National Bank Holdings Corp Q4 FY2025 Earnings Call

Good morning, everyone, and welcome to the National Bank Holdings Corporation 2025 Fourth Quarter Earnings Call. My name is Rachel, and I will be your conference operator for today. As a reminder, this conference is being recorded for replay purposes. I will now turn the call over to Emily Gooden, Chief Accounting Officer and Director of Investor Relations.

Thank you, Rachel, and good morning. We will begin today's call with prepared remarks, followed by a question-and-answer session. I would like to remind you that this conference call will contain forward-looking statements, including, but not limited to, statements regarding the company's strategy, loans, deposits, capital, net interest income, noninterest income, margins, allowance, taxes, and noninterest expense. Actual results could differ materially from those discussed today. These forward-looking statements are subject to risks, uncertainties, and other factors which are disclosed in more detail in the company's most recent filings with the U.S. Securities and Exchange Commission. These statements speak only as of the date of this call, and National Bank Holdings Corporation undertakes no obligation to update or revise these statements. In addition, the call today will reference certain non-GAAP measures which National Bank Holdings Corporation believes provides useful information for investors. Reconciliations of these non-GAAP financial measures to the GAAP measures are provided in the news release posted on the Investor Relations section of www.nationalbankholdings.com. It is now my pleasure to turn the call over and introduce National Bank Holdings Corporation's Chairman and CEO, Mr. Tim Laney.

Well, thank you, Emily. Good morning, and thank you for joining us as we discuss National Bank Holdings' Fourth Quarter and Full Year 2025 financial performance. I'm joined by John Steinmetz, our Executive Vice Chair and Executive Managing Director of Strategic Initiatives; our President, Aldis Birkans; John Finn, our Chief Enterprise Technology Officer; and of course, our Chief Financial Officer, Nicole Van Denabeele. I'll begin this morning by extending a very warm welcome to our new Vista teammates who joined the NBH family earlier this month. Turning to the fourth quarter and full year 2025. While the fourth quarter was noisy, we ended the year having grown tangible book per share by 10%, and we grew our CET1 capital ratio to 14.89%. I'm pleased with our swift closure of the Vista Bank acquisition and believe our combined organization will produce powerful results, results that Nicole will guide us through when she presents. It was a noisy fourth quarter with one-time acquisition costs, the strategic sale of securities and a move to put any lingering problem loans behind us. Our goal was to enter 2026 with a clean slate and with a focus on profitable growth. I'll touch on 2UniFi later in the call, but share for now that we're pleased to have completed Phase 1 of the 2UniFi build. And we’re joined by John Finn, who co-leads 2UniFi, and he'll cover our progress in detail in just a bit. Before I hand off to Nicole, I also want to compliment our bankers on their deposit and loan pricing discipline, which led us to close out the year with a net interest income margin of 3.97%. I believe we are set up for a beautiful 2026.

Thank you, Tim, and good morning. Today, I'll review the fourth quarter and full year 2025 financial highlights and provide guidance for 2026. Our guidance reflects the combined organization, and consistent with past practice, excludes the impact of any future Fed rate decisions. In 2025, we executed on key strategic priorities. We announced and have now closed the Vista acquisition within 4 months, grew tangible book value by 10%, and delivered a full-year net interest margin of 3.94%. Fourth quarter's results were impacted by elevated provision expense and one-time items, including $4.1 million in after-tax acquisition costs and a $2.6 million after-tax loss on the strategic sale of investment securities to remain below $10 billion in assets at year-end. As a reminder, this action will preserve approximately $10 million in interchange income for 1 more year. Excluding one-time items, fourth quarter net income totaled $22.7 million or $0.60 of earnings per diluted share. As Tim shared, we addressed the specific set of problem loans during the quarter. This resulted in $9.1 million of provision expense related to charge-offs and specific reserves. For the full year 2025 on an adjusted basis, net income totaled $117.6 million or $3.06 of earnings per diluted share. Return on tangible assets was 1.3%, and return on tangible common equity was 12.2%. During 2025, we maintained a top quartile full year net interest margin of 3.94%, generated $1.6 billion of new loan originations, executed share buybacks and added to our robust capital base. We are pleased to have added a number of experienced bankers to our team through the Vista acquisition. We kick off the year with a combined loan portfolio of approximately $9.4 billion and are projecting 2026 loan growth to be approximately 10%. At acquisition closing, we added approximately $2.4 billion of earning assets from Vista to our balance sheet. As we optimize the total cash and investment portfolio mix, we project the combined bank to generate earning asset growth of 7% to 10% during 2026. Our goal is to hold approximately 15% of total assets in cash and investments and maintain a loan-to-deposit ratio of approximately 90%. Fully taxable equivalent net interest margin for the fourth quarter was 3.89% and was impacted by variable rate loans repricing well ahead of Fed rate cuts. However, we cut deposit rates in tandem with the Fed, creating a lag effect in our cost of deposits. Most of this has now worked its way through our balance sheet, and December's margin returned to a strong 3.97%. Similarly, Vista's December margin was 4%. As a result, we project 2026 fully taxable equivalent net interest margin to remain right around 4%, excluding the impact of future rate moves. Turning to credit. Our nonperforming asset ratio improved 11 basis points during 2025 to end the year at a low 36 basis points of total loans. The criticized loan ratio improved 73 basis points during the year. Net charge-offs were 34 basis points of loans for the year, and the allowance to total loans ratio ended the year at 1.18%, consistent with the prior quarter. We continue to hold $16.8 million of marks against our acquired loan portfolio as of December 31, providing an additional 23 basis points of loan loss coverage if applied across the NBH legacy loan book. We will be adding marks from Vista's loans during the first quarter of this year. We project the provision expense in 2026 to cover net charge-offs and new loan growth at a rate consistent with the current 1.2% allowance to total loans ratio. Fourth quarter noninterest income was $14.4 million and included $3.3 million in pretax securities losses. For 2026, we project total noninterest income to be in the range of $75 million to $80 million. Fourth quarter noninterest expense totaled $72.4 million, including $5.4 million of acquisition costs. Also included in the fourth quarter's expense were investments made in bankers in our resort markets. Full year noninterest expense was $265 million, including $7.2 million in acquisition costs and $22 million related to 2UniFi. For 2026, we project noninterest expense of $320 million to $330 million, reflecting a full year of Vista expenses. We project expenses during the first half of the year in the range of $165 million to $170 million. This means lower expenses in the back half of the year, reflecting cost savings from operational efficiencies generated by the combined organization following the completion of system integration. During 2026, we expect to incur one-time expenses associated with the acquisition and rebranding. In addition, we may recognize CECL day 1 provision expense depending on our final purchase accounting approach. As Tim shared, we are pleased to have completed the initial phase of 2UniFi in 2025 with the launch of our fully automated SBA loan offering last quarter. With the core technology infrastructure now in place, we expect a substantial reduction in capital expenditures for 2UniFi in 2026. This shift positions us to begin realizing operating leverage from the platform. For 2026, we expect $2 million to $4 million in 2UniFi revenue contribution, which is included in my fee income guidance. Importantly, we expect to maintain flat year-over-year 2UniFi expense, even with 2026 reflecting a full year of capitalized asset depreciation, which is approximately half of 2UniFi's 2026 expense. This means significantly lower cash spend in 2026. Turning to income taxes. The 2025 effective tax rate was 18%. With the integration of Vista and the resulting shift in the mix of taxable versus nontaxable income, we expect our effective tax rate to be approximately 20% for 2026. Capital levels remain strong, and we continue to grow our excess capital. We ended the year with a TCE ratio of 11%, Tier 1 leverage ratio of 11.6% and a strong common equity Tier 1 ratio of 14.9%. We project a 2026 share count of 45.8 million shares, reflecting the Vista-related share issuance. On a final note, bringing this all together, we believe we are well positioned to deliver earnings in excess of $1 per share in the fourth quarter of 2026, which sets the stage for full year earnings exceeding $4 per share in 2027.

Thank you, Nicole, and good morning. On behalf of the Vista team, our state and our NBH family, I am pleased to have successfully merged our organization with National Bank Holdings Corporation and honored to be joining you on today's call. As the newest member of National Bank Holdings, I am thrilled about the future of our combined companies. We have partnered with a dynamic, high-performing team and platform, and I believe there is tremendous potential for our combined organization. It hasn't taken long to have my instincts confirmed that our companies are ideal partners for our shareholders and team members alike. With its strong leadership, consistent discipline around credit, and a vision to create one of the most respected and profitable financial institutions in the country, NBH has built a platform that is uniquely positioned for strong continued organic and strategic growth. As a part of the NBH family, we are excited to have the opportunity to offer expanded services, such as wealth management and trust services, and enhanced treasury management offerings, added mortgage products, and a bigger balance sheet to support the growth of our valued clients. This broader product set will strengthen our relationships, deepen wallet share and enable our exceptional bankers company-wide to better serve our clients through their financial life cycle. We are also honored that Tim and the Board made the decision to adopt the Vista name as the go-forward brand in our diversified markets. It provides our combined teams a unified front and is a name that works well in both English and Spanish, further enforcing our commitment to taking the long view of better serving our clients in the future. With a $2.7 trillion GDP, Texas is one of the fastest-growing economies, larger than most countries and consistently outperforming national averages. Texas' diversified high-growth economy provides unlimited opportunities for our combined organizations. That said, I'm also equally excited about the growth opportunities in the various resort markets we serve currently, such as Jackson Hole, Aspen, Vail, Telluride, and Palm Beach, Florida. Since the transaction, we have already added 3 presidents with over 45 years of combined experience at their previous banks prior to joining NBH. These communities, once seen as primarily secondary home destinations, are now primary residences for wealthy baby boomers. This shift presents an opportunity to offer our white glove concierge private client and wealth management services, further setting our bank apart in a very crowded industry. Additionally, I am pleased to share with you that we are already seeing early momentum in our combined pipeline, fueled by the energy of our seasoned team members and enhanced capabilities, creating a clear path to value creation through relationship-driven profits. Equally significant is the cultural fit between our two organizations. Over the past several months, the Vista Bank and NBH teams have united around a shared velocity, putting people first, a focus on the value of teamwork and meritocracy, all while delivering exceptional results and building long-term relationships. These values drive results and further increase shareholder value. The legacy Vista team has been together for nearly 2 decades, and I want to express my unwavering commitment: To finance the American dream for those entrepreneurs brave enough to pursue it. We invest in our communities, and we compete to win while striving to create the best place for our associates to work. Having deep respect for Tim, Aldis, and the entire NBH team that they have built, we couldn't be prouder to join the NBH family. I truly believe the best is yet to come. All that said, we are confident that our contributions will enhance NBH's growth profile, strengthen its market presence and further expand shareholder value. I'll close my remarks by thanking you for your trust and support. And now I'll hand off the call to my friend, Aldis.

All right. Thanks, John, and good morning. I'll begin by highlighting what was a strong loan production quarter. We originated $591 million in total loans, the second highest loan production quarter in our company's history. I believe that performance is a direct reflection of our franchise strength and capability of our bankers. What I'm most proud of is the composition of that production. $429 million of that came from commercial loan originations, a new record for us. This drove our commercial loan portfolio growth to nearly 8% annualized. This is high-quality, relationship-driven business that proves we are winning in our core markets. During the fourth quarter, we continued to see pressure on our commercial real estate loan balances. This decline was mostly driven by accelerated payoffs as clients move toward alternative funding like private credit, REITs, and life insurance companies. As a result, we improved our non-owner-occupied CRE to capital ratio to a low 127%. And when we factor in the Vista balance sheet, we are starting the year comfortably below the 200% threshold, which gives us meaningful runway for growth moving forward. From a credit perspective, Tim and Nicole have already walked you through the actions we took during the fourth quarter, so I'll just simply add this. My expectation is that our asset quality metrics will continue their positive trends, returning to top quartile performance in 2026. I'm also very pleased to be working alongside John Steinmetz as we expand our footprint in Texas and key resort markets. And together, we expect to deliver our 2026 targets, driven by profitable and prudent growth. When you combine the Vista merger with our planned organic growth across all markets and recognize that we have reached our turning point for 2UniFi, the stage is set for a very compelling 2026. With that, I will turn it back to Tim.

Thank you, Aldis. I'll share a few thoughts on 2UniFi before handing off to John Finn. First, I want to congratulate the 2UniFi team on completing the Phase 1 build. Second, make no mistake. During 2026, there will be an intense focus on new client activation and growing revenue. And finally, our goal is before year-end to have entered into a partnership that will meaningfully reduce NBH's 2UniFi investment run rate. With that said, I'll turn the call over to John Finn. John?

Thank you, Tim. Today, I'm pleased to share more about the journey of 2UniFi as we unlock the future of small business banking. Last quarter, we reached a significant milestone with the launch of our SBA working capital loan, integrated seamlessly into our platform alongside our innovative business suite deposit account. This achievement is a key moment in Phase 1 of our multiyear strategy. Imagine a world where a small business owner can log in once and see their entire financial landscape, accounts, cash balances, and lending options, all in one unified view. We are revolutionizing the client experience well beyond traditional online banking, creating a seamless platform that helps a small business owner manage financial products and services across multiple banks and fintechs. With our integrated digital passport, we have transformed the application and onboarding process. Clients can provide their information once and eliminate the need to reenter it for additional products, whether opening an interest-bearing account or applying for a loan. Our innovative passport will ultimately enable business owners to effectively shop for financial services across a broad set of financial service providers. Now that our foundational infrastructure is in place, we are shifting gears from constructing systems to activating services. We're launching with two essential capabilities that small business owners need, beginning with convenient access to SBA working capital loans, as well as an automated nightly suite that earns interest on excess deposits, which is functionality typically reserved for larger mid-market clients. Our custom middleware and microservices architectures enable us to deliver advanced features like real-time event notifications and tailored communications. Clients receive faster decisions with clear and concise updates, saving time and reducing stress for business owners. Our vision has always been clear: To build an integrated and seamless technology platform, not just another digital bank. Operating with a full-service banking charter, our scalable and secure architecture is supported by industry leaders like Finxact, Savana, Visa, and Marqeta. This ensures we have the best tools at our disposal to serve our clients effectively. Leveraging our technology with Snowflake and Microsoft Azure positions us to enable enterprise-grade data insights in upcoming releases. Our data architecture will support AI-driven, customizable data sets, enabling 2UniFi to provide valuable cash flow insights and proactive product recommendations based on clients' activity. This architecture also creates opportunities to develop new insight-based products and analytics-enabled services based on aggregated, anonymized data alongside deeper client analytics. As Tim has shared, we are optimistic about the formation of a partnership in 2026 that will accelerate our distribution and scale. Our full-service banking charter provides the partner with access to a tech-forward platform, including the ability to offer FDIC and shared deposit solutions nationwide. As we move forward beyond Phase 1, our investment in 2UniFi will become more targeted with a step down in our capital expenditure run rate as the build phase gives way to a more efficient operating profile. Importantly, we're scaling 2UniFi deliberately. We will onboard clients responsibly and optimize our controls, which we believe will translate into quality conversions and more durable relationships over time. We are prioritizing a high-quality onboarding experience with robust fraud mitigation because, as you know, building trust is foundational to long-term value creation. With a more efficient cost profile and a growing set of capabilities, we remain committed to building 2UniFi into a marketplace that we believe will compound value for small business owners and our shareholders alike. I appreciate the opportunity to provide this update on 2UniFi. I will now turn it back to Tim.

All right. Well, thank you, John. We've covered a lot of ground this morning. So Rachel, I'll go ahead and ask you to open up the call for questions.

Our first question comes from Jeff Rulis with D.A. Davidson.

Nicole, that was a whirlwind of updates. If I could just rattle through a couple. Just to confirm, you said 10% loan growth in '26 off the combined $9.4 billion balance, a margin for the full year near 4%, earnings over $1 in the fourth quarter and over $4 in '27. Is that right?

That is correct.

Okay. And on the 2UniFi front, I think you said $2 million to $4 million in revenue this year. What was the cost again for '26?

Yes. So that's correct, $2 million to $4 million 2UniFi revenue projection for 2026, and we will be holding 2UniFi expense flat in 2026, consistent with 2025, which was $22 million.

Understood. It seems the partnership is aimed at lowering investment costs. The leverage of the model for 2027 is still uncertain, but it appears that as we increase scale, we could reach a breakeven point by that year. I'm aware that this situation is still evolving, but I'm trying to understand what the financial outlook for 2027 will be.

Look, I think what we should share with you is that right now, we are incredibly focused on Phase 1 product activation with clients and driving revenue and really testing the market with those services. Number two, as I shared, we are very focused on working to establish a partnership that frankly could have the effect, amongst other options, of moving this off the NBH financials altogether, where we would remain a meaningful investor as shareholders, but it would be treated in a very different fashion financially. But I'll come back to the first point, which is our focus today is on client activation and scaling this business, and we'll come back to you. It's just too early to come back to you with any kind of definitive targets on '27.

Yes, that's helpful, Tim. Regarding the range of options, including the possibility of moving off the bank's financials, we'll keep an eye on that. To switch to the credit side, the three loans that accounted for most of the net charge-offs—could you identify the category and the reasons behind that group? It seems like you anticipate credit metrics to improve further in '26. I'm looking to understand what led to these charge-offs.

If you remember, at the start of 2025, we were facing only a few problematic relationships. We believed that throughout 2025, they would navigate through the judicial process and resolve themselves, but that did not happen. We made a prudent choice to tackle these issues as aggressively as possible in 2025 to ensure a clear path for 2026. We do not think it's wise to let such problems persist. The Board and I agreed that taking this action was the right and careful decision, even though it was difficult to implement in the fourth quarter of last year. However, it feels very relieving to have moved past it.

And we will take our next question from Kelly Motta with KBW.

To start with growth, we discussed the year 2025, which will involve managing some credits impacted by payoffs and refinancings. However, the outlook for 2026 appears very strong, particularly due to the new partnership with Vista. Regarding the anticipated 10% loan growth, can you elaborate on the factors driving this growth? Is it largely due to the opportunities in Texas and other markets, considering the acceleration we've observed in recent quarters?

Yes, this is Aldis. I'll kick off, and then I'll have John chime in. But yes, it's a combination of all the markets and certainly, the continuation of the strong production we saw in the fourth quarter. As I mentioned, it was our second highest loan production quarter for NBH stand-alone basis. In our company's history, we did really well on originating commercial loans. If you look at the C&I in the table, that grew north of 10% annualized. So we do see a very good momentum going into this year. And certainly, adding markets like Texas and the expertise and teammates that we are adding through this acquisition is great. And John, maybe you can add on that front as well as touch on the resort markets.

Sure, thanks, Aldis. Yes, Kelly, we are really excited about the growth potential not just in Texas but across all the resort markets. I'm looking forward to connecting with team members in all of the NBH markets. We believe that the platform developed at NBH provides us with the strong balance sheet necessary to continue growing alongside our valued clients while supporting our exceptional bankers. Additionally, we have always seen a significant opportunity for NBH in the resort markets, which have evolved from being viewed as second homes to now being primary residences in areas where people prefer to have their local bank. I hope that by this time next quarter, we will showcase some performance-driven metrics that increase shareholder value in this regard. The platform at NBH will not only help us sustain the 20-plus percent compound annual growth rate on deposits and loan growth that we've experienced historically but will also help us address the challenges related to fee income that Vista Bank has faced in the past.

Got it. That's really helpful. I have a question about the margin. It was down this quarter a bit more than I expected. With the loan yields, were there any interest reversals considering the credit situation? I also appreciate the guidance in the mid-3.90s, excluding rate cuts. However, could you refresh us on the initial asset sensitivity and how we should be thinking about that?

Yes, this is Nicole. I want to emphasize that our December margin was a solid 3.97%. We have effectively managed through 75 basis points of rate cuts in 2025. Despite those rate cuts this year, we achieved 9 basis points of margin expansion. In the fourth quarter, there were no interest reversals, and the loans we addressed were already nonaccrual. Additionally, we've done well with our deposit pricing in response to previous rate cuts. We adjusted our deposit rates ahead of the Fed, and this time we decided to hold off until we had clarity on the Fed's actions. While this created a lagging effect, we successfully navigated it and ended the year with a strong margin of 3.97%.

Great. Last one, if I could slip in just one more. On the 2UniFi guide, the expense guide at $22 million, I wanted to confirm that this does not include any potential impacts from a partnership that could change the economics here. Also, with it flat, I imagine increasing the user base is important for driving those revenues higher, so I'm surprised it's flat. Could you explain how you're considering that line item, given that we aren't seeing a change from last year?

I appreciate your question. It's important to highlight that we view 2026 as a pivotal year for 2UniFi. As I mentioned, we expect to see operating leverage from 2025 in 2026. Our revenue guidance shows an increase from last year, with expectations of $2 million to $4 million in revenue, benefiting from 2025. Holding expenses steady is significant, especially since we will be accounting for a full year of capitalized asset depreciation in 2026. This steady expense includes the increase in depreciation, which constitutes half of our projected expenses for 2026. Regarding the partnership, from a financial standpoint, it presents an opportunity for upside, but none of this has been factored into our guidance for 2026.

And we will take our next question from Andrew Terrell with Stephens.

First one, just to clarify, Nicole. On the margin, was the 3.97% at the end of the year or 3.97% for the full month of December?

3.97% was for the full month of December.

Okay. Can you provide information on the timing difference where assets adjusted much faster than deposits? Specifically, where were deposits, either total or interest-bearing, at the end of December or on a spot basis at the end of the quarter?

Yes. This is Aldis. It was 182 is the spot deposit cost at the end of December for NBH. But I recall now starting in Q1 or starting now, obviously, we're incorporating all of the Vista deposit base as well. So it will change into Q2. But I think what you're getting at is how spot margin is around 4% if you incorporate all of the benefit from deposit bleed through in December.

Yes. Yes. Got it. Okay. If I could ask just around the 2UniFi, specifically the partnership. If I go back to October, Tim, when we talked about on the call, it sounded like you were maybe pretty close on announcing something from a partnership standpoint. It sounds like now, that's still likely but maybe delayed a bit. I guess I'm curious what's kind of causing a delay here or if there is a delay in your mind?

I may have made a mistake in sharing as much as I did at that point candidly. It perhaps even reflected too much optimism, and I could kick myself for that. I believe we were further along in consummating a partnership there. But frankly, when you're involving two parties, you can have different needs, expectations on either side that may not come together in the timeframe that you expected. So what you need to hear from me today is that we are intensely focused on bringing the right partnership together and moving 2UniFi ahead. And frankly, we are proud to be targeting a $4 run rate in our earnings in '27. But imagine what that looks like if we're pulling those expenses of 2UniFi in all or in part off of our income statement. So we're highly motivated to see something happen there.

Yes, I understand. Lastly, was there any revenue realized in the fourth quarter? Also, regarding the buyback you announced, could you share some insights about the interest in that?

Yes. I can touch on the 2UniFi revenue question. So we did have some revenue related to 2UniFi in the fourth quarter, but it wasn't meaningful. And then the second part was the appetite for share buyback.

We have a strong interest in share buybacks. We just announced a $100 million buyback authorization, and we consider it a priority at this point.

And we will take our next question from Brett Rabatin with Hovde Group.

I joined a little bit late, Tim, but I wanted to revisit your strong loan originations, especially recently. However, the net growth has been limited due to payoffs. Can you discuss what you experienced in the fourth quarter regarding payoff activity and how that affected things? Also, if I heard correctly, you mentioned a forecast of 10% loan growth for '26. Is there a net and gross assumption included? What are your thoughts on the likelihood of payoffs diminishing compared to what you've seen in the last few quarters?

Aldis mentioned the insurance competition in the private debt market. To be honest, most banks are experiencing this competition. There were several instances where the structures and pricing of certain deals did not align with our risk management framework, so we chose to let those opportunities pass. Looking at the bigger picture for the year, we entered 2025 with a cautious mindset due to concerns about tariffs and the economy. This risk-averse stance was evident throughout the year, and while I am proud of our team's production, it was achieved under a very conservative approach. As we move into 2026, we have the combined strengths of Vista and NBH, and based on the growth plans we've shared, both Aldis and John are very confident that we will meet or exceed those goals. I’ll now open the floor, starting with Aldis for more details on the fourth quarter, and then John, Aldis, feel free to add your thoughts on growth for '26 as well.

Yes. Brett, I want to add that as we look toward 2026, one aspect that stands out is that, in addition to what Tim mentioned about transportation or trucking, we have indeed exited that segment, which was previously a challenge for us. We are currently positioned where we want to be, so that won't pose a challenge in 2026. Additionally, on the legacy book side of NBH, we have around $250 million to almost $300 million in scheduled maturities this year that are less than last year. This means we have a smaller hurdle to overcome in order to maintain growth even with the same production outcomes. John, do you have anything to add regarding the legacy Vista side?

Thank you for the question, Brett. I am optimistic and very excited about 2026. We have consistently achieved a 23% compound annual growth rate in loan growth without the support of the NBH balance sheet, making this partnership ideal. There are significant opportunities in the resort markets, and I firmly believe that top clients are drawn to the best bankers. We are dedicated to supporting our outstanding team members at Vista and the entire NBH family, as well as recruiting and retaining talent amid the current disruptions, especially in Texas. This merger has brought together two exceptional teams, and I feel very optimistic about our prospects. Regarding an earlier question from Jeff at D.A. Davidson, I want to emphasize our commitment to credit quality. I hope our credit team at Vista recognizes how seriously we take this, as we strive for unparalleled credit quality. I have great confidence in Rick, Danny, and the credit team at NBH. We conducted thorough diligence on NBH, knowing they did the same on us. I take pride in partnering with an organization focused on credit quality, as I believe they approach issues with integrity, and I am excited about what lies ahead in 2026.

That's really helpful. I'm sorry?

I was just saying as a shareholder and team member.

Yes. Okay. That's all really helpful. And I think most investors are going to give you guys credit for the credit situation as being truly one-off. So I don't think anybody is concerned about that. The other question I wanted to ask you, John, was just I think you're kind of known as a recruiter and you got this deal with NBH, but there's been significant disruption in a lot of the markets of the core operating pro forma company. Just wanted to hear if you had offers out or if there was a hiring effort pro forma, or if it's too early, and you're just still trying to combine everything before you maybe go too much on offense with market share opportunities related to disruption? And just any thoughts on how you see that playing out?

I appreciate your question, Brett. This is my first public earnings call, and while Tim advised me to avoid making promises I can't fulfill, I want to share that we are actively recruiting and also retaining our talent. Many of our team members have been together for 20 years, and I take great pride in having the best bankers on board. We are receiving numerous inquiries, not just from recruiters but from bankers at various organizations in Texas and beyond, eager to join a people-first culture. I am excited for my friends in Texas who announced their deal today, and I can assure you that recruitment is a priority for me. In this crowded industry, where competition is fierce, I believe that 2026 could be a promising year if we commit ourselves. I look forward to working with our established team and getting to know the NBH team, who I have deep respect for. This merger has built over five years of relationships with Tim, Aldis, and the entire NBH team. I also want to thank the team at Vista for their patience as we explore various opportunities. We believe this partnership is ideal due to our similar credit management philosophies.

Thank you. And I am showing we have no further questions at this time. I will now turn the call back to Mr. Laney for his closing remarks.

I'll just simply say thank you for your time today. And if you have any follow-up questions, do not hesitate to reach out directly. Have a good day.

And this concludes today's conference call. If you would like to listen to the telephone replay of this call, it will be available in approximately 24 hours, and the link will be on the company's website on the Investor Relations page. Thank you very much, and have a great day. You may now disconnect.