Diluted EPS was $0.33 and tangible book value per share was $11.53.
Effective tax rate was 29% due to a California tax law change, with a long-term statutory tax rate expectation reduced to 25.5%.
GAAP net income more than doubled to $38 million from $15 million last year, achieving an ROTCE of nearly 12%, surpassing the 8% target set at the beginning of the year.
LendingClub delivered 32% year-on-year growth in originations and 33% growth in revenue in Q2 2025.
Net charge-off ratio improved to 3% from 6.2% last year, though expected to rise modestly as newer vintages season.
Net interest margin improved to 6.1%, benefiting from repricing of deposit portfolios.
Noninterest expense was $155 million, up 17%, mainly due to a 26% increase in marketing spend.
Originations reached $2.4 billion, driven by paid marketing initiatives and product enhancements.
Pre-provision net revenue (PPNR) was $94 million, up 70% year-over-year and above guidance.
Provision for credit losses was $40 million, modestly up from $36 million last year, with a provision benefit of approximately $9 million due to credit outperformance.
Total revenue was $248 million, up 33% year-over-year, with noninterest income at $94 million (up 60%) and net interest income at $154 million (up 20%).
Impact of Early Payoffs and Paydowns on Loan Outstandings
Loan outstandings contracted by $31.9 million during the quarter, impacted by early payoffs and paydowns.
Year-to-date, loan outstandings decreased by $25.4 million, contrasting with $117.6 million growth in the previous year.
Management emphasizes ongoing active situation with a suspicious credit involving $16.4 million, with fraud suspected, and no further comments at this time.
Impact of Securities Portfolio Repositioning on Earnings and Margins
Executed an additional securities repositioning at the end of Q2, resulting in a $8.5 million net loss but expected to be accretive to future earnings.
Repositioning is projected to add 13 basis points to net interest margin and $0.20 of annual EPS, primarily benefiting Q3.
Management emphasized the strategic importance of this move for margin expansion and earnings growth.
AFG reported core net operating earnings of $2.14 per share for Q2 2025, down from $2.56 in the prior year quarter.
AFG returned over $100 million to shareholders in Q2 2025 through dividends and share repurchases.
Alternative investments returned 1.2% annualized in Q2 2025, down from 5.1% in the prior year quarter, negatively impacting overall investment income by about 5%.
Annualized core operating return on equity was 15.5%, despite lower returns from alternative investments.
Gross and net written premiums increased 10% and 7%, respectively, driven partly by earlier crop acreage reporting.
Net investment income excluding alternatives increased 10% year-over-year due to higher interest rates and asset balances.
Underwriting margins in Specialty Property & Casualty insurance were strong with a 93.1% combined ratio, up 2.6 points year-over-year.
Dafinchi