Allowance for credit losses ratio increased slightly to 1.45%, with a $2.5 million provision driven by specific reserves and net charge-offs.
Capital ratios remain strong with CET1 at 13.86% and Tier 1 leverage at 12.12%, tangible common equity to tangible assets at 9.98%, and tangible book value per share increased to $26.70.
Deposits decreased by $53.6 million to $3.74 billion, with a shift toward more noninterest-bearing deposits, increasing their ratio to 26.7%.
Loans held for investment grew by $23.1 million or 3% annualized to $3.1 billion, despite higher loan payoffs totaling $49.1 million in multifamily loans.
Net interest income increased to $42.5 million from $38.5 million sequentially, with net interest margin (NIM) rising to 4.07% from 3.81%, partly due to the onetime interest recovery.
Noninterest expense increased slightly to $33.5 million, driven by higher personnel and professional service costs.
Noninterest income rose to $12.2 million from $10.6 million, mainly due to mortgage banking revenue increases and fair value adjustments.
Second quarter diluted EPS was $0.86, up from $0.72 in the linked quarter, boosted by a $1.6 million onetime interest recovery related to a fully repaid nonaccrual loan.
Adjusted EBITDA was $105 million with a margin of 24.8%, up 80 basis points sequentially; excluding divestiture impacts, EBITDA grew 12% with margin expansion of 130 basis points.
Adjusted net income was $27.6 million or $0.46 per share, down from $0.59 last year due to divestiture EBITDA loss; GAAP net loss of $50 million included noncash tax valuation allowances.
Digital Wallet revenue grew 3% organically to $201.2 million, with 7.2 million 3-month active users, but adjusted EBITDA was flat year-over-year due to lower interest revenue and business mix.
Merchant Solutions volume increased 9% to $35.7 billion, with organic revenue growth of 6% and adjusted EBITDA margin of 17.1%, despite mix headwinds from ISO channel growth.
Reported revenue declined 3% to $428.2 million, but organic revenue grew 5%, driven by double-digit e-commerce growth and modest gains in SMB and digital wallets.
Unlevered free cash flow was $54 million with a 51% conversion rate, impacted by unfavorable FX; LTM conversion stood at 64%, with full-year guidance of 65-70%.
Declines were driven by lower U.S. agent count, broker fees, and revenue from previous acquisitions, partially offset by new revenue streams including RE/MAX Media Network and lead concierge initiatives.
Revenue excluding marketing funds was $54.5 million, down 6.8% year-over-year due to negative organic growth of 5.7% and adverse foreign currency movements of 1.1%.
Selling, operating, and administrative expenses decreased by $1 million or 2.8% to $33.9 million, primarily due to lower personnel expenses partially offset by severance and investments in flagship websites.
Total leverage ratio was 3.58:1 as of June 30, consistent with March 31, with expectations to decrease in the second half of the year.
Total revenue for Q2 2025 was $72.8 million, with adjusted EBITDA of $26.3 million and an adjusted EBITDA margin of 36.1%, up 30 basis points from Q2 2024.
Alternative investment income was $60 million below expectations due to lower private equity and real estate returns and a $50 million unfavorable impact from the annual assumption update process.
Capital position remains strong with cash and liquid assets at $3.9 billion, above the $3 billion minimum liquidity target.
Group insurance had one of its best earnings quarters recently with strong underwriting results and a benefit ratio improved to 80.9%.
Individual Life sales grew 10% year-over-year with improved earnings results.
Institutional Retirement delivered $9 billion in sales, including robust Longevity Risk Transfer transactions.
International businesses sales were up 4%, driven by retirement and savings products in Japan despite surrender headwinds.
PGIM's assets under management increased by 8% to $1.4 trillion, with total net flows of $400 million including $2.6 billion institutional inflows and $2.8 billion retail outflows.
Pretax adjusted operating income was $1.7 billion or $3.58 per share, up 9% from the prior year quarter.
Dafinchi