- Adjusted total noninterest expenses decreased 1% year-over-year excluding repurchase debt impacts.
- Average loans decreased 1% year-over-year to $17.6 billion due to higher payment rates and elevated credit losses.
- Credit sales increased 5% year-over-year to $6.8 billion despite inflation and weak consumer sentiment.
- Net income of $188 million and adjusted net income of $191 million with EPS of $4.02, excluding $3 million post-tax repurchase debt expenses.
- Net loss rate improved to 7.4%, down 40 basis points year-over-year and 50 basis points sequentially.
- Return on average tangible common equity was 28.6% for the quarter.
- Revenue declined 1% year-over-year to $971 million, impacted by lower billed late fees and pricing changes.
- Tangible book value per common share grew 19% year-over-year to $56.36.
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- Adjusted earnings were approximately $66 million or $0.69 per diluted share.
- Adjusted efficiency ratio improved by about 7 percentage points.
- Adjusted loan yields decreased 1 basis point to 6.18%.
- Adjusted pre-provision net revenue was $103 million.
- Adjusted total cost of deposits decreased 18 basis points to 2.04%.
- Allowance for credit losses (ACL) as a percentage of total loans increased 1 basis point to 1.57%.
- Capital ratios remain well above regulatory minimums.
- Core net interest margin expanded from 3.42% to 3.58%.
- Deposits increased by $361 million or 7% quarter-over-quarter.
- Loans increased by $312 million or 7% quarter-over-quarter.
- Net charge-offs were $12.1 million, mainly from two credits.
- Noninterest expense was $183.2 million, excluding $20.5 million merger/conversion expenses, core expense was $162.7 million.
- Noninterest income was $48.3 million, up $11.9 million linked quarter, driven by The First and mortgage division.
- Reported earnings were $1 million or $0.01 per diluted share for Q2 2025.
- Reported margin rose from 3.45% to 3.85% reflecting purchase accounting adjustments.
- Loan paydowns increased by $500 million over the previous two quarters, which contributed to below-expected loan growth in Q3 2025.
- Management reviewed loan booking and draw activity, noting a slight decline in the pipeline as a percentage of projected payoffs.
- Despite softer loan growth, the pipeline is 40% higher than a year ago, indicating strong future potential.
- Loan payoffs include some low fixed-rate loans that are being paid off through asset sales, which is viewed positively.
- Management expects a solid loan closing quarter in Q4, with all markets now profitable for the first time since inception.
- The company emphasizes that not all payoffs are negative, especially those related to asset sales at favorable rates.
- Capital ratios remained strong with CET1 at 13.99% and tangible common equity ratio at 10.20%.
- Core revenues totaled $182 million, with total interest income of $194 million and interest expense of $42 million.
- Net charge-offs were $13 million, down $7.6 million sequentially, with a net charge-off rate of 0.64%.
- Net interest margin was 5.31%, slightly down from 5.42%, impacted by increased liquidity and wholesale funding.
- Noninterest expenses were $94.8 million, in line with guidance of $95-96 million for 2025.
- Record assets exceeded $12 billion and loans surpassed $8 billion, with strong loan origination and core deposit flows.
- Return on average assets was 1.73% and return on average tangible common equity was 17%.
- Second quarter earnings per share diluted was $1.15, a 6.5% increase year-over-year, driven by a 1.5% increase in total core revenue.
- Tangible book value per share was $27.67, and efficiency ratio was 52%.
- Diluted earnings per share nearly tripled to $0.37, with pretax income more than tripling to $57 million.
- Net interest income reached a record $158 million, supported by a growing balance sheet and expanding net interest margin of 6.2%.
- Non-interest income grew 75% to $108 million, boosted by improved loan sales prices and strong credit performance.
- Originations grew 37% year-over-year to $2.62 billion, exceeding the top end of guidance.
- Provision for credit losses was $46 million, with net charge-off ratio improving modestly to 2.9%.
- Return on tangible common equity rose to 13.2%, above the high end of guidance.
- Revenue increased 32% to $266 million, driven by higher marketplace volume and net interest income.
- Tangible book value per share increased to $11.95, reflecting strong capital position.
- Allowance for credit losses decreased by $11.7 million; provision for credit losses was $6.1 million, including $6 million for net charge-offs and $2.2 million due to macroeconomic factors, offset by releases due to loan growth and recoveries.
- Assets under management increased by $132.42 million to $3.1 billion, driven by higher market valuations and net new assets.
- Classified loans increased by $9.3 million or 4.5% to $215.4 million due to downgrades in CRE and commercial loans, partially offset by $50 million in charge-offs, payoffs, and loans sold.
- Core efficiency ratio was 66.35%, core ROA was 0.94%, and core ROE was 10.49%.
- Gross loans were down by $30 million to $7.2 billion, primarily due to increased prepayments offsetting loan production and some loans originated but not yet funded.
- Net interest income was $90.5 million, up $4.6 million, driven by higher average balances of securities and lower average balances and rates on time deposits.
- Net interest margin (NIM) was 3.81%, higher than projected due to recovery of interest on commercial loans including a fully paid off nonaccrual loan and a fully charged off loan.
- Noninterest income was $19.8 million, while noninterest expense was $74.4 million, higher than the guided $71.5 million due to noncore expenses and increased customer derivatives expenses.
- Nonperforming loans decreased by $41 million due to payoffs, loans sold, paydowns, and charge-offs.
- Pre-provision net revenue (PPNR) was $35.9 million in 2Q '25 compared to $33.9 million in 1Q '25; core PPNR was $37.1 million, up 17.7% from $31.5 million in 1Q '25.
- Provision for credit losses was $6.1 million, down $12.4 million from $18.4 million in the first quarter.
- Return on assets (ROA) improved to 0.90% and return on equity (ROE) to 10.1%, compared to 0.48% and 5.3% respectively in the prior quarter.
- Total assets reached $10.3 billion as of the close of the second quarter.
- Total deposits increased by $151.6 million to $8.3 billion, driven by growth in core deposits and a planned reduction of $51 million in broker deposits.
- Total investment securities were $2 billion, up by $209.2 million, including $120 million mortgage-backed securities classified as trading securities and $87 million available for sale.
- Third consecutive quarter of increased provision expense and nonperforming loans, particularly in franchise finance and small business lending portfolios.
- Overall industry nonperforming loan ratio remains at 1%, with delinquencies improving to 62 basis points, a 15 basis point decline.
- Franchise finance loans moved to nonperforming status totaling $12.6 million in Q2, with specific reserves of $4.5 million.
- Portfolio of 633 loans, with 5% on nonaccrual, and recent success in workout strategies leading to improved recovery rates.
- Significant progress in derisking the franchise portfolio, with a small pool of delinquent borrowers and slowing delinquencies, indicating potential for future improvement.
- Consumer banking net income grew 28% to $3.4 billion with 600 basis points of operating leverage.
- Earnings per share (EPS) increased 31% year over year to $1.06.
- Investment banking fees exceeded $2 billion, up 43% year over year.
- Net interest income (NII) on a fully taxable equivalent (FTE) basis hit a record $15.4 billion, up 9% year over year.
- Operating leverage of 560 basis points achieved, with efficiency ratio falling below 62%.
- Reported revenue of $28 billion, up 11% year over year.
- Return on assets reached 98 basis points.
- Return on tangible common equity (ROTC) improved to 15.4%.
Dafinchi