National Bank (NBHC) Q4 2025 Earnings Transcript

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Date

Wednesday, January 28, 2026 at 11 a.m. ET

Call participants

• Chairman, President, and Chief Executive Officer — Timothy Laney
• Chief Financial Officer — Nicole Van Denabeele
• Executive Vice Chair and Executive Managing Director of Strategic Initiatives — John Steinmetz
• President — Aldis Birkans
• Chief Enterprise Technology Officer — John Finn

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Takeaways

• Tangible book value per share -- Grew by 10% for the year, with management citing focus on capital growth.
• CET1 capital ratio -- Increased to 14.9%, supporting management's claims of a robust capital base.
• Vista acquisition -- Closed within four months, resulting in the addition of approximately $2.4 billion of earning assets to the balance sheet.
• Fiscal Q4 net income (ex-onetime items, period ended Dec. 31, 2025) -- Totaled $22.7 million, or $0.60 per diluted share, with explicit exclusion of $4.1 million after-tax acquisition costs and a $2.6 million after-tax securities loss.
• Fiscal full-year adjusted net income (period ended Dec. 31, 2025) -- $117.6 million, or $3.06 per diluted share, as reported by the Chief Financial Officer.
• Fiscal Q4 net interest margin (period ended Dec. 31, 2025) -- December's margin recovered to 3.97%; fiscal full-year net interest margin was 3.94%.
• Loan portfolio -- Ended at approximately $9.4 billion post-acquisition, with fiscal 2026 loan growth projected at about 10%.
• Earning asset growth guidance -- Projected growth of 7%-10% for fiscal 2026, reflecting combined operations.
• Loan-to-deposit ratio target -- Management intends to maintain an approximate 90% ratio.
• Net charge-offs -- Accounted for 34 basis points of loans for the fiscal full year, with the allowance to total loans ratio at 1.18% at year-end.
• Nonperforming asset ratio -- Decreased by 11 basis points to 36 basis points of total loans.
• Noninterest income (fiscal Q4, period ended Dec. 31, 2025) -- Amounted to $14.4 million, including $3.3 million in pretax securities losses.
• Noninterest expense (fiscal Q4, period ended Dec. 31, 2025) -- $72.4 million, including $5.4 million in acquisition costs and investments in resort markets.
• 2UniFi expenses -- Kept flat at $22 million for fiscal 2026, despite a full year of capitalized depreciation, with anticipated $2 million to $4 million in related revenue contribution.
• Fiscal 2025 effective tax rate (period ended Dec. 31, 2025) -- 18%, with management projecting approximately 20% for fiscal 2026 due to changes in income mix from the acquisition.
• Share buyback authorization -- A $100 million program was announced, with management stating it is a priority.
• Branding strategy -- Management will adopt the Vista name as the go-forward brand in diversified markets.
• Fiscal 2026 EPS guidance -- Management expects at least $1 earnings per share in fiscal Q4 2026 and over $4 per share for fiscal full year 2027.
• Nonowner-occupied CRE to capital ratio -- Lowered to 127%; entry into fiscal 2026 is "comfortably" below the 200% threshold per management.
• New loan production (fiscal Q4, period ended Dec. 31, 2025) -- Originated $591 million in total loans, $429 million of which were commercial loans.
• Return on tangible assets -- Fiscal full-year performance reached 1.3%.
• Return on tangible common equity -- Achieved 12.2% for the fiscal year.
• Fiscal 2026 noninterest income guidance -- Projected at $75 million to $80 million.
• Fiscal 2026 noninterest expense guidance -- Expected to range from $320 million to $330 million, reflecting Vista expense integration.
• First-half fiscal 2026 expense projection -- Guided to $165 million to $170 million, signaling anticipated back-half cost reductions from operational efficiencies.
• Projected share count -- Estimated to be 45.8 million shares for fiscal 2026 as a result of shares issued in the Vista transaction.
• Planned strategic sale of investment securities -- Triggered $2.6 million in after-tax losses to preserve roughly $10 million in interchange income for one more year.
• 2UniFi platform status -- Phase 1 completed; company expects to reduce further capital expenditure for the initiative.
• Asset maturity profile -- The legacy loan book is anticipated to have $250 million to $300 million less scheduled maturities in fiscal 2026 versus the prior year.
• Recruiting activity -- Management confirmed both active retention and recruitment, with the addition of three new presidents bringing over 45 years of industry experience via the Vista acquisition.

Summary

National Bank Holdings Corporation (NYSE:NBHC) concluded a transitional fiscal fourth quarter and full year (period ended Dec. 31, 2025) highlighted by the recent closing of the Vista acquisition, leaving the organization with a larger loan book and scale in core and resort markets. Management revealed specific guidance for earnings, revenue, and expense items, while signaling 2UniFi's transition from platform build-out to client activation. The company affirmed its capital strength and balance sheet positioning, noting tangible capital enhancements and top-quartile asset quality metrics. New strategic branding and expansion efforts mark the operational integration with Vista and set the tone for the next fiscal year.

• The board explicitly addressed the resolution of legacy problem loans, incurring $9.1 million in provision expense to clear outstanding issues and set a "clean runway" heading into fiscal 2026.
• Guidance for fiscal 2026 noninterest expense introduces a lower second-half run-rate, attributed to anticipated operational synergies post-system integration.
• Management confirmed the December spot net interest margin of 3.97%, and indicated no interest reversals impacted the quarter.
• The company emphasized ongoing negotiations for a strategic partnership to potentially reduce, or even fully remove, 2UniFi investment from NBHC’s financials, stating "So no potential -- the partnership really from a financial perspective is all upside, and none of that has been included in our guidance for 2026."
• Recent competitive market dynamics, such as client payoffs shifting to private credit and other funding sources, affected commercial real estate loan balances but were strategic non-core actions aligned with risk management discipline.
• Hiring momentum continues, with management citing inbound interest from industry peers and new leadership appointments in key growth areas.
• The company noted a tax rate increase to 20% for next year, reflecting the impact of acquisition-driven shifts in taxable income mix.

Industry glossary

• 2UniFi: NBHC’s proprietary digital small business banking platform, integrating loan origination, deposit sweeping, and multi-bank account management with an emphasis on automation and data-driven insights.
• Nonowner-occupied CRE to capital ratio: A regulatory risk measure expressing non-owner-occupied commercial real estate loans as a percentage of regulatory capital, used to monitor portfolio risk concentrations.
• SBA loans: Small Business Administration-guaranteed lending products, referenced in relation to 2UniFi and commercial banking growth strategies.

Full Conference Call Transcript

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 onetime 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 complement 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. Nicole?

Nicole Van Denabeele: 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 onetime 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 onetime 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 onetime 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. With that, I'll turn the call over to John Steinmetz.

John Steinmetz: 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 fired up about the future of our combined companies. We have partnered with a dynamic, high-performing team and platform, and I believe there is a 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 positions our company 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 offering, 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 $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 combined experience at their previous banks prior to joining NBH. These communities, once seen as primarily secondary home destinations, are now primary residents 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 value drive results and further increase shareholder value.

The legacy Vista team has been together for nearly 2 decades, and I -- and my commitment remains unwavering: To finance the American dream for those entrepreneurs brave enough to pursue it. We invest in our communities, and we compete to win and while striving to create the best place for our associates to call work. Having deep respect for Tim, Aldis and the entire NBH team 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.

Aldis Birkans: 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 nonowner-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.

Tim Laney: 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?

John Finn: 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 1 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 2 essential capabilities that small business owners need, beginning with a 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 enables 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 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.

Tim Laney: 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.

Operator: [Operator Instructions] Our first question comes from Jeff Rulis with D.A. Davidson.

Jeff Rulis: 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?

Nicole Van Denabeele: That is correct.

Jeff Rulis: 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?

Nicole Van Denabeele: 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.

Jeff Rulis: Got it. And then it sounds like the partnership developing to sort of reduce those investment costs. I guess the leverage of the model into '27 is a little bit TBD, but I guess the focus is as you scale it up, that's more of a breakeven-type climate in '27. Just -- I know that were -- all this is developing, but trying to get a sense for what the '27 economics look like?

Tim Laney: 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.

Jeff Rulis: Yes. No, that's helpful, Tim. Just the range of options, including moving the -- off the financials of the bank entirely, we'll stay tuned. Maybe the -- just to pivot on to the credit side, the 3 loans that made up the bulk of the net charge-offs. Could you kind of identify the sort of category and why that group? Any systemic -- it sounds as if you expect credit metrics to further improve in '26. Just trying to get a sense for what was charged off.

Tim Laney: If you'll recall, at the beginning of '25, we literally were dealing with less than a handful of relationships that had emerged as problems. We really were in the belief that over the course of '25, they would work their way through the judicial process, and we would have them resolved, and that simply wasn't the case. The decision -- we believe a prudent decision was to address these as aggressively as we could in '25 and have a clean runway for '26. We're just not believers in letting problems like this linger.

And the Board and I felt like this was the correct and prudent action to take, even though it obviously was painful to take here in the fourth quarter of last year, but it feels good -- very good to put it behind us.

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

Kelly Motta: Maybe to kick it off with growth. I know we talked about 2025 year being -- working through some credits and impacted by some payoffs and refinancings, but it sounds like the outlook for '26 is really strong in part with your Vista partnership that you just brought on. As you look to, I think it was 10% loan growth, can you speak to the drivers of that growth, if that's significantly Texas and other markets where you're seeing opportunities just given the acceleration from what we've seen in the past several quarters?

Aldis Birkans: 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.

John Steinmetz: Sure. Thanks, Aldis. And yes, Kelly, we're really excited about the future growth potential, not only in Texas, but the resort markets, in all the markets, candidly. I'm looking forward to getting to know the team members throughout all of the NBH markets. And we believe in Texas that this platform that was built at NBH provides us not only the balance sheet that we need to continue to grow with our valued clients, but support our exceptional bankers. And to Aldis' point, we also have always believed that NBH has an incredible opportunity in the resort markets.

Resort markets that, again, were once seen as second homes, but are now becoming primary residents in places where people want to have their local bank. And I hope at this time next quarter, you'll see some performance-driven metrics and increase shareholder value around that. But the platform that we have at NBH as a team is going to provide -- not only allow us to support the continued 20-plus percent CAGR on deposits and loan growth that we've historically had, but it's also going to allow us to overcome a lot of the lack of fee income which Vista Bank has historically struggled with.

Kelly Motta: Got it. That's really helpful. Maybe bouncing to a question on the margin. It was down this quarter a bit more than I had expected. With the loan yields, were there any interest reversals given what you had with credit? And I appreciate the guide in the mid-3.90s too is ex rate cuts, but just -- if you could refresh us on -- clearly, I think there was some initial asset sensitivity, so how we should be thinking through that?

Nicole Van Denabeele: Yes. Kelly, this is Nicole. Yes, I'll just reiterate. So our December margin did come in at a strong 3.97%. We have managed, in our view, very well through 75 basis points of rate cuts in 2025. We experienced -- we drove 9 basis points of margin expansion even with those rate cuts this year. There wasn't any interest reversals in the fourth quarter, and the loans that we worked through were already on nonaccrual. But I will just -- just to reiterate, we've done a nice job with our deposit pricing for prior rate cuts. We cut deposit price -- we cut our deposit rates ahead of the Fed.

This time, we held and we waited until we knew exactly what the Fed was going to do. And so that did cause that lag and drag effect, but we have overcome that and finished the year with a strong margin of 3.97%.

Kelly Motta: Great. Last one, if I could slip in just one more. On the 2UniFi guide, the expense guide that -- flat at $22 million. I just wanted to confirm because you alluded to a potential partnership that could change the economics here, that, that didn't bake in any potential impacts of maybe offloading some of those expenses, one? And then two, with it flat, I imagine getting -- increasing the user base is an important part of driving those revenues higher. And so I'm surprised it's flat. So I guess, if you could kind of speak to how you guys are thinking about that line item, given that we're not really seeing a change from last year?

Nicole Van Denabeele: Yes. I appreciate you asking that question. I think it's important to note, we see 2026 as a turning point for 2UniFi. And as I shared, we are seeing operating leverage from 2025 from 2UniFi in 2026. So the revenue guide is an increase from last year. So $2 million to $4 million revenue guide, positive impact from 2025. And then holding expenses flat, it's actually very significant that we're holding expenses flat because we will have a full year of capitalized asset depreciation in 2026. And so that expense flat includes that uptick in depreciation, which is half of the 2026 expenses. And then to your point on the partnership.

So no potential -- the partnership really from a financial perspective is all upside, and none of that has been included in our guidance for 2026.

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

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

Nicole Van Denabeele: 3.97% was for the full month of December.

Andrew Terrell: Okay. And then do you have the -- it sounds like there was a lag here where assets reprice quite a bit quicker than deposits. Do you have where deposits, either spot or interest-bearing -- I mean, either total or interest-bearing were either in the month of December or on a spot basis at the end of the quarter?

Aldis Birkans: 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.

Andrew Terrell: 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?

Tim Laney: 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 2 parties, you can have different needs, expectations on either side that may not come together in the time frame 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.

Andrew Terrell: Yes. Got it. And last for me, was there any -- I appreciate that 2UniFi guide, but was there any revenue in the fourth quarter realized? And then just on the buyback that you guys announced, maybe Tim, if you could speak to kind of the appetite there?

Nicole Van Denabeele: 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.

Tim Laney: We have a strong interest in share buybacks. I believe, you know, we literally just announced a $100 million buyback authorization. And we have a -- frankly, we would consider it a priority at this point.

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

Brett Rabatin: Wanted to -- I joined a little bit late, Tim, but I wanted just to go back to -- you guys have had really strong loan originations, particularly here lately. But again, obviously, the net growth has been limited due to payoffs. Can you talk maybe a little bit about what you've experienced -- or what you experienced during 4Q in terms of payoff activity and how that played out? And then just your confidence for '26, if I heard correct, 10% loan growth. Is there a net and gross assumption there? Or any thoughts on confidence on payoffs diminishing relative to what you experienced the past few quarters in particular?

Tim Laney: Aldis did touch on what we were seeing with insurance competition in the private debt market. But let's be candid. All banks -- or most banks would be facing that competition. I'll tell you, there were just a number of situations where the kind of structures that were being put together and the pricing related to those deals just simply did not fit within our risk management framework. And so we're more than willing to let that business move along. But I think the broader context is the whole year, where we entered 2025 with, frankly, a risk-off mindset, having concerns about tariffs, having concerns about where the economy would land.

And I would tell you that, that risk off position that we took was somewhat pervasive throughout the year to a point where when it was time to really turn things back on, I'm proud of the team's production, but I would tell you it was being done in a very, very conservative atmosphere. We come into '26 really with the combined forces of form a Vista and NBH. And as we lay out these growth plans that we shared for you, Aldis and John have expressed nothing but very high confidence that we will meet, if not beat them. So with that, I'll open it up first. Maybe you, Aldis, just for more detail on the fourth quarter.

But then in terms of growth here in '26, John, Aldis, feel free to jump in on that as well.

Aldis Birkans: Yes. Brett, what I would add is, looking ahead in 2026, one thing that is a bit different in addition to what Tim was mentioning in terms of, again, like transportation or trucking is a segment we definitely exited, and that was a headwind. We are where we want to be. So that's not going to be a headwind in 2026. The other thing I'll say is -- and again, this is on NBH's legacy book side, but we have approximately $0.25 billion to almost $300 million of less scheduled maturities this year than it was last year.

So that's less of a, call it, headwind return that we have to overcome to again, grow even with the same production results. So John, anything that you'd add on from legacy Vista side?

John Steinmetz: Sure. Well, Brett, thanks for the question. And let me say, I'm optimistic and very excited about '26. We have consistently put up a 23% CAGR in loan growth without the balance sheet that NBH provides us. And so we think that this was the perfect partnership. We see tremendous opportunities in these resort markets. But I am very confident and have always believed that the reason people first matters is because the best clients follow the best bankers, and we are committed to continuing to not only augment and support our exceptional team members at Vista and the entire NBH family, but also recruit and retain through the disruption that we see not only today, but throughout Texas.

This was a merger of two incredible teams, and I'm incredibly optimistic and expect to win. And with respect to a question that was asked earlier, I believe, by Jeff with D.A. Davidson, I want you all to know that we take great pride in our credit quality. And for, I hope, our credit team that is listening today at Vista -- legacy Vista, I'm still getting used to this -- they know how much pride we take in pricing with credit quality second to none, and I have an extraordinary amount of confidence in Rick, Danny and the credit team at NBH.

We did our reverse diligence and examined NBH's because I assure you, they did theirs on us, much like a proctology exam. And I am very proud to be partnering with this excellent credit quality minded organization because I don't think they kick the can down the road, and I'm fired up about '26.

Brett Rabatin: That's really helpful. I'm sorry?

John Steinmetz: I was just saying as a shareholder and team member.

Brett Rabatin: 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?

John Steinmetz: And Brett, I appreciate that question. And I'll tell you, this is my first public earnings call, and Tim told me not to make promises I can't keep, but I'll tell you this. We are actively recruiting, but I'll tell you, we are actively retaining. Like I said, most of our team members have been together for 20 years, and I take so much joy in knowing that we have the best bankers providing these. The opportunities and the inbound calls that we're receiving, not from recruiters, but from bankers at the organizations in Texas and beyond to be a part of a culture that puts their people first is something like I've never seen.

And I'm excited for my friends in Texas that announced the deal today, but I can assure you, I am recruiting. And I think we all should be in this incredibly crowded industry, where we all eat out of each other's dog bowl. So I think that '26 could be a really good year if we're willing to dig in. And I'm excited about digging in with the team that we've had in the past, and more importantly, getting out and getting to know the NBH team that I have had a deep level of respect. This merger took place over 5 years of getting to know Tim, Aldis and the entire NBH team.

And for -- if you would, Brett, just allow me to thank the team at Vista for their patience as we explore various opportunities. But we think this is a perfect partnership because of the way that they manage credit, much like we do.

Operator: 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.

Tim Laney: 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.

Operator: 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.

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