positioning across markets, driven by product strength and employee dedication [10] - The overall asset quality remains stable, with no significant loss exposures currently in workout status [22] - Management anticipates continued margin expansion from cash flow repricing dynamics in both loan and securities portfolios [22] Other Important Information - The company returned $164 million of capital to shareholders in 2025, including the repurchase of 913,000 shares for $61 million [8] - The fourth quarter results benefited from a lower tax rate due to one-time adjustments associated with the corporate tax return [14] Q&A Session Summary Question: Can you walk through the dynamics with the criticized classified loans? - Management noted that the increase in non-performing assets was primarily due to one specific loan that is now in the first quarter 2026 maturity bucket, which is expected to be resolved early in 2026 [27][29] Question: What is the outlook on deposit betas with potential rate cuts? - Management indicated that they expect to maintain a 20% beta on non-CD deposits and 80% on CDs, reflecting their deposit franchise structure [30][31] Question: What is the outlook on M&A? - Management stated that they are not focused on M&A at the moment, prioritizing organic growth and successful integration of the enterprise acquisition [32] Question: What are the plans for hiring additional commercial loan officers? - Management mentioned that they are in a good position with new hires from the previous year and expect inherent C&I growth from these new team members [57] Question: Can you provide guidance on capital targets? - Management indicated long-term capital targets for CET1 in the high 11%-12% range, suggesting a focus on returning capital to shareholders through buybacks [39]

Financial Data and Key Metrics Changes - Fourth quarter GAAP net income was $75.3 million, with diluted earnings per share of $1.52, resulting in a 1.20% return on assets and an 8.38% return on average common equity [12] - Adjusted operating net income for the quarter was $84.4 million, or $1.70 diluted EPS, representing a 1.34% return on assets and a 9.38% return on average common equity [12] - Operating EPS increased by 60% and operating ROAA rose by 40 basis points from the first quarter to the fourth quarter of 2025 [2] Business Line Data and Key Metrics Changes - C&I loans increased 9% organically in 2025, now representing 25% of total loans compared to 22% at year-end 2024 [6] - Total commercial loans closed were $789 million in the fourth quarter, up from $754 million in the previous quarter [6] - Non-time deposits grew organically by 4.2% in 2025, with DDAs representing 28% of overall deposits [7] Market Data and Key Metrics Changes - The cost of total deposits was 1.46% in the fourth quarter, reflecting the value of the deposit franchise [7] - Legacy Rockland Trust branches generated record new business relationships, totaling 6,921, with 100% of branches achieving positive net new consumer growth [8] Company Strategy and Development Direction - The company aims to focus on organic growth, expense management, and capital optimization moving into 2026 [10] - Plans to hire more commercial lenders and align incentive structures to emphasize both loan and deposit growth [9] - The company is not currently focused on M&A, prioritizing organic growth and successful integration of the Enterprise acquisition [32] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's positioning across markets, driven by product strength and employee dedication [10] - The company expects to build on strong performance in the upcoming quarters, with a focus on prudent expense and capital management [10] - Management noted that credit metrics have stabilized, allowing for a more open approach to resuming normal commercial real estate growth [9] Other Important Information - The company returned $164 million of capital to shareholders in 2025, including the repurchase of 913,000 shares for $61 million [8] - The fourth quarter results benefited from a lower tax rate due to one-time adjustments associated with the 2024 corporate tax return [14] Q&A Session Summary Question: Can you walk through the dynamics of the criticized classified loans? - Management noted that the increase in non-performing assets was primarily due to one specific loan that is now in the first quarter 2026 maturity bucket, with expectations for resolution early in 2026 [27][29] Question: What is the outlook on deposit betas with potential rate cuts? - Management indicated confidence in maintaining a 20% beta on non-CD deposits and 80% on CDs, supported by their deposit franchise structure [30][31] Question: What is the long-term capital target for the company? - Long-term capital targets are set at CET1 in the high 11%-12% range, suggesting tangible capital in the 8.75%-9% range [39] Question: What is the outlook for M&A activity? - Management stated that they are not focused on M&A at the moment, prioritizing organic growth and successful integration of the Enterprise acquisition [32] Question: How do you view the current credit cycle? - Management believes they are close to the peak of the credit cycle, with no significant loss exposures currently in workout status [43][44] Question: What are the plans for hiring additional commercial loan officers? - Management expressed confidence in the new hires from the previous year and their ability to drive activity and volumes in the commercial lending space [57]

Financial Data and Key Metrics Changes - Earnings per share (EPS) for Q4 2025 was $0.81, unchanged from the prior quarter, while full-year EPS increased to $3.09 from $2.93 in 2024 [4][5] - Revenue for Q4 increased by 2% sequentially to $143.8 million, and full-year revenue rose by 6.9% to $554 million [4][5] - Operating income for Q4 increased by 3% to $52.4 million, with full-year operating income up 6.3% to $195.1 million [6][5] - The effective fee rate for Q4 was stable at 59 basis points, consistent with the prior quarter [5] Business Line Data and Key Metrics Changes - Ending assets under management (AUM) in Q4 was $90.5 billion, slightly down from Q3, but average AUM was higher compared to the prior quarter [6][19] - Net inflows during Q4 were $1.2 billion, primarily from advisory and closed-end funds, offset by market depreciation and distributions [6][19] - The institutional pipeline strengthened, ending the year with $1.72 billion across 20 mandates [22] Market Data and Key Metrics Changes - U.S. REITs returned just 3.2% in 2025, ranking last among the 11 GICS sectors in the S&P 500 [20] - Natural resource equities performed well, with a return of nearly 30%, while global listed infrastructure saw returns ranging from 14% to 22% [21] - Global real estate stocks were flat in Q4, with gains in Asia-Pacific markets countered by weakness elsewhere [11] Company Strategy and Development Direction - The company aims to focus on harvesting returns on investments made in new strategies and vehicles over the past years [25] - There is an expectation for REIT earnings to accelerate above trend to roughly 8% in 2026 and 2027 due to lower supply and increasing demand [16] - The company plans to increase coverage in the RIA channel and expand its institutional presence outside the U.S. [25] Management's Comments on Operating Environment and Future Outlook - Management noted that economic activity and market returns are expected to broaden in 2026, with above-consensus global growth anticipated [14] - The company is optimistic about the return of investor interest in private real estate, driven by improving market conditions [36] - There is a belief that the combination of broadening economic growth and relative valuation attractiveness will benefit the company's asset classes in 2026 [18] Other Important Information - The company reported liquidity of $403 million at year-end, a $39 million increase from the prior quarter [8] - The effective tax rate for the quarter was 25.7%, consistent with the previous year [8] - The company celebrated its 40th anniversary in 2026, highlighting its evolution and commitment to listed markets [31][32] Q&A Session Summary Question: Signs of improving demand for private real estate - Management noted early signs of increasing interest in private real estate, with expectations for it to become a more significant contributor in 2026 [36][38] Question: Progress in the institutional channel - Management indicated a strong pipeline for the institutional channel, with improved conversations and a broader range of mandates [45][46] Question: Dynamics driving the won and unfunded pipeline - Management confirmed that the recent increase in the won and unfunded pipeline reflects broader market dynamics and improved allocator confidence [48][50] Question: Regional demand for advisory and sub-advisory - Management observed expanding demand in non-U.S. markets, with allocators from various countries showing interest [53][54] Question: Areas of demand for active ETFs - Management reported strong interest from RIAs and existing holders of open-end funds converting to active ETFs, indicating a positive trend for future growth [61][62]

Financial Data and Key Metrics Changes - Earnings per share (EPS) for Q4 2025 was $0.81, unchanged from the prior quarter, while full-year EPS increased to $3.09 from $2.93 in 2024 [4] - Revenue for Q4 increased by 2% sequentially to $143.8 million, and full-year revenue rose by 6.9% to $554 million [5][6] - Operating income for Q4 increased by 3% to $52.4 million, and for the full year, it rose by 6.3% to $195.1 million [6] - The effective fee rate during Q4 was stable at 59 basis points, consistent with the prior quarter [5] Business Line Data and Key Metrics Changes - Ending assets under management (AUM) in Q4 was $90.5 billion, slightly down from Q3, but average AUM was higher compared to the prior quarter [6][19] - Net inflows during Q4 were $1.2 billion, primarily from advisory and closed-end funds, offset by market depreciation [6] - The institutional pipeline strengthened, ending the year with $1.72 billion across 20 mandates [22] Market Data and Key Metrics Changes - Equities finished 2025 with double-digit gains for the third consecutive year, with diversified real assets rising about 3% in Q4 [11] - Natural resource equities rose more than 6% in Q4, driven by strength in metals and mining stocks [11] - Global real estate stocks were flat overall in Q4, with significant disparities in returns by property type [11] Company Strategy and Development Direction - The company aims to focus on harvesting returns on investments made in recent years and increasing coverage in the RIA channel while maintaining presence in wirehouses [25] - The largest AUM strategy, U.S. REITs, is expected to enter a favorable return cycle, with earnings anticipated to accelerate [25][26] - The company is positioning itself to benefit from a broadening economic growth engine and relative valuation attractiveness in 2026 [18] Management's Comments on Operating Environment and Future Outlook - Management noted that economic activity and market returns are expected to broaden in 2026, with above-consensus global growth anticipated [14] - The company is optimistic about the return of investor interest in private real estate, driven by adjustments in commercial real estate prices and reduced interest rates [36][38] - The institutional channel is showing improved activity, with a strong pipeline and increased interest from allocators [45][46] Other Important Information - The company reported liquidity of $403 million at year-end, a $39 million increase from the prior quarter [8] - The effective tax rate for the quarter was 25.7%, consistent with the previous year [8] - The company launched five active ETFs with total AUM of $378 million, indicating strong market acceptance [29] Q&A Session Summary Question: Signs of improving demand for private real estate - Management noted early signs of increasing interest in private real estate, with expectations for it to become a more significant contributor in 2026 [36][38] Question: Progress in the institutional channel - Management highlighted a strong pipeline for two consecutive quarters, with improved allocator confidence and more liquidity in portfolios [45][46] Question: Dynamics driving the won and unfunded pipeline - Management indicated that the recent increase in the won and unfunded pipeline reflects broader positive dynamics in the market [48][50] Question: Demand for active ETFs - Management observed that active ETFs are gaining traction, particularly among RIAs who exclusively use ETFs, which is driving new capital into these vehicles [62]