Good day, and welcome to the West Banco 4th Quarter 2025 Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then 1 on a touch-tone phone. To withdraw your question, please press star then 2. Please limit yourself to one question and one follow-up. Please note this event is being recorded. I would now like to turn the conference over to John Iannone, Senior Vice President of Investor Relations. Please go ahead.

Good morning, and welcome to West Banco, Inc.'s fourth quarter and full year 2025 earnings conference call. Leading the call today are Jeff Jackson, President and Chief Executive Officer, and Dan Weiss, Senior Executive Vice President and Chief Financial Officer. Today's call, an archive of which will be available on our website for one year, contains forward-looking information. Cautionary statements about this information and reconciliations of non-GAAP measures are included in our earnings-related materials issued yesterday afternoon, as well as our other SEC filings and investor materials. These materials are available on the Investor Relations section of our website, westbanko.com. All statements speak only as of January 28, 2026, and West Banko undertakes no obligation to update them. I would now turn the call over to Jeff. Jeff?

Thanks, John, and good morning. On today's call, we will provide an overview on fourth quarter performance and provide our initial outlook for 2026. Key takeaways from the call today are successful execution on our growth-oriented business model while maintaining strong credit quality measures, full-year pre-tax pre-provision earnings growth of 105% year-over-year and full-year earnings per share of 45% to $3.40 when excluding merger-related charges. Loan growth fully funded by deposit growth both year-over-year and quarter-over-quarter, helping to drive our fourth-quarter net interest margin to $3.61. Continued focus on operational efficiencies and cost control, as demonstrated by our fourth-quarter efficiency ratio of 52%. 2025 was another strong year for West Banco, and a clear demonstration that our growth-oriented business model continues to deliver results while maintaining discipline, credit, and expense management. For the full year, we generated pre-tax, pre-provisioned earnings growth of more than 100% year-over-year and earnings per share growth of 45% to $3.40, when excluding merger-related charges. Importantly, that performance was driven not by one-time actions, but by core strategic execution, including loan growth, fully funded by deposit growth, expanded net interest margin, and continued efficiency gains. For the fourth quarter ending December 31, 2025, we reported net income, excluding merger and restructuring expenses, available to common shareholders of $81 million. and diluted earnings per share of $0.84, which increased 18% year-over-year. On a similar basis and excluding day-one provision for credit losses, we reported full-year net income of $309 million and diluted earnings per share of $3.40. Furthermore, the strength of our 2025 financial performance was reflected in our fourth quarter return on tangible common equity of 16 percent. Non-performing assets to total assets of 0.33 percent. Our capital position remains solid with a CET1 ratio of 10.3 percent, giving us flexibility to support growth and navigate the operating environment ahead. We also achieved several strategic milestones in 2025. Chief among those was the successful acquisition and integration of Premier Financial. transforming West Banco into a $28 billion asset regional financial services partner. With this historic acquisition, we now rank among the top 50 publicly traded U.S. financial institutions based on assets. At the same time, we continue to invest in organic growth, expanding into new markets through the opening of loan production offices in northern Virginia and Knoxville, launching our new healthcare vertical, and optimizing our financial center network and digital banking capabilities to support evolving customer preferences. And we will soon be celebrating the opening of a new financial center in Chattanooga, our first in Tennessee. Underlying all of this is the consistent focus on relationship banking that sets us apart from others. That approach drove record treasury management revenue of $6 million and a record total wealth management assets under management of $10.4 billion. Turning to operational topics, disciplined execution remains the theme. Our dedicated teams, supported by continued strong customer satisfaction, drove deposit growth at fully funded low growth both year over year and quarter over quarter. Our third quarter deposit campaign delivered strong second-half results, with total deposits increasing 5% annualized or more than 6% for core deposit categories, as we strategically allowed higher-cost certificates of deposit to run off. We have continued to see a significant pickup in commercial real estate project payoffs, which totaled $415 million during the fourth quarter and over $900 million for the year. $100 million more than we had anticipated last quarter, as developers continue to take advantage of the current operating environment for permanent financing or sale of properties. This increase in payoffs created a 4% headwind to loan growth for both the year-over-year and quarter-over-quarter comparisons. Despite these elevated payoffs, we delivered solid fourth-quarter organic loan growth as total loans increased 6% annualized from the third quarter and 5% year-over-year, driven by our commercial teams converting pipeline opportunities. Since year-end 2021, we have achieved a strong compound annual loan growth rate of 9% without sacrificing credit quality, as our key measures have remained consistent the last several years and favorable to the average of all banks with assets between $20 and $50 billion. As of both year-end and mid-January, our commercial loan pipeline stood at over $1.2 billion, with more than 40% tied to new markets and loan production offices. Despite anticipated elevated CRE payoffs through the at least first half of the year, we continue to expect mid-single-digit year-over-year loan growth during 2026, given the current loan pipeline and the strength of our markets. During the fourth quarter, our new healthcare vertical team refinanced a major skilled nursing provider in Virginia, serving as the lead bank in the syndication and sole lender for the working capital line of credit. This new relationship includes all operating, reserve, and payroll accounts for their properties, as well as a six-figure treasury management fee relationship. This win highlights the momentum of our healthcare vertical and the cross-team collaboration that helps us deepen relationships and deliver exceptional service. Before turning the call over to Dan to walk through the financials and outlook, I want to recognize our team members for their exceptional execution throughout the year. Their efforts were reflected not only in our results, but also in national recognitions we continue to receive for soundness, stability, workplace culture, and trust. Dan, I'll turn it over to you.

Yeah, thanks, Jeff, and good morning. For the fourth quarter, we reported GAAP net income available to common shareholders of $78 million, or 81 cents per share. And when excluding restructuring and merger-related expenses, fourth quarter net income was $81 million, or $0.84 per share. On a similar basis, when excluding the day one provision for credit losses on acquired loans, we reported $3.40 per share for the year, as compared to $2.34 last year, representing an increase of 111% from the prior year. To highlight a few of the fourth quarter's accomplishments, we generated strong year-over-year pre-tax, pre-provision, core earnings growth of 90%. We funded strong loan growth with deposits, improved the net interest margin to 3.61%, and reduced the efficiency ratio to just under 52%. Our balance sheet reflects the benefits of both the premier acquired balance sheet and organic growth. Total assets of $27.7 billion increased 48% year-over-year and included total portfolio loans of $19.2 billion and total securities of $4.5 billion. Total portfolio loans increased 52% year-over-year due to the acquired PFC loans of $5.9 billion and organic growth of more than $650 million driven by commercial teams across our footprint. Commercial real estate payoffs increased more than anticipated during the fourth quarter and totaled $905 million for the year, roughly $100 million more than we anticipated on our third quarter earnings call, and two and a half times last year's level. Despite this headwind, though, we delivered solid organic loan growth for both the quarter and the year. We anticipate CRE payoffs to remain elevated during 2026 and currently estimate them to be between $600 and $800 million for the year, but weighted more towards the first half. Deposits increased 53% year-over-year to $21.7 billion due to acquired PFC deposits of $6.9 billion and organic growth of $662 million, which fully funded our loan growth. On a sequential quarter basis, total deposits increased $385 million due to the efforts of our consumer and business teams during the recent deposit campaign, which more than offset the intentional runoff of $55 million of higher-cost certificates of deposit and the paydown of $50 million in brokered deposits. Turning to capital, credit quality continues to remain stable as key metrics have remained low from a historical perspective and within a consistent range throughout the last five years. As expected, our criticized and classified loans continued to decrease during the fourth quarter to 3.15 percent, and net charge-offs declined to just six basis points of total loans. The allowance for credit losses to total portfolio loans was 1.14 percent of total loans, or $219 million, consistent with the third quarter, as increases related to loan growth were mostly offset by macroeconomic factors and reductions in qualitative factors. The fourth quarter margin of 3.61 percent improved 58 basis points on a year-over-year basis through a combination of higher loan and security yields and lower funding costs. The margin increased eight basis points from the third quarter, which was above last quarter's guide of three to five basis points of improvement, primarily due to exceptional deposit growth, which allowed us to replace higher-cost Federal Home Loan Bank borrowings with lower-cost core deposits. Total deposit funding costs, including non-interest-bearing deposits, declined 13 basis points year-over-year and eight basis points quarter-over-quarter to 184 basis points. For the fourth quarter, non-interest income of $43.3 million increased 19% year-over-year, due primarily to the acquisition of Premier. And for the year, we reported record non-interest income of $167 million, once again, due to the acquisition of Premier and organic growth, including strong Treasury management revenue. We again saw a nice improvement in gross swap fees, which increased $2.1 million year-over-year to $3.4 million in the fourth quarter and doubled to $10 million for the full year, reflecting both the interest rate environment and traction within our newest markets. Trust fees were also at record levels for both the fourth quarter and the year. Non-interest expense excluding restructuring of merger-related costs for the fourth quarter of 2025 was $144.4 million, an increase of 44% year-over-year due to the addition of Premier's expense base, higher core deposit and tangible asset amortization that was created from the acquisition, and higher FDIC insurance expense due to our larger asset size. On a similar basis, operating expenses were down slightly from the third quarter, reflecting reflecting our focus on managing discretionary expenses. As I mentioned, our fourth quarter efficiency ratio came in just below 52%. I'd like to highlight here that we have updated our methodology for calculating our efficiency ratio to exclude both net security gains or losses from the denominator and amortization of intangibles from the numerator. This update makes our ratio more consistent with how our peers and other organizations calculate efficiency ratio, and the ratios for all periods reported in our fourth quarter earnings release reflect this change, and a reconciliation can be found in the non-GAAP measures section of the release. Turning to capital, during the fourth quarter, we redeemed $150 million of our outstanding Series A preferred stock on November 15th and $50 million of sub-debt acquired for Premier on December 30th using the proceeds from our Series B preferred stock offering. As noted in yesterday's earnings release, preferred dividends reduced earnings available to common shareholders by $13 million, which represented the overlapping quarterly dividends on both the Series A and Series B preferred stock, as well as the Series A redemption premium. Our CET1 ratio as of December 31st improved 24 basis points to 10.34%, and we anticipated to build 15 to 20 basis points per quarter on a go-forward basis. Turning to our outlook for 2026, we are currently modeling two 25 basis point Fed rate cuts in April and July. Reflecting our exceptional fourth quarter deposit growth, which accelerated margin expansion, we anticipate our first quarter net interest margin to be roughly consistent with our fourth quarter margin of 3.61% and then increase three to five basis points in the second quarter and then modestly grow into the high 360 range in the back half of the year. This assumes, among other things, that loan growth is fully funded by deposits and a slightly steeper yield curve. Generally speaking, we model first quarter fee income overall to be consistent with the fourth quarter. Trust fees should benefit modestly from organic growth and influence by equity and fixed income market trends. And as a reminder, first quarter trust fees are seasonally higher due to tax preparation fees. Securities brokerage revenue is anticipated to grow slightly from the range of the last few quarters due to modest organic growth. Mortgage banking should grow modestly over 2025 beginning in the spring, driven by improved market conditions and recent hiring initiatives. And total Treasury management revenues should see increases from 2025 as the compounding effect of our services continue to expand. Gross commercial swap fee income, excluding market adjustments, should be in the $7 million to $10 million range. Fully debt benefit income added $700,000 to the fourth quarter, which is not expected to repeat during 2026. And similarly, the fourth quarter loss on the sale of assets is not expected to repeat. We remain focused on delivering disciplined expense management to drive positive operating leverage and will continue our efforts throughout 2026. As previously disclosed, we successfully closed 27 financial centers on January 23rd, and the anticipated annual savings of approximately $6 million will begin to be realized midway through the first quarter of 2026, helping to offset the impact of inflation. Occupancy expense should be flat to slightly down as compared to 2025 due to branch optimization efforts, while equipment and software expenses are expected to increase somewhat as compared to 2025 as we continue to invest in products, services, and technology to improve the customer experience and drive revenue growth. Marketing is expected to increase approximately $800,000 per quarter due to targeting new customers' general campaigns to increase brand awareness in our newer markets and deepen relationships with existing customers with a focus on deposit gathering campaigns. Based on what we know today, we expect our expense run rate during the first quarter to be roughly consistent with the fourth quarter, increase in the second quarter from mid-year merit increases, revenue-producing hires and marketing initiatives, and then grow modestly in the back half of the year from the full effect of annual merit increases and investment initiatives in revenue-enhancing technology. The provision for credit losses will depend upon changes to the macroeconomic forecast and qualitative factors, as well as various credit quality metrics, including potential charge-offs, criticized and classified loan balances, delinquencies, changes in prepayment speeds, and future loan growth. Beginning with the first quarter of 2026, the dividends on our Series B preferred stock will be $4.24 million per quarter. And lastly, we currently anticipate our full-year effective tax rate to be between 20.5% and 21.5%, which is slightly higher than 2025 due to a lower percentage of tax-exempt income to total income. And so overall, we're pleased with our growth during 2025 and excited about the opportunities in 2026 as we continue to execute on our growth initiatives to deliver shareholder value. Operator, we're now ready to take questions.

Would you please review the instructions? We will now begin the question and answer session. To ask a question, you may press star then 1 on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw the question, please press star then 2. Please limit yourselves to one question and one follow-up. At this time, we will pause momentarily to assemble our roster. Our first question comes from Daniel Tamayo with Raymond James. Please go ahead.

Thank you. Good morning, everybody. Good morning, Danny. Yeah, maybe just to start off, Jeff, on the loan growth expectation and the payoffs expectation embedded in that um you know i i guess if if you're thinking about that you know i think you said 600 to 800 million and 26 weighted to the the first half of the year i'm i'm assuming that implies kind of a step down from this the fourth quarter number which was was really elevated the 415 but um you know maybe just walk us through how you're thinking about the the pace of payoffs through the year and what's driving that assumption in your modeling?

Yeah, sure. So, obviously, we had a tremendous amount of payoffs last year. We do think some of that will continue, especially in the first half of the year. What we've been seeing, as we've mentioned, is large CRE payoffs, whether they're selling or whether they're refinancing to the permanent market, the pipelines continue to remain really strong. So I think that will be an offset to the payoffs. But if you think about looking back when people refinanced projects, when rates were much lower prior to rates getting elevated, normally we would do a construction loan and then it would become stabilized and then it would typically roll off our and all banks balance sheets. I think what you had was because rates elevated and went up so quickly, these loans stayed on ours and other banks' balance sheets for a lot longer period of time. Now that you've seen rates slightly come down and permanent marketing is really opening up, we've seen these elevated payoffs. We're no different than I think many other banks who do a lot of CRE. But as far as this year, we do believe just based on our current forecast and talking to customers that it should slow down, especially compared to fourth quarter. And with putting that together along with our pipelines continuing to remain incredibly strong, on top of just the other opportunities we have with the LPOs and healthcare, and I can get into that more later. But that's why we feel like loan growth should be in the mid-single digits, and depending on how the back half of the year goes, could be even better.

That's great. And you actually took my next question, or you started to, which is perfect. Maybe you can give us some more details on that health care vertical.

Yes. Yeah, it was a tremendous lift for us last year. The team, I believe, did around $500 million in new loans. We had a tremendous amount of deposits and fees. I believe they accounted for about $3 million of the swap fees that we did last year as well. So we feel like that will be one of the main growth engines of us for this year and feel like that is a great offset to many of the CRE payoffs that we should see in the first quarter even. Also kind of following up with the LPOs, those are really going well. Also, Chattanooga, Knoxville, Northern Virginia has really started to take off, and we're really continuing to look at other cities. I've mentioned Richmond before, but also looking at Atlanta and maybe even other southeastern cities as we move forward. You know, we really kind of feel like we've perfected the LPO strategy, and we're seeing in our results, we're seeing in our pipelines, and we're going to continue doing that, I would say, the rest of this year.

Well, terrific. Thanks for all the color, and I appreciate it, Jeff.

Our next question comes from Russell Gunther with Stevens. Please go ahead.

hey good morning guys hey good morning russell morning russell uh wanted to start on the expense guide appreciate the color there uh it sounds like you know we're going to be you're going to be flat in one q step up a bit in two q we had the branch closures kind of you know early early in the quarter so uh fair to say that that's all captured in this in this guide the full savings from that. And then, you know, you guys tend to evaluate the branch network on an annual basis, typically in the back half of the year. You know, is that something that you would look to do again this year? And is any of that reflected in your 2026 commentary, Dale?

Yes, I'll take the branch piece. Absolutely. So, as you know, we always evaluate the branch network. Just throwing out that, you know, since 2019, we've closed about 93 branches. So, I would anticipate us to continue to evaluate that. It is not in any of these numbers, just to be clear. But yes, I think it's safe to say we will definitely evaluate it, and that would be a potential addition to reduce our expenses at some point in time this year. Okay. Excellent. Thank you, Jeff. And then just

a follow-up question or second question for me, switching gears to the margin outlook. So maybe, Dan, if you could just address the puts and takes behind the cadence of the NIMS, you know, flat in the coming quarter, a nicer step up in 2Q, and then the moderation. What's sort of underpinning your expectations for that glide path?

Yeah, sure, Russell. I think first what I would say is you can think about the guidance that we've been providing, three to five basis points of margin improvement per quarter. What we really saw here, and I mentioned this in the prepared commentary, in the fourth quarter was just extraordinary growth in deposits, particularly non-interest bearing. And that deposit growth occurred pretty early in the fourth quarter and was at times, you know, $500 million plus intra-quarter. And so we were able to pay down federal home loan bank borrowings during a good maturity of the quarter, which kind of provided a really nice lift to margin. So that's how we kind of picked up, you know, eight basis points of margin improvement or expansion over the third quarter versus kind of that three to five that we were, you know, projecting. But what I would say is we really kind of, you know, effectively pulled forward, I would say, the next three to five basis points that would have otherwise been projected for the first quarter into the fourth quarter, And that's how we get kind of a flatter, you know, margin just on a, you know, a length quarter basis when we look towards the first quarter. I would also tell you, you know, typically we see deposit flows, like outflows in the early half or the first half, really, of the first quarter. And, you know, we've seen those. And so that's another, like, kind of what we see as, like, a headwind, something that normally would – it's very normal. from, you know, from history, but at the same time, whenever you've got as much deposit growth as we had inter-quarter throughout the fourth quarter, and then kind of some of those deposits pulling back some for, you know, the first half of the first quarter, that also kind of, you know, you're borrowing from the Federal Home Loan Bank at 4% instead of, you know, holding, you know, non-interest bearing or assets or liabilities, you know, they're funding at, you know, 2%. So I think that's really what is driving, for the most part, that, you know, flat-ish margin compared to the first quarter. But then whenever we look forward, you know, into the second quarter, you know, kind of three to five basis points is what we're guiding to, you know, recognizing, once again, kind of the benefit of the continued benefit and grind of, you know, loan and security repricing, you know, loan growth, et cetera. We continue to see and expect to see reduction in cost of funds. We'll continue to see quick kind of downward repricing of our short-term federal home loan bank barrings. Of our $1.2 billion, $1.1 billion is kind of six weeks or less. And so all of this kind of will help drive that margin improvement. It's happening in the background in the first quarter as well. It's just not as apparent. The other piece I would just say is that, you know, the CD book will continue to reprice. Particularly, it becomes more evident in the second quarter. We have about $2.1 billion in CDs that are going to be repricing here in the next two quarters. About $1 billion is repricing here in the first quarter from kind of 375 downward, 25 to 50 basis points, and then another $1.1 billion in the second quarter. And really, the repricing of CDs here in the first quarter from that $3.75 down into the, say, $3.25 range is where we also see some nice lift in terms of margin as we're going to continue to see funding costs accelerate downward relative to. So I think, you know, that's kind of how we look at it. And then, again, that continued grind into the back half of the year gets us, you know, as we model today, somewhere in the high, you know, three.

Very helpful, guys. Thank you both. Thanks.

Our next question comes from Manuel Navas with Piper Sandler. Please go ahead.

Hey, could you just speak to within the NIM, if there's a little bit of back book repricing that is helping on the loan yields? I know that the floating rates will come down a bit. And also, what are kind of new loan yields coming in at? Just trying to get some more on the asset side dynamics in the NIM.

Yeah, sure. So we do have about $400 million of loans, fixed rate loans, that we'll be repricing over the next 12 months with a weighted average rate of about 4.5%. And so I would anticipate those to be, you know, replaced or refinanced, et cetera, somewhere in that low 6%, high 5% range. I would tell you that if you look at within the presentation, you can see that the weighted average yield on new loans originated in the fourth quarter was right around 6.15%. I would tell you, you know, the spot rate for the month of December was just above 6%, so kind of 601, 602. So that's kind of, you know, where we're at and what we're projecting for more or less here for this. The other thing I'll mention is just if we think about margin benefit longer term is the securities book continues to reprice as well. So we've got about $250 million of cash flows kicking off of that securities portfolio. Those yields are about 3.3%, and right now we're investing at about 4.7% roughly. So picking up between $125 and $150.

Is that $250 million per quarter? Yeah, okay. And then shifting over to capital for a moment, I appreciate the commentary. Just shifting over to capital. As you build and TCE has gotten over 8%, CET1 is at 10.3%. Can you discuss your kind of capital deployment priorities, growth, but also just kind of where would M&A or buybacks fit in?

Yeah, sure. First, we'd start with dividends, obviously committed to the dividend. And then we would go to loan growth and, you know, making sure we can obviously fund the loan growth with our strong capital levels. Then I would put in buybacks. We've talked about our targets being 10.5% to 11% CET1. Around those ranges, we would look to buyback. And then I would put M&A, a distant fourth. Right now, we don't see that happening this year. We're really focused on the first three, and specifically when it looks at growth. Obviously, we have a lot of opportunities, but we are also seeing really tremendous opportunities to acquire bankers and talented individuals to come on our team. But those would be the capital priorities. Glad to dig into any of the four. But once again, dividends, growth, buybacks, and then far-distance M&A.

Yeah, and I would just add on to that that, you know, we're growing CET1 right now at about 15 to 20 basis points a quarter. So, you know, the print that we had here for the fourth quarter, 10.34% CET1, that pretty comfortably gets us over that 10.5%, you know, by the end of the second quarter. And so that does offer, as Jeff said, you know, some flexibility there as we think about where organic growth is relative to, you know, say maybe, you know, beginning to explore.

I appreciate that.

Our next question comes from Kathleen Mueller with KBW. Please go ahead.

Thanks. One follow-up on the margin, and I apologize if I missed this, but any indication on just what you're expecting for the cadence of fair value accretion over 2026?

Yeah. Yeah, so I would say, I believe we had about 27 basis points of accretion here in the fourth quarter. And we were modeling about 25 basis points for the first quarter. And then, you know, as I've said in the past, it kind of, it's a basis point or two per quarter, and it runs off over, you know, the next six years.

Okay, great. That's helpful. And then the reduction in borrowings was great to see this quarter. How do you actually kind of think about the size of the balance sheet outside of loans and deposits, kind of maybe growth into the bond book relative to what we should see from your borrowing base over the course of 26?

Sure, yeah. So we're going to keep that bond book right around, you know, that – call it 15% to 17% of total assets. You know, today it's 16%, and that's kind of where we feel is the sweet spot to maintain, you know, a nice level of liquidity but also make sure that we're, you know, generating as much, you know, return on equity as possible through the higher yielding loan book.

Okay, great. And then let me, if I slip one more in, just kind of big picture profitability. It feels like we've got some nice operating leverage coming into 26 with the revenue growth, with the NIM expansion, and then growth in fees, and your balance sheet, which kind of feels like of a more stable expense base. Are there any kind of profitability targets that you would look to as we move through 26?

Yeah, I mean, I would say, you know, at a high level, what we've continued to talk about is kind of that ROA being right around that 130 mark, You know, return on average tangible common equity, you know, somewhere in the high teens. And so that's kind of what I would tell you what we expect and what we're modeling.

Great. Great quarter, guys.

Thank you.

Our next question comes from Carl Shepard with RBC Capital Markets. Please go ahead.

Hey, good morning, guys.

Hey, good morning, Carl. Morning, Carl.

My line cut out a little bit, so I apologize if you covered this. But just on the margin again, so the three to five basis points, are you saying that sort of burns out as we get later in the year? And then maybe that high 360 range is kind of an appropriate way to think about longer term without giving guidance for, you know, 27 or anything like that?

Yeah, Carl, I would say, you know, 27 is a long way away. It's probably, you know, it can be difficult to even project the back half of 26. But what we can see, you know, like I said, in the nearer term is, you know, that continued three to five basis points of benefit in 2Q. You know, where it goes in the back half of the year is really going to be dependent on a number of things, including, you know, loan pricing, loan competition, deposit pricing, deposit competition, you know, how well we're able to fund our loan growth with deposits and what the cost of those deposits are. So I think, you know, all of those things kind of play into the – what we can – you know, we can see, though, that the back book, the assets are repricing upward, and that grind will continue to benefit more, and, like I said, based on everything we know today.

And then I guess maybe more of a strategic question. So the LPO strategy has been out there for a few years now. You're adding a financial center in Chattanooga. Can you just maybe talk about how these things mature and get to where you want them to be and then just opportunity to continue to do new LPOs or, I guess, strengthen some of those markets with additional talent? Just kind of, you know, big picture. How are you thinking about that, Jeff?

Yeah, sure. I'm very excited about the LPOs. So Chattanooga, we should open the first branch in Tennessee. we're anticipating in April. That group has done over half a billion dollars in loans and has done a really great job with full relationships, just to be clear, some deposits and different things, treasury fees, swap fees, et cetera. So what we typically look at depends on the mass of the team we bring on, the size of the assets, and those things. So my goal would be to continue to grow Knoxville in that similar range, add a branch there. Nashville, we're looking to add to that team, but we'll also be looking to add a branch once they get around that half a billion dollars. And then as it relates to future LPOs, once again, that is what we're really focused on this year. We are seeing a tremendous amount of opportunity based on the other M&A going on or leadership changes, et cetera. And so I think that's what you'll be seeing us do this year, expanding in other markets. But most likely, we would start with the LPO offices, get a little bit of loan balances, fee businesses going, and then look to add a branch. Obviously, if we took on a much larger team, potentially, then we would, depending on where it would be, we could add a branch immediately. Obviously, funding for these LPOs is really critical, and having a single branch in those markets, we feel like, gives us a great advantage to add more funding when we start up these LPOs. But, once again, I can't tell you what tremendous opportunities we have in some of these markets in the southeast, and I think you'll be hearing more about that from us in future quarters. Thanks. Thanks so much, guys.

Thanks, Carl. Our next question comes from Dave Bishop with Hovde Group. Please go ahead.

Hey, good morning, guys. Good morning, Dave. Hey, Jeff, you noted, you know, the loan pipeline, you know, holding up pretty nicely here. Now you're getting traction from the new production offices and the LPOs. Just curious, and you may not have this number here, but do you have any line of sight maybe into the deposit pipeline into the first half of the year, first quarter of the year, and maybe what spot deposit costs were exiting the quarter?

Yeah, I'll comment on the pipeline. I'll let Dan talk about the cost. But, yeah, they're still pretty strong. Once again, as Dan mentioned, we kind of go back and look over the last several years. Seasonally, January usually is a down month for us in deposits, but then February builds back up, and usually we finish with some nice growth at the end of March. So I would say the deposit pipeline still is very good. And, you know, for us, we're always looking to bring in full relationships, and then our retail employees are doing a great job driving home those deposits as well. So I would imagine that we should still show pretty good growth this year in deposits based on everything I'm seeing.

I would just add spot deposit rates for, you know, at least for the month of December relative to the full quarter's average. Full quarter average is right around 245, you know, down about seven basis points.

I appreciate that color. Then, Jeff, maybe a follow-up. You know, you talked about I appreciate the color on the, you know, new loan offices, especially in Tennessee and Northern Virginia. Are the types of loans you're seeing in those markets different than some of your core legacy markets, you know, size, you know, types of bars and such, you know, especially Northern Virginia, which is a big, you know, GovCon market. Just maybe speak to maybe the types of loans you're doing and size, you know, relative to the legacy markets.

Yeah, sure. Great question. They're pretty similar, to be honest. Once again, we have not changed our credit culture, any policies at all. So we're seeing some CRE, a lot of CNI, some health care. We did a big health care deal in Virginia. But, yeah, GovCon is part of northern Virginia and D.C. area, but I can't really say we've done almost none of that. It's really been more CRE, CNI, health care. Just similar things that we're doing in all our markets. The great thing that really helps our LPO strategy is, you know, we take our existing kind of credit culture and just get great, talented bankers in all these markets that can operate within what we like to do, and it's working extremely well.

Perfect. Appreciate the color.

Thanks, Dave.

Our final question today comes from Manuel Navas with Piper Sandler. Please go ahead.

hey i just want to follow up on um the uh fee initiatives and the commercial lending team you brought up the six million in treasury management um swaps are doing well and just kind of keep to go into those a little bit more detail in terms of what could be the growth next year and what is the uptake in the premier team uh using uh using using your fee products as well

No, we're very excited about that. So I can tell you that a year and a half ago, just starting with our treasury management fees, let me take you back a couple years ago. So I believe in 2023, we did about $2 million in treasury management fees. 2024, we did about $4 million. And then last year, we topped $6 million. I think that can continue to grow double digits this year from a percentage perspective. If you just look at our purchase card, we basically had five customers back in, I believe, March of last year. Today, I believe we've got over about 130 customers with about another 45 in the pipeline. We've gone from, call it $100,000 a month in spend to, I believe, we've topped $7 million a month in spend. And we think we could get it up to $10 million plus this year as it relates to the purchase card, commercial purchase card, multi-card. Then as it relates to swaps, I do believe, you know, we're around $9 million in just gross production last year. I think that could easily grow a good amount this year as well to be above $10 million plus, depending on how the year goes and what interest rates do. So I think there is some tailwinds in both those feed businesses, along with our wealth business, too. We just topped over $10 billion in assets under management when you combine our trust and securities business. So we feel like that's really going to be another driver for our profitability this year, and we could see some tremendous growth.

Thank you. Appreciate it.

This concludes our question and answer session. I would like to turn the conference back over to Jeff Jackson for any closing remarks.

Thank you. 2025 was another year of disciplined growth and strong execution for West Banco. We strengthened our financial metrics, advanced our strategic priorities, and positioned the company well to continue delivering value for our customers and our shareholders. Thank you for joining us today, and we look forward to speaking with you at one of our upcoming investor events. Have a great week.

Thank you for attending today's presentation. The conference is now concluded. You may now disconnect.