United Bancorporation of Alabama, Inc.

Good morning, and welcome to our quarter United Bank earnings call. I'm Brian Brule, and joined by our panelists, President and CEO Mike Benson, Chief Credit Officer David Stewart, and Chief Financial Officer Leanne Jones. We'll be taking questions through the Q&A function of your app this morning, whether at the top or bottom of your screen, and we'll be monitoring that feature throughout the call. So with that, turn it over to you, Mike.

Great. Thank you, Brian. Good morning, everyone, and thank you for joining our call once again. This is our Q4 2025 recap. We'll go over some of the high points for the fourth quarter and for 2025. So for the quarter, United Bank reported net income of $3.7 million, and that's an earnings per share of $1.15 million. That is compared to $6.9 million in earnings per share of $2 for the same period last year. On a year-to-date basis, that is net income of $17.2 million, earnings per share of $5.23. and that is compared to the prior year of $26.9 million and earnings per share of $7.65. We'll get into some of the details of that throughout the call, but one thing that you'll hear as you compare year-over-year numbers is some of the differences in the CDFI programs, some of the grant programs that we were able to participate in in 2024 that were not available in 2025. One thing that we're happy to report is the continued strong and stable net interest margin of 455. That has been a hallmark of this bank for quite some time and our ability to continue keeping strong margins. One highlight that we wanted to recognize is our continued stock repurchase program. During the quarter, we acquired 176,000 shares. That's a total of 328,000 shares during the year overall. And then one last highlight regarding UBCD, one of our subs, was their award of $75 million in new market tax credit allocation. That's a number of years in a row for that group, and we're very pleased and excited that they're able to continue some of the good work that they've been able to do so far. So, with that, David, I'll turn it over to you, and maybe you can talk a little bit about the loan book.

Sure. Thank you, Mike. Good morning, everyone. Good to be with you all again. Just a little summary, year-over-year growth was right at 2.4% or $20.9 million. Down a little bit from the last couple of years, a few things were going on, particularly in the fourth quarter. If you guys were watching that multifamily construction budget, that declined by about $10 million. I think we've talked about that in the past. We have a very active affordable housing group that does a lot of construction lending for families. Those low-income housing projects, we got caught where we have several projects coming to stabilization for a year and going out to the permanent financing with housing tax credits. So that reported that significant decline that we saw earlier. Also, if you were watching sort of buckets between call codes, you saw some vacillation. There was a cleanup that we did internally in credit during the fourth quarter of moving some of the call codes from the construction bucket over into the commercial real estate perm loan bucket. So there was a pretty big swing that you might have noticed, and that was related to some of the call code cleanup to make sure we had everything aligned properly within those buckets. But all in all, you know... Decent year. We're looking forward to next year. We did have strong closings in the fourth quarter for some construction-related items with the affordable housing groups. So we're looking forward to good things and also good news with the new markets allocation for UBCD and the associated loan growth we typically see with funding those allocations and those projects as well. A couple of highlights that I wanted to note. Non-accruals was up. That was related to two large relationships we put on non-accrual at the end of the year. We're sort of back in that range where we were towards the end of 2024 in Q3 and Q4 of 2024. So non-accruals are higher than we would like them to be. However, that's allocated to three large relationships, which make up about 89% of that non-accrual total. We're actively working through those credits and seeking resolution. Also, non-performance as well, non-performance assets was up. Related to the same thing as well, NPA ratios at 1.12 net of the government guarantees. So we're going to be spending a lot of our time focusing on that in Q1 and Q2 to bring those down for the bank. In terms of ORE, it's remained unchanged at 1.3%. Again, that's the focus of mine, working those through. We've got some things that are out being marketed and spending a little dollars in terms of some advertising to make sure those get moved off the balance sheet. Last highlight, just wanted to – the allowance for credit loss remains good at 1.32% or $11.7 million. We spend a significant amount of time working through the CECL model each quarter and are confident with that result and that reserve. So that's all I have from my seat as Chief Credit Officer. So I'll pass it on to Leanne for the securities overview.