Good morning, and welcome to FB Financial Corporation's fourth-quarter 2025 earnings conference call. Hosting the call today from FB Financial are Chris Holmes, President and Chief Executive Officer, and Michael Mettee, Chief Operating and Financial Officer.

Please note that FB Financial's earnings release and supplemental financial information and this morning's presentation are available on the Investor Relations page of the company's website at www.firstbankonline.com and on the Securities and Exchange website at www.sec.gov. Today's call is being recorded and will be available for replay on FB Financial's website approximately an hour after the conclusion of the call.

At this time, all participants have been placed in a listen-only mode. The call will be open for questions after the presentation.

During this presentation, FB Financial may make comments which constitute forward-looking statements under the federal securities laws. Forward-looking statements are based on management's current expectations and assumptions and are subject to risks, uncertainties, and other factors that may cause actual results and performance or achievements of FB Financial to differ materially from any results expressed or implied by such forward-looking statements.

Many of such factors are beyond FB Financial's ability to control or predict, and listeners are cautioned not to place undue reliance on such forward-looking statements. A more detailed description of these and other risks that may cause actual results to materially differ from expectations is contained in FB Financial's periodic and current reports filed with the SEC, including FB Financial's most recent Form 10-K.

Except as required by law, FB Financial disclaims any obligation to update or revise any forward-looking statements contained in this presentation, whether as a result of new information, future events, or otherwise. In addition, these remarks may include certain non-GAAP financial measures as defined by SEC Regulation G.

A presentation of the most directly comparable GAAP financial measures and a reconciliation of non-GAAP measures to comparable GAAP measures is available in FB Financial's earnings release, supplemental financial information, and this morning's presentation, which are available on the Investor Relations page of the company's website at www.firstbankonline.com and on the SEC's website at www.sec.gov. I would like to now turn the presentation over to Mr.

Chris Holmes, FB Financial's President and CEO.

All right. Thank you very much, Mike.

Thank you to everyone for joining us on the call this morning and for your interest in FB Financial. For the quarter, we reported EPS of $1.07 and adjusted EPS of $1.16.

We've grown our tangible book value, excluding the impact of AOCI, at a compounded annual growth rate of 11.6% since we became a public company with our IPO. This quarter, our pre-tax pre-provision net revenue was $71.1 million, or $77.1 million on an adjusted basis.

Earnings were led by net interest income of $150.6 million, a net interest margin of 3.98%, and low credit cost in the quarter. Adjusted returns were solid, reporting a return on average assets of 1.40%, or 1.51% on an adjusted basis, and a return on average tangible common equity of 14.4%, or 15.9% on an adjusted basis.

For the year, we reported EPS of $2.45 and adjusted EPS of $3.99. Our balance sheet grew through the acquisition of Southern States Bank and was complemented by organic growth in our key businesses and geographies.

All-in, loans held for investment grew 29% and deposits were up 25% year-over-year. As I reflect back on 2025 and think forward into 2026, there are two key themes that stand out to me.

The first of those is growth, both in our financial assets, but also in our capabilities, which comes in the form of talented new teammates. During the past year, we executed on an acquisition in record time, we grew our talent base by adding new associates across the company, and we reorganized leadership responsibilities in various areas to optimize our organization.

We expect to see these actions pay off in 2026 and beyond through enhanced customer experience, contributions to our strong and inviting company culture, and ultimately continuing our history of outstanding growth. The second area is we're generating earnings and financial returns now that meet my expectations as the CEO of the company and as a shareholder with high expectations.

This year, and particularly this quarter, our bottom-line results were where they need to be with adjusted returns of about 1.5% on assets and approximately 16% on tangible common equity, and that's with a TCE ratio of almost 10%. These profitability results were within the range of expectations we set for ourselves.

Our results for organic growth in loans and deposits were the only real notable area of underperformance in 2025, and that comes from a combination of economic conditions, some distractions from the acquisition, and some related organizational changes. As we look into 2026, we're very excited about the prospect for strong growth opportunities both organically and otherwise.

We did accomplish a lot during the year, which reinforces the strength and determination of our team and franchise. I'm pleased with our results, proud of the team, and I'm very bullish on the year ahead.

While I could use some additional time today to give you my perspective on a multitude of other topics like regulatory environment, views on M&A, our myriad of metrics and goals that we've set for ourselves in 2026, I'm simply going to reiterate our top priority for the year ahead, which is to cement our focus on the customer. Through this simple action, we'll deepen relationships, we'll provide better products and service, and we'll acquire more new associates and customers.

It's that focus that's going to allow us to grow the business. Very simply, that's going to be our winning formula in 2026.

With that, I'd like to turn the call over to our Chief Financial and Operating Officer Michael Mettee. Michael?

Thank you, Chris, and good morning, everyone. I'll pick up right where Chris left off.

Over the past year, we've laid a solid foundation that positions us to accelerate into a period of significant opportunity. We've acquired and converted Southern States.

That added approximately 20% to our size. We've seen market disruption in our geographies, which has created opportunity in our markets.

We've added talent in key areas of our company. As we move into 2026, we really couldn't be more excited about the year ahead.

Turning to our results for the quarter and for the full year, net income on a reported basis for the quarter was $57 million, or $61.5 million on an adjusted basis. For the year, we delivered net income of $122.6 million, and adjusted net income of just over $200 million.

Our net interest margin for the quarter came in at 3.98%, which is a three basis point expansion over the third quarter. Even with the Fed rate cuts and lower loan yields, we were able to manage our liability side of the balance sheet to expand margin, namely through deposit repricing and benefits realized on our third-quarter subdebt and trust preferred payoff.

Non-interest income improved in the quarter as we saw stronger swap fees and investment services revenue, along with benefits from nonrecurring items which we've detailed in our supplement. On the expense side, fourth-quarter non-interest expense came in at $107.6 million, or $100.4 million on an adjusted basis.

Included in the reported results is roughly $4.6 million in merger and integration expenses, which should largely conclude by the end of the first quarter 2026. In our adjusted non-interest expense, we had an additional $3 million in performance-based incentive expense and roughly $1.2 million in higher franchise tax expense.

We also had higher-than-expected year-end increases related to the share repurchase transaction, which I'll detail in a bit, technology costs, and other professional services totaling about a million and a half that are not run rate expenses. All-in, our banking core non-interest expense totaled $88 million for the quarter and $298 million for the full year.

Looking at credit, our reported provision expense was lighter this quarter at $1.2 million, due to low charge-offs and minimal changes in modeled reserves. Nonperforming assets picked up slightly this quarter with higher past dues in some of our consumer portfolios and in our optional Ginnie Mae repurchase portfolio, but loss content remains low as annualized net charge-offs totaled only five basis points in the quarter.

Overall, our credit outlook remains stable for our portfolios and geographies. All-in, our allowance for loan losses settled at $186 million, or 1.5% of our loans held for investment.

Looking at the balance sheet, you'll see loan growth of $86 million for the quarter and total deposit growth of $97 million, both roughly 3% on an annualized basis. In the fourth quarter, we experienced a pickup in late-quarter payoff activity, which reduced our loan growth by about half.

This activity was spread across several loan categories, but was mostly pronounced in our C&I and CRE buckets. As Chris mentioned earlier, these organic growth levels for the quarter are below what we expect and what we've historically delivered.

However, when I look at average balances for the quarter, we show annualized 6% loan growth and, yeah, 7% deposit growth. For the year, we're pleased to have grown the company 29% on loans and approximately 25% on deposits.

New production trends remain competitive both on rate and structure, with new loan yields priced around 6.75% for the quarter and new deposit costs around 3% for the quarter. Even with softer organic growth during the fourth quarter, we believe the wind is at our backs and our sails are up.

The company has significant opportunity to grow market share organically as we continue bringing new relationships to the bank. With that, you should expect a return to our normal high single-digit growth rate in 2026.

As it pertains to capital, I want to highlight the large stock repurchase transaction that we executed in the quarter. In total, we repurchased just over 1.7 million shares, which represented about 3% of the company.

The transaction was with our largest shareholder, the estate of the late Mr. Jim Ayers, which allowed the estate to diversify its holdings and gain some liquidity, while also allowing the company to deploy excess capital in a beneficial way.

We were proud to participate in this transaction with other large institutional investors, and this investment in ourselves demonstrates our belief in our franchise and our growing business. As we move into 2026, we expect our net interest margin, exclusive of loan accretion, to land between 3.78% and 3.83% in the first quarter and on a full-year basis, consistent with where we are today, and that assumes a rate cut baked into our forecast for 2026.

We would then expect the benefit from loan accretion to add an additional 15 basis points or so, and that's exclusive of any accelerated accretion that might pull through. In banking, we're expecting to see fee income grow in the upper single-digit range as we continue to grow our customer base, add product offerings, and deepen relationships with our current customers.

On expenses, I'll reiterate the full-year guide that we gave last quarter, as we expect banking expense to land between $325 million and $335 million, which puts our efficiency ratio in the low 50s for the full year and at 50% by year-end 2026. This guide is run rate only and would not include any investments made in revenue producers or market expansion.

From a balance sheet standpoint, we're sticking with a mid to high single-digit loan growth and core customer deposit growth in that same mid to high single digits that we've spoken about for full year 2026. As I conclude, I want to thank the team for their work this year, and I'll look forward to a prosperous 2026.

With that, I'll turn the call back over to Chris.

All right. Thanks for the color, Michael.

Thanks again to everybody for joining us on the call this morning and your interest in FB Financial. Operator, at this time, we'll open the line for questions.

Hi guys, this is Anya Pelshaw. I'm asking questions on behalf of Brett.

He was wondering if management anticipates any additional share repurchases from the Ayers estate?

That is a good question. We do not actually anticipate that.

The conversations we've had that we do not anticipate that. That does not mean, just like any of us, that folks won't change their mind.

All the conversations we've had, we do not anticipate that.

Thank you. Another question that I have is do you guys think mortgage banking is on the right path or does the platform need any additional tweaking?

Hey Anya, good morning. This is Michael.

Actually mortgage had a really good year. If you think about where we were two years ago in the mortgage environment versus today, 2026 versus 20- or 2025 versus 2023, we originated the same amount of volume, but the contribution went from a negative to a nice positive number.

They're definitely on the right track. Tweaks to the platform, I would say, just like on the banking side, we're open for business, looking for revenue producers that can continue to expand our relationships and bring core customers to the bank.

We're pleased with mortgage, and we expect big things from them.

I would just add in terms of tweaks, I'd say we're always tweaking, whether that's mortgage, as Michael said. We're tweaking things everyday.

In terms of the basic structure and the elements of what we have in that business, we're actually quite pleased with it. When we look at 2026, it's a very positive potential for overperformance, I would say.

As Michael said, this year it actually went from a negative to a positive. Depending on what happens in the world and what happens in the market, that's an area that could be a bright spot for us based on what we have put in our expectations for next year.

Thank you. What does management think about the current M&A climate and is there any optimism on additional deals?

Climate-wise, I'd say a lot of conversations going on out there, I think at every level. That's just an industry comment.

It's not specific to us, but I'd say there's a lot of things happening out there. People evaluating strategically what the future holds for them.

When we think about us specifically, we'll continue to evaluate opportunities. In my prepared remarks, one of the things I talked about, our customer focus.

We have to maintain that, and we have to make sure that that's at the top of our priority list and for our objectives for the year. As we get opportunities, which we do, we have conversations and we get opportunities, we'll continue to evaluate those.

If the right one comes along, certainly we would be in a position to act on it. The Southern States combination that we did in 2025 was very positive, we feel like, all the way around.

They always do cause some distraction from your normal operating environment, and so we weigh that anytime we're considering a transaction. When it's worth it, then we're going to be in a place to take advantage of it.

Sounds good. Thank you.

Appreciate for the answers.

Sure. Thank you.

Give Brett our best.

Hey, good morning, guys. I'd like to start on the loan growth front.

Hey Russell,

good morning. Morning, Chris.

Morning, Michael. On the loan growth front, you called out the elevated paydowns and how they impacted this quarter.

Would be helpful just a quick level set where those levels compared to last quarter. Then, as a follow-up, you guys tend to position yourselves as a high single-digit to low double-digit grower.

Sounds like you're guiding to high single digits for this year. Maybe if you could just kind of walk us through the asset class and geographic loan leaders and just whether or not that assumes that level of growth can happen with the players on the field today versus incremental hires.

Michael, you want to go first?

Yeah. I would say, Russell, in the fourth quarter, payoffs were a bit elevated and then especially at the latter part of the quarter.

Chris would have let us all go home on December 24th, we probably would be having a different point-to-point conversation. You work full year.

That last week of the year is where we saw a lot of the payoffs come. Every company has ebbs and flows, right?

Every company faces payoffs. That's just part of business.

That's just something you have to do. On a percentage basis, it was elevated in the fourth quarter.

That being said, we're going to have payoffs in the first quarter of this year, and second quarter of this year. We expect to grow through it as a company.

Our growth forecast is not predicated on hiring new people. It's the teams we have in place with the relationship managers and bankers that we have.

We would expect us to grow that high single-digit range without adding another person. Where can that come from?

We came into Asheville, North Carolina last year. They're off to a good start.

Tuscaloosa, Alabama, smaller market, but had a really strong year. Every market, especially in our metro areas, have a lot of in-migration and growth opportunities.

Then in our more community markets, we expect to continue to grow market share. Both sides of the balance sheet.

More focused on growing deposits and loans, not just the loan side. Then asset class, look, we pride ourselves on being a community bank, and so that means we serve all asset classes.

We're not saying, "Hey, you can only grow one or the other." We want to be full service to our clients, and so I'd expect that to be broad-based.

Russell, if I can just make a couple of comments, and I want to reiterate two things or two or three things Michael said or expand. He is right.

If we would have stopped the world in motion there and not had the last week of the quarter, we'd have been north of 5% in terms of loan growth, actually sixish. Then if you compare average to average, you would see that in our numbers.

Point-to-point was one thing, but we don't get obsessive over that because we feel pretty good about the run rate right where it is. You asked about can it happen with current players.

I think that's an important part of kind of how we project ourselves for the future and how we budget. We budget current players, and we budget a very normal activity.

We certainly don't budget acquisitions, we do not budget bringing over big teams. It's current player activity.

Michael, he also made a statement in his prepared remarks, our expense side is the same. Our expense side is also current players with a very I'll say normal, measured growth rate versus having the big moves in there on either the revenue or expense side.

I think that that's important. Then on geographies, there's one other thing I would say is Nashville approaches half of our loans and deposit base.

That becomes an important part of that picture for 2026 and beyond. That becomes probably the biggest part of that.

As we've had some changes there, and we continue to be actually really bullish headed into '26 on that part of our geography.

That's really helpful. Thank you both.

Then my last question would be on the expense front. Would be helpful to get a sense for how the 4Q run rate shapes up.

Michael, I think you called out $1.5 million of non-run-rate expenses, but please correct me if I misheard that. Then as a follow-up, last quarter you mentioned a willingness to kind of toss that expense guide out the window if you think you can hire commercial lenders the way you'd like.

Just curious if any of that materialized in this fourth-quarter result, and have any changes been made to the comp structure in order to be able to kind of help attract the type of talent you'd like to get or that might shake loose?

Thanks Russell. Just to clarify on the expense piece, yeah, there's $3 million that was performance-based, related to long-term incentive, which is equity, which is really a peer comp analysis.

Chris mentioned our returns, it's a return-based compensation model, and so as we saw our returns continue to perform at a higher level, that's what drove that. That's not necessarily reoccurring because we should be in line with where we expect our performance shares to pay out on a go-forward.

Then, yeah, franchise tax, which was another thing I called out, $1.2 million, that shouldn't be reoccurring as well. Then the other piece, we did the share repurchase transaction and had some professional services fees in there, which I said was non-run-rate.

If I looked at $88 million on the banking side outside of merger and integration costs, and I'd say $5 million or $6 million of that was not what I would call run rate, but it was expense. It hit in the fourth quarter, and that's really why we reiterated our guide for '26 that we gave last quarter, is we don't see those as continuous.

Although I would love to have, as we outperform on a return basis, if our performance shares go up, then that's actually a good problem for everybody, I think. The other piece, you mentioned throwing out the expense guide out the window.

I like how you put that. I don't know that that's how I said it, but I think about it in two buckets, really.

We have our normal course of business, as Chris mentioned, or he said players in seats, and that goes for the entire company. We've got to maintain discipline and create operating leverage, and so we'll continue to do that.

We do recognize that as opportunities come, there's an expense outlay that occurs. We're certainly willing to do that for the right people, the right teams.

We don't hire just to hire. We also recognize that it's a very fluid environment, and all of our people get recruited as well.

We play offense and defense. I'm a college football guy, it's a little bit like the transfer portal.

You've got to make sure you've got your team recruiting all the time, internal and external, and so we actively do that. Then, yeah, we added a couple key people during the quarter and we're really excited about those.

We expect that to continue to pay off for the long term. Really, all that's just heating up, and that's full-time responsibility to make sure that we're recruiting the right people for FB Financial.

I think excellently put all the way around, Michael. I want to add two things is as a lot of disruption in a lot of places, not just our markets, all around the country.

Even if you look at comments made on earnings calls so far this cycle, you've seen banks get pretty bold and saying, "Hey, I'm coming after you," to some of the regional banks. You've seen others talk about their hiring goals and that kind of thing.

You have to realize we have a lot of people coming into our markets in Middle Tennessee, East Tennessee, Georgia, Alabama. What that does is they're just recruiting anybody and everybody.

Your people are getting calls. Our people are getting calls, and we say this internally, and I'm certainly saying it on this call, we don't want any of our people underpaid, and so we will make sure that they're all fairly compensated.

If they're not, we want to correct that. As Michael said, that's part of us just making sure we're taking care of our folks.

Then when it comes to those A-players that may be available out in the market, we will not miss the opportunity because of comp. Okay.

We can compete with anybody from the largest bank on the planet to the smallest community bank that we can compete with. We feel very strong about our position there.

If that's the case and you take that off the table, it really comes down to culture, where the company is headed, and how they feel that they can take care of their customers and compete. That's where we think over the long term, we're going to win.

That's how we do it.

That's great, guys. Thank you for all the help and for taking my questions.

Sure.

Hey, great. Good morning, guys.

Pinch-hitting for Catherine here. Maybe I just wanted to stick along the same lines.

I feel like a lot has been made about some of the M&A disruption that is out there and what that could mean for the talent acquisition front, as well as the client acquisition front. I wanted to ask you guys, we're talking about how big this opportunity is, but you guys are seeing it and living it everyday on the ground.

Is that opportunity, is it out there right now? Are you actively seeing this big opportunity we're talking about hiring in terms of just your boots on the ground there?

Yeah. Good morning, Will.

It's Chris. I think these things, and I don't want to point to anything specific, I'll look in the mirror.

Okay. Remember, we did a transaction in 2025, and again, it just creates a lot of disruption for your own company, but also for others, and it creates a lot of activity.

I think all that depends on a lot of things. How quickly the transaction closes, what the communication is during all that period, when conversion actually takes place.

Conversions become a big deal. Actually, the most important part of a transaction is integration, because that's and sometimes folks confuse conversion and integration.

Integration starts before you make the announcement, because teams are working together and you see how that goes. You then make an announcement, and you then go through all this period of frankly changes to how people do business.

All of us approach that a little differently, I will tell you. Some folks, especially if they're the lead acquirer, they say, "Hey, let me tell you how you do business now."

Some folks don't like that and go somewhere else. Our approach tends to be a best approach.

We evaluate how both companies do business, and we end up adopting some of both. We take the approach of what we call a best athlete approach, and we take folks from both companies, depending on what works best for the whole.

Again, I'm telling you all that to tell you it's so much more art than science that all of that's going on in a lot of places right now. It evolves over time.

Sometimes there's an immediate exodus of people because they just go, "This is not going to work," okay, or, "It's not going to work for me." Other times, there's never an exodus of people.

I'd say most commonly, there's a slow drip. All of those are going on with multiple transactions, and we're out there playing in that sandbox.

Again, our approach is, hey, make sure we have the right culture, make sure that people know our long-term plan and that this is a great place to be, and make sure that they can take care of their clients. That is the most I'd say important thing.

Again, I wish I could give you a little something a little more formulaic that could work its way into an EPS model, but all of that's going on, and depending on who you're talking about, I would say there's a couple of big transactions going on in our market, and I think that the two different bigger transactions are taking different approaches.

Will, it's Michael. That, to your point on disruption, and Chris mentioned some other calls, one of the the markets that's been called out in some of them is Huntsville, Alabama.

If if you look at Huntsville, bankers, there hasn't been necessarily M&A that's driven it, but banker disruption has been on fire for six months. We looked up in the fourth quarter and we were really excited about the team we have in Huntsville right now.

There's probably and amongst banks, I don't, write this in stone, but there's, 50 or 60 bankers that moved between banks in the past six months. We look at our team and we we see the opportunity there.

There We're super excited about them, relatively new, but very experienced market bankers. Not even M&A-related, it's just opportunity related.

That's it's happening in and all around us, and and we think we're poised to are well positioned to be successful with that.

That's great. Thank you both.

That's all very helpful context. I think we're all just trying to contextualize what we're talking euphorically about this hiring opportunity that exists, and just wanted to see if maybe there's an immediacy to it or from your lens, it might take a little time to get there.

I appreciate that context. Michael, maybe for you

Hey Will, not to interrupt you, but I think the answer to that is both. There is immediacy, but we're not just thinking about the next two weeks, right?

This is a three, five, seven-year kind of opportunity with all this going on. These things take a little bit of time.

The answer is both, and that's probably not what you're looking for, but

Michael, I was going to say exactly the same thing. The answer the answer is both, and I would say this is what folks what tends to be what helps FBK is folks view us as having a very long runway, and they and and and they view us as as being able to they they view us as as having a having a a really bright path forward.

That that's helping us, and we play the long game there. We're we're much more interested in, "Hey, we're going to be here, we're going to play the long game," and we think that's going to be a winning formula.

It is both.

Okay. That's very helpful.

I appreciate you guys contextualizing that for us. Michael, maybe one for you on the margin.

It was great to see the higher NIM this quarter. You guys seem to consistently outperform where you guys expect the margin to be.

We have a little bit of higher guide, and it's really just been a large function of you guys being good managers of deposit costs. As we enter kind of a '26 period where we expect growth to pick up, even from where we are today, what do you think just incremental deposit betas will look like?

What kind of levers do you feel like you still have to manage deposit costs over the course of next year?

Yeah. That's a really good question.

We feel good about the margin guide and the growth opportunity. I will say that mid to high single-digit growth at a 3.80% kind of core margin.

However, as you mentioned, as people come in, yeah, sometimes when you hire people, or not sometimes, a lot of times, to bring over relationships, you've got to start with bringing over a customer and it's probably paying above market for a deposit cost, and then you earn their business over time. We fully expect that our bankers can do that and will do it.

Of course, I'm sure our competitors do as well. More people coming into our markets, paying higher costs.

I personally get flyers from a lot of large banks, twice a week or mail offering things that are pretty exorbitant. We do realize it's out there.

Really comes down to the customer experience and relationship long term and earning that business, and that's what we're focused on. You could see, both on the loan and deposit side, some margin compression if things get really kind of dicier, competitive out there.

I think so far everybody's pretty focused on everybody, meaning competitively wise, as well, kind of lowering cost as rates go down. I will say this, too, though, Will, because this is counterintuitive to maybe a lot of other institutions.

We want to be a fair value proposition to our customers. Chris mentioned the long game.

We're thinking years and decades. We're not trying to get everybody to a zero cost deposit.

We want to be fair. We want them to have their money here.

We want it to be the entire family, their business, everybody. We expect that on both sides of the balance sheet.

We're going to have fair loan yields, we won't be the lowest loan pricing either. We want to take care of our customers, and so our deposit costs does run a little bit higher than some others, and our loan yields run a little bit higher.

We think that's the fair thing for the customer and for the company and for the shareholders. That's kind of a different approach probably.

Just give me your expectations on what incremental deposit betas will look like in this kind of competitive market you're describing.

I think if you're still looking at that 55%, 60% range, which is where it's been, I think, on the interest-bearing. We'll see how Treasuries are up, right?

A lot of external noise to the banking system that could put pressure on money moving back into some of those US Treasuries or money market funds, which could impact that. We've been pretty consistently able to move down deposit costs with rate cuts.

That being said, we only think there's going to be one or so where we sit today.

Okay. Good stuff.

Maybe just lastly for me, Chris, we talked a little bit about just the appetite for what incremental M&A would look like, and you mentioned for the right opportunity, you guys would keep your eyes and ears open. Could you just frame what that opportunity would look like, maybe as you think about the right size, the right geography, just what you would look for in an M&A transaction today?

Yeah. Geographically, we're going to be looking around the Southeast and the Carolinas, even into Virginia, which is a contiguous state for us from where we are today, and not far at all geographically.

Carolinas, Virginia, Georgia, Alabama. Something that could even get down into the northern part of Florida would all be the types of places we would be looking.

We would prefer, okay, not necessarily it have to be contiguous to some of our existing geography. Here's an example of what I mean by that.

I mentioned Virginia. Hampton Roads, Virginia is actually quite a long way from us, and so that would be less interesting for us than let's say Western Virginia.

I don't know. I'm hesitant to throw out names of towns.

Sometimes I get calls going, "Are you talking about us on your earnings call?" I'm a little hesitant to get too specific.

You can understand what I mean by jumping over big parts of geography is generally not what we're looking for. We'd like for it to be a little closer to our existing.

In all of those locations. I would think of more kind of Western Virginia, and the Carolinas, certainly of interest.

The Georgia, Alabama, all of our existing Southeastern, let's say, geography. Then, we generally aren't looking for things that we have to fix in a significant way.

We like companies that perform well. Asset-wise or size of the institution, we love things that are call it anywhere from a couple of billion in assets all the way up to $6 billion or $7 billion even billion in assets.

That's the description of what we'd target. There's some cases where we may go smaller than that on the asset side if it's a market that we're particularly interested in and we like what they do in that market.

There are cases where we'd go smaller than that, asset-wise.

That's great color, Chris. I appreciate it, guys.

Thanks for the questions, and congrats on a great year.

Thanks, Will. Thank you so much, Will.

Hey guys, this is Thomas on for Steve. Could you just talk maybe about the loan pipeline and client sentiment broadly?

How is client confidence these days and what is their appetite for investment?

Tom, good morning. It's Michael.

Actually pipeline is pretty strong. I think we've been saying that.

We've been seeing strong pipelines. If some deals have pushed into '26 from '25, and so I'd reiterate that they've been strong.

Clients, I think a lot of the noise that happened maybe early last year that limited some of that early growth is past. All the noise is still out there.

I think that they're just operating in a way that, hey, it's kind of new norm and we're excited about the future and investments occurring. We're seeing a lot of existing clients start new projects or deals, and a lot of times they're able to take their older stuff to the permanent market if it's multi-family or real estate-based, and C&I activities picking up.

Really actually pretty positive operating environment, business-wise.

Great. Appreciate that color.

Just one more for me. Last quarter, I know you guys indicated that loan growth would largely be governed by core deposit growth, and it looks like maybe core deposit growth was a little challenged in the fourth quarter.

I saw you took on some brokered. Maybe talk about your core deposit growth outlook for 2026 and maybe the strategy that's going to get you there.

Yeah. Core deposit growth always a focus for us.

We've got a lot of funding capabilities that we would exercise in kind of the shorter term if need be. I'd say actually when I think about core, it goes back to a comment I made a little bit earlier, that sometimes you bring over customers and the intent is to turn them into relationships, which is another word for core.

A lot of times, if that doesn't materialize over some period of time, and they're higher cost, we'll just go ahead and say, "Hey, maybe we're not the place for you." That's where you can see deposit movement in and out of the balance sheet, and that's a continuous process.

Brokered, small number for us, 4% or so of balances. We do make sure that we have funding in place if need be.

I think from a perspective of how we're going to do it in '26, I do think it gets back to what Chris said in his comments, is the focus on the customer, customer experience, making sure we have the right treasury management platform and products as we go what I'll call more upstream a little bit, opportunities, that kind of middle market commercial client, a lot of opportunity there. Even half our business is consumer as well.

Our retail network, we've got to reignite the focus on our client there, and we're in the process of that, and just really adding and activating relationships. It's broad-based.

You can't point to just a single thing because we're in a lot of these different businesses and so a lot of opportunity in our geographies.

Got it. Thanks for taking my questions, and congrats on a good year.

Thanks, Tom. Appreciate it, Tom.

Thanks.

All right. Thank you so much again.

We appreciate everybody joining us on the call, and we are glad to have had a good year and looking forward to 2026. Thank you all, and reach out directly if we need to give you more information.