F.N.B. Corporation (NYSE: FNB) Q4 2025 Earnings Call dated Jan. 21, 2026
Corporate Participants:
Lisa Hajdu — Manager of Investor Relations
Vincent J. Delie — Chairman, President and Chief Executive Officer
Vincent J. Calabrese — Chief Financial Officer
Gary L. Guerrieri — Chief Credit Officer
Analysts:
Unidentified Participant
Daniel Tamayo — Analyst
Russell Gunther — Analyst
Kelly Motta — Analyst
Brian Martin — Analyst
Presentation:
operator
Good morning everyone. Thank you for joining this morning’s FMB Corporation conference call. The call will begin momentarily. We do thank you for joining. Please stay on the line. If you do need assistance, please press star and zero once again. The call will begin here in just a few minutes. Thank you. Good morning everyone and welcome to the FMB fourth quarter 2025 earnings conference call. All participants will be in a listen only mode. Should you need assistance, please signal a. Conference specialist by pressing the star key followed by zero. After today’s presentation there will be an opportunity to ask questions. To ask a question you may press STAR and then one on your touchtone phones. To withdraw your questions you may press STAR and two. Please also note that today’s event is being recorded at this time. I’d like to turn the conference call over to Lisa Haidu, Manager of Investor Relations. Ma’, Am. Please go ahead.
Lisa Hajdu — Manager of Investor Relations
Good morning and welcome to our earnings call. This conference call of FMB Corporation and the reports it files with the securities and Exchange Commission often contain forward looking statements and non GAAP financial measures. Non GAAP financial measures should be viewed in addition to and not as an alternative for our reported results prepared in accordance with gaap. Reconciliations of GAAP to non GAAP operating measures to the most directly comparable GAAP financial measures are included in our presentation materials and in our earnings release. Please refer to these non GAAP and forward looking statement disclosures contained in our related materials reports and registration statements filed with the securities and Exchange Commission and available on our corporate website.
A replay of this call will be available until Wednesday, January 28th and the webcast link will be posted to the About Us Investor Relations section of our corporate website. I will now turn the call over to Vince Dille, Chairman, President and CEO.
Vincent J. Delie — Chairman, President and Chief Executive Officer
Thank you and welcome to our fourth quarter earnings call. Joining me today are Vince Calabrese, our Chief Financial Officer and Gary Guerrero, our Chief Credit officer. FNB reported fourth quarter operating net income available to common shareholders of 182 million or $0.50 per diluted common share full year. 2025’s operating performance reflected several records including revenue of 1.8 billion, operating net income available to common shareholders Of 577 billion and operating earnings per diluted common share of $1.59 full year. Operating EPS grew 14% year over year driven by the 9% growth in net interest income, significant margin expansion and record non interest income.
We delivered strong profitability and capital metrics with return on average tangible common equity equaling 16% and tangible book value per share of $11.87, an increase of 13% from the year ago quarter. Throughout 2025, we focused on resetting the balance sheet to best position FNB for continued future success including managing loan concentrations as well as improving the loan to deposit ratio to 89.7%. In December, we transferred approximately 200 million of performing residential mortgage loans to held for sale in anticipation of a loan sale to close in the first quarter of 2026. Additionally, as I mentioned on the earnings call a year ago, we have strategically decreased our CRE concentration organically to 197% over the past two years.
We are generating enough capital to support growth across our loan portfolio including CRE and have ample capacity to achieve historical growth rates. Since launching our clickster brick strategy 10 years ago, FMB has introduced innovative solutions including the ESTORE and Common Application that provide an enhanced client experience to deepen relationships and achieve customer primacy. Our comprehensive digital strategy, including our early adoption of AI remains a driving force behind client acquisition, engagement and convenience. This quarter we introduced Payment Switch, which enables customers to easily switch pre authorized payments to their primary checking to FMB through our mobile app.
With Direct Deposit Switch and Payment Switch, we’ve eliminated two of the most common barriers for customers to move their primary banking relationship to fmb. This is another great example of how FMB is leading the industry. With our EStore Clickster brick strategy and comprehensive digital capabilities, we are planning on introducing additional unique features over the coming quarters that will benefit our customers and further differentiate us in the marketplace. Concurrently, FMB continues to expand AI and data analytics usage to drive efficiency and accelerate revenue growth. Through our disciplined expense management culture, FNB has achieved annual cost savings of $10 to $20 million per year since 2019.
Leveraging our investments in technology, AI and data analytics, we expect even higher levels of cost savings in 2026 through increased automation and process improvements. This provides FMB the ability to continue to invest in our revenue generating businesses and and differentiated Omni channel customer experience while continuing to produce meaningful positive operating leverage. With that, I would like to turn the call over to Gary to discuss the strong credit results for the quarter. Gary.
Gary L. Guerrieri — Chief Credit Officer
Thank you Vince and good morning everyone. We ended the quarter and year end with our asset quality metrics remaining at very strong levels. Total delinquency ended the quarter at 71 basis points up 6bps from the prior quarter with NPLs and Oreo down 6bps ending at a multi year low of 31 basis points. Net charge offs totaled 19 basis points and 20 basis points for the year showing continued strong performance throughout an uncertain economic environment, we experienced a further decline of 147 million or 10.2% in criticized loans on a linked quarter basis driven by payoff activity, with decreases again observed throughout all of the commercial segments.
Once again we were pleased with the improvements we saw during the quarter and throughout 2025. Total funded provision expense for the quarter stood at 18.7 million. Supporting the CNI loan growth and charge offs, our ending funded Reserve stands at 440 million, an increase of 2.3 million, ending at 1.26%, up 1 basis point from the prior quarter. When including acquired unamortized loan discounts, our Reserve stands at 1.32% and our NPL coverage position remains strong at 438% inclusive of the discounts. Regarding tariffs, we continue to monitor line utilization and industry concentrations, especially customers with a higher potential impact over the longer term.
Since Q1, we have not seen any material impacts on the loan portfolio and have continued to experience positive credit migration since then. Furthermore, this quarter marked our strongest CNI loan production activity for the year, enabling us to achieve positive net CNI loan growth in the quarter and year over year which offset another decrease in line utilization. Regarding the non owner CRE portfolio, all credit metrics improved quarter over quarter and year over year. With delinquency and NPLs at 34 and 31 basis points respectively, we have successfully managed the CRE risk and exposure to end the year within our desired range as a percentage of our capital base.
We started to see some high quality opportunities during the quarter. However, exits through ongoing secondary market activity resulted in a reduction in exposure. We continue to enhance our concentration risk and allowance for credit loss frameworks and our proprietary credit management tool that provides a comprehensive view of our customer base. Notwithstanding periodic uncertainty in the economic environment, our core credit philosophy and strong credit risk management practices position us to successfully navigate any potential volatility across the various economic cycles. In summary, we continue to be very pleased with the performance of our loan portfolio and our team’s attention to managing risk which has positioned us well for growth in the year ahead.
Building on the strong momentum we saw in the quarter, we continue to focus on core CNI and equipment finance growth with our building pipelines. Additionally, with potential for increases in line utilization, our growth expectations for high quality CRE and our well positioned retail franchise, we look forward to achieving our desired levels of balance sheet growth in the year ahead. I will now turn the call over to Vince Calabrese, our Chief Financial Officer for his remarks.
Vincent J. Calabrese — Chief Financial Officer
Thanks Gary and good morning. Today I will focus on the fourth quarter’s financial results and walk through our guidance. For the first quarter and full year of 2026, fourth quarter operating net income totaled a record 181.8 million or $0.50 per share when excluding a discretionary $20 million charitable contribution to the FMB foundation, partially offset by reduction in the estimated FDIC Special assessment record. Total revenues of nearly 458 million grew a very strong 12.4% on an operating basis and operating pre provision net revenue grew 21.5% from the year ago quarter. The fourth quarter’s performance also includes investment tax credits of 37.2 million from a renewable energy financing transaction, partially offset by related non credit valuation impairment of 4.4 million pre tax on the financing receivable which is included in other non interest expense.
FMB’s equipment finance business originates renewable energy financing transactions is a core element of their business strategy. While we continue to have an active pipeline in the renewable energy sector, certain types of projects are limited by changes in the tax laws. Total assets at year end 2025 exceeded 50 billion for the first time in company history. Fourth quarter average loans and leases of 35 billion increased 169 million from last quarter or 1.9%. Annualized average consumer loans grew 223 million primarily due to higher residential mortgage and consumer line of credit balances. Average commercial loans and leases slightly decreased 54 million linked quarter driven by higher attrition from secondary market activity, lower line utilization and further scheduled reductions in CRE balances.
Average commercial and industrial loans increased 81 million and commercial leases increased 26 million while average commercial real estate loans declined 158 million TRE. Exposure has reached our desired concentration range and combined with record capital levels and a sub 90% loan to deposit ratio provides FNB a meaningful opportunity to participate in an economic environment with more favorable loan growth prospects. As part of our ongoing balance sheet management strategies, approximately 200 million of performing residential mortgage loans were transferred to help for sale late in the fourth quarter, with the actual loan sale expected to close in the first quarter.
Residential mortgage loans are expected to roughly approximate the growth in the overall loan portfolio in 2026. Fourth quarter average deposits totaled 38.6 billion, an increase of 740 million or 7.7%. Linked quarter annualized driven by organic growth in new and existing customer relationships. Average interest bearing demand balances grew strongly, particularly interest bearing checking and money market balances. Average non interest bearing deposits exceeded 10 billion and were up 4.5% linked quarter annualized. The mix of non interest bearing deposits to total deposits on a spot basis remained at 26%. Success of our ongoing balance sheet management strategies and deposit gathering initiatives brought our loan to deposit ratio below 90%, a more than 170 basis point improvement from year end 2024.
Fourth quarter net interest income totaled a record $365.4 million up 1.7% linked quarter and 13.4% above the fourth quarter of 2024. Average earning assets were up 310 million sequentially on higher loan and investment securities balances. The yield on earning assets declined 11 basis points sequentially as variable rate loans were impacted by the 75 basis points of Federal Reserve interest rate cuts Since September of 2025 while the yield on the investment securities portfolio only declined slightly. Interest bearing deposit costs decreased 13 basis points linked quarter to 2.53% and borrowing costs declined 30 basis points to 4.35%.
The resulting fourth quarter net interest margin was 328, up 3 basis points linked quarter and up 24 basis points year over year. Our total cumulative spot deposit beta since the Fed interest rate cuts began in September of 2024 ended the year at 25%. We continue to strategically lower deposit pricing in step with the downward trend in the Fed funds rate and we expect a relatively stable net interest margin in the first quarter 2026. Operating non interest income was 92.3 million, up 8.8% from the year ago period. Wealth management revenues grew 15% from 2024 levels driven by securities commissions and fees and growth across the geographic footprint.
Service charges increased 4.1% from last year reflecting increased contributions from treasury management activities. Increases in SBA sold loan premiums and other miscellaneous gains drove the strong increase in other income and BOLI income was boosted by higher life insurance claims. Capital markets income included higher swap fees and increased international banking revenue despite higher gain on sale and net positive fair value adjustments from hedging activity. Mortgage banking income declined on higher MSR amortization and a net MSR fair value recovery in the fourth quarter of 2024. Operating non interest expense totaled 256.5 million, an 8.3 million or 3.4% increase from the year ago quarter.
Salaries and employee benefits expenses were up 4.5% from the year ago quarter primarily reflecting strategic hiring and higher performance and production related compensation. Outside services increased 15.3% from last year due to higher volume related technology and third party costs and occupancy and equipment increased 7.3% primarily due to technology related investments and higher occupancy costs. Other operating non interest expense decreased 3.3 million and included a financing receivable non credit impairment of 4.4 million from the tax credit transaction mentioned earlier, which was approximately $6 million lower than the impairment recognized for the fourth quarter quarter 2024 tax credit transaction.
The efficiency ratio remains solid at 53.8% for the fourth quarter, 307 basis points better than the fourth quarter of 2024. We continue to manage our expense base in a disciplined manner which is expected to generate significant positive operating leverage in 2026. FMB’s capital levels remained at record levels with a CET1 ratio at 11.4% and tangible common equity ratio at 8.9%, providing flexibility to optimally deploy capital to increase shareholder value on a year over year basis. Tangible book value for common share increased $1.38 or 13.2% to $11.87, demonstrating our strong profitability levels and commitment to peer leading internal capital generation.
Share repurchases totaled nearly 50 million for the full year of 2025, the highest level since the program originated in 2020. Let’s now look at the guidance for the first quarter and full year of 2026 starting with the balance sheet for full year 2026 period. End loans and deposits are expected to grow mid single digits versus year end 2025 as we continue to increase our market share across our diverse geographic Footprint. Full year 2026 net interest income is expected to be between 1.495 and 1.535 billion with first quarter net interest income expected between 355 million and 365 million.
Our guidance assumes two 25 basis point rate cuts in April and October. Non interest income for the year is expected to be between 370 and 390 million with the first quarter expected between 90 and 95 million. Full year guidance for non interest expense is expected to be between 1 billion and 1.02 billion representing a 1.5% increase at the midpoint compared with 2025 operating expenses. First quarter non interest expenses are expected in a range of 255 to 260 million as compensation expense is seasonally higher in the first quarter due to the timing of normal long term stock compensation and higher payroll taxes.
The 2026 provision expense is expected to be between 85 and 105 million dependent on net loan growth and charge off activity. Lastly, the full year effective tax rate should be between 21 and 22% which does not include any investment tax credit activity that may occur. With that, I will turn the call back to Vince.
Vincent J. Delie — Chairman, President and Chief Executive Officer
As you have heard in our prepared remarks, we are very pleased with our financial results and achieved a number of records for 2025 including revenue, non interest income and EPS. Our balance sheet surpassed $50 billion in assets and we are well positioned to benefit from technology investment and expected growth opportunities. Our performance reflects steadfast execution of our multi pronged strategy. Diversifying revenue streams, optimizing our balance sheet, deploying capital thoughtfully and serving as the primary bank for our clients. Enabled by our tech investments in Estore and Omni channel capabilities. Successful execution of FMB strategy has led to enhanced profitability and capital accretion, all while achieving some of the highest returns in the industry.
Looking ahead to 2026, we are confident in our ability to deliver meaningful loan and deposit growth, margin expansion and further diversification of fee income. Our improved capital levels and double digit tangible book value growth year over year provide strong capital flexibility and position FMB to continue to deliver sustainable long term value benefiting our customers, employees, communities and shareholders. Thank you.
Questions and Answers:
operator
Ladies and gentlemen. We’ll now begin the question and answer session. To ask a question you may press STAR and then one on your touchtone phones if you are using a speakerphone, we do ask that you please pick up your handset prior to pressing the keys to ensure the best sound quality. To withdraw your questions you may press Star and two once again that is STAR and then one to join the question queue. We’ll pause momentarily to assemble the roster. Our first question today comes from Daniel Tamayo from Raymond James. Please go ahead with your question.
Daniel Tamayo
Thank you. Good morning everyone. Yeah, maybe we start on the fee income side. You know obviously at the investor day last quarter you talked a lot about growth that has been expected. Sorry, Investments that have been made into the fee income businesses and kind of long term growth pathways. Just curious, as you look at the guidance range for 26, what do you think might get you towards the upper end of the guide and how likely that could be in your mind?
Vincent J. Delie
Yeah, I mean I don’t. Do you want to answer Vince?
Vincent J. Calabrese
Sure, I can jump in and you can add I think just a couple of things on fee income. Right. It again highlights the importance of diversification. So you know we had all time highs for 7 of our fee based businesses for the full year and four of them in the fourth quarter alone. You know when you look at the kind of moving parts that were there, the growth in service charges, trust, insurance and securities Commissions and BOLI offset mortgage banking and capital markets being lower than the prior quarter. So the benefit of the diversification comes through when you look ahead to 26.
You know, we’re projecting continued solid growth there. The newer businesses that we’ve, we’ve talked about starting to contribute at higher levels is definitely baked into the guidance. I think there might be some upside to that. And then strong performance from our kind of core fee based businesses wealth, treasury management, capital markets and mortgage. I think there’s, you know, opportunity for them to have another strong year as we did in 2025.
Vincent J. Delie
The only thing I was going to add Vince, is that the macroeconomic environment, as we mentioned when we were all together, Danny, plays in our favor. So you know, the interest rate environment is positive for the mortgage banking business. You know we sell, servicing release gain on sale from the sale of mortgage loans. So that’s reflected in the fee income number more activity in treasury management moving into next year because of what Vince said. You know, with market share gains expected, new initiatives there too and new initiatives there and the build out of our TM platform.
We expect that to continue to grow with contributions from merchant and other areas that relate to treasury management derivatives. We would expect given the interest rate environment from a derivatives perspective to play out in our favor. And then we built out the public finance division or in the process of building it out, we’re very optimistic about contributions from that business in the debt capital markets arena. So that that should play out for us. And then the M and A advisory business is, you know, they’re seeing a lot of opportunities and we’re expecting to translate that into fee income in 26.
So you know, there are quite a few drivers. That’s why we’re fairly confident that we’re going to be able to achieve what we laid out in the guide.
Vincent J. Calabrese
And we did move the first quarter guidance up a bit. Danny too. You know, the implied guide from fourth quarter was 88 to 93. We moved it up to 90 to 95 in a seasonally slower quarter. So I think that’s an indication too.
Daniel Tamayo
Great. Thanks for all the color, Vince. And Vince, maybe a bigger picture question on operating leverage. Just your thoughts around operating leverage in 2026 and what might be potential issues in not getting there or levers to achieve it.
Vincent J. Calabrese
Yeah, I would just a couple of things. So if you look at the PP R was lower in the fourth quarter versus the third quarter, all very explainable. We had about $12 million of what I would call discrete non run rate expenses that came through in the fourth quarter we had the solar tax impairment that we mentioned in the remarks. We had some higher medical claims that occur in the fourth quarter every year. Our mortgage down payment program was a little over $3 million and then year end performance based accruals and 401 contributions based on the strong overall financial performance.
And then in the third quarter we had $5.4 million recovery. So there was a lot of noise kind of moving from third to fourth quarter. I mean, as we go forward next year, our guidance, you know, includes a meaningful increase in PPNR and in the operating leverage. And I think as we talked about Investor day, you know, expenses growing in the low single digits while we’re continuing to invest in the new initiatives, some of the ones that Vince mentioned. So I think we feel pretty good about our ability to, you know, meaningfully increase the operating leverage in 2026.
Vincent J. Delie
We also don’t have the expense related to heightened standards building as rapidly because we’ve completed many of the initiatives that we needed to complete from a personnel perspective and you know, from a consulting and systems perspective. So, you know, we don’t expect that to be a headwind anymore. We’ve also completed, you know, we fulfilled our obligation to fund grants for low income mortgage loans. So that was a pretty significant expense in 25. So, you know, that that will be behind us as well. So we’re fairly confident that we’re going to be able to achieve the results that we reflected in our guide.
In addition, we’ve had a number of expense initiatives that, you know, Vince has mentioned in the past. And this year we believe we can achieve even better cost takeouts on a run rate basis than we have historically. We’ve been focused on it. So, you know, efficiency is a focus moving into next year. And we’re also leveraging some of the digital investment, you know, changes that we’re making from a process perspective by utilizing AI and data analytics to make our operations more efficient. And the deployment of the common app in the retail delivery channel also provides a great deal of efficiency from a back office perspective because a lot of that processing is digitized.
So that should all play well for us as we move into next year with elevated volumes in the consumer segment.
Vincent J. Calabrese
Yeah, some of the initiatives baked into, from a CapEx standpoint is, you know, investing in our data science platform, AI machine learning data platform, you know, with the new leaders that we have on board, investing more to get even more benefit out of those, those functions there. And that’s part of why we were confident with the Higher cost savings goal that we have for 26. And if you bake into our guidance has the efficiency ratio kind of getting down into the low 50s by the end of the year or second half of the year, I would say.
Daniel Tamayo
That’S great. Thanks for all that color. All right, I’ll step back.
Vincent J. Delie
Thanks Doug.
Vincent J. Calabrese
Thanks, Dan.
operator
Our next question comes from Russell Guenther from Stevens. Please go ahead with your question.
Russell Gunther
Hey, good morning guys. I wanted to ask on the morning. The loan growth outlook for 26 of mid single digits. First Vince, I want to make sure I caught you that your expectations for the RESI portfolio would be around that sort of mid single digit level. And then second, you know, as you discussed at the investor day, CNI and CRE are expected to be the loan growth leaders going forward. So you know, if we are thinking. About RESI in that mid single digits, is it safe to assume CNI and. CRE would outpunch that? And maybe just some comments around the. Drivers of the magnitude within commercial.
Vincent J. Delie
Sure. I mean if you, if you strip out the large payoffs that we had, particularly in the CRE space, we got a very strong production quarter. I know it’s not reflected in the spot balance because of those payoffs. An acceleration in payoffs, particularly in multifamily and with some larger C and I credits that, you know, went the way of capital markets versus bank debt. So you know, I think the production, the underlying production was very strong. The CNI production was extraordinarily good I would say for the fourth quarter of the year.
So we’re moving into next year with some good momentum. We do have a lot of capacity. We talked a little bit in the prepared remarks about resetting the balance sheet. So we use 25 to kind of position our company to grow CRE loans and to grow CNI loans more rapidly. If you look at our loan to deposit ratio, we’ve had great success generating deposits. As I said earlier in the year, my hope was we would be closer to 88% or at 89.7%. So we’re, we’re close. That gives us a lot of capacity to fund loan growth moving into 26 and to manage our, our margin from a deposit cost perspective.
So those are positives. If you look at the capital generation that this company has been able to produce historically, we generate sufficient capital levels to sustain mid to high single digit loan growth, you know, with, with relative ease. If you look at capacity from a CRE perspective, we’re one of the few banks in our peer group that has A concentration as low as we do. And we specifically managed that down. We mentioned we wanted to be under 200. We finished just under 297, 197 capital. So, you know, this is a reset and that should give you great confidence because now we can move into 26 and be much more aggressive in the CRE space and in the CNI lending space.
And we have a much stronger platform from a fee income perspective to support leading those credits. So I think all of that is why we’re very optimistic about achieving the guide that we put out there. The other thing I will note, if you look at the H8 data and you exclude, you know, some of the payoffs that we’ve had, we’ve actually performed significantly better than the banks in total in the last quarter. So again, you know, not looking at the full year because we were being very measured and we were reducing exposures in a bunch of areas that we wanted to reduce exposures in to prepare for 26.
But if you strip out some of the payoffs, you know, we were many times greater than the other banks in the industry. So, you know, we’re optimistic about it. We haven’t pulled back, you know, in terms of our, our pursuit of good CNI opportunities. We’re not an ndfi, we’re not a commercial finance driven CNI shop. So this is core CNI across our markets where we’re taking market share and line utilization is very low, remains low. So there’s upside there as well. So all in, I think we’re in a fairly strong position moving into 26 to continue to drive growth in our loan categories and mortgage.
I would, you know, we’re. There’s a sale of performing mortgage loans. We decided there were some single household mortgage loans that we felt, you know, we should move off the balance sheet to give capacity for other things to provide higher returns. And that’s, you know, that’s the decision driving that. So I would expect growth in the mortgage business to be more tempered moving into 26 and with the change in rates, probably an opportunity to get better data on sale margin as we move into 26 to help fee income. So more moving off the balance sheet and 26.
I hope that helps.
Russell Gunther
Okay, great. It does. Thank you both. And then my second question would be Capital related CET1 at 11 4. You know, not too long ago that target was 10% and 10 and a half would be helpful to get a sense for where you would plan to manage that in 2026. And as you grow that CRE where are you willing to flex that concentration level to.
Vincent J. Calabrese
Yeah, I would say a few things on that topic. Right. Like you mentioned the 11.4%. It wasn’t that long ago that we had a goal of 10 and then 10 was a floor. And you know, now we’re at 11.4, you know, dividend payout for the full year. Then you combine that with, you know, our expectation for strong internal capital generation.
Based on the guidance that we have, we’re in the best position we’ve ever been to deploy capital to optimize shareholder value. The organic growth is the first use of that, of course. But like Vince said, we’re generating enough capital to really support high single digit loan growth. So I think that.
Vincent J. Delie
Oh no, go ahead, stop you right there. Because you asked a question about our ability to maintain the concentration levels. We did. Look at that. We do generate a lot of capital. You mentioned our strong internal capital generation. We could basically based on that in our guide, we could originate nearly a billion dollars in CRE loans and not change the concentration level at this point in time. So I think that’s an important point. And I’m sorry to interrupt. I thought given your, your speech on our capital. Yeah, no, that’s capital. Yeah. So there’s, there’s, there’s significant capacity to do business as usual there and we’re going to pick the transactions that we. We want to bank. But, but we’ve got plenty of capacity with the capital generation that the company’.
Vincent J. Delie
But if we move slightly above 200, that’s not going to kill us. We’re still well below others that we compete against in the marketplace. But, but our goal is to stay there if we can. Go ahead, guys.
Vincent J. Calabrese
So beyond supporting that balance sheet growth, you know, we still think buybacks are attractive. I mean, we did 50 million for the full year. We did 18 in the fourth quarter. Even at these valuation levels, we still think it’s attractive. And for 2026, you know, I would expect we’d be at the same level or higher as far as buyback activity and then the dividend. You know, we’ve been having conversations, I mean, it’s something we discuss regularly and we’d be discussing with our board. You know, in the past we had that elevated payout ratio for such a long period of time and we like the flexibility of the buyback.
So that will be a component of capital management. But our payout ratio at, you know, in the 25 level at least creates the ability to increase the dividend at some point if we decide to do that. So it’s definitely something that’s on the table for us to discuss. There hasn’t been a decision or anything that’s a board decision, but it’s something we’ll take our look at this year. This is a strategic planning cycle for us. So it would be kind of part of our capital management planning. You know, as we look ahead and.
Vincent J. Delie
You know, the board’s going to look at it through the lens of our shareholders. They, they want to do what’s absolutely best from a capital deployment perspective. That has always been their stated mission. You know, they want to drive returns at the company, drive higher stock price performance. So they’re going to look at all of that and look at our relative valuation, you know, with buybacks in mind when they make those decisions. So deployment of capital is a focus of the board will continue to be.
Vincent J. Calabrese
Yeah. The last point I would make too is just when you look at our financial performance, Alfred always says this and it’s a good point. You know, we have a 16.3% return on tangible common equity on a TC ratio. That’s 8.9%. So that TC ratio has built significantly from the four and a half it was when the three of us started in our roles, you know, to 8.9%. So I think that’s important too. So even with the higher levels of capital, we’re generating, you know, a top quartile for sure return on tangible common equity and managing that capital will be key to our performance as we, as we move forward.
Russell Gunther
That’s really helpful guys. I appreciate your thoughts. Thanks for taking my question.
Vincent J. Calabrese
Thanks.
Vincent J. Delie
Thank you.
operator
Our next question comes from Casey Hare. Please go ahead with your question.
Unidentified Participant
Great, thanks. Good morning guys. Happy New Year. I want to touch on the margin. Yeah, so the, just wondering, the interest bearing deposit beta, where does that trend throughout 26 versus that, that 25% cycle today?
Vincent J. Calabrese
Yeah, I would say, you know, we, we’ve still talked and still feel that kind of mid-30s on a terminal beta makes sense to us. By the end of the year, you know, our guidance probably get us to about 30% or so, you know, up from the 25. You know, I think our team has done an excellent job managing the deposit rates through this cycle, being very thoughtful and strategic in how we’re adjusting rates and which tranches we’re adjusting rates at.
So, you know, there’s still opportunity for us from year, the end of the year reference point forward to continue to bring down deposit rates and big slugs at the deposit base. So I would say you know, 30% or so by the end of the year, Casey. And still kind of a mid-30s once this cycle finishes.
Unidentified Participant
Okay, excellent. And then just a credit question.
Vincent J. Calabrese
Yeah, total too. Sorry, I should have commented.
Unidentified Participant
Oh, so that’s not ibd, that’s total. Total.
Vincent J. Calabrese
That’s total, yeah. I’m sorry, you were asking interest. That’s total.
Unidentified Participant
Okay, gotcha. Okay. All right. And then on the credit side, so the provision guide, does that assume I’m like, that assumes that the ACL ratio, the reserve ratio kind of holds this. Level. You know, supports mid single digit growth and then the charge off outlook. I’m assuming that that presumes that we kind of hang out at this 20 bip level.
Vincent J. Delie
Yeah, I think you’re spot on, Casey, with your assessment of that. Oh, all sounds pretty close to what we’re expecting there with the guide.
Unidentified Participant
Okay, great. And just last one for me, one more on the capital front. So you guys clearly have a very nice capital generation. It’s not inconceivable that you’re above 12% CET1 in a year from now. So I guess kind of the other way is there. I know you’re well above your floor. Are you looking to, is there a level of capital that’s too much, you know, or are you happy to just let capital stockpile before, you know, I mean, you have more room to be more aggressive and take the payout ratio higher. I’m just wondering what’s preventing you.
Vincent J. Calabrese
Nothing’s really preventing us. I mean, as I commented on, you know, the dividend will be a discussion with our board this year as far as potentially increasing the dividend. You know, having buybacks at or higher than the level that we did, we did last year is kind of part of what’s baked into our plan. You know, the capital ratio, if you, if you do the math and run it forward, you get around 12% by the end of the year. So, you know, some of that, at some point the loan growth activity picks up to get to the high single digits.
Right. And you want to have the ability to do that. But you know, we’re looking at all the pieces of it between funding loan growth as well as the dividend and the buyback.
Vincent J. Delie
Yeah, we don’t want to sit here and keep accumulating capital, Casey. We’re focusing on a bunch of avenues to deploy capital to boost our returns too. I mean, if we can invest capital in high returning opportunities, then we’re going to have a much higher return on tangible common equity on a slightly lower capital Base, but it has to be sustainable. It can’t just be a one time deal where we buy back shares and then everything rolls back. You know, we’re looking forward and making sure that we’re deploying that capital in the most productive ways on a go forward basis so we can drive returns.
Vincent J. Calabrese
And the industry has been moving higher too. The peers generally have been drifting upwards. So kind of keep one eye on that and then rest of our eyes on what we’re doing.
Vincent J. Delie
Yeah, I mean it’s kind of tough when you look at the AOCI impairment that occurred a few years ago and there’s accretion going on. Casey. So some of the, you know, TBV build is, you know, just a reversal of impairments that occurred and we didn’t have that. So you know, when you look at these big outsized numbers in TBV growth, you have to take that into consideration. Ours is core earnings and retained earnings. That’s a, that’s a big difference. So you know, when you’re evaluating all these banks, you know, you should be taking that into consideration.
I hope. I think you are.
Vincent J. Calabrese
And we’ve returned 2.2 billion capital since 2009. So I mean it’s been an active part of our, you know, overall shareholder positioning.
Unidentified Participant
Gotcha. Thank you.
operator
Our next question, actually, if you would like to ask a question, please press star and then one. To withdraw your questions, you may press star and two again to join the question queue. That is Star and then one. Our next question comes from Kelly Mota from kbw. Please go ahead with your question.
Kelly Motta
Hey, good morning. Thanks for the question. So not to beat a dead horse with capital, but just kind of building off of the last couple of questions there, it sounds like you believe your stock is still attractive here. Can you one, remind us any price sensitivity that you have regarding the buyback, if there’s any sort of guiding principles there. And then two, I’d be remiss if not to ask about any updated thoughts on M and A here. Thank you.
Vincent J. Calabrese
Yeah, I would just say valuation. We think our stock’s worth a lot more than where it’s trading. If you look at where it was trading say in the last year or two, I mean it had been trading at a discount on a P basis to our peers, which didn’t make sense to us. And you know, now it’s kind of equal to the peers and we think it should be higher than the peers. So we still think it’s a good investment for us to make even at these higher valuation levels. And there’s not a bright line Kelly.
I guess I would say where we would stop. I mean we look at our relative positioning and what’s happening with the market and what’s happening with the economy. So, but, but definitely room for us to continue to be active.
Vincent J. Delie
Yeah, we’re, and from an M and A perspective, we’re nine years past our last M and a large M and A transaction. We did two small bank deals, very small. You know, we’ve said repeatedly we’re focused on internal capital generation. We’re focused, we’ve set this back going back, you know, five, six years ago. We’re going to continue to look at the mechanisms that we have to drive returns through organic growth. So that’s our, our priority. We’ve been able to do that very successfully. We’ve been able to invest in tech and outperform some of the largest banks in the country in certain aspects of our tech offering.
So we’re going to keep doing that and if something comes up opportunistically it really has to be a good fit. And you know, I, I think it would have to provide us with, you know, it can’t dilute what we built. So you know, 26% non interest bearing deposits in the deposit mix is pretty strong still even after it declined, you know, post the effect of stimulus. And I think our goal is to continue to drive that mix in a favorable manner. We don’t want to dilute that. You know, we don’t want to dilute capital tangible book value materially because we’ve spent a lot of time focusing on it and you know, driving TBV growth.
So we have good momentum there. If something provides us with an opportunity to drive organic growth at a faster clip, sure we would look at it. But we’ve got tremendous markets. You know, we’re spread across a pretty broad geography. We, as I’ve said before, we’ve grown market share in 75% of the MSAs that we compete in. So you know, we are proving that we can compete effectively at our scale and size and our efficiency ratio is very strong. So you know, I don’t place that as a high priority anymore. I know that seems surprising to people but because we’ve been here for so long, I mean I’ve been in this seat for almost 15 years so we did a lot of M and A transactions to get to where we are, but we needed to, to get to.
Vincent J. Calabrese
This level and then leveraging the investments we made that are really early stages of contributing.
Vincent J. Delie
Yeah, so I guess the answer is we’re going to do whatever we think makes the most sense for the shareholders. And we’re going to be very cautious as we move forward just like we have been over the last five, six, seven years. And you know, if something presents itself that checks all the boxes, sure, we’ll look at it. But we’re going to continue to stay focused on organic growth, driving organic growth, building out our platform, leveraging our retail bank, which is I think the 19th, if you look at locations, it’s the 19th largest retail bank in the country.
Right Alfred? And one of the most efficient if we, you know, looked at metrics relative to the largest banks in the country. And we run a very efficient retail bank. So the consumer business for us is a good business anyway. That’s, that’s our take on it. And I appreciate the question. Thank you for giving me a chance to answer.
Kelly Motta
I appreciate all the color mixed. Makes total sense. Maybe one follow up for me. Just asking the operating leverage kind of in a, in a different way. Clearly you’ve set the stage very well for 2026 to drive positive operating leverage ahead. And you noted you anticipate the efficiency ratio getting into the low 50s, you know, kind of by the second half of the year. Looking back, you were more a mid to high 50s efficiency ratio type bank. You’ve obviously made a lot of investments in tech that you’re able to really leverage now. Just wondering as you kind of think about the longer term efficiency ratio of the bank, given these significant investments you have made in technology, is do you think that low 50s, is that lower run rate is sustainable? Any kind of thoughts in either direction here, particularly as de novo expansion remains a focus here?
Vincent J. Delie
Yeah, I think there’s two things, you know, one, there’s the, there’s the efficiency that’s being produced through automation and digitization of the banking industry. We’ve talked about this where we built out the data hub. We’re using that data to drive efficiency in the delivery of products and services. I think we’ve only scratched the surface on taking cost out right over time with, you know, looking at how we process transactions across the entire bank and thinking about the impact of AI and automation on, you know, driving efficiency and you know, what that means over time, I think is pretty positive for the industry.
That should be viewed as a positive. I also think from a revenue generation perspective, which is the other side this our ability to analyze data, present information to prospects, clients or our own internal people extremely fast so that they’re able to react to it and produce better revenue results Per engagement with a customer is going to drive that efficiency ratio as well. So revenue growth through automation and efficiency are still, you know, we’re still looking down the road for that. You know, we’ve started to experience some of it, but there’s quite a bit to come.
So I’m very optimistic about that. I don’t know, Vince, if you want to add anything to the question.
Vincent J. Calabrese
No, I would just say, you know, sustaining around that low 50s to 50% level feels very achievable as we move forward, given all the things Vince just described. That’s all I would say is.
Vincent J. Delie
And I also think when you look at us relative to the other banks, our size, we have a disproportionately large retail bank. So the efficiency ratio in the retail business is not what it is in the commercial business. So, you know, if we were a pure commercial bank, yes, we would be below 50%, well below. But, you know, Alfred gives us all these branches. But the truth is, you. Know, we’ve got this big machine that we have to run and it’s a good business for us. And as I’ve said, we. We’re able to do it very efficiently, which is remarkable given our size and scale. I mean, in fairness to the retail business, we do run an incredibly efficient retail delivery channel. It compares very favorably to the largest banks in the country. And if you look at the efficiency ratio, broadly speaking, there are probably going to be some puts and takes to it. We’re going to continue to drive efficiency in the areas that we can through automation.
But as Vince mentioned earlier, we have plan to grow fee income, which tends to be a higher efficiency ratio business in and of itself. And the idea is that all these investments that will continue to drive the efficiency ratio plus the investments in growing additional fee income, I think net net results in a top quartile roe that compares pretty favorably to our peers. And you saw, Kel, you were here, you saw what we’ve already done with the digitization of the retail delivery channel. We’ve already embedded the E Store into the ITM so that somebody remotely can engage a customer, you know, fully digitally in a branch and provide them with the ability to transact, you know, cash checks down to the penny, make loan payments, and also advise them on what they have in the shopping cart, help them proceed to check out right there.
So that in and of itself reduces the need for personnel in the branches over time. So that helps us gain efficiency as well. And we’ve already built it, it hasn’t been deployed fully, but it’s built, so that’s coming as well. Anyway, that’s, that’s all. I don’t know what else to add. Yeah, I think we’re pretty good spot and we’re very optimistic about efficiency.
Kelly Motta
That’s really helpful. Thank you. Thank you so much for the question. I’ll step back.
Vincent J. Delie
Thank you. Thanks for the question, Kelly.
operator
So it seems like there is a break with our operator. But Manuel, I think that you’re up the line. If you have a question, please go ahead and ask it.
Unidentified Participant
Okay, great. Hey, I hear you guys on the lending capacity from your end and kind of strong production. Can you discuss lending sentiment in your markets and how does that drive kind of expectations for growth to be more back half the year loaded and are you already seeing headwinds from payoffs and secondary market improvements slowing already?
Vincent J. Delie
Yeah, I’d say I think you’re right. We tend, typically in this business we tend to see the loan growth come in the CNI side anyway. Real estate’s kind of all over the board depending on when the project was launched. But from a CNI perspective, you tend to see it build towards the second half of the year because companies are completing their financial statements, they’re turning them over to the bank, they’re planning from a capex perspective now. So then they’re coming back right about now and they’re starting to reach out to the bankers and start to make plans for capital expenditures and working capital needs.
So that’s happening like discussions are happening. I would expect growth to be more back ended this year. I also think bonus depreciation, you know, in some of the comments I read, we get comments back from every region, you know, before we do this call. So we all read them. They do pretty nice job. I thought this was the best they’ve ever done, giving me commentary. I spent last night reading 38 pages of commentary. But you know, I think, you know, when you look at the Southeast, you look at Charlotte and Raleigh and Greensboro, you know, there’s a lot of competition.
You’ve got, you know, branch branches being built out across that footprint. But our people continue to see opportunities. We’re entrenched in those markets. You know, we have been building out our delivery channel as well and introducing our digital strategy and building out our treasury management capabilities. So those markets have performed extraordinarily well and I would expect them to continue to perform well. If you pivot to Pittsburgh, Cleveland, Baltimore, the more mature markets that we’re in, you know, they’ve had some pretty significant payoffs in those markets. Not because we lost customers to other banks, but because we tend to play up market.
So we have a lot of clients, you know, drives that debt capital markets business where we get the income on bonds as well. You know, unfortunately, the flip side of that is the company has access to capital markets and they’ve paid down the facility. So we had, you know, a lot of that going on last year. I think that’s, that’s pretty much over unless you see a significant decline in interest rates from here, short term rates from here, which would be positive for us from a margin perspective but negative from a, from a capital markets access standpoint.
But it also reduces the cost of capital from a banker, from a bank loan perspective for clients. So I would, I would suspect that next year should be a pretty good year for everyone, assuming that the markets remain calm, we don’t have some big turbulent event. But you know, the sentiment around the table is, you know, people were starting to have serious talks about capital investment. So that, that bodes well for loan growth. That’s, you know, that’s what we’re seeing. That’s what I’ve read across the board. You know, I will also pivot to the depository side.
We have a lot of large deposit prospects that you know are coming in. So, you know, I see that being positive too for next year.
Unidentified Participant
Yeah. In the past you’ve talked about the treasury management pipelines being solid. It’s showing up in the fee side. Do they remain. They’re remaining robust as well. On the commercial treasury management deposit, we’re.
Vincent J. Delie
Seeing lots of opportunities across the footprint from a depository perspective, from a Treasury management perspective.
Vincent J. Calabrese
So we still have a large pipeline, close to a billion dollars of deposit prospects we’re going after.
Gary L. Guerrieri
The other thing I would add, Manuel, is we are starting to see increased levels of opportunities around Some high quality CRA discussions were pretty active over the last 60 to 90 days here and we’re seeing some really nice opportunities there.
Unidentified Participant
That’s good to hear. Any more details on the mortgage sale? I hear you that you’re just opening up capacity. Were they specific to any region? Just any more color on kind of this sale that’s coming up in the first quarter?
Vincent J. Delie
Yeah, they were, they were predominantly, they were out of market. Predominantly. Not out of market, not out of our operating area, but out of our immediate area. So, you know, round branches. So we looked at them from a practical perspective and said our probability of cross selling additional services to this pool is limited. So, you know, there’s nothing wrong. They’re from a Credit perspective, they’re, they’re good credits but we just don’t see an opportunity to be able to, to deploy, you know, cross sell engagement. So we, we decided to return the capital and reuse it for something we can become the primary client.
Right. And that’s what drove that. That plus you know, it helps us manage the I, my expectation is that we move into next year, we’re going to see prepayment elevate anyway. So we’re going to see attrition in that book anyway. And I think we’re going to be able to move more off the balance sheet because there’s more activity in the conforming space moving into next year, particularly in a lower rate environment. So I would expect us to drive fee income, manage the exposure and be able to still grow the other categories because we’ll have the capital to do that.
The other higher returning categories. But those loans in particular we just viewed as a drag on capital.
Vincent J. Calabrese
Yeah, we were. The other thing I would add too is just from a concentration management standpoint, you know mortgages as a percent of total loans around 25%. You can see that in the slide deck. So kind of managing that level of concentration, we decided to, you know, take 200 million off. I mean we’re very strategic in how we take actions. Remember during the year we had pricing strategies to generate more saleable production just to again manage the total mortgages on the balance sheet. And I think as we go forward in 26 that creates capacity for the commercial growth that you heard us talk about.
And as far as the sale too, we expect sale to be basically a par when it settles this quarter.
Vincent J. Delie
Right.
Unidentified Participant
Thank you, that’s very helpful. Thank you.
Vincent J. Delie
Thank you, thank you.
operator
And our next question comes from Brian Martin from Janney Montgomery. Please go ahead with your question.
Brian Martin
Hey, good morning guys. Say just your last comment. Maybe Gary made a comment about the loan growth but it’s, and I joined late. So from a commentary standpoint it sounds like the loan growth outlook is mid single digits back end loaded. Did you talk about kind of the current pipeline and then also just maybe your comment about Vince the mortgage being coming down around 25%. When you think about big picture about the loan concentration levels where they are today, where do you see opportunity to maybe make some additional changes throughout the year as we get to the end of 26? Is there targets in terms of where that mortgage number might be, where other buckets may be that you can talk a little bit about terms of how the positioning looks?
Vincent J. Delie
I’ll do high level and then I’ll turn it back over to these guys. You know, our goal would be to shrink the mortgage book and redeploy over time. Right. If you see prepayment speeds accelerating in a different interest rate environment, you’re going to see that portfolio basically stay the same in size. Right. Or grow. It’s a percent very small as a percentage of the total. But our goal would be to redeploy that capital into CNI and CRE lending. And I said earlier, I don’t know if you missed it, but earlier I talked about our internal capital generation, Brian, and the ability for us now that our CRE concentration is at a 197, you know, it’s below 200%, there’s capacity there to lend.
So, you know, even keeping that concentration at the same level, given the internal capital generation, we could still originate and fund a billion dollars in CRE loans. So, you know, we don’t have to keep it at 197. There’s something to move up and down. That was just our internal goal. Right. From a concentration perspective, it puts us in a much better position than many of the peers. So there’s a lot of capacity to lend there. We can be very selective. On the CNI side, I think we have a great opportunity to deploy capital there and grow over the next 12 months because we think that that business will start to accelerate for us and, you know, we can move in again.
We’re not doing, you know, the consumer finance stuff, ndfi, all the other stuff that that is baked into the H8 data for CNI growth, that really is mass consumer growth. But we’re, we’re doing true middle market transactions, you know, across our footprint, growing that business. And I think, I think we’ve done a pretty good job and the pipelines have actually built over time and. Go ahead, Gary.
Gary L. Guerrieri
Yeah, I was going to add, Brian, the equipment finance business for us has been extremely strong and you would expect that with the bonus depreciation, that group had an exceptional year and that just continues to build. They had a very strong fourth quarter and we expect to have a really, really solid 2026 across that group through the quarters and even building more, as Vince mentioned, towards the latter part of the year with where we sit economically at the moment. So we really, really excited about that piece of the business and the CI opportunities ahead of us.
Vincent J. Calabrese
Yeah, Brian, I would just on the mortgage point, just to close it out. I mean, we’re looking for production levels to still be very strong. So it’s not that we’re trying to lessen the activity in that business. The amount of originations, it’s just what ends up on the balance sheet. And just for reference, I was looking back, you know, last year was 23% of total loans. At the end of 23, it was 20%. Just as kind of reference points. Today it’s 25. So just managing that concentration, the commercial activity that Gary and Vince have talked about.
Brian Martin
Gotcha. And Gary, that equipment finance, how big a piece of the loan book is that today?
Gary L. Guerrieri
That portfolio today sits at right? About a billion and a half dollars.
Brian Martin
Billion and a half. Okay, perfect. And then maybe just one or two last ones. Just on the loan pricing maybe. I don’t know if you talked about this earlier, but we heard that some of the pricing has been a bit irrational of late. So just wondering how that, how you’re viewing on the, on the loan pricing and you know, just how that plays into the trajectory on your outlook for margin for the year and kind of what’s embedded in your guidance on, on that as you kind of look into 20, 26.
Vincent J. Delie
I don’t think you know, loan pricing in the CNI book or across the board. What do you referencing specifically?
Brian Martin
I guess, you know, the commentary we’ve heard is that, you know, people are really looking to, you know, be aggressive on pricing just because they haven’t, you know, they haven’t had the ability to grow. So I guess, I guess I haven’t heard that it’s whether it’s on CRE or CNI specifically. So just I would say, yeah, the.
Vincent J. Delie
CRE pricing has been a little bit, you know, it’s been more firm, the CNI pricing is more aggressive. But it has been. Yeah, I mean I, you sound like some of the people that run the regions that we have, they talk about how competitive. It’s always been competitive. For the 40 years I’ve been in banking, I’ve never sat there and said, oh, it’s not, it’s, it’s so uncompetitive. I just, you know, I can do anything I want. It’s always competitive, but there’s always a threshold for return. Right. Everybody’s running the same models. So we try to achieve a certain return risk adjusted return on capital. And I would say that kind of governs it. So it tends to fluctuate. Let’s say cni, good solid CI credit, not risky stuff because that could be all over the board, but your traditional middle market transaction, that’s on solid footing, good fixed charge coverage, lots of capital, you know, you’re looking at 25 basis point variance between extraordinarily competitive and not as competitive. So it’s never that wide of a margin. Right. It gets skinny from time to time, but I think, you know, you’ve got to be able to overcome that with products and services that produce returns, you know, look at the broader relationship and bring in deposits, compensating balances, support treasury management fees, you know, provide capital markets fees with derivatives and, you know, debt capital markets opportunities.
That’s what drives the return. We kind of look at those returns holistically and we look, you know, for returns that are north of, you know, 15, 16, 17%, all in some cases higher.
Brian Martin
Yeah.
Vincent J. Delie
So that, that kind of drives the whole market, essentially.
Gary L. Guerrieri
Yeah. And I think we’ve done a good job driving that cross sell activity across all of those fee income products that we have. And we talked about the diversification of those income streams earlier. You know, the group is very focused on it and I can tell you the leadership there is really driving that through the banking teams.
Vincent J. Calabrese
Brian, I would just add one point. So top of the house, the new loans that we made during the fourth quarter came on at 592, which is about 24 basis points above the portfolio rate. So it’s still, you know, additive to the overall return.
Vincent J. Delie
See, Vince is always bringing you facts. I’m giving you anecdotal. He layers in the stuff you really want to hear.
Vincent J. Calabrese
It all works together. Exactly.
Brian Martin
Cool. And then how about just did you guys any commentary on kind of what’s embedded in the NI growth outlook in terms of margin, just kind of trajectory of margin kind of as you kind of go through the year, given your outlook for rate cuts here and just kind of the better environment.
Vincent J. Calabrese
Yeah, I would just say what’s baked into our guidance is two rate cuts, one in April, one in September. I mean, April and October, you know, if we don’t get the next one, I think last I saw the market was saying July. I mean, it’s. If you don’t get it, it’s like a couple million dollars worth of benefit to a quarter. So just kind of as a reference point baked into our guidance, has the margin moving up modestly, you know, a few basis points a quarter, say between the 328 and the end of the year is kind of what’s baked into our guidance.
If you do the math. Yeah, okay.
Brian Martin
Okay, I think I’m good. And Vince, just the question on M and A, I guess just in terms of big picture, if we do see something, if There’s a great opportunity out there. Does it feel like it’s a smaller opportunity given you don’t want to kind of take the momentum away from what you have, you know, all you’ve talked about today, or is that the wrong. Way to think about it? Because the right opportunity could be something bigger. It just feels like it, it might be something smaller and less disruptive if there wasn’t an opportunity out there. But I guess maybe I’m reading it to that.
Vincent J. Delie
No, I think, I think we’re pretty focused internally on organic growth. And what we’re doing is we’re looking at capital deployment constantly. We’ve talked about this before. Somebody else asked a similar question. I don’t know if. But we, you know, we’re going to do whatever we think makes the most sense for the shareholders from a return and capital deployment perspective. You know, we’re not out trying to find things. I think given where we are right now and the success we’re having and you know, how valuations line up, you know, it’s more unlikely that we do a large MA transaction.
Right. And if you look back over the last, I said nine years, going back to the large, last large deal we did, we’ve only done two deals since then and they were relatively small and they basically were additive to the overall strategy. So both deals had really high demand deposit mixes and they provided lots of customers. There was like granularity in the customer base and it could be plugged into the consumer bank and we could drive our cross sell strategies and drive fee income and that’s, you know, that made sense to us. But those are more opportunistic than, you know, plotted.
Yeah. Okay.
Brian Martin
Yeah, that answers it. And thanks for taking the questions and congrats on the quarter and the momentum you guys have going into 26.
Vincent J. Delie
Yeah, thank you very much. I appreciate it.
Vincent J. Calabrese
Thanks, Brian.
Vincent J. Delie
Brian. Thank you, everybody. I think that concludes the questions. And you know, I want to thank our employees for a tremendous year. I know there was a lot of hard work that went into this year and I want you to know the executive leadership team appreciates it and thank you to our shareholders for continuing to believe in us and support us. Thank you.
operator
Ladies and gentlemen. With that, we’ll conclude today’s conference call and presentation. We do. Thank you for joining. You may now disconnect your lines. SA. Sam.