Welcome to Wintrust Financial Corporation's fourth quarter and full year 2025 earnings conference call. A review of the results will be made by Tim Crane, President and Chief Executive Officer, David Dykstra, Vice Chairman and Chief Operating Officer, and Richard Murphy, Vice Chairman and Chief Lending Officer. As part of their reviews, the presenters may make reference to both the earnings press release and the earnings release presentation. Following their presentations, there will be a formal question and answer session. During the course of today's call, when trust management may make statements that constitute projections, expectations, beliefs, or similar forward-looking statements, actual results could differ materially from the results anticipated or projected in any such forward-looking statements. The company's forward-looking assumptions that could cause the actual results to differ materially from the information discussed during this call are detailed in our earnings press release and in the company's most recent form, 10-K, and any subsequent filings with the SEC. Also, our remarks may reference certain non-GAAP financial measures. Our earnings press release and earnings release presentation include a reconciliation of each non-GAAP financial measure to the nearest comparable GAAP financial measure. As a reminder, this conference call is being recorded. I will now turn the conference call over to Mr. Tim Crane.

Good morning, and for those of you we haven't seen or talked to recently, Happy New Year. Thank you for joining us for the Wintrust fourth quarter and full year 25 earnings call. In addition to the introductions Lateef made, I'm joined by our Chief Financial Officer, Dave Starr, and Chief Legal Officer, Kate Bogie. As we usually do on these calls, I'll begin the morning with a few highlights. Dave Dykstra will review the financial results. Rich will speak to loan activity and credit performance. And I will return with some summary comments on 2025 and early thoughts on 2026. As always, following our remarks, we'll be happy to take questions. With that, Wintrust delivered solid performance in 2025. The results reflect our focus on generating strategic and disciplined growth. I'm proud to say our efforts drove record net income for the year. For full year 2025, we reported net income of $824 million, up 19% from $695 million in 2024. Earnings per diluted share was $1140, up from $1031 in 2024, and tangible book value increased by over $13 to nearly $89 a share. Total assets at year-end were just over $71 billion. Our fourth quarter was also strong. Net income was $223 million, also a record up 3%, or $7 million from the prior quarter. Solid loan and deposit growth during the quarter and a slightly improved margin led to continued growth in net interest income. Credit quality remained solid, and overall non-interest expenses were well managed. When I look back over the year, I want to highlight three things that I am particularly pleased by. First, we delivered disciplined growth at a level above most of our peers with a stable margin. As we've discussed, we are adding new relationships, consumer and commercial, that we expect will be with us for years to come as we continue to build the franchise. In fact, in 2025, our steady and consistent approach moved us into third position in deposit market share in the Chicago area, and we showed strong gains in both Wisconsin and West Michigan. Second, we achieved solid operating leverage. On a percentage basis, net revenue was up 11.2%, 340 basis points higher than our non-interest expense. We did this while investing in the tools, technology, and people to both run a bank our size today and to build the foundation for future growth. Lastly, we saw improved net promoter scores that were already best in class in both retail and commercial banking in 2025 as our focus on exceptional customer service continues to differentiate us from many of our peers. Before I turn this over to Dave, I want to call your attention to the charts we include in our press release at the end of each year showing our 10-year performance on key metrics.

What you will see here is the continued consistent performance that we stress with our teams I'm very proud of these results and how they translate into real value for our shareholders now let me turn this over to Dave great thanks Tim we finished up 2025 with another quarter of strong loan and deposit growth with both falling within our stated range of mid to high single digits growth specifically the deposit growth is right at 1 billion dollars during the quarter representing a 7% increase over the prior quarter on an annualized basis. This deposit growth helped to fund continued strong fourth quarter loan growth of a similar 1.0 billion dollar amount that represented 8% on a full year basis loans and deposits grew 11% and 10% respectively. Turning the income statement results this was a very solid operating quarter for WinTrust producing a record level of quarterly net income. Speaking to the major components of the income statement our net interest income also reached another high record quarterly amount a 1.1 billion dollar increase in the average earning assets as well as a four basis point increase in the net interest margin drove the 16.9 million dollar increase in net interest income over the prior quarter then an interest margin ranged from 3.50 to 3.56 during the four quarters of 2025 and the 3.54 net interest margin for the fourth quarter I would note the period end loans are once again higher than the average loans for the fourth quarter giving us a good start on achieving higher average earning assets. The provision for credit losses was relatively consistent with prior quarters remaining in the twenty to thirty million dollar range experience 2025 as the overall credit environment and asset quality has remained. Regarding other non-interest income and other non-interest expenses, non-interest income totaled a hundred and thirty point four million in the fourth quarter similar to the $130.8 million recorded in the prior quarter. The very slight decline was impacted by lower security gains, but overall other than the continued softness in the mortgage revenue, it was a solid outcome. As to non-interest expense categories, non-interest expenses totaled $384.5 million in the fourth quarter, which represented a slight increase from the $380 million recorded in the prior quarter. Increases in employees health insurance claims, OREO expenses, travel and entertainment, and various other small expense increases were offset somewhat by season. Overall expenses were well controlled and within the expected range we discussed. Additionally, both the quarterly net overhead ratio and the efficiency ratio remained relatively steep. In summary, I'll reiterate loan and deposit growth, a stable net interest margin with a steady outlook, a record level of net interest income, and a continual low level of non-profit. Our team delivered net income that was a record for any full fiscal year in the company's history, and we have a positive outlook for continued growth in assets. So with that, I'll conclude my comments and turn it over to Rich Murphy to discuss credit.

Thanks, Dave. As Tim and Dave both noted, credit performance continued to be very solid in the fourth quarter. As detailed on slide seven, loan growth of approximately $1 billion came from a number of different categories. Commercial real estate loans grew by $322 million. Our mortgage warehouse team grew their outstanding by $310 million. the WinTrust Life Finance Team had another strong quarter and grew by $265 million, and our leasing and residential mortgage groups also had a very solid quarter. We believe loan growth for the first quarter, while typically our slowest quarter, will continue to be solid for a number of reasons. Our core CNI and CRE pipelines remain consistent, and we continue to benefit from our unique market positioning in our core markets of Chicagoland, Wisconsin, West Michigan, and Northwest Indiana. In addition, we continue to have very good momentum in a number of our lending verticals, including mortgage warehouse, leasing, and premium finance. From a credit quality perspective, as detailed on slide 15, we continue to see strong credit performance across the portfolio. This can be seen in a number of metrics. Non-performing loans increased slightly from 162.6 million, or 31 basis points, to 185.8, or 35 basis points but remained at a very manageable level and in line with levels we had seen in the first half of the year charge us for the quarter were 17 basis points down from 19 basis points in the prior quarter we continue to believe the level of NPLs and charge offs in the fourth quarter reflect a stable credit environment as evidenced by the chart of historical non-performing asset levels on slide 16 and consistent in the consistent level in our special mention and substandard loans on slide 15. This quarter is another example of our commitment to identify problems early and charging them down where appropriate. Our goal, as always, is to say ahead of any credit check. As noted in our last few earnings calls, we continue to be highly focused on our exposure to commercial real estate loans, which comprise roughly one quarter of our total portfolio. As detailed on slide 19, we continue to see signs of stabilization during the fourth quarter as CRE NPLs remain at a very low level, decreasing from 0.21 percent to 0.18 percent. And CRE charge-offs continue to remain at historically low levels. On slide 20, we continue to provide enhanced detail on our CRE office exposure. Currently, this portfolio remains steady of 1.7 billion or 12.1 percent of our total CRE portfolio and only 3.2 percent of our total loan portfolio. we monitor this portfolio very closely and we will continue to perform our deep dive analysis on a quarterly basis the most recent deep dive analysis showed very consistent results when finally as we have discussed on previous calls our team stay in close contact with our customers and those conversations continue to reflect a measured optimism with solid visibility into our loan pipelines and continued discipline around our portfolio we would expect loan growth in 2026 to be within our guidance and portfolio performance in line with our historical experience. That concludes my comments on credit and I'll turn it back to Tim.

Great, thank you Rich. Again, really good financial results in 2025. Our primary objective for 2026 is to continue to deliver solid and consistent financial performance. We expect our teams will continue to provide a differentiated level of service to drive organic growth. At the same time we will continue to invest in the tools, technology, and people needed to support that growth. Our targets for 2026 are straightforward. We expect mid to high single-digit loan growth funded by a similar level of deposit growth as we continue to expand share. Given the current interest rate environment and And even with a few rate changes in either direction, we expect the margin to remain relatively stable around 3.5%. We plan to deliver positive operating leverage while continuing to make the important investments that position us for the future. We expect to see improved non-interest income in our wealth management and service-based fee income businesses and are hopeful for the mortgage market to pick up. We remain focused on our Midwestern footprint and will continue to make the most of opportunities across the United States for our specialty businesses where our expertise and unique solutions give us a competitive advantage. Our pipelines remain solid, and although we have strong momentum going into the year, we are mindful of the typical seasonality that can make our quarterly growth uneven, particularly in the first half of the year. With this in mind, I feel good about our business heading into 2026. Let me end by saying that we could not generate the results that we do without the dedication and commitment of our Wintrust team. We have the best people in the business, and I want to thank each of our colleagues for all that you do to ensure we deliver results for our clients and our shareholders while we work to drive sustainable growth in the communities we serve. Thank you for joining us this morning, and let me turn it back to Lateef for your questions.

Thank you. As a reminder, to ask a question, you will need to press star 11 on your telephone. To remove yourself from the Q, you may press star 11 again. Please stand by while we compile the Q&A roster. Our first question comes from the line of John Arfstrom of RBC Capital Markets. Please go ahead, John.

Hey, thanks. Good morning, John. Can we usually start with a long growth, but can you talk a little bit more about that, Tim? Kind of what takes you to the mid-single digit, what takes you to the high single digit? Sounds like you're off to a stronger start, even though you're flagging how the first quarter and second quarter can sometimes be a little bit softer. But it feels like you're entering the year with pretty good momentum. Can you just unpack that a little bit for us?

Sure, a little bit. John and Rich can help me here. But again, we're cautiously optimistic about what we're hearing in the local economies where we operate. Employment levels, unemployment levels are low. And it was a pretty solid quarter for us, you know, broad based in terms of loan growth. So I think we feel pretty good. As you mentioned, the first quarter can be a little bit softer than the second quarter for us, but the first half of the year tends to be in line with our targets. So, again, I think we feel pretty good.

Yeah, no, I think you answered that very well. First quarter last year was 653, so down from where about 6%. And then we picked it up in the second quarter, as you, you know, John, you know that story, how our first insurance business really kind of picks up the pace there in the second quarter. So we had a really good second half, but, you know, there's, but where that comes from is, as I mentioned, some really good market positioning right now in our CNI and CRE space that we feel pretty good about. When we talk to customers, as I mentioned, you know, they feel pretty good about where the economy stands right now. And, you know, I think there's enough stability in the general picture where they're willing to invest. You know, and then you look at the different verticals that we saw really good success with in the fourth quarter, in particular mortgage warehouse lines. And if we get some pickup here on the mortgage side of the business, I think you'll continue to see that in the first half of the year. um you know leasing um you know resi mortgage also had a good quarter so you know there's a lot of different uh things that feel pretty good right now but again you know that the uh the effect of uh the first quarter phenomenon in the uh premium finance business is something that you know we will we would expect to see um usually reversing then back in the second quarter Yeah.

Okay. Good. And then maybe Tim or Dave, you talked about the positive operating leverage. I mean, there was a big lift in 2025. What are some of the puts and takes on expenses and overall thoughts on the expense plans for 2026?

Well, I think it's probably sort of more of the same story that we've had before. If we have that mid to high single-digit revenue growth, so sort of say 7.5% to 8% is sort of the middle of the target, we would expect, and that's off of the fourth quarter run rate, we would expect expenses off of the fourth quarter run rate probably to be in that 4% to 5% range. And so we expect to get positive operating leverage again. And, you know, if you had revenue that was at the lower end of that range, then we would, you know, we would tighten up on expenses. So the goal is to get a positive operating expense, invest in the business to support stronger second and third quarter insurance claims are tending to be up a little bit in this market. And so they may raise a little bit, but all of that is sort of baked into expected growth. And again, I get you.

Yeah, John, the two kind of wild cards. One, I think everybody is seeing benefit expense go up fairly substantially. The other is if the mortgage business picks up, we'll get more expense, but that would be good news for us because we would get, obviously, more revenue as well. Otherwise, I think Dave got the answer there.

Okay. Thanks a lot. I appreciate it.

Thank you. Our next question comes from the line of Nathan Race of Piper Sandler. Please go ahead, Nathan. Hey, guys.

Good morning. Thanks for taking the questions. You bet. I was hoping to unpack just the decline deposit costs in the quarter, some of the drivers there. So maybe, Tim, could you just speak to, you know, how much of the opportunity to reduce deposit costs in the quarter was just a function of more rational competition in Chicago these days, or maybe just some complexion changes in terms of the wind trust deposit composition over the years that has allowed you guys to, you know, put up some pretty favorable deposit reductions lately?

Yeah, you bet, Nate. I guess two things. One, our team did a really nice job moving deposits as the Fed moved, and we talked about the expectation that we would be able to do that, and that, in fact, did play out in the fourth quarter. We also had kind of a nice trend in terms of DDA deposits during the quarter. that can be a little bit lumpy at year end as companies position themselves for, you know, their reporting activities. But, you know, we continue to see good growth in terms of the commercial deposits of the bank and the treasury services they use. And, you know, we're going to continue to work that mix. It's just, it can be a little bit lumpy. But we were very pleased with the way deposit costs were managed in the quarter.

Okay, great. That's helpful. And then, you know, just looking at some of the deposit growth drivers, it looked like it mainly came in the non-maturity segment. So just curious, you know, do you see additional opportunities to run off higher cost CDs going forward? And do you kind of just speak to maybe the CD repricing benefit that you have with, you know, like 95% or so of your deposits that are CDs maturing by the end of this year?

Yeah, I think there's a, you know, probably a minor benefit. Again, I would emphasize minor on the CD book rolling as we, you know, continue into 2026. But, you know, the non-interest or the interest-bearing deposit growth, you know, supports our loan growth. And as we continue to grow loans at a pretty healthy level, you know, we've stated that we would try to continue to fund that with new deposits and you know our deposit costs can be a little bit higher than some of our peers we're fine with that as we add clients to the bank that will be with us for a long time understood i appreciate the color thanks guys congrats on a nice quarter thank you thank you our next question comes from the line of chris mcgratty of kbw your line is open, Chris.

Great morning. Tim or Dave, I guess, what's not where you want it to be? It seems like a lot of positives in one column. What's not where you want it to be in terms of either growth by asset class or anything operational?

Well, we'd like the mortgage business to be stronger. We think we've done a good job of paring back the expense related to that business so it's not damaging to us at these relatively low levels, you know, from a volume standpoint. You know, we'd always like more commercial activity, but we remain pretty disciplined about trying to pick relationships versus transaction activity. And, you know, periodically as some of our peers try to get loan growth, we've seen some transactional activity and some odd pricing but um we think we're we continue to be well positioned in the market size wise there are very few local institutions near where we are we think that's an advantage for us and you know net net we continue to feel like we're in a pretty good position okay and then just following up tim you don't need to do a deal with that kind of growth um but you have historically kind of entertained tuck-ins like what's the latest on m&a appetite Right. Yeah, Chris, you're right. I mean, we're aiming for organic growth and that would be our plan. If we get an opportunity to do an acquisition, we think we're reasonably good at acquisitions, at least the smaller ones that we've done. Conversations continue. There's a little bit of fits and starts, but nothing that's worth talking about right now. And our business plan for 2026 is based on growing our business organically.

Great. Thank you.

Thank you.

Our next question comes from the line of Brendan Nosso of D Group. Please go ahead, Brendan.

Hey, good morning, everybody. Hope you're doing well. Good morning. Just to start off on capital, you've built ratios nicely over the last 12 months despite, you know, robust loan growth. Is there a point at which you see an alternative deployment outlets for capital beyond the dividend and organic growth?

I think as we talked before, I mean, generally, if you grow that mid to high single digits, we're probably growing capital at 10 basis points. And so, and we've been doing that. I think, as we said before, we want to focus on organic growth and see how strong that is. If that number starts to get to 10 and a half or above, and we don't have any good acquisition opportunities, and organic growth is mid to high single digits, that number would keep growing. So then I think you would look at buybacks and then dividend increases. But generally, it would be organic growth, well-priced, a buyback, and just what we do have a little over. Right now, I think we're letting it grow a little bit. Going to see how the organic growth opportunity.

That's helpful. One more for me, just pivoting to credit and specifically the reserve, you know, I think if I look back over the past two years, you've been gradually shaving a couple of basis points here and there off reserve ratios, whether it's the stated reserve to loan or the ACL to the core loan portfolio. I get that a lot of that is formulaic and driven by outside doctors, but just kind of take us through the thought process on gradually bringing down reserves and, you know, where Where do you see coverage ratios trending across 2026?

Well, we don't, you know, we don't, you know, if the economic forecast gets, the economy gets worse and you're going to see that coverage. What we saw started during the year is that the economic forecasts generally were getting better. The model, our credit, as we talked about, has been very charged us, you know, we, or even some, you know, we really do a fair-

That makes a great deal of sense. color and taking the questions.

Thank you. Our next question comes from the line of Jeff Rulis of DA Davidson. Your line is open, Jeff.

Thanks. Good morning, Tim. Maybe just back to the, you talked about the macro environment being pretty favorable or optimistic with the customers. I wanted to touch on the competitive landscape. Some of your larger Midwest peers are engage with deal activity down in the southeast in Texas and wanted to kind of, is a portion of your growth or market share gains from maybe competitors being focused elsewhere? Just a thought on, if you could touch on that.

Sure. We've always benefited from disruption, distraction, you know, call it whatever you want. But we believe our position in the Midwest is an attractive one. We believe the markets we compete in are actually very good markets. There's a lot of density. There's a lot of wealth. And to the extent that others elect to focus elsewhere at times, I think that's only helpful to us. But, you know, we compete with all of the big banks every day and, you know, a handful of Chicago-based competitors and, in some cases, credit unions in some of our markets. And so we believe we differentiate based on service and the people at the company, and we'll continue to do that.

And I guess, Tim, just to kind of follow up then, I mean, you've outstripped a little bit of the, even the high single digit, I think, 11% loan growth. And just trying to think about timing, do you look at 26 as equal opportunity on that disruption as you've had in maybe the prior year. I guess the question being, any change to that? Is that closing? Are you seeing folks kind of reorient with the Midwest and might be a more competitive year ahead? Loaded question.

No, well, it's hard to say. I think there certainly are lots of fits and starts for various competitors, and we have some folks that are trying to open more locations in Chicago. and, you know, people that are trying to move teams. So I don't think that's anything really new. The only piece that I would say on loan growth relative to the last few years is we've obviously had a little bit of a tailwind in terms of premium finance with premiums rising in addition to the bank growing the number of units that we produce. And I think there is some flattening in terms of the premium environment for insurance companies. I don't, you know, people use soft and hard and all those terms. I just think it's probably up to us to grow the loans now as opposed to getting help from the market.

Appreciate it. And just one other one, Rich. Looking at the link quarter commercial non-performing loan increase, again, not big, and I could probably flat it down from the second quarter, so the balances are kind of moving around. But anything you'd point to on the commercial link quarter increase on non-performing loans?

No, not really. It's more episodic in nature. And we've said this in the past where we see things as just kind of one-off things and we work to solve them. And, you know, I think when I look at credit quality in the portfolio, I really focus on where the special mentioned substandard numbers are, you know, which we're seeing at a pretty consistent level. So, you know, things will occasionally go bump in the night, and that's our job to fix those. But, you know, this is really more, for this quarter at least, more of a, you know, we would kind of identify it as.

And, Rich, I guess as we approach a year from kind of the tariff Liberation Day noise, your sense of customers, is there more maybe relative ease? I mean, that threat is always out there, but from a customer standpoint, do you sense any more comfortability than you were nine months ago?

Yeah, I think the ease around the tariffs is real. I think probably maybe even more so is, you know, I think labor costs and finding labor was really problematic. I think that that's improved quite a bit. And I think people kind of look at just a more stable labor environment, more predictable from an expense perspective. And so they're...

Great.

Appreciate it.

Thank you. Our next question comes from the line of David Long of Raymond James. Your line is open, David.

Hi, everyone. Good morning, David. But, you know, we talked about M&A, and I understand you guys have an excellent organic growth opportunity in front of you and fully taking advantage of it. But in the past, you've talked about other MSAs and looking to replicate what you do in Chicago and other MSAs, Minneapolis, St. Louis, Indianapolis have been mentioned. Is there any appetite to move outside of the Chicago MSA at this point?

Well, I mean, we're in southeast Wisconsin and west Michigan now, which you know, David. I mean, we would be opportunistic in other Midwest geographies that we don't cover today, but that would be on a disciplined basis. And where we haven't been able to acquire, we've, in some cases, opened branches, and we've been effective in doing so. So we've talked in the past about Rockford, and we've got some branches opening in northwest Indiana this coming year. So we'll take the opportunities as they come to us, but if we need to go to other geographies organically, we think we've proven our ability to do that. Great. Thanks, Tim.

Appreciate taking my question. That's all that I have. You bet. Thanks, David.

Thank you. Our next question comes from the line of Terry McAvoy of Stevens, Inc. Terry, your line is open.

Thank you. Maybe, Tim, just a question for you. As the industry continues to evolve, what are your current thoughts on the strategic benefits of operating 16 banking charters kind of relative to some of the costs and leveraging the WinTrust brand?

Yeah, the charter question comes up periodically, and we currently have 16 for those of you that are following along. We believe they continue to be a benefit for us. They keep us closer to the market than many of our competitors. We've centralized most of the infrastructure and expense that goes along with the charters, And so it's really more of a marketing and market function that we believe is valuable to us. And if you look at the communities in which we operate, in many of those communities, we're the number one or number two market share in very attractive markets. That's not a benefit we want to give up at this point. So we watch it carefully. The expense is not trajectory changing. It's a structure that we believe we operate well, and we'll continue to evaluate it as we go. But for the time being, we like it. There are clearly benefits. Deposit insurance is one of them. Our MaxSafe product obviously gives us the ability to provide customers more insurance than they might otherwise get. There are other benefits, and as you would expect, there are some other tradeoffs. But the net balance for us remains positive.

Thanks, Tim. And then as a follow-up, about a third of last quarter's loan growth was in mortgage warehouse. And I think in the past you've talked about gaining market share. But when you kind of look at the forward curve, is that portfolio kind of a headwind, a tailwind to growth expectations for 26? six?

Obviously depends on what happens to the mortgage market. We've been successful in growing that business in a stable mortgage market because of the expertise our team brings and the job our folks do from an operational standpoint. But for us, that's a zero loss business with very attractive dynamics. We think we're very efficient. It'll move a little bit with the mortgage volume over time. And if the mortgage market gets stronger, as we've talked about, it's a benefit to us, both in terms of our core business and the warehouse business.

Yeah, in addition to which, you know, I think it's a great point Tim brings up, you know, it's the market, obviously, but they have done a really nice job of bringing new names in. And that comes with, you know, if you get the volume, you also get some fee income out of that and some very nice deposits. So, I mean, it's really it's been a great story in spite of the fact that you might get some volatility in overall rates so uh we we like where we the mortgage market thanks for taking my questions appreciate it you bet thank you our next question comes from the line of casey hair of autonomous research

your line is open casey great thanks good morning happy to be everyone um tave wanted to clarify your comments about the operating leverage dynamics. I think you said you expect mid to high single-digit revenue off of 25 and then expenses to grow mid to high, you know, 4% to 5% versus the fourth quarter run rate. There's a little bit of excitement that you meant or that you said mid to high single-digits revenue growth off the fourth quarter run rate. I just wanted to clarify that.

Yeah, no, we're talking off of the – since we generally have acquisitions in past years and we grow organically so good, we generally try to give you guidance off the fourth quarter. When we're talking about forward growth, we're talking about – Wow, okay, all right.

And then just to follow up on the – a couple follow-ups on the NIMS. So, first off, I have your interest-bearing deposit beta cycle to date at around 57%. Just some updated thoughts as to where that can trend to, yeah, in 26.

Yeah, you know, as we've talked about on prior calls, our guess on the deposit beta, you know, in terms of total cycle is going to be in the low 60s. And, you know, we continue to believe if we get rate cuts that we'll do a nice job managing the deposit, the interest-bearing deposit expense. And so I don't think our view has changed there.

Okay, very good. And just last one for me, the hedge program that you guys detail on slide 12, you do have a number of hedges that mature this year. Does that hurt your ability to hold the NIMS stable, or is there a plan to backfill with new hedges as they come off?

No, our guidance fully contemplates those hedging programs running off, but we would probably do some forward starts and fill in. We think given our current projections, times are down two or three times, we still think we're there. so we think we're very neutral.

Great, thank you.

Thank you. Our next question comes from the line of David Ciaverini of Jeffries. Your question please, David.

Hi, thanks. And maybe just starting off with further clarification on that run rate comment. So are we talking 4Q26 versus 4Q25, those growth rate figures, or are we talking full year 26 versus the 4Q25 annualized?

I'm taking 4Q25 annualized to get to a number, and then you can put the growth rates on top of that for the full year of 26.

Perfect. Thank you for that. And then I wanted to ask about the mortgage banking outlook. It sounds like that could be a nice swing factor for 2026. Can you talk about your expectations in terms of volume, gain on sale margins, whether those could increase or be under pressure? And just give us a sense of how optimistic you are on that business.

Well, I guess we've always been optimistic. I think the last two years I've been optimistic for a great spring buying season. It hasn't occurred, but we are optimistic. There's still a supply shortage out there. But, I mean, if you look at our mix of business in the fourth quarter, it was about 50-50 purchase and refi. And in the prior three quarters, it was probably three quarters purchase and a quarter refi. So as rates have come down, we've seen a little bit of a pickup in refi, but also a slow winter buying season. But if you sort of look at the service portfolio, which is a sizable portfolio, we've got maybe at the current rates around in the low 6%, between 10% and 15% of that portfolio is sort of in the money to refi. But if rates go down another 25 basis, say 50 basis points, you'd have more like a quarter of that portfolio. We think if rates go down 25 to 50 basis points on the mortgage side, that we could have some pickup. But, you know, the 10-year has been, I can't predict interest rates, but we are optimistic that it's for quite a while here and with very low application volume. So unless rates really shoot up in the mortgage market, we think we can hold this revenue. So we look at it as upside and we're optimistic it happens, but we can't control the mortgage rates.

Yeah, and maybe the other benefit, which has been the case now for a couple of years, is as these low rates have continued, many of the sort of refinance, independent broker mortgage operations have gone out of business. And so our share of the market, we think, is up considerably. And when it comes back, we expect to do well.

Very helpful. Thank you.

Thank you. Our next question comes from the line of Ben Gerlinger of Citi. Your line is open, Ben. Hey, good morning.

Good morning, Ben. Sorry, I just wanted to double-check and maybe fine-tune a little bit here. And I apologize for reading a little myopic on it, but you talked through the property casualty insurance market, and I agree, softening versus strengthening, I don't know either. But it seems like the pricing is a little limited. year over year. So is it fair to think like 2Q will still be a good growth quarter, but maybe not as heroic as we've seen previously? And I'm just trying to fine tune the first half of the year in terms of modeling growth.

Yeah, I think the only point we were trying to make is that for the last couple of years, we've had the benefit of premiums going up. That may not be the case right now. We don't think they're working against us, but we still expect a strong second quarter. It's a seasonal component of the property and casualty premium finance business, and we would expect to have a good second quarter.

Gotcha. And then just kind of at a 50,000-foot view, you guys generally tend to show loan growth and deposit growth in roughly the same quarter. Is that a fair way to think about this year, given kind of what's transpired over rates and your outlook for growth?

Yeah, we certainly aim for deposit growth to mirror our loan growth, and we would take more deposit growth if we could get it. Again, that's adding clients that will be with us for a long time. You know, it can be lumpy, so I can't tell you if they're going to exactly mirror each other, but that would be our target. Gotcha. Thank you, Jesse.

Thank you. Our next question comes from the line of Jared Shaw of Barclays. Please go ahead, Jared.

Most have been asked and answered, but I guess just, you know, as you look at hiring incremental revenue producers here, are you seeing competition impacting what you have to pay for new people here or what's sort of driving the movement of revenue producers among companies right now?

I don't think there's been a hugely material change. Obviously, top-tier producers can be expensive, and we think we do a good job of not only working our own team and periodically finding others. We don't talk about it a lot here just because it's a normal part of our business. And so we're always looking to add folks that are very good at taking care of customers and help us differentiate our services.

Okay, thanks. And then just finally, looking at construction down this quarter, any color on the build-out of construction and how that could potentially be funded up as we move through next year or this year?

Are you talking about just general construction lending?

Yeah, it was down this quarter, I'm guessing, from completions. But what's the growth outlook there?

Yeah, I would say Chicago hasn't been a huge construction market. We've seen a little bit, but I think there's more upside there. Multifamily, for instance, in Chicago continues to be very strong. Some other markets are maybe struggling a little bit more because the oversupply activity will be for this coming year.

Great.

Thank you.

Thank you. Our next question comes from the line of Janet Leigh of TD Cohen. Please go ahead, Janet.

Good afternoon. Not to beat on a dead horse, but just to clarify on your outlook for resi mortgage and mortgage warehouse, is your mid-to-high single-digit loan growth for 2026 contemplate a level of bullish, like, are you assuming that mortgage rates perhaps dip to the 5% handle? Like, are you baking in a level of mortgage rate reduction in your mid to high single-digit outlook, or were you referring to an additional upside to the mid to high single-digit loan growth if mortgage rates do dip below 6 percent?

Janet, the assumption would be a slightly improved mortgage market in line with the Mortgage Bankers Association projections, not any dramatic drop in rates. And Dave, a couple of minutes ago, gave you a little bit of a sense for how much volume you could get if the rates dropped. But I think to get any very, very material lift rates would have to go below 6%.

Got it. And on your NIM outlook for a first table, I think there's room for interpretation since you're characterizing for basis point increase in NIM this quarter as being stable. You're pretty neutral to rates, it seems, and 60% beta also seems solid. What are some of the drivers that could put you to either, you know, perhaps increasing net interest margin through 2026 and and are you still seeing the phenomena of seeing some spread compressions on fully funded CRE which you've talked about in the past quarters thanks well we've talked about competitive pressures largely from folks that maybe haven't grown as quickly as we have and you know kind of desire to do that and so I think there still is a fairly competitive environment for fully funded loans.

But some of that's transaction-based and we're really much more focused on relationship-based arrangements. If the competitive environment changed dramatically, you could get some pressure on the margin. Obviously, the first quarter with a couple fewer days has a math impact on the margin. But we're actually pretty neutral, almost independent of rate changes, and given the visibility to the competitive environment, that would be the case there, too.

Thank you.

Thank you.

Our next question comes from the line of Bill Heppel of Q2V Research. Your line is open, Bill.

Good morning, guys. Thanks. Can you just maybe talk through the fixed asset reprice that you're seeing on both the loan and the security side, kind of where roll-on, roll-off yields are in both books. Thanks.

I haven't talked about the roll, so if you look back, what CMT was and kind of calculate that impact. And commercial premium finances is generally, well, it's not tied to prime, but generally has good correlation to the prime rate. And there are nine-month loans that are fixed rate that pay monthly. So it takes nine to 10 months for them to generally turn over. So again, if you look back at what the prime rate was, the commercial portfolio repriced on securities.

Got it. And where are you adding the securities that you added and available for sale book? Where were those yields coming on? Where were you purchasing?

High fours.

Five.

Got it. Okay.

Thank you very much.

Thank you. I would now like to turn the conference back to Tim Crane for closing remarks, sir.

Thank you, Lateef. As always, for those of you on the phone, we appreciate you joining us and for your support. We start 2026 in a good place. I hope we've answered your questions. If not, you know where to find us, and we'll be working hard for all of you and for our shareholders. Thank you.

This concludes today's conference call. Thank you for participating. You may now disconnect.