Q1 2026 SB Financial Group Inc Earnings Call

April 24, 2026

Speaker #3: Good morning, and welcome to the SB Financial First Quarter 2026 Conference Call and Webcast. I would like to inform you that this conference call is being recorded, and that all participants are in a listen-only mode.

Operator: Good morning, and welcome to the SB Financial Q1 2026 Conference Call and Webcast. I would like to inform you that this conference call is being recorded, and that all participants are in a listen-only mode. We will begin with remarks by management and then open the conference up to the investment community for questions and answers. I will now turn the conference over to Sarah Mekus with SB Financial. Please go ahead, Sarah.

Speaker #3: We will begin with remarks by management and then open the conference up to the investment community for questions and answers. I will now turn the conference over to Sarah Mekus with SB FINANCIAL.

Speaker #3: Please go ahead, Sarah.

Speaker #4: Thank you, and good morning, everybody. I'd like to remind you that this conference call is being broadcast live over the internet, and will be archived and available on our website.

Sarah Mekus: Thank you, and good morning, everybody. I'd like to remind you that this conference call is being broadcast live over the internet and will be archived and available on our website. Joining me today are Mark A. Klein, Chairman, President, and CEO, Anthony V. Cosentino, Chief Financial Officer, and Steven A. Walz, Chief Lending Officer. Today's presentation may contain forward-looking information. Cautionary statements about this information, as well as reconciliations of non-GAAP financial measures, are included in today's earnings release materials as well as our SEC filings. These materials are available on our website, and we encourage participants to refer to them for a complete discussion of risk factors and forward-looking statements. These statements speak only as of 24 April 2026, and SB Financial undertakes no obligation to update them. I will now turn the call over to Mr. Klein.

Speaker #4: Joining me today are Mark Klein, Chairman, President, and CEO; Tony Cosentino, Chief Financial Officer; and Steve Walls, Chief Lending Officer. Today's presentation may contain forward-looking information.

Speaker #4: Cautionary statements about this information, as well as reconciliations of non-GAAP financial measures, are included in today's earnings release materials and our SEC filings.

Sarah Mekus: Cautionary statements about this information, as well as reconciliations of non-GAAP financial measures, are included in today's earnings release materials as well as our SEC filings. These materials are available on our website, and we encourage participants to refer to them for a complete discussion of risk factors and forward-looking statements. These statements speak only as of 24 April 2026, and SB Financial undertakes no obligation to update them. I will now turn the call over to Mr. Klein.

Speaker #4: These materials are available on our website and we encourage participants to refer to them for a complete discussion of risk factors and forward-looking statements.

Speaker #4: These statements speak only as of April 24, 2026, and SB Financial undertakes no obligation to update them. I will now turn the call over to Mr. Klein.

Speaker #5: Thank you, Sarah. And good morning, everyone. Welcome to our first quarter 2026 conference call and webcast. The first quarter represented a solid start to the year for SB Financial and really reinforces the consistency and resilience of our operating model.

Mark A. Klein: Thank you, Sarah, and good morning, everyone. Welcome to our Q1 2026 conference call and webcast. First quarter represented a solid start to the year for SB Financial and really reinforces the consistency and resilience of our operating model. Our results reflected balance sheet performance across the franchise, supported by loan growth, stable net interest income, improved fee-based revenue, disciplined expense management, and sound credit quality. This quarter also marked the first full anniversary of the Marblehead acquisition, and we now view that transaction as a solid contributor to our funding base, expanded presence in Northern Ohio, and overall franchise stability. While the operating environment remains competitive, we continue to feel good about our position. Balance sheet remains sound. Our credit metrics continue to compare favorably, and our business line provides a healthy mix of margin and fee-based revenue.

Mark Klein: Thank you, Sarah, and good morning, everyone. Welcome to our Q1 2026 Conference Call and Webcast. Q1 represented a solid start to the year for SB Financial and really reinforces the consistency and resilience of our operating model. Our results reflected balance sheet performance across the franchise, supported by loan growth, stable net interest income, improved fee-based revenue, disciplined expense management, and sound credit quality.

Speaker #5: Our results reflected balance sheet performance across the franchise, supported by loan growth, stable net interest income, improved fee-based revenue, disciplined expense management, and sound credit quality.

Speaker #5: This quarter also marked the first full anniversary of the Marblehead acquisition, and we now view that transaction as a solid contributor to our funding base, expanded presence in Northern Ohio, and overall franchise stability.

Mark Klein: This quarter also marked the first full anniversary of the Marblehead acquisition, and we now view that transaction as a solid contributor to our funding base, expanded presence in Northern Ohio, and overall franchise stability. While the operating environment remains competitive, we continue to feel good about our position. Balance sheet remains sound. Our credit metrics continue to compare favorably, and our business line provides a healthy mix of margin and fee-based revenue.

Speaker #5: While the operating environment remains competitive, we continue to feel good about our position. The balance sheet remains sound, our credit metrics continue to compare favorably, and our business line provides a healthy mix of margin and fee-based revenue.

Speaker #5: We believe that combination, along with our disciplined approach to growth and capital deployment, supports our ability to build long-term shareholder value. Briefly, some highlights for the quarter: net income of $4.3 million, to GAAP diluted EPS of $0.33 for the first quarter of 2025.

Mark A. Klein: We believe that combination, along with our disciplined approach to growth and capital deployment, supports our ability to build long-term shareholder value. Briefly, some highlights for the quarter. Net income $4.3 million with diluted EPS of $0.69 compared to GAAP diluted EPS of $0.33 for Q1 2025. This now marks our 61st consecutive quarter of profitability. Tangible book value per share ended the quarter at $18.45 compared to $15.79 for Q1 2025 and $18 at year-end. Adjusted tangible book value per share, excluding AOCI, now comes in at nearly $22. Our net interest income totaled $12.7 million compared to $11.3 million in Q1 2025 and $12.7 million in the linked quarter. The year-over-year improvement was driven by higher interest income on loans and a stable funding profile while the linked quarter comparison remained relatively consistent.

Mark Klein: We believe that combination, along with our disciplined approach to growth and capital deployment, supports our ability to build long-term shareholder value. Briefly, some highlights for the quarter. Net income $4.3 million with diluted EPS of $0.69 compared to GAAP diluted EPS of $0.33 for Q1 2025. This now marks our 61st consecutive quarter of profitability. Tangible book value per share ended the quarter at $18.45 compared to $15.79 for Q1 2025 and $18 at year-end.

Speaker #5: This now marks our 61st consecutive quarter of profitability. Tangible book value per share ended the quarter at $18.45, compared to $15.79 for the first quarter of 2025 and $18.00 at year-end.

Speaker #5: Adjusted tangible book value per share, excluding AOCI, now comes in at nearly $22. Our net interest income totaled $12.7 million, compared to $11.3 million in the first quarter of 2025, and $12.7 million in the linked quarter.

Mark Klein: Adjusted tangible book value per share, excluding AOCI, now comes in at nearly $22. Our net interest income totaled $12.7 million compared to $11.3 million in Q1 2025 and $12.7 million in the linked quarter. The year-over-year improvement was driven by higher interest income on loans and a stable funding profile while the linked quarter comparison remained relatively consistent.

Speaker #5: The year-over-year improvement was driven by higher interest income on loans and a stable funding profile, while the linked quarter comparison remained relatively consistent. Loan balances increased by approximately $92 million from the prior-year quarter and approximately $500,000 from the linked quarter, reflecting continued production across the trend of sequential quarterly growth.

Mark A. Klein: Loan balances increased by approximately $92 million from the prior year quarter and approximately $500,000 from the linked quarter, reflecting continued production across the franchise and extended our trend of sequential quarterly growth. Total deposits in the quarter were $1.37 billion compared to $1.27 billion for Q1 2025 and $1.3 billion at year-end. On a year-over-year basis, deposits increased over $100 million or nearly 8%, reflecting continued organic deposit growth and stable client relationships across the franchise. Non-interest income improved to $4.7 million from $4.1 million in the first quarter of the year and $3.7 million from the linked quarter. Our percentage of fee income to total revenue of 27% was slightly higher than the prior year and well ahead of the linked quarter. Non-interest expense totaled $11.9 million and improved from the prior year quarter, while increasing modestly from the linked quarter.

Mark Klein: Loan balances increased by approximately $92 million from the prior year quarter and approximately $500,000 from the linked quarter, reflecting continued production across the franchise and extended our trend of sequential quarterly growth. Total deposits in the quarter were $1.37 billion compared to $1.27 billion for Q1 2025 and $1.3 billion at year-end. On a year-over-year basis, deposits increased over $100 million or nearly 8%, reflecting continued organic deposit growth and stable client relationships across the franchise.

Speaker #5: Total deposits ended the quarter at 1.37 billion compared to 1.27 billion for the first quarter of 2025 and 1.3 billion at year-end. On a year-over-year basis, deposits increased over 100 million or nearly 8%, reflecting continued organic deposit growth and stable client relationships across the franchise.

Speaker #5: Non-interest income improved to $4.7 million from $4.1 million in the first quarter of the year, and $3.7 million from the linked quarter. Our percentage of fee income to total revenue of 27% was slightly higher than the prior year, and well ahead of the linked quarter.

Mark Klein: Non-interest income improved to $4.7 million from $4.1 million in the first quarter of the year and $3.7 million from the linked quarter. Our percentage of fee income to total revenue of 27% was slightly higher than the prior year and well ahead of the linked quarter. Non-interest expense totaled $11.9 million and improved from the prior year quarter, while increasing modestly from the linked quarter.

Speaker #5: Non-interest expense totaled $11.9 million and improved from the prior-year quarter, while increasing modestly from the linked quarter. The prior-year quarter included acquisition-related expenses and incremental operating costs associated with Marblehead, which elevated the comparison period.

Mark A. Klein: Prior year quarter included acquisition-related expenses and incremental operating costs associated with Marblehead, which elevated the comparison period. Asset quality continues to remain a strength of SB Financial. Non-performing assets totaled $4.8 million or 0.3% of total assets, compared to $6.1 million or 0.41% the first quarter. While non-performing assets increased modestly from year-end, overall credit performance remained sound and reserve coverage remained strong. We're especially pleased with the efforts of not only our lenders, but more importantly, our collection team, which drove our total delinquency level down to just 28 basis points at quarter end. As we've revealed in prior quarters, we continue to keen on our five key strategic initiatives, growing and diversifying revenue, more scale for efficiency, a greater share of the client's wallet for more scope, operational excellence, and of course, asset quality.

Mark Klein: Prior year quarter included acquisition-related expenses and incremental operating costs associated with Marblehead, which elevated the comparison period. Asset quality continues to remain a strength of SB Financial. Non-performing assets totaled $4.8 million or 0.3% of total assets, compared to $6.1 million or 0.41% the first quarter. While non-performing assets increased modestly from year-end, overall credit performance remained sound and reserve coverage remained strong.

Speaker #5: Asset quality continues to remain a strength of SB Financial. Non-performing assets totaled $4.8 million, or 0.3% of total assets, compared to $6.1 million, or 0.41%, in the first quarter.

Speaker #5: While non-performing assets increased modestly from year-end, overall credit performance remained sound and reserve coverage remained strong. We're especially pleased with the efforts of not only our lenders but, more importantly, our collection team, which drove our total delinquency level down to just 28 basis points at quarter-end.

Mark Klein: We're especially pleased with the efforts of not only our lenders, but more importantly, our collection team, which drove our total delinquency level down to just 28 basis points at quarter end. As we've revealed in prior quarters, we continue to keen on our five key strategic initiatives, growing and diversifying revenue, more scale for efficiency, a greater share of the client's wallet for more scope, operational excellence, and of course, asset quality.

Speaker #5: As we've revealed in prior quarters, we continue to key on our five key strategic initiatives: growing and diversifying revenue; more scale for efficiency; a greater share of the client's wallet for more scope; operational excellence; and, of course, asset quality.

Speaker #5: Looking a little closer at revenue diversity, mortgage originations totaled approximately $66 million, compared to approximately $40 million for the first quarter of 2025 and approximately $72 million in the linked quarter.

Mark A. Klein: Looking a little closer at revenue diversity, mortgage originations totaled approximately $66 million, compared to approximately $40 million for Q1 2025 and approximately $72 million in the linked quarter. Mortgage business remains an important part of our franchise, helping us expand household relationships while also contributing meaningful fee income across the company. While weaker volume than we anticipated in the quarter, the pipeline has stabilized at approximately $35 million, and we anticipate approximately 25% increase in volume for Q2 sequentially from the linked quarter. Peak Title continued to perform well during the quarter, benefiting both internal referrals and continued traction of clients outside of the bank. This business remains a valuable part of our product set and an important contributor to fee income diversification.

Mark Klein: Looking a little closer at revenue diversity, mortgage originations totaled approximately $66 million, compared to approximately $40 million for Q1 2025 and approximately $72 million in the linked quarter. Mortgage business remains an important part of our franchise, helping us expand household relationships while also contributing meaningful fee income across the company.

Speaker #5: Mortgage business remains an important part of our franchise, helping us expand household relationships while also contributing meaningful fee income across the company. While volume was weaker than we anticipated in the quarter, the pipeline has stabilized at approximately $35 million, and we anticipate an approximately 25% increase in volume for the second quarter sequentially from the linked quarter.

Mark Klein: While weaker volume than we anticipated in the quarter, the pipeline has stabilized at approximately $35 million, and we anticipate approximately 25% increase in volume for Q2 sequentially from the linked quarter. Peak Title continued to perform well during the quarter, benefiting both internal referrals and continued traction of clients outside of the bank. This business remains a valuable part of our product set and an important contributor to fee income diversification.

Speaker #5: Peak Title continued to perform well during the quarter, benefiting from both internal referrals and continued traction with clients outside of the bank. This business remains a valuable part of our product set and an important contributor to fee income diversification.

Speaker #5: On the scale front, the Marblehead acquisition continues to support our funding profile, and we remain pleased with the stability of those client relationships, just one year after closing.

Mark A. Klein: On the scale front, the Marblehead acquisition continued to support our funding profile, and we remain pleased with the stability of those client relationships just 1 year after closing. Deposit growth continued to provide meaningful support to our balance sheet. We remain pleased with the stability of the Marblehead relationships, and more broadly, we continue to see opportunities to grow deposits organically through client calling efforts, treasury management activities, and the broader relationship model that has served us well across our markets, particularly with the current market disruption and consolidation. As we discussed previously, we committed to two nearby markets recently, Angola, Indiana, and Napoleon, Ohio. These results have exceeded our admittedly aggressive goals. We have closed nearly $19 million in loans and approximately $17 million in deposits in just 5 months of operation.

Mark Klein: On the scale front, the Marblehead acquisition continued to support our funding profile, and we remain pleased with the stability of those client relationships just 1 year after closing. Deposit growth continued to provide meaningful support to our balance sheet.

Speaker #5: Deposit growth continued to provide meaningful support to our balance sheet. We remain pleased with the stability of the Marblehead relationships and, more broadly, we continue to see opportunities to grow deposits organically through client calling efforts, treasury management activities, and the broader relationship model that has served us well across our markets—particularly with the current market disruption and consolidation.

Mark Klein: We remain pleased with the stability of the Marblehead relationships, and more broadly, we continue to see opportunities to grow deposits organically through client calling efforts, treasury management activities, and the broader relationship model that has served us well across our markets, particularly with the current market disruption and consolidation. As we discussed previously, we committed to two nearby markets recently, Angola, Indiana, and Napoleon, Ohio.

Speaker #5: As we discussed previously, we committed to two nearby markets recently—Independence, Indiana, and Napoleon, Ohio. And these results have exceeded our admittedly aggressive goals.

Mark Klein: These results have exceeded our admittedly aggressive goals. We have closed nearly $19 million in loans and approximately $17 million in deposits in just 5 months of operation.

Speaker #5: We have closed nearly $19 million in loans and approximately $17 million in deposits in just five months of operation. These two markets have clearly been at the forefront of market disruption.

Mark A. Klein: These two markets have clearly been at the forefront of market disruption, I just mentioned, and we certainly have seized on that opportunity. Client relationships have more scope. We remain focused on serving clients through our relationship-based model that emphasizes responsiveness, local market knowledge, and a full suite of products and services. We continue to believe that that approach, combined with our hybrid office model and expanding digital capabilities, positions us well to serve our clients across both legacy and newer urban expansion markets. Referral activity continues to be an important tool in strengthening household relationships across our business line, and we continue to view that cross-functional approach as an important part of deepening client relationships across the franchise and delivering more scope and a greater share of the client wallet. On operational excellence, we remain focused on matching growth with disciplined execution.

Mark Klein: These two markets have clearly been at the forefront of market disruption, I just mentioned, and we certainly have seized on that opportunity. Client relationships have more scope. We remain focused on serving clients through our relationship-based model that emphasizes responsiveness, local market knowledge, and a full suite of products and services.

Speaker #5: As I just mentioned, we have certainly seized on that opportunity—client relationships, more scope. We remain focused on serving clients through our relationship-based model that emphasizes responsiveness, local market knowledge, and a full suite of products and services.

Speaker #5: We continue to believe that that approach, combined with our hybrid office model and expanding digital capabilities, positions us well to serve our clients across both legacy and newer urban expansion markets.

Mark Klein: We continue to believe that that approach, combined with our hybrid office model and expanding digital capabilities, positions us well to serve our clients across both legacy and newer urban expansion markets. Referral activity continues to be an important tool in strengthening household relationships across our business line, and we continue to view that cross-functional approach as an important part of deepening client relationships across the franchise and delivering more scope and a greater share of the client wallet.

Speaker #5: Referral activity continues to be an important tool in strengthening household relationships across our business line, and we continue to view that cross-functional approach as an important part of deepening client relationships across the franchise and delivering more scope and a greater share of the client wallet.

Speaker #5: On operational excellence, we remain focused on matching growth with disciplined execution. The first quarter reflected that mindset, with expense levels improving from the prior year period and remaining controlled relative to revenue.

Mark Klein: On operational excellence, we remain focused on matching growth with disciplined execution.

Mark A. Klein: Q1 reflected that mindset with expense levels improving from the prior year period and remaining controlled relative to revenue. Plus, we continue to evaluate staffing, technology, and physical presence across the franchise to ensure resources are always aligned with current client activity and long-term market opportunities. Capital levels remain strong with improvement in total capital and higher ratios for both TCE and CET1 regulatory capital. Finally, before I turn it over to our CFO, Tony Cosentino, asset quality. Credit performance remained sound for the quarter. While non-performing assets increased modestly from year-end, they remained well below the prior year quarter level. Reserve coverage exceeded 400% and continued to reflect our conservative approach to risk management. The allowance for credit losses at 1.39% remained strong relative to total loans with criticized and classified loans at just $4.6 million, down $2.5 million or 35% from the prior year.

Mark Klein: Q1 reflected that mindset with expense levels improving from the prior year period and remaining controlled relative to revenue. Plus, we continue to evaluate staffing, technology, and physical presence across the franchise to ensure resources are always aligned with current client activity and long-term market opportunities. Capital levels remain strong with improvement in total capital and higher ratios for both TCE and CET1 regulatory capital.

Speaker #5: Plus, we continue to evaluate staffing, technology, and physical presence across the franchise to ensure resources are always aligned with current client activity and long-term market opportunities.

Speaker #5: Capital levels remain strong, with improvement in total capital and higher ratios for both TCE and CET1 regulatory capital. And finally, before I turn it over to our CFO, Tony Cosentino, asset quality.

Mark Klein: Finally, before I turn it over to our CFO, Tony Cosentino, asset quality. Credit performance remained sound for the quarter. While non-performing assets increased modestly from year-end, they remained well below the prior year quarter level. Reserve coverage exceeded 400% and continued to reflect our conservative approach to risk management. The allowance for credit losses at 1.39% remained strong relative to total loans with criticized and classified loans at just $4.6 million, down $2.5 million or 35% from the prior year.

Speaker #5: Credit performance remains sound for the quarter, while non-performing assets increased modestly from year-end. They remained well below the prior-year quarter level, and reserve coverage exceeded 400%, continuing to reflect our conservative approach to risk management.

Speaker #5: The allowance for credit losses at 1.39% remains strong relative to total loans, with criticized classified loans at just $4.6 million, down $2.5 million or 35% from the prior year.

Speaker #5: We continue to emphasize disciplined underwriting, proactive management of problem assets, and prudent growth across all markets. We believe that combination remains one of the key differentiators for SB Financial and an important metric for our long-term performance.

Mark A. Klein: We continue to emphasize disciplined underwriting, proactive management of problem assets, and prudent growth across all markets. We believe that combination remains one of the key differentiators for SB Financial and an important metric for our long-term performance. Now I'd like to ask Tony to give us some more details on our quarterly performance. Tony?

Mark Klein: We continue to emphasize disciplined underwriting, proactive management of problem assets, and prudent growth across all markets. We believe that combination remains one of the key differentiators for SB Financial and an important metric for our long-term performance. Now I'd like to ask Tony to give us some more details on our quarterly performance. Tony?

Speaker #5: Now, I'd like to ask Tony to give us some more details on our quarterly performance. Tony?

Speaker #6: Thanks, Mark. And good morning again, everyone. Let me outline some highlights and important details of our first quarter results. On the income statement, in the first quarter, total operating revenue increased to $17.4 million, representing a 13.2% increase from the $15.4 million in the prior year period and a 6.1% increase from the linked quarter.

Anthony V. Cosentino: Thanks, Mark, and good morning again, everyone. Let me outline some highlights and important details of our Q1 results. On the income statement, in Q1, total operating revenue increased to $17.4 million, representing a 13.2% increase from the $15.4 million in the prior year period and a 6.1% increase from the linked quarter. As Mark noted, this quarter reflected a balanced revenue performance with stable net interest income and a stronger contribution from our fee-based businesses. Mark also detailed our GAAP EPS earlier in the call, and when we adjust both years for OMSR recapture and the Marblehead merger costs, EPS would be $0.63 for the current period, compared to $0.42 in Q1 of 2025, up over 50% on an adjusted basis. Net interest income was up $1.4 million, or 12.7%, from Q1 of 2025 and consistent with the linked quarter.

Tony Cosentino: Thanks, Mark, and good morning again, everyone. Let me outline some highlights and important details of our Q1 results. On the income statement, in Q1, total operating revenue increased to $17.4 million, representing a 13.2% increase from the $15.4 million in the prior year period and a 6.1% increase from the linked quarter. As Mark noted, this quarter reflected a balanced revenue performance with stable net interest income and a stronger contribution from our fee-based businesses.

Speaker #6: As Mark noted, this quarter reflected a balanced revenue performance, with stable net interest income and a stronger contribution from our fee-based businesses. Mark also detailed our GAAP EPS earlier in the call, and when we adjust both years for OMSR recapture and the Marblehead merger costs, EPS would be $0.63 for the current period compared to $0.42 in Q1 of '25.

Tony Cosentino: Mark also detailed our GAAP EPS earlier in the call, and when we adjust both years for OMSR recapture and the Marblehead merger costs, EPS would be $0.63 for the current period, compared to $0.42 in Q1 of 2025, up over 50% on an adjusted basis. Net interest income was up $1.4 million, or 12.7%, from Q1 of 2025 and consistent with the linked quarter.

Speaker #6: Up over 50% on an adjusted basis. Net interest income was up $1.4 million, or 12.7%, from the first quarter of '25 and consistent with the linked quarter.

Speaker #6: The year-over-year increase was driven primarily by continued balance sheet growth, better mix, and the repricing benefits within the portfolio. Total interest expense increased modestly from the prior-year quarter, as higher volume-driven deposit costs were partially offset by lower costs across other funding sources.

Anthony V. Cosentino: The year-over-year increase was driven primarily by continued balance sheet growth, better mix, and the repricing benefits within the portfolio. Total interest expense increased modestly from the prior year quarter as higher volume-driven deposit costs were partially offset by lower costs across other funding sources. While funding costs remain an important point of focus, the overall funding profile of the company remains well-aligned with the asset growth we have achieved over the last year. Net interest margin for the quarter was 3.49%, compared to 3.41% in the prior year quarter and 3.52% in the linked quarter. Even with net interest income remaining flat sequentially, the company continued to benefit from the larger balance sheet and the repricing of interest-earning assets. Non-interest income increased to $4.7 million. On a percentage basis, that represents an increase of approximately 14.7% from the prior year period and 27% from the linked quarter.

Tony Cosentino: The year-over-year increase was driven primarily by continued balance sheet growth, better mix, and the repricing benefits within the portfolio. Total interest expense increased modestly from the prior year quarter as higher volume-driven deposit costs were partially offset by lower costs across other funding sources. While funding costs remain an important point of focus, the overall funding profile of the company remains well-aligned with the asset growth we have achieved over the last year.

Speaker #6: While funding costs remain an important point of focus, the overall funding profile of the company remains well aligned with the asset growth we have achieved over the last year.

Speaker #6: Net interest margin for the quarter was 3.49%, compared to 3.41% in the prior-year quarter and 3.52% in the linked quarter. Even with net interest income remaining flat sequentially, the company continued to benefit from the larger balance sheet and the repricing of interest-earning assets.

Tony Cosentino: Net interest margin for the quarter was 3.49%, compared to 3.41% in the prior year quarter and 3.52% in the linked quarter. Even with net interest income remaining flat sequentially, the company continued to benefit from the larger balance sheet and the repricing of interest-earning assets. Non-interest income increased to $4.7 million. On a percentage basis, that represents an increase of approximately 14.7% from the prior year period and 27% from the linked quarter.

Speaker #6: Non-interest income increased to $4.7 million. On a percentage basis, that would represent an increase of approximately 14.7% from the prior year period and 27% from the linked quarter.

Speaker #6: The quarter-over-quarter and year-over-year improvement was driven by higher mortgage loan servicing fees, stronger gains on sale of mortgage loans and OMSR, and improved gains on the sale of SBA loans.

Anthony V. Cosentino: The quarter over quarter and year over year improvement was driven by higher mortgage loan servicing fees, stronger gains on sale of mortgage loans in OMSR, and improved gains on the sale of SBA loans. The total mortgage banking contribution for the quarter was $1.8 million, compared to $1.5 million in the prior year quarter and $1.5 million in the linked quarter. We continue to utilize our hedging program, which was in the money for the quarter, as it successfully offset the disruption in the rate markets. Operating expenses totaled $11.9 million in the quarter, down $500,000 from the prior year and up just $700,000 from the linked quarter. The year-over-year comparison benefited from the one-time merger related costs that were present in Q1 2025. The linked quarter increase was modest and reflects normal quarterly expense variability.

Tony Cosentino: The quarter over quarter and year over year improvement was driven by higher mortgage loan servicing fees, stronger gains on sale of mortgage loans in OMSR, and improved gains on the sale of SBA loans. The total mortgage banking contribution for the quarter was $1.8 million, compared to $1.5 million in the prior year quarter and $1.5 million in the linked quarter. We continue to utilize our hedging program, which was in the money for the quarter, as it successfully offset the disruption in the rate markets.

Speaker #6: The total mortgage banking contribution for the quarter was $1.8 million, compared to $1.5 million in the prior year quarter and $1.5 million in the linked quarter.

Speaker #6: We continue to utilize our hedging program, which was in the money for the quarter, as it successfully offset the disruption in the rate markets.

Speaker #6: Operating expenses totaled $11.9 million in the quarter, down $500,000 from the prior year and up just $700,000 from the linked quarter. The year-over-year comparison benefited from the one-time merger-related costs that were present in the first quarter of 2025.

Tony Cosentino: Operating expenses totaled $11.9 million in the quarter, down $500,000 from the prior year and up just $700,000 from the linked quarter. The year-over-year comparison benefited from the one-time merger related costs that were present in Q1 2025. The linked quarter increase was modest and reflects normal quarterly expense variability.

Speaker #6: The linked-quarter increase was modest and reflects normal quarterly expense variability. Our efficiency ratio for the first quarter was 68.1%, representing a meaningful improvement from the prior-year period and continued stability on a sequential basis.

Anthony V. Cosentino: Our efficiency ratio for Q1 was 68.1%, representing a meaningful improvement from the prior year period and continued stability on a sequential basis. Our adjusted efficiency ratio was down by over 500 basis points from the prior period, and the adjusted operating leverage was a positive 5 times. Turning to the balance sheet, loan balances ended the quarter at approximately $1.18 billion, reflecting continued year-over-year growth and a modest increase from year-end, with loans to assets at a healthy 74%. We remain encouraged by the continued stability and production across the franchise, and we believe the current balance sheet remains well-positioned to support additional disciplined loan growth during the year. Our loan-to-deposit ratio at quarter-end was 86%, although we continue to view the low- to mid-90s% as a reasonable long-term operating range.

Tony Cosentino: Our efficiency ratio for Q1 was 68.1%, representing a meaningful improvement from the prior year period and continued stability on a sequential basis. Our adjusted efficiency ratio was down by over 500 basis points from the prior period, and the adjusted operating leverage was a positive 5 times. Turning to the balance sheet, loan balances ended the quarter at approximately $1.18 billion, reflecting continued year-over-year growth and a modest increase from year-end, with loans to assets at a healthy 74%.

Speaker #6: Our adjusted efficiency ratio was down by over 500 basis points from the prior period, and the adjusted operating leverage was a positive five times.

Speaker #6: Turning to the balance sheet, loan balances at the end of the quarter were approximately $1.18 billion, reflecting continued year-over-year growth and a modest increase from year-end.

Speaker #6: With loans to assets at a healthy 74%, we remain encouraged by the continued stability and production across the franchise, and we believe the current balance sheet remains well positioned to support additional disciplined loan growth during the year.

Tony Cosentino: We remain encouraged by the continued stability and production across the franchise, and we believe the current balance sheet remains well-positioned to support additional disciplined loan growth during the year. Our loan-to-deposit ratio at quarter-end was 86%, although we continue to view the low- to mid-90s% as a reasonable long-term operating range.

Speaker #6: Our loan-to-deposit ratio at quarter-end was 86%, although we continue to view the low-to-mid 90s as a reasonable long-term operating range. The current funding profile gives us flexibility to support loan growth while maintaining strong liquidity in a balanced risk posture.

Anthony V. Cosentino: The current funding profile gives us flexibility to support loan growth while maintaining strong liquidity, and a balanced risk posture. On capital management, during the quarter, the company repurchased approximately 29,000 shares at an average price of $21.12. We have guided lower on the buyback for 2026 as prices are at or near our adjusted tangible book value. We are also cognizant of the impending potential call of our subdebt that would require a capital outlay, potentially impacting an aggressive buyback posture moving forward. Turning lastly to asset quality. While non-performing assets totaled $4.8 million and relatively unchanged compared to the linked quarter, we did foreclose on a large property that elevated OREO with a like-size reduction in NPLs. We feel confident in our collateral position and do not anticipate further write-downs from this relationship.

Tony Cosentino: The current funding profile gives us flexibility to support loan growth while maintaining strong liquidity, and a balanced risk posture. On capital management, during the quarter, the company repurchased approximately 29,000 shares at an average price of $21.12. We have guided lower on the buyback for 2026 as prices are at or near our adjusted tangible book value. We are also cognizant of the impending potential call of our subdebt that would require a capital outlay, potentially impacting an aggressive buyback posture moving forward.

Speaker #6: On capital management, during the quarter, the company repurchased approximately 29,000 shares at an average price of $21.12. We have guided lower on the payback on the buyback for 2026, as prices are at or near our adjusted tangible book value.

Speaker #6: We are also cognizant of the impending potential call of our subdebt that would require a capital outlay, potentially impacting an aggressive buyback posture moving forward.

Speaker #6: Turning lastly to asset quality, while non-performing assets totaled $4.8 million and were relatively unchanged compared to the linked quarter, we did foreclose on a large property that elevated OREO with a like-size reduction in NPLs.

Tony Cosentino: Turning lastly to asset quality. While non-performing assets totaled $4.8 million and relatively unchanged compared to the linked quarter, we did foreclose on a large property that elevated OREO with a like-size reduction in NPLs. We feel confident in our collateral position and do not anticipate further write-downs from this relationship.

Speaker #6: We feel confident in our collateral position and do not anticipate further write-downs from this relationship. The allowance for credit losses as a percentage of total loans was 1.39%, compared to 1.36% in the linked quarter and 1.41% in the prior year.

Anthony V. Cosentino: The allowance for credit losses as a percentage of total loans was 1.39%, compared to 1.36% in the linked quarter and 1.41% in the prior year. Coverage of non-performing loans was higher than both the linked and prior year quarters, underscoring the continued strength of the company's reserve position and disciplined approach to credit risk management. Total delinquencies were also down substantially for both the linked and prior year, and when we exclude loans on non-accrual, the delinquency rate is effectively zero. I will now turn the call back over to Mark.

Tony Cosentino: The allowance for credit losses as a percentage of total loans was 1.39%, compared to 1.36% in the linked quarter and 1.41% in the prior year. Coverage of non-performing loans was higher than both the linked and prior year quarters, underscoring the continued strength of the company's reserve position and disciplined approach to credit risk management. Total delinquencies were also down substantially for both the linked and prior year, and when we exclude loans on non-accrual, the delinquency rate is effectively zero.

Speaker #6: Coverage of non-performing loans was higher than both the linked and prior year quarters, underscoring the continued strength of the company's reserve position and disciplined approach to credit risk management.

Speaker #6: Total delinquencies were also down substantially for both the linked quarter and prior year, and when we exclude loans on non-accrual, the delinquency rate is effectively zero.

Speaker #6: I will now turn the call back over to Mark.

Tony Cosentino: I will now turn the call back over to Mark.

Speaker #1: Thank you, Tony. We certainly remain encouraged by our positioning as we move through 2026, supported by strong credit fundamentals, as we mentioned, a growing balance sheet, continued discipline and expense control, and capital management.

Mark A. Klein: Thank you, Tony. We certainly remain encouraged by our positioning as we move through 2026, supported by strong credit fundamentals, as we mentioned, a growing balance sheet, and continued discipline in expense control and capital management. We're focused on executing across all of our footprint, optimizing our lenders and lending capacity, and driving cross-sell activity to support core deposit growth while maintaining a balanced approach to risk. We will be announcing a quarterly dividend of $0.16 per share, equating to an annualized yield of approximately 2.8%, representing 25% of our earnings. We continue to believe the current environment presents attractive opportunities to build on our growth trends. Our capital levels provide flexibility, our collective experience provides a clear path to a broader footprint, and our continued focus on improvement supports our long-term objective of scaling our franchise toward the $2 billion strategic goal of a balance sheet.

Mark Klein: Thank you, Tony. We certainly remain encouraged by our positioning as we move through 2026, supported by strong credit fundamentals, as we mentioned, a growing balance sheet, and continued discipline in expense control and capital management. We're focused on executing across all of our footprint, optimizing our lenders and lending capacity, and driving cross-sell activity to support core deposit growth while maintaining a balanced approach to risk.

Speaker #1: We're focused on executing across all of our footprint, optimizing our lenders and lending capacity, and driving cross-sell activity to support core deposit growth, while maintaining a balanced approach to risk.

Speaker #1: We will be announcing a quarterly dividend of $0.16 per share, equating to an annualized yield of approximately 2.8%, representing 25% of our earnings.

Mark Klein: We will be announcing a quarterly dividend of $0.16 per share, equating to an annualized yield of approximately 2.8%, representing 25% of our earnings. We continue to believe the current environment presents attractive opportunities to build on our growth trends. Our capital levels provide flexibility, our collective experience provides a clear path to a broader footprint, and our continued focus on improvement supports our long-term objective of scaling our franchise toward the $2 billion strategic goal of a balance sheet.

Speaker #1: We continue to believe the current environment presents attractive opportunities to build on our growth trends. Our capital levels provide flexibility; our collective experience provides a clear path to a broader footprint, and our continued focus on improvement supports our long-term objective of scaling our franchise toward the $2 billion strategic goal of a balance sheet.

Speaker #1: Now I'll open it up for calls and questions, Sarah.

Mark A. Klein: Now I'll open it up for calls and questions. Sarah?

Mark Klein: Now I'll open it up for calls and questions. Sarah?

Speaker #2: Nick, you can open up to questions, please.

Steven A. Walz: Nick, you can open up the questions, please.

Sarah Mekus: Nick, you can open up the questions, please.

Speaker #3: Thank you . We will now begin the question and answer session . To ask a question , you may press star . Then one on your touchtone phone .

Operator: Thank you. We will now begin the question and answer session. To ask a question, you may press star then one 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 your question, please press star and then two. At this time, we will pause momentarily to assemble our roster. The first question will come from Brian Martin with Brean Capital. Please go ahead.

Speaker #3: 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 your question, please press star and then two.

Speaker #3: At this time, we will pause momentarily to assemble our roster. And the first question will come from Brian Martin with Brean Capital.

Speaker #3: Please go ahead

Speaker #4: Hey , good morning guys

Brian Martin: Hey, good morning, guys.

Speaker #1: Good morning, Brian. Hi, Brian. Brian.

Mark A. Klein: Morning, Brian.

Mark Klein: Morning, Brian.

Steven A. Walz: Hi, Brian.

Steve Walz: Hi, Brian.

Speaker #4: Hey . Just maybe just a couple of things here . And if you guys can cover them , you talked a little bit there on the call about it , but just the particularly the , the success you've had in , you know , the newer markets , Mark , you mentioned that just kind of trying to get a handle on , you know , when you look at loan growth and , and going forward here , just even the deposit growth , you know , the benefits you've gotten from these new markets just can you frame up just kind of your outlook on loan growth here , you know , is there , is there more to come from those those new markets ?

Brian Martin: Hey, maybe just a couple things here, and if you guys cover them. You talked a little bit there on the call about it, but just particularly the success you've had in the newer markets. Mark, you mentioned that. Just kind of trying to get a handle on, when you look at loan growth and going forward here, just even the deposit growth, the benefits you've gotten from these new markets. Just can you frame up just your outlook on loan growth here? Is there more to come from those new markets? It seems that maybe you've got the low-hanging fruit, but there's still more upside. Just frame up your outlook on loan growth in the pipeline here.

Speaker #4: I mean , it sounds like maybe you've kind of got the , the low hanging fruit and but there's still more upside . But just frame up kind of your outlook on , loan growth and the pipeline here

Brian Martin: It seems that maybe you've got the low-hanging fruit, but there's still more upside. Just frame up your outlook on loan growth in the pipeline here.

Speaker #1: Sure . As I'm sure you know , Brian , Angola was a mortgage production office originally . And Covid hit and we left it a mortgage production office and some wealth management business .

Mark A. Klein: Sure. As I'm sure you know, Brian, Angola was a mortgage production office originally, and COVID hit, and we left it as a mortgage production office and some wealth management business. Then recently here, we knew that there was certainly some opportunities in Angola to develop it into full-service office, and it's been really good. We got a great staff. There's certainly a lot of opportunity. We used to spend some time up in that market, but when COVID hit, we kind of pulled back. Angola is doing well and we are right on the verge of having black numbers coming out of that with positive P&L. Then Napoleon was specifically a result of the disruption in the market that we all know about, which is a result of consolidation and mergers. That's got great potential.

Mark Klein: Sure. As I'm sure you know, Brian, Angola was a mortgage production office originally, and COVID hit, and we left it as a mortgage production office and some wealth management business. Then recently here, we knew that there was certainly some opportunities in Angola to develop it into full-service office, and it's been really good. We got a great staff. There's certainly a lot of opportunity. We used to spend some time up in that market, but when COVID hit, we kind of pulled back.

Speaker #1: And then recently , here , we knew that there was some , certainly some opportunities in Angola to develop that into full service office .

Speaker #1: And it's been really good . We've got a great staff , and there's certainly a lot of opportunity . We used to spend some time up in that market , but when Covid hit , we kind of pulled back .

Speaker #1: But and gold is doing well and we are right on the verge of having black numbers coming out of that with , you know , positive P and L , and then Napoleon was specifically a result of the disruption in the market that we all know about , which is a result of consolidation and mergers .

Mark Klein: Angola is doing well and we are right on the verge of having black numbers coming out of that with positive P&L. Then Napoleon was specifically a result of the disruption in the market that we all know about, which is a result of consolidation and mergers. That's got great potential.

Speaker #1: And that's got great potential . As I mentioned before , in webcast , there's probably a $1 billion in that market that has now become deposits of larger regional banks , where , as before , they were deposits of smaller community banks .

Mark A. Klein: As I've mentioned before in webcasts, there's probably $1 billion in that market that has now become deposits of larger regional banks, whereas before they were deposits of smaller community banks. We feel there's a great opportunity in continuing to lever that. We got a great staff, and that's going to not only provide lending growth, but also nice deposit opportunities in a market that is longing for a community bank that lost a couple of them prior, as well as some merger consolidation and disruption. We're pretty bullish on those. Lastly, we've been in Gahanna for a period of time, and it's been generally a mortgage loan production office.

Mark Klein: As I've mentioned before in webcasts, there's probably $1 billion in that market that has now become deposits of larger regional banks, whereas before they were deposits of smaller community banks. We feel there's a great opportunity in continuing to lever that. We got a great staff, and that's going to not only provide lending growth, but also nice deposit opportunities in a market that is longing for a community bank that lost a couple of them prior, as well as some merger consolidation and disruption.

Speaker #1: And so we feel there's a great opportunity and continuing to lever that . We've got a great staff . And that's going to not only provide lending growth , but also nice deposit opportunities in a market that is longing for a community bank that lost a couple of them prior , as well as some merger , consolidation and disruption .

Speaker #1: So we're pretty bullish on those. And then lastly, we've been in Gahanna for a period of time, and it's been generally a mortgage loan production office.

Mark Klein: We're pretty bullish on those. Lastly, we've been in Gahanna for a period of time, and it's been generally a mortgage loan production office.

Speaker #1: And most likely, by the end of the year, we'll be having more conversations about opening that as a full-service office there in Columbus, because we know there's certainly some opportunities.

Mark A. Klein: Most likely by the end of the year, we'll be having more conversations about opening that as a full service office there in Columbus because we know there's certainly some opportunities down there with just the one office we have in Dublin. That's a little update on those offices in terms of opportunities for de novo expansion.

Mark Klein: Most likely by the end of the year, we'll be having more conversations about opening that as a full service office there in Columbus because we know there's certainly some opportunities down there with just the one office we have in Dublin. That's a little update on those offices in terms of opportunities for de novo expansion.

Speaker #1: Down there with just the one office we have in Dublin. So that's a little update on those offices in terms of opportunities for de novo expansion.

Brian Martin: Okay, as far as just the pipeline and what you're expecting here in the coming quarters?

Speaker #4: Okay . And as far as just kind of the pipeline and kind of what you're expecting here and kind of the coming quarters

Mark A. Klein: Yeah. Steve can speak to the pipeline thing. We've had a few payoffs here recently, not because they wanted to leave us, but because they sold one of their projects. I think it's generally pretty decent. We know and we've discussed many times about an outweighed segment of our growth has come from Columbus and continues to do so. We also indicated this year we were hoping that our other markets like Fort Wayne, Indianapolis, Toledo, and Findlay all kick in and provide their portion of our $75 to $100 million growth. Steve, any comments on what that pipeline looks like?

Mark Klein: Yeah. Steve can speak to the pipeline thing. We've had a few payoffs here recently, not because they wanted to leave us, but because they sold one of their projects. I think it's generally pretty decent. We know and we've discussed many times about an outweighed segment of our growth has come from Columbus and continues to do so. We also indicated this year we were hoping that our other markets like Fort Wayne, Indianapolis, Toledo, and Findlay all kick in and provide their portion of our $75 to $100 million growth.

Speaker #1: Yeah , Steve can speak to the pipeline thing . You know , we've had a few payoffs here . Here recently , not because , you know , they they wanted to leave us , but because they , you know , sold , you know , one of their projects .

Speaker #1: But I, I think it's generally pretty, pretty decent. We know and we've discussed many times about an outweighted segment of our growth has come from Columbus and continues to do so.

Speaker #1: But we also indicated this year we were hoping that our other markets, like Fort Wayne, Indianapolis, Toledo, and Findlay, all kick in.

Speaker #1: And , you know , provide their their portion of our 75 to $100 million growth . But , Steve , any comments on what that pipeline looks like

Mark Klein: Steve, any comments on what that pipeline looks like?

Steven A. Walz: Yeah, no, Mark, I think consistent with that high single digits we talked about previously. As we discussed in previous calls, you know it, I remember, Brian, we are focusing on expanding the breadth. Certainly, Columbus delivers a lot of growth for us and will continue to do so. We are committed to expanding that growth story to those other urban markets. That even does include, as Mark referenced earlier, entering the Angola and Napoleon offices. That story remains further to be told. There's more growth there, and we think our model serves those markets well.

Steve Walz: Yeah, no, Mark, I think consistent with that high single digits we talked about previously. As we discussed in previous calls, you know it, I remember, Brian, we are focusing on expanding the breadth. Certainly, Columbus delivers a lot of growth for us and will continue to do so. We are committed to expanding that growth story to those other urban markets. That even does include, as Mark referenced earlier, entering the Angola and Napoleon offices. That story remains further to be told.

Speaker #5: Yeah , no , Mark , I think consistent with that , that high single digits we talked about previously as we discussed in previous calls , you know .

Speaker #5: Remember, Brian, we are focusing on expanding the breadth. Certainly, Columbus delivers a lot of growth for us, and will continue to do so.

Speaker #5: But we are committed to expanding that that growth story to those other urban markets . And and that even does include , as Mark referenced earlier , entering the Angola Napoleon offices .

Speaker #5: Those are those , you know , that story remains further to be told . There's more growth there . And , and we think our model serves those markets well .

Steve Walz: There's more growth there, and we think our model serves those markets well.

Mark A. Klein: Yeah, a lot of disruption, Brian, in those markets, which has really played well into our hand. We could have gone there even before the disruption, but it wouldn't be quite as robust as we're finding it today.

Mark Klein: Yeah, a lot of disruption, Brian, in those markets, which has really played well into our hand. We could have gone there even before the disruption, but it wouldn't be quite as robust as we're finding it today.

Speaker #1: Yeah , a lot a lot of disruption , Brian , in those markets , which is really played well into our hand . You know , we could have gone there even before the disruption , but it wouldn't be quite as robust as we're finding it today .

Brian Martin: Okay. Now with the geopolitical risks out there, we've heard more people just have it. The sentiment is a little bit near-term isn't quite as positive in the loan growth side, but it sounds like at least your pipeline is still good, and you're still optimistic about achieving your targeted goals for the year.

Speaker #4: Okay , so not with the with the geopolitical risks out there . You know , we've heard more people just send it , you know , sentiments a little bit , you know , near term isn't quite as positive .

Speaker #4: And the loan growth side , but it sounds like at least you , your pipeline is still good and you're still optimistic about achieving kind of your , your targeted goals for the year .

Steven A. Walz: Yes, I think that's true, Brian. Certainly, we have not seen, yet anyway, a whole lot of blowback from what's going on in the Middle East. Our ag portfolio, which is not insignificant, as you know, our farmers, by and large, have pre-purchased all those supplies that are impacted by that. We wouldn't expect any hit to our ag portfolio, certainly this year, and hopefully, obviously, things over there don't persist beyond this year.

Steve Walz: Yes, I think that's true, Brian. Certainly, we have not seen, yet anyway, a whole lot of blowback from what's going on in the Middle East. Our ag portfolio, which is not insignificant, as you know, our farmers, by and large, have pre-purchased all those supplies that are impacted by that. We wouldn't expect any hit to our ag portfolio, certainly this year, and hopefully, obviously, things over there don't persist beyond this year.

Speaker #5: Yes , I think that's true . Brian . And certainly we have not seen yet . Anyway , a whole lot of blowback from , from what's going on in the Middle East .

Speaker #5: Our ag portfolio , which is not insignificant , as you know , our farmers by and large have pre-purchased all those supplies that that are impacted by that .

Speaker #5: So we wouldn't expect any hit to our AG portfolio . Certainly this year . And hopefully , obviously , things over there don't persist beyond this .

Mark A. Klein: Brian, I have to go on record and reiterate our credit culture, which is we're never going to get enough of yield to compensate for an undue amount of risk. We walk away from some deals. We could grow, I think we could grow, Steve, in the low double digit easily if we wanted to, but we stay pretty disciplined. We like our credit quality, and we know the effect it potentially is going to have on profitability, should we lose what we've worked hard to get.

Mark Klein: Brian, I have to go on record and reiterate our credit culture, which is we're never going to get enough of yield to compensate for an undue amount of risk. We walk away from some deals. We could grow, I think we could grow, Steve, in the low double digit easily if we wanted to, but we stay pretty disciplined. We like our credit quality, and we know the effect it potentially is going to have on profitability, should we lose what we've worked hard to get.

Speaker #1: Year . And Brian , I have to go on record and reiterate , you know , our credit culture , which is we're never going to get enough of yield to compensate for an undue amount of risk .

Speaker #1: We walk away from some deals we could grow . I think we could grow . Steve , in the low double , double digit , easily .

Speaker #1: If we if we wanted to . But we stay pretty disciplined . We like our credit quality and we know the effect that potential is going to have on profitability .

Speaker #1: Should we lose what we've worked hard to get?

Steven A. Walz: Yeah. Certainly, the markets we're in would afford that kind of opportunity, along with our presence there. We walk away from deals that don't make sense for our credit culture.

Steve Walz: Yeah. Certainly, the markets we're in would afford that kind of opportunity, along with our presence there. We walk away from deals that don't make sense for our credit culture.

Speaker #5: Yeah , certainly the markets we're in would afford that kind of opportunity along with our presence there . But but we are we walk away from from deals that don't make sense for our credit culture .

Brian Martin: Okay. Well, we'll stay tuned for some progress in the other markets. Maybe just Tony, on the margin. Just the liquidity that you have today, I know you've talked about competition. At least the liquidity you have today seems to give you a little cover on the potential deposit competition. Just, can you talk about how you feel about the margin here in kind of the next couple of quarters, just in the backdrop of maybe a stable rate environment?

Speaker #4: Okay , well , we'll stay tuned for the other some progress in the other markets . Maybe just Tony on the margin , you know , just the , the liquidity that you have today .

Speaker #4: I know you've talked about competition. At least the liquidity you have today seems to give you a little cover on the potential deposit competition.

Speaker #4: But just, can you talk about how you feel about the margin here in the next couple of quarters? Just in the backdrop of maybe a stable rate environment?

Anthony V. Cosentino: Yeah. We're down, call it 5 points, 5 basis points from the linked quarter, which is really a function of being very liquid. We did a lot of deposit growth, $65 million in the quarter. We didn't really go out and were terribly aggressive on the rate side. Even in the new markets, that we're maybe 25 basis points above market, nothing crazy. I do think there's been a little bit of, call it parking of money, a little bit in the markets, and we were the benefactor of that. A number of the new clients that we've gotten via disruption have been some deposit dollars that we've gotten. I do think liquidity will wane a little bit here in the coming quarters. We've already started to get a little bit stickier on deposit pricing, not really matching on some aggressive rates.

Tony Cosentino: Yeah. We're down, call it 5 points, 5 basis points from the linked quarter, which is really a function of being very liquid. We did a lot of deposit growth, $65 million in the quarter. We didn't really go out and were terribly aggressive on the rate side. Even in the new markets, that we're maybe 25 basis points above market, nothing crazy. I do think there's been a little bit of, call it parking of money, a little bit in the markets, and we were the benefactor of that.

Speaker #6: Yeah . I mean , you know , we're down , call it five points , five basis points from the linked quarter , you know , which is really a function of being very liquid .

Speaker #6: You know , we did a lot of deposit growth , 65 million in the quarter . We didn't really go out and , and were terribly aggressive on , on the rate side , you know , even in the new markets , you know , we're maybe 25 basis points above , above market , nothing , nothing crazy .

Speaker #6: I do think there's been a little bit of call it parking of money a little bit in the markets . And we were the benefit benefactor of that and a number of the new clients that we've gotten via disruption have been , you know , some deposit dollars that we've gotten .

Tony Cosentino: A number of the new clients that we've gotten via disruption have been some deposit dollars that we've gotten. I do think liquidity will wane a little bit here in the coming quarters. We've already started to get a little bit stickier on deposit pricing, not really matching on some aggressive rates.

Speaker #6: I do think , you know , liquidity will will wane a little bit here in the coming quarters . And , you know , we've already started to get a little bit stickier on on deposit pricing , you know , not really matching on , on some , some aggressive rates .

Anthony V. Cosentino: I do think we're in a pretty good spot. I do think 347 is probably going to move up a few basis points here in Q2. Just because I think we'll get back to having, call it $15 to 20 million of loan growth in the quarter versus the kind of the $1 million we had in the quarter that we just finished.

Tony Cosentino: I do think we're in a pretty good spot. I do think 347 is probably going to move up a few basis points here in Q2. Just because I think we'll get back to having, call it $15 to 20 million of loan growth in the quarter versus the kind of the $1 million we had in the quarter that we just finished.

Speaker #6: So I do think we're in a pretty good spot . I do think , you know , 347 , you know , is probably going to move up a few basis points here in the second quarter .

Speaker #6: Just because I think we'll get back to having , you know , call it 15 to 20 million of loan growth in the quarter versus , you know , the kind of the 1 million we had in the quarter that we just finished .

Brian Martin: Okay. In terms of the cost of deposits, I guess you still think that we're trending higher from here than lower in terms of thinking about that as you go into next year with the competition?

Speaker #4: Okay . And in terms of the cost of deposits , I guess you still think that we're we're trending higher from here than lower in terms of , you know , thinking about that as you go into next year with the competition .

Anthony V. Cosentino: Yeah. I've been pretty confident that deposit costs would trend higher, and they continue to trend a bit lower. I've missed that so far, but I still believe the market disruption we've had. I don't think that's going to continue. I do think those competitors are going to become aggressive, and they're certainly. I've read their earnings release. They're certainly focused on growing loans. They're going to have to fund it.

Tony Cosentino: Yeah. I've been pretty confident that deposit costs would trend higher, and they continue to trend a bit lower. I've missed that so far, but I still believe the market disruption we've had. I don't think that's going to continue. I do think those competitors are going to become aggressive, and they're certainly. I've read their earnings release. They're certainly focused on growing loans. They're going to have to fund it.

Speaker #6: Yeah . I mean , I've been I've been pretty confident that deposit costs would trend higher . And they continue to trend a bit lower .

Speaker #6: So I've missed that so far . But I still believe , you know , the market disruption we've had . I don't think that's going to continue .

Speaker #6: I do think those those competitors are going to you know , become aggressive and and they're certainly in I've read their earnings release , they're certainly focused on growing loans .

Mark A. Klein: I think, Tony, you would agree that deviating from CRE a bit to more ag-based C&I brings that deposit base that we're-

Mark Klein: I think, Tony, you would agree that deviating from CRE a bit to more ag-based C&I brings that deposit base that we're-

Speaker #6: They're going to have to fund it.

Speaker #1: And I think , you would agree that deviating from CRE a bit to more ag based C and I brings that deposit base that we're very , very happy about that we didn't have prior to six months ago .

Anthony V. Cosentino: Yes

Tony Cosentino: Yes

Mark A. Klein: ... very, very happy about that we didn't have prior to six months ago. Not only are we acquiring some of those balances, the full relationship comes with deposits, which has been a real needle mover.

Mark Klein: ... very, very happy about that we didn't have prior to six months ago. Not only are we acquiring some of those balances, the full relationship comes with deposits, which has been a real needle mover.

Speaker #1: So not only are we acquiring , acquiring similar balances , the full relationship comes with deposits , which has been a real needle mover .

Brian Martin: Okay.

Anthony V. Cosentino: Absolutely.

Tony Cosentino: Absolutely.

Brian Martin: Yeah. Okay. In terms of the mortgage outlook, or just kind of big picture, I think you talked about it being 20% or 25%. I think that was a production maybe next quarter, but just bigger picture, kind of where rates are today and kind of what you're seeing in terms of the outlook for mortgage. Maybe full year or just kind of zooming out a bit, just bigger picture, kind of how you're thinking about it.

Speaker #4: Okay .

Speaker #6: Absolutely

Speaker #4: Okay . And then terms of , you know , the , the mortgage outlook , you know , or just kind of big picture , I think you talked about it being 20 or 25% .

Speaker #4: I think that was a production maybe next quarter , but just bigger picture kind of where rates are today and kind of what you're seeing in terms of the outlook for mortgage , you know , maybe full year , just kind of zooming out a bit , just bigger picture , kind of how you're thinking about it .

Mark A. Klein: Well, Brian, do you want my number or do you want Tony's number, because I'm still landing on the $350 million number, just because I thought we were going to get a little bit of a play in the 10-year, which as we all know, has been temporarily disrupted. That's going to be a bit of a fly in the ointment here going forward. We just hired a couple new high-producing MLOs in some of our urban markets, gaining some traction and a little more representation in some of our legacy markets. We know that the average production is going down, which is why we brought on more MLOs. When we get closer to 30, and they do $12 to 14 million on average, because we have some high producers, it's the 80/20 rule. 80% comes from 20% of the producers.

Mark Klein: Well, Brian, do you want my number or do you want Tony's number, because I'm still landing on the $350 million number, just because I thought we were going to get a little bit of a play in the 10-year, which as we all know, has been temporarily disrupted. That's going to be a bit of a fly in the ointment here going forward. We just hired a couple new high-producing MLOs in some of our urban markets, gaining some traction and a little more representation in some of our legacy markets.

Speaker #1: Well , Brian , do you want my number or do you want Tony's number or his number ? You know , cause I , I'm , I'm , I'm , I'm still landing on the 350 million number just because I thought we were going to get a little bit of a play in the ten year , which is , as we all know , has been temporarily disrupted .

Speaker #1: So that's going to be a bit of a fly in the ointment here going forward. But we just hired a couple of new high-producing MLOs in some of our urban markets, gaining some traction and a little more representation than some of our legacy markets.

Mark Klein: We know that the average production is going down, which is why we brought on more MLOs. When we get closer to 30, and they do $12 to 14 million on average, because we have some high producers, it's the 80/20 rule. 80% comes from 20% of the producers.

Speaker #1: So we know that the average production has gone down , which is why we brought on more mlos . So when we get closer to 30 and they do 12 to 13 , 14 million on average , because we have some high producers , it's the 80/20 rule .

Mark A. Klein: I'm still pretty optimistic that we can deliver something closer to that 350 to 400 number. I'm sure Tony's got a different number.

Mark Klein: I'm still pretty optimistic that we can deliver something closer to that 350 to 400 number. I'm sure Tony's got a different number.

Speaker #1: You know, 80% comes from 20% of the producers. But I'm still pretty optimistic that we can deliver something closer to that.

Speaker #1: 350 to 400 number. But I'm sure Tony's got a different number.

Anthony V. Cosentino: Yeah. I think March, we did 45% of our total Q1 volume. I was very pleased with how the quarter ended. We did just shy of $30 million in the month of March. Our pipeline's kind of at that $35 million number. I think we're going to do 90-ish type million in Q2, and I would suspect we're going to repeat that probably in Q3 if things are where they are. As Mark said, I'm encouraged that we're able to hire some high-performing folks in various markets. That tells you that our model is still working and that the volume's out there. That would kind of put you on pace to get to $310 to 325 million on kind of the high end for the full year, and I think rates are going to be relatively stable where they are.

Tony Cosentino: Yeah. I think March, we did 45% of our total Q1 volume. I was very pleased with how the quarter ended. We did just shy of $30 million in the month of March. Our pipeline's kind of at that $35 million number. I think we're going to do 90-ish type million in Q2, and I would suspect we're going to repeat that probably in Q3 if things are where they are. As Mark said, I'm encouraged that we're able to hire some high-performing folks in various markets. That tells you that our model is still working and that the volume's out there.

Speaker #6: Yeah , I think you know , you know , March , we did 45% of our total , you know , first quarter volume .

Speaker #6: So I was very pleased with , you know , how the quarter ended . You know , we did just shy of 30 million in the month of March .

Speaker #6: You know , our pipeline is kind of at that $35 million number . I think we're going to do . 90 ish type million in the second quarter .

Speaker #6: And I would suspect we're going to repeat that probably in the third quarter . If if things are where they are , as Mark said , you know , I'm encouraged that we're able to hire some high performing folks in various markets that tells you that our model is still working and that the volumes out there .

Tony Cosentino: That would kind of put you on pace to get to $310 to 325 million on kind of the high end for the full year, and I think rates are going to be relatively stable where they are.

Speaker #6: So that would kind of put you on pace to get to three , 10 to 325 , you know , on the on kind of the , the high end .

Speaker #6: So for the full year and , you know , I think rates are going to be relatively stable where they are . I mean , the , the mortgage rates have fought back against , I would call it the increase in the long end of the curve .

Anthony V. Cosentino: The mortgage rates have fought back against, I would call it, the increase in the long end of the curve. As long as we're at 6 or 5 7/8, I think we can hang in there. You're starting to see a lot of the secondary people really get aggressive to try to get volume on. The FHLB is getting aggressive on doing very low rate type opportunities to sell. We're going to be participating in all of those, which I think inures to our benefit.

Tony Cosentino: The mortgage rates have fought back against, I would call it, the increase in the long end of the curve. As long as we're at 6 or 5 7/8, I think we can hang in there. You're starting to see a lot of the secondary people really get aggressive to try to get volume on. The FHLB is getting aggressive on doing very low rate type opportunities to sell. We're going to be participating in all of those, which I think inures to our benefit.

Speaker #6: And as long as we're at 6 or 5 and 7/8 , I think we can hang in there . You're starting to see a lot of the of the secondary people really get aggressive to try to get volume on the Fhlb is getting aggressive on doing very low rate type opportunities to sell .

Speaker #6: And so we're going to be participating in all of those, which I think inures to our benefit.

Mark A. Klein: Tony, said differently, you don't think Warsh is going to bend to every whim of President Trump and drop rates to get us something below 4 in a 10-year?

Mark Klein: Tony, said differently, you don't think Warsh is going to bend to every whim of President Trump and drop rates to get us something below 4 in a 10-year?

Speaker #1: So Tony , differently , you don't think Warsh is going to bend to every whim of President Trump and drop rates to get us get us something below four and a ten year .

Anthony V. Cosentino: I do think it'll get there by the end of the year, but I don't know that it'll be that aggressive.

Tony Cosentino: I do think it'll get there by the end of the year, but I don't know that it'll be that aggressive.

Speaker #6: I wouldn't. I do think it'll get there by the end of the year, but I don't know that it'll be that aggressive.

Mark A. Klein: I'm hopeful, Brian, that we'll get a play on the 10-year. I'm still optimistic with that. Again, with the larger balance sheet, it's the gift that keeps on giving every month. You don't have to do $100 million in mortgages every month. We got the balance sheet size, and we got the operating revenue now.

Mark Klein: I'm hopeful, Brian, that we'll get a play on the 10-year. I'm still optimistic with that. Again, with the larger balance sheet, it's the gift that keeps on giving every month. You don't have to do $100 million in mortgages every month. We got the balance sheet size, and we got the operating revenue now.

Speaker #1: I'm hopeful , Brian , that we'll get a play on the ten year . I'm still optimistic with that . But again with the larger balance sheet , it's the gift that keeps on giving .

Speaker #1: Every month . You just don't have to , you know , don't have to do 100 million mortgages every month . We , we got the balance sheet size and we got the operating revenue .

Brian Martin: Yeah. The mortgage folks you hired, you're still planning to hire more, but those were in metro markets? Or what markets did you add people in?

Speaker #1: Now .

Speaker #4: Yeah . And the mortgage folks , you hired , you , you're still planning to hire more , but those were in metro markets or what , what markets did you add people in .

Mark A. Klein: Yes. We've added one in Cincinnati and Indianapolis, and we've got a couple other individuals that are considering, which has been kind of a gap for us in some of our legacy markets. Findlay's been a gap for us. We've had enough people, Brian, to cover all those markets. It's not like we haven't had anybody there. We just haven't had anybody that lives, works, plays, and does their thing in the market, which is more accretive to all the business lines if you have people that work, play, and live right there, like Angola. We're currently hunting down somebody in Angola market. We're committed to the business line. We love the gain on sale, but getting another household with more products and services is a big deal.

Mark Klein: Yes. We've added one in Cincinnati and Indianapolis, and we've got a couple other individuals that are considering, which has been kind of a gap for us in some of our legacy markets. Findlay's been a gap for us. We've had enough people, Brian, to cover all those markets. It's not like we haven't had anybody there. We just haven't had anybody that lives, works, plays, and does their thing in the market, which is more accretive to all the business lines if you have people that work, play, and live right there, like Angola.

Speaker #1: Yes, we've added one in Cincinnati and Indianapolis, and we've got a couple other individuals that are considering, which has been kind of a gap for us in some of our legacy markets.

Speaker #1: Findlay's been a gap for us . But , you know , we've had enough of people trying to cover all those markets . So , you know , it's not like we haven't had anybody there .

Speaker #1: We just haven't had anybody that lives, works, plays, and does their thing in the market, which is more accretive to all the business lines.

Mark Klein: We're currently hunting down somebody in Angola market. We're committed to the business line. We love the gain on sale, but getting another household with more products and services is a big deal.

Speaker #1: If you have people that work, play, and live right there, like Angola. We're currently hunting down somebody in the Angola market, so we're committed to the business line.

Speaker #1: We love the gain on sale, but getting another household with more products and services is a big deal.

Brian Martin: Yeah. Okay. How about just last two for me, just on expenses. Big picture, how you're thinking about the full year, just ebbs and flows here. Any initiatives or things to take it off, kind of the current run rate? Or is the current run rate kind of a decent level to think about here in the coming quarters?

Speaker #4: Yeah . Okay . And then how about just the last two for me ? Just on expenses . Big picture . You know how you're thinking about , you know , the full year , just ebbs and flows here .

Speaker #4: Any initiatives or things that take it off ? You know , kind of the current run rate or the current run rate , kind of a decent , decent level to think about here in the coming quarters .

Anthony V. Cosentino: I do think the run rate is in pretty good shape. We've had some opportunities here, I think, as we've seen some opportunities in the market that we've consolidated some areas in our operational sections, and we've made some efficiencies, which I think will continue to help us. I think the bulk of our technology spend on new things is kind of in the rear-view mirror a little bit. We do have the conversion to Fiserv that's going to happen here at the end of the year that I think will be a net zero in 2026, will be a bit of a headwind as we go into 2027 as we try to find some opportunities. I'm very hopeful on the expense side.

Tony Cosentino: I do think the run rate is in pretty good shape. We've had some opportunities here, I think, as we've seen some opportunities in the market that we've consolidated some areas in our operational sections, and we've made some efficiencies, which I think will continue to help us. I think the bulk of our technology spend on new things is kind of in the rear-view mirror a little bit.

Speaker #6: I , I do think , you know , the , the run rate is in pretty good shape . I mean , we've had some opportunities here .

Speaker #6: I think as we as we've seen some opportunities in the market that we've consolidated some areas in our operational sections , and we've made some efficiencies , which I think will continue to help us .

Speaker #6: I think the bulk of our technology spend on new things is kind of in the rearview mirror a little bit. We do have the conversion of Fiserv that's going to happen here at the end of the year that I think will be a net zero in '26.

Tony Cosentino: We do have the conversion to Fiserv that's going to happen here at the end of the year that I think will be a net zero in 2026, will be a bit of a headwind as we go into 2027 as we try to find some opportunities. I'm very hopeful on the expense side.

Speaker #6: And, you know, will be a bit of a headwind as we go into '27 as we try to find some opportunities.

Speaker #6: So I'm very hopeful on on the expense side , you know , we as we've gotten bigger , we've founded more opportunities to do things and to do more with less , which I think is what we need to get to continually every month .

Anthony V. Cosentino: As we've gotten bigger, we've found more opportunities to do things than to do more with less, which I think is what we need to get to continually every month.

Tony Cosentino: As we've gotten bigger, we've found more opportunities to do things than to do more with less, which I think is what we need to get to continually every month.

Brian Martin: Got you. Okay. In capital, you said, Tony, the buyback's a little bit lower, but I guess it's the near term is, I think you talked about the sub-debt and then maybe potentially M&A. Is that kind of how to think about capital deployment today or just what you're doing there?

Speaker #4: Gotcha . Okay . And capital , you said , Tony , the buybacks a little bit lower , but I mean , I guess it's , you know , the the near term is I think you talked about the sub debt and then maybe potential M&A is that kind of where , you know , how to think about capital deployment today or just , you know , what you're what you're doing there ?

Anthony V. Cosentino: Yeah, I think so. I think we've obviously been very aggressive on the buyback, and I still think it's a great use of our internal generated capital. But it's come at the price where it is today that I think we can afford to slow down a bit. We do have the sub-debt here in June, and we've got to think about some things. Then we have a lot of opportunities to deploy. If we do another $160 million, which I don't anticipate, of asset growth in 2026 like we did in 2025, we're going to be stressed a little bit on regulatory capital. We've got to be cognizant of that in our rear-view mirror.

Tony Cosentino: Yeah, I think so. I think we've obviously been very aggressive on the buyback, and I still think it's a great use of our internal generated capital. But it's come at the price where it is today that I think we can afford to slow down a bit. We do have the sub-debt here in June, and we've got to think about some things. Then we have a lot of opportunities to deploy. If we do another $160 million, which I don't anticipate, of asset growth in 2026 like we did in 2025, we're going to be stressed a little bit on regulatory capital.

Speaker #6: Yeah , I , I think so I think , you know , we've , we were , we've obviously been very aggressive on the buyback .

Speaker #6: And I still think it's a great use of our internally generated capital, you know, but it's kind of at the price where it is today that I think we can afford to slow down a bit.

Speaker #6: We do have the sub debt here in June that we've got to think about some things. And then we have a lot of opportunities to deploy.

Speaker #6: And if we do another $160 million, which I don't anticipate, of asset growth in '26 like we did in '25, we're going to be stressed a little bit on regulatory capital.

Tony Cosentino: We've got to be cognizant of that in our rear-view mirror.

Speaker #6: So we've got to be cognizant of that in our rearview mirror.

Mark A. Klein: On M&A, Brian, we continue to keep our ear to the ground. That's downstream as well as middle stream and everything in the middle and everything above. Nothing transformative at this point, other than we know that organic is great, but clearly M&A is divine. We continue to look at opportunities that are in the region.

Mark Klein: On M&A, Brian, we continue to keep our ear to the ground. That's downstream as well as middle stream and everything in the middle and everything above. Nothing transformative at this point, other than we know that organic is great, but clearly M&A is divine. We continue to look at opportunities that are in the region.

Speaker #1: And on M&A , Brian , we continue to keep our ear to the ground . That's downstream as well as middle stream and everything in the middle and everything above .

Speaker #1: But , but nothing transformative at this point . Other than we know that organic is great , but clearly M&A is divine . So we continue to look at opportunities that are in the region .

Brian Martin: Gotcha. In credit, all sounds good. I know a little bit of it, I guess improvement or just continued success on the credit front. Nothing really causing any problems in terms of things you're seeing out there in terms of risk?

Speaker #4: Gotcha . And credit all sounds good . You know no a little bit of you know I guess improvement I guess , or just continued , success on the credit front .

Speaker #4: Nothing, nothing really causing any problems in terms of, you know, things you're seeing out there in terms of risk.

Mark A. Klein: Yeah. No. Again, from a high level, we like to think. When you have a downturn, as we all know, that's when you get a good idea of your underwriting administration. As we all know, we haven't had really much of a downturn. Our clients' balance sheets are pretty liquid. We get personal guarantees. We rely on makers. We have good projects in urban markets. Generally all is good, but as we all know, you have it until you don't. So we're pretty cautious on the risk we take and the deals we do. As I mentioned, if we wanted to really light it up, we've got great opportunities because we have 17 different lenders running around out there trying to find deals.

Mark Klein: Yeah. No. Again, from a high level, we like to think. When you have a downturn, as we all know, that's when you get a good idea of your underwriting administration. As we all know, we haven't had really much of a downturn. Our clients' balance sheets are pretty liquid. We get personal guarantees. We rely on makers. We have good projects in urban markets. Generally all is good, but as we all know, you have it until you don't. So we're pretty cautious on the risk we take and the deals we do.

Speaker #1: Yeah . No , again , from a high level , we , you know , we , we like to think we've , you know , when you have a downturn , as we all know , that's when you , you know , get a good idea of , of your underwriting administration .

Speaker #1: And as we all know , we haven't had really much of a downturn . You know , our , our clients balance sheets are pretty liquid .

Speaker #1: We get personal guarantees . We rely on makers , we have good projects in urban markets , you know , generally all is good .

Speaker #1: But as we all know, you have it until you don't. So we're pretty, pretty cautious on the risk we take and the deals we do.

Mark Klein: As I mentioned, if we wanted to really light it up, we've got great opportunities because we have 17 different lenders running around out there trying to find deals.

Speaker #1: And as I mentioned, if we wanted to really light it up, we've got great opportunities because we have 17 different lenders running around out there trying to find deals.

Mark A. Klein: What our job is, Steve, myself, and Tony, is to pull back on the reins to make sure we keep this thing measured and we keep it on the tracks. Steve, any more perspective on credit quality?

Mark Klein: What our job is, Steve, myself, and Tony, is to pull back on the reins to make sure we keep this thing measured and we keep it on the tracks. Steve, any more perspective on credit quality?

Speaker #1: So what our job is Steve and me , Steve , myself and Tony is pulled back on the reins to make sure , you know , we keep this thing measured and we keep it on the tracks .

Steven A. Walz: Yeah, no, certainly I echo everything you said, Mark. We've talked about previously, Brian. The stability of our asset quality, those credits we're working through, it's not a function of turnover and new credits coming into our non-accrual loans. It's kind of the same ones we've talked about in the past. Unfortunately, the wheels of justice grind a little more slowly than we might like. As Tony referenced, we did get control of one of those pieces of collateral that we are very confident in our position on all those credits.

Steve Walz: Yeah, no, certainly I echo everything you said, Mark. We've talked about previously, Brian. The stability of our asset quality, those credits we're working through, it's not a function of turnover and new credits coming into our non-accrual loans. It's kind of the same ones we've talked about in the past. Unfortunately, the wheels of justice grind a little more slowly than we might like. As Tony referenced, we did get control of one of those pieces of collateral that we are very confident in our position on all those credits.

Speaker #1: And Steve, any more perspective on credit quality?

Speaker #5: Yeah . No , certainly I echo everything you said , Mark , we've talked about previously , Brian , the , the stability of our asset quality , you know , those credits we're working through , it's not a function of turnover and new credits coming into our Non-accrual loans .

Speaker #5: It's kind of the same , same ones we've talked about in the past . Unfortunately , the wheels of justice grind a little more slowly than we might like .

Speaker #5: The Tony referenced . We did get control of of a , of one of those pieces of collateral that we are very confident in our position in all those credits where we think we are , and we're going to get out where we're ultimately we belong .

Mark A. Klein: Where we think we are and we're going to get out where ultimately we belong.

Steve Walz: Where we think we are and we're going to get out where ultimately we belong.

Brian Martin: Okay, a bit more progress there. Last one, Tony, I meant to ask you had commented earlier, the deposit growth and the liquidity, I guess, do deposits maybe tail off a bit here given kind of what you've gotten some good growth, but maybe, I guess, it sounds like some money may be going out the door, but just how are you thinking about deposit growth from here?

Speaker #4: Okay , so a bit more progress here . And last one , Tony , I meant to ask you , you commented earlier , somebody just the deposit growth and the liquidity , I guess does do deposits .

Speaker #4: Maybe tail off a bit here . Given , you know , kind of what you've gotten some good growth , but I guess is that a it sounds like some money may be going out the door , but just how are you thinking about deposit growth from here ?

Anthony V. Cosentino: Yeah, I do think we're going to have a down quarter in Q2 on the deposit side. We already know of some kind of larger relationships that are moving out through normal business cases. I don't think we'll have enough to overcome that on the retail side. I do think we're probably going to be at the 90% loan to deposit ratio here in the rest of the year, and I think that's a comfort level for us. I don't think we need to be overly priced on the deposit side to get there. I think we're only nervous about liquidity if the loan pipeline gets to be on the upper end of our range. I think we're comfortable at mid to high single digits and funding that based upon all the things that we've got going on.

Tony Cosentino: Yeah, I do think we're going to have a down quarter in Q2 on the deposit side. We already know of some kind of larger relationships that are moving out through normal business cases. I don't think we'll have enough to overcome that on the retail side. I do think we're probably going to be at the 90% loan to deposit ratio here in the rest of the year, and I think that's a comfort level for us. I don't think we need to be overly priced on the deposit side to get there.

Speaker #6: Yeah , I think I do think , you know , we're going to have a down quarter in , in the second quarter on the deposit side , we already know of some kind of larger relationships that are that are , you know , moving , moving out through normal business cases .

Speaker #6: So , you know , I don't think we'll have enough to overcome that on the retail side . So I do think , you know , we're probably going to be at the 90% loan to deposit ratio here in the rest of the year .

Speaker #6: And I think that's a comfort level for us. I don't think we need to be overly priced on the deposit side to get there.

Tony Cosentino: I think we're only nervous about liquidity if the loan pipeline gets to be on the upper end of our range. I think we're comfortable at mid to high single digits and funding that based upon all the things that we've got going on.

Speaker #6: And you know , I think we're only nervous about liquidity if , you know , the loan pipeline gets to be on the upper end of our of our range .

Speaker #6: You know, I think we're comfortable with it at mid- to high single digits and funding that based upon all the things that we've got going on.

Anthony V. Cosentino: If we get above that level is when we might have some stress.

Tony Cosentino: If we get above that level is when we might have some stress.

Speaker #6: And if we get above that level is when we might have some stress.

Mark A. Klein: My only comment, Brian, is I don't think we want to downplay or trivialize the market disruption, which has been absolutely wonderful for us because we've garnered relationships that we never would have probably been able to bring over to our company as a result of that. That's really just begun. It's not like it's ending. We're nine months into our plan to find more of disrupted companies' assets, and we're at that $110 million number. We're cruising along to our strategic goal of $ a few hundred million. A lot of opportunities and a bigger job to be done.

Mark Klein: My only comment, Brian, is I don't think we want to downplay or trivialize the market disruption, which has been absolutely wonderful for us because we've garnered relationships that we never would have probably been able to bring over to our company as a result of that. That's really just begun. It's not like it's ending. We're nine months into our plan to find more of disrupted companies' assets, and we're at that $110 million number. We're cruising along to our strategic goal of $ a few hundred million.

Speaker #1: My only comment, Brian, is I don't think we want to downplay or trivialize the market disruption, which has been absolutely wonderful for us, because we've garnered relationships that we never would have probably been able to bring over to our company as a result of that.

Speaker #1: And that is just that's really just begun . It's not like it's ending . We're nine months into our to our plan to find more of , of disruptive companies , assets .

Speaker #1: And , you know , we're at that 100 and 110 million number . So , you know , we're cruising along to our strategic goal of a few hundred million .

Mark Klein: A lot of opportunities and a bigger job to be done.

Speaker #1: So, a lot—a lot of opportunities and a bigger job to be done.

Brian Martin: Got you. Okay. Well, thanks for taking the questions, guys. I appreciate it.

Mark A. Klein: All right. Thanks, Brian.

Mark Klein: All right. Thanks, Brian.

Speaker #4: Gotcha . Okay . Well , thanks for taking the questions , guys . I appreciate it .

Anthony V. Cosentino: See you, Brian.

Tony Cosentino: See you, Brian.

Operator: This concludes our question and answer session. I would like to turn the conference back over to Mr. Mark A. Klein for any closing remarks.

Speaker #1: All right. Thanks, Ryan.

Speaker #6: See you . Brian

Speaker #3: This concludes our question-and-answer session. I would like to turn the conference back over to Mr. Mark Klein for any closing remarks.

Mark A. Klein: Thank you. Thanks for joining us this morning. We certainly look forward to having you join us in July for our Q2 2026 results. Thanks for joining us. Goodbye. Have a great day.

Mark Klein: Thank you. Thanks for joining us this morning. We certainly look forward to having you join us in July for our Q2 2026 results. Thanks for joining us. Goodbye. Have a great day.

Speaker #1: Thank you . And again , thanks for joining us this morning . We certainly look forward to having you join us in July for our second quarter of 2026 results .

Speaker #1: Thanks for joining us. Goodbye. Have a great day.

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

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