Deposits grew by $32 million, resulting in a loan-to-deposit ratio of 95%, and cost of funds declined slightly.
Investment securities increased by $164 million to $562 million, driven by $206 million in securities from securitizations with an average yield of approximately 5.63%.
Net interest income increased by $6.6 million or 15.4% from the first quarter, partly due to $2 million in fee income from securitization transactions.
Net interest margin improved materially to 4.22%, with a forecasted margin of 3.90% to 3.95% for the second half of 2025 assuming no new securitizations.
Noninterest expenses rose 2.6% or $738,000, with $500,000 attributed to securitization-related costs.
Return on assets improved to 1.38% and return on equity was 14.7%.
Second quarter loans grew by $91.7 million, with compound annual growth of 21.1% since December 2021, expanding from $2.07 billion to $4.08 billion.
Third Coast Bancshares reported second quarter net income of $15.6 million, up 25% versus the first quarter of 2025.
Significant Operating Leverage and Margin Expansion Strategy
Primis highlighted its wide operating leverage, with incremental margins in the mid-4% range, driven by the sale of the life premium portfolio and the addition of the warehouse lending team.
The company emphasized that its digital platform is scalable and targeted, contributing $36 million at a 4.06% rate, supporting low-cost deposits and high-yield lending.
Management stressed that deposit costs have decreased by 32% year-over-year to 2.89%, significantly improving margin and deposit competitiveness.
Closed over $500 million of fund commitments in Q2, totaling over $1 billion to date, providing over $2 billion in combined liquidity and fund availability.
Discounted debt extinguishment gains are maintained at $20 million in guidance, with potential for higher gains from debt purchases at 1552-1560 Broadway.
Earnings guidance was raised by $0.40 per share at the midpoint, reflecting substantial increased profit.
Interest expense is trending about $0.10 per share above expectations due to timing of asset sales and debt payoff delays.
NOI is trending slightly better than original expectations, offset by some underperformance at SUMMIT due to temporary closure of a premium experience.
Sale of 50% participation interest in preferred equity position at 625 Madison Avenue generated significant liquidity.
SL Green concluded over 540,000 square feet of leasing in Q2 2025, bringing year-to-date leasing to 1.3 million square feet, with a pipeline of over 1 million square feet for near-term execution.
The company realized nearly $90 million profit on a $130 million investment in 522 Fifth Avenue mortgage position within a year.
Dafinchi