First Internet Bancorp
For the period ended Sep 30, 2025. Filed Nov 10, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2025 · Filed Nov 10, 2025
INBK$25.37-1.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-06-30; filed 2025-08-06.
0001562463-25-000071
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2025-09-30; filed 2025-11-10.
0001562463-25-000109
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 107 previous paragraphs and 116 current paragraphs.
56 unchanged; 42 reworded; 17 added; 7 removed; 2 previous and 1 current paragraphs rearranged.
Tables are not compared: 18 previous and 18 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (17)
Current report
The $48.6 million decrease in net income for the third quarter 2025 compared to the third quarter 2024 was due primarily to an increase of $31.4 million, or 926.2%, in the provision for credit losses, a decrease of $36.7 million, or 304.9%, in noninterest income, as well as an increase of $2.7 million, or 11.7%, in noninterest expense, partially offset by an increase of $8.6 million, or 39.5%, in net interest income and a decrease of $13.6 million in income tax expense.
Current report
The $58.4 million decrease in net income for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 was due primarily to an increase of $50.5 million, or 511.3%, in the provision for credit losses, a decrease of $40.1 million, or 127.6%, in noninterest income and an increase of $4.7 million, or 7.0%, in noninterest expense, partially offset by an increase of $19.6, or 30.7%, in net interest income and a decrease of $17.2 million in income tax expense.
Current report
During the third quarter 2025, the Company closed on the sale of $836.9 million of single tenant lease financing loans recognizing a pre-tax loss of $37.8 million on the transaction. The transaction was executed as part of an initiative to strengthen the Company’s regulatory capital ratios and improve its interest rate risk position. While the loss on the transaction negatively impacted shareholders’ equity and regulatory capital, the transaction significantly reduced risk-weighted assets, resulting in a net positive effect on regulatory capital ratios. Furthermore, the loan sale reduced the Company’s interest rate risk profile by reducing exposure to longer-duration assets. Additionally, the Company expects the transaction to have a beneficial impact on key profitability metrics, such as net interest margin and return on average assets, in future periods.
Current report
Subsequent to September 30, 2025, the Company sold an additional $14.3 million of single tenant lease financing loans resulting in a pre-tax loss of $0.5 million. The Company does not anticipate any additional sales from this transaction.
Current report
During the three months ended September 30, 2025, the Company sold $836.9 million of single tenant lease financing loans, which resulted in a net loss on the sale of $29.1 million. Excluding the net loss on the sale of these loans, adjusted net loss for the three months ended September 30, 2025 was $12.5 million and adjusted diluted loss per share was $1.42. Additionally, for the three months ended September 30, 2025, adjusted ROAA, adjusted ROAE and adjusted ROATCE were (0.81%), (12.63%) and (12.78%), respectively.
Current report
During the nine months ended September 30, 2025, the Company sold $836.9 million of single tenant lease financing loans, which resulted in a net loss on the sale of $29.1 million. Excluding the net loss on the sale of these loans, adjusted net loss for the nine months ended September 30, 2025 was $11.3 million and adjusted diluted loss per share was $1.29. Additionally, for the nine months ended September 30, 2025, adjusted ROAA, adjusted ROAE and adjusted ROATCE were (0.25%), (3.86%) and (3.91%), respectively.
Current report
During the nine months ended September 30, 2025, adjusted PTPP was $41.9 million, an increase of 43.7% from adjusted PTPP of $29.1 million for the nine months ended September 30, 2024. The $12.7 million increase was due to an increase of $19.6 million, or 30.7%, in net interest income, partially offset by a decrease of $2.2 million, or 7.2%, in adjusted noninterest income and an increase of $4.7 million, or 7.0%, in noninterest expense.
Current report
Net interest income for the nine months ended September 30, 2025 was $83.4 million, an increase of $19.6 million, or 30.7%, compared to $63.8 million for the nine months ended September 30, 2024. The increase in net interest income was the result of a $28.0 million, or 13.1%, increase in total interest income to $242.1 million for the nine months ended September 30, 2025 from $214.1 million for the nine months ended September 30, 2024. The increase in total interest income was partially offset by an $8.4 million, or 5.6%, increase in total interest expense to $158.7 million for the nine months ended September 30, 2025 from $150.3 million for the nine months ended September 30, 2024.
Current report
Noninterest (Loss) Income
Current report
Total assets decreased $98.7 million, or 1.7%, to $5.6 billion at September 30, 2025 compared to $5.7 billion at December 31, 2024. The decrease was due primarily to a decline in loans due to the single tenant leasing financing loan sale and lower construction and franchise finance balances, partially offset by higher investor commercial real estate, commercial and industrial and small business lending balances. Total liabilities declined $66.8 million, or 1.2%, to $5.3 billion at September 30, 2025 compared to $5.4 billion at December 31, 2024. The decrease was due mainly to a decline in advances from the Federal Home Loan Bank and, to a lesser extent, a decrease in total deposits. Increased liquidity from growth in fintech partnership deposits allowed the Company to pay down higher cost brokered deposits and advances from the Federal Home Loan Bank throughout 2025.
Current report
Total deposits decreased $17.8 million, or 0.3%, to $4.9 billion as of September 30, 2025, compared to $4.9 billion as of December 31, 2024. The decrease was due primarily to decreases of $279.6 million, or 49.7%, in brokered deposits and $17.8 million, or 0.8%, in certificates of deposits, partially offset by increases of $107.3 million, or 12.0%, in interest-bearing demand deposits, $107.1 million, or 78.5%, in noninterest-bearing deposits and $66.4 million, or 5.6%, in money market accounts. The increase in noninterest-bearing deposits and interest-bearing demand deposits, driven by growth in fintech partnership deposits, provided the ability to pay down maturing higher-cost brokered deposits and certificates of deposits.
Current report
Goodwill
Current report
Goodwill represents the excess of the cost of an acquisition over the fair value of the net assets acquired. Goodwill is not amortized but is periodically evaluated for impairment under the provisions of ASC Topic 350, Intangibles - Goodwill and Others. Impairment losses on recorded goodwill, if any, will be recorded as operating expenses.
Current report
Impairment testing is performed using either a qualitative or quantitative approach. The Company has selected August 31 as the date to perform the annual goodwill impairment test. Additionally, the Company performs a goodwill impairment evaluation on an interim basis when events or circumstances indicate impairment potentially exists.
Current report
To quantitatively test goodwill for impairment, an income-based approach and a market-based approach are completed. The income-based approach utilizes a calculation based on the discounted cash flow method and relies on assumptions, some of which involve a level of subjectivity and judgment. Certain assumptions may be subject to market and economic conditions. Notably, key inputs to estimate the discounted after-tax net income stream and terminal fair value of the Company include projected balance sheet and income statement forecasts prepared by Company management. Further, after-tax net income streams distributable to common equity holders are subjected to a minimum tangible equity requirement of 8.00%. These inputs are discounted by the cost of equity, which includes assumptions involving the Company’s beta, equity risk, size and premiums, and the 20-year treasury yield. Assumptions used in calculating the cost of equity are obtained using market and third-party data.
Current report
The market-based approach utilizes two methodologies for its calculation: a peer analysis and a comparable transaction analysis. The peer analysis uses a set of comparable institutions price to earnings and price to tangible book value multiples and applies the multiple to forecasted net income/tangible book value to determine if impairment is present. The peer analysis also includes an assumed control premium in the determination of the fair value of the Company. The comparable transaction analysis applies price-to-earnings and price-to-tangible book value multiples for comparable merger and acquisition activity and applies the multiple to forecasted net income and tangible book value to determine if impairment is present. Notably, the comparable transaction analysis assumes a control premium is already implied within the multiples selected. Upon completion of the income-based approach and market-based approach, the results are then weighted to determine a final estimated fair value of equity. When results were compared to book value, no impairment was indicated as of August 31, 2025.
Current report
Judgment is inherent in assessing goodwill for impairment. The various assumptions used in assessing goodwill for impairment involve uncertainties that are beyond the Company’s control and could cause actual results to differ materially from those projected. We will continue to monitor the impact of current economic conditions and other events on the Company’s business, operating results, cash flows and financial condition. If the current economic conditions and other events were to deteriorate and the Company’s stock price falls below current levels for a prolonged period, we will have to reevaluate the impact on the Company’s financial condition and potential impairment of goodwill.
Removed paragraphs (7)
Previous report
The $5.6 million decrease in net income for the second quarter 2025 compared to the second quarter 2024 was due primarily to an increase of $9.6 million, or 237.6%, in the provision for credit losses and a decrease of $5.5 million, or 49.6%, in noninterest income, partially offset by increases of $6.7 million, or 31.2%, in net interest income as well as a $2.3 million income tax benefit and a decrease of $0.5 million, or 2.4%, in noninterest expense.
Previous report
The $9.8 million decrease in net income for the six months ended June 30, 2025 compared to the six months ended June 30, 2024 was due primarily to increases of $19.1 million, or 294.2%, in the provision for credit loss and $2.0 million, or 4.6%, in noninterest expense and a decrease of $3.4 million, or 17.5%, in noninterest income, partially offset by an increase of $11.0 million, or 26.2%, in net interest income and a $3.6 million in income tax benefit.
Previous report
During the six months ended June 30, 2025, PTPP income was $23.7 million, an increase of 31.1% from PTPP of $18.1 million for the six months ended June 30, 2024. The $5.6 million increase was due to an increase of $11.0 million, or 26.2%, in net interest income, partially offset by a decrease of $3.4 million, or 17.5%, in noninterest income and an increase of $2.0 million, or 4.6%, in noninterest expense.
Previous report
Net interest income for the six months ended June 30, 2025 was $53.1 million, an increase of $11.0 million, or 26.2%, compared to $42.1 million for the six months ended June 30, 2024. The increase in net interest income was the result of an $18.6 million, or 13.4%, increase in total interest income to $157.7 million for the six months ended June 30, 2025 from $139.1 million for the six months ended June 30, 2024. The increase in total interest income was partially offset by a $7.6 million, or 7.8%, increase in total interest expense to $104.6 million for the six months ended June 30, 2025 from $97.1 million for the six months ended June 30, 2024.
Previous report
Noninterest Income
Previous report
Total assets increased $334.7 million, or 5.8%, to $6.1 billion at June 30, 2025 compared to $5.7 billion at December 31, 2024. The increase was due primarily to an increase in deposits driven by growth in fintech partnerships, which was used in conjunction with on-balance sheet liquidity to fund loan growth, purchase securities and pay down higher cost brokered deposits and FHLB advances.
Previous report
Total deposits increased $365.6 million, or 7.4%, to $5.3 billion as of June 30, 2025, compared to $4.9 billion as of December 31, 2024. The increase was due primarily to increases of $561.5 million, or 62.6%, in interest-bearing demand deposits, $27.2 million, or 2.3%, in money market accounts, $12.9 million, or 0.6%, in certificates of deposit and $8.7 million or 6.4%, in noninterest-bearing deposits, partially offset by a decrease of $245.7 million, or 43.7%, in brokered deposits. The increase in interest-bearing demand deposits was due primarily to growth in fintech partnership deposits. When combined with the liquidity provided by growth in money market accounts, the Company paid down a significant amount of higher-cost brokered deposits.
Reworded paragraphs (42)
Previous wording
We believe that we differentiate ourselves from larger financial institutions by providing a full suite of services to emerging small businesses and entrepreneurs on a nationwide basis. We are one of the fastest-growing lenders in the Small Business Administration (“SBA”) 7(a) program, closing $282.8 million in SBA 7(a) loans during the six months ended June 30, 2025, and currently rank as the 7th largest SBA 7(a) lender for the SBA’s year-to-date 2025 fiscal year. We also offer a top-ranked small business checking account product to our country’s entrepreneurs.
Current wording
We believe that we differentiate ourselves from larger financial institutions by providing a full suite of services to emerging small businesses and entrepreneurs on a nationwide basis. We are an active lender in the Small Business Administration (“SBA”) 7(a) program, closing $460.4 million in SBA 7(a) loans during the nine months ended September 30, 2025, and currently rank as the 7th largest SBA 7(a) lender for the SBA’s 2025 fiscal year ended. We also offer a top-ranked small business checking account product to our country’s entrepreneurs.
Previous wording
As of June 30, 2025, the Company had consolidated assets of $6.1 billion, consolidated deposits of $5.3 billion and stockholders’ equity of $390.2 million.
Current wording
As of September 30, 2025, the Company had consolidated assets of $5.6 billion, consolidated deposits of $4.9 billion and stockholders’ equity of $352.2 million.
Previous wording
During the second quarter 2025, net income was $0.2 million, or $0.02 diluted earnings per share, compared to net income of $5.8 million, or $0.67 diluted earnings per share, during the second quarter 2024, representing a decrease in net income of $5.6 million, or 96.7%, and a decrease in diluted earnings per share of $0.65, or 97.0%. During the six months ended June 30, 2025, net income was $1.1 million, or $0.13 diluted earnings per share, compared to the six months ended June 30, 2024 net income of $11.0 million, or $1.25 per diluted share, resulting in a decrease in net income of $9.8 million, or 89.6%, and a decrease in diluted earnings per share of $1.12, or 89.6%.
Current wording
During the third quarter 2025, net loss was $41.6 million, or $4.76 diluted loss per share, compared to net income of $7.0 million, or $0.80 diluted earnings per share, during the third quarter 2024, representing a decrease in net income of $48.6 million, or 695.0%, and a decrease in diluted earnings per share of $5.56, or 695.0%. During the nine months ended September 30, 2025, net loss was $40.5 million, or $4.63 diluted loss per share, compared to the nine months ended September 30, 2024 net income of $17.9 million, or $2.05 per diluted share, resulting in a decrease in net income of $58.4 million, or 325.4%, and a decrease in diluted earnings per share of $6.68, or 325.9%.
Previous wording
During the second quarter 2025, return on average assets (“ROAA”), return on average shareholders’ equity (“ROAE”), and return on average tangible common equity (“ROATCE”) were 0.01%, 0.20%, and 0.20%, respectively, compared to 0.44%, 6.28%, and 6.36%, respectively, for the second quarter 2024. During the six months ended June 30, 2025, ROAA, ROAE and ROATCE were 0.04%, 0.58%, and 0.59%, respectively, compared to 0.42%, 5.96%, and 6.04%, respectively, for the six months ended June 30, 2024.
Current wording
During the third quarter 2025, return on average assets (“ROAA”), return on average shareholders’ equity (“ROAE”), and return on average tangible common equity (“ROATCE”) were (2.71%), (42.11%) and (42.62%), respectively, compared to 0.50%, 7.32% and 7.41%, respectively, for the third quarter 2024. During the nine months ended September 30, 2025, ROAA, ROAE and ROATCE were (0.91%), (13.80%) and (13.97%), respectively, compared to 0.45%, 6.42% and 6.51%, respectively, for the nine months ended September 30, 2024.
Previous wording
During the six months ended June 30, 2024, the Company recognized $0.5 million in IT termination fees and $0.1 million in anniversary expenses. Excluding these items, adjusted net income for the six months ended June 30, 2024 was $11.4 million and adjusted diluted earnings per share was $1.30. Additionally, for the six months ended June 30, 2024, adjusted ROAA, adjusted ROAE and adjusted ROATCE were 0.43%, 6.20% and 6.29%, respectively.
Current wording
During the nine months ended September 30, 2024, the Company recognized $0.5 million in IT termination fees and $0.1 million in anniversary expenses. Excluding these items, adjusted net income for the nine months ended September 30, 2024 was $18.4 million and adjusted diluted earnings per share was $2.10. Additionally, for the nine months ended September 30, 2024, adjusted ROAA, adjusted ROAE and adjusted ROATCE were 0.46%, 6.58% and 6.67%, respectively.
Previous wording
During the second quarter 2025, pre-tax, pre-provision income (“PTPP”) was $11.7 million, an increase of 17.2% from PTPP of $10.0 million for the second quarter 2024. The $1.7 million increase was due to an increase of $6.7 million, or 31.2%, in net interest income and a decrease of $0.5 million, or 2.4%, in noninterest expense, partially offset by a decrease of $5.5 million, or 49.6%, in noninterest income.
Current wording
During the third quarter 2025, adjusted pre-tax, pre-provision income (“PTPP”) was $18.1 million, an increase of 64.3% from adjusted PTPP of $11.0 million for the third quarter 2024. The $7.1 million increase was due to an increase of $8.6 million, or 39.5%, in net interest income and an increase of $1.1 million, or 9.5%, in adjusted noninterest income, partially offset by an increase of $2.7 million, or 11.7%, in noninterest expense.
Previous wording
Net interest income for the second quarter 2025 was $28.0 million, an increase of $6.7 million, or 31.2%, compared to $21.3 million for the second quarter 2024. The increase in net interest income was the result of a $9.9 million, or 14.0%, increase in total interest income to $80.9 million for the second quarter 2025 from $71.0 million for the second quarter 2024, partially offset by a $3.3 million, or 6.6%, increase in total interest expense to $52.9 million for the second quarter 2025 from $49.6 million for the second quarter 2024.
Current wording
Net interest income for the third quarter 2025 was $30.4 million, an increase of $8.6 million, or 39.5%, compared to $21.8 million for the third quarter 2024. The increase in net interest income was the result of a $9.4 million, or 12.5%, increase in total interest income to $84.4 million for the third quarter 2025 from $75.0 million for the third quarter 2024. The increase in total interest income was partially offset by a $0.8 million, or 1.5%, increase in total interest expense to $54.0 million for the third quarter 2025 from $53.2 million for the third quarter 2024.
Previous wording
The increase in total interest income for the second quarter 2025 compared to second quarter 2024 was due primarily to an increase in interest earned on loans, resulting from an increase of 24 bps in the yield earned on loans, including loans held-for-sale, as well as an increase of $470.5 million, or 12.0%, in the average balance of loans, including loans held-for-sale. Additionally, the average balance of securities increased $190.5 million, or 25.6%, and the yield earned on the securities portfolio increased 15 bps for the second quarter 2025 compared to the second quarter 2024. The yield on funded portfolio loan originations was 7.55% for the second quarter 2025, a decrease of 133 bps compared to the second quarter 2024, reflective of 100 bps of Fed rate cuts in the second half of 2024. However, new origination yields remained well above the overall loan portfolio yield, helping to drive both total interest income and the loan portfolio yield higher.
Current wording
The increase in total interest income for the third quarter 2025 compared to third quarter 2024 was due primarily to an increase in interest earned on loans, resulting from an increase of 28 bps in the yield earned on loans, including loans held-for-sale, as well as an increase of $397.8 million, or 9.9%, in the average balance of loans, including loans held-for-sale. Related to securities, the average balance increased $106.1 million, or 13.4%, while the yield earned on the securities portfolio increased 8 bps for the third quarter 2025 compared to the third quarter 2024. The yield on funded portfolio loan originations was 7.50% for the third quarter 2025, a decrease of 135 bps compared to the third quarter 2024, reflective of 100 bps of Fed rate cuts in the second half of 2024. However, new origination yields remained well above the overall loan portfolio yield, helping to drive both total interest income and the loan portfolio yield higher.
Previous wording
The increase in total interest income for the six months ended June 30, 2025 compared to the six months ended June 30, 2024 was due primarily to an increase in interest earned on loans, resulting from an increase of 25 bps in the yield on loans, including loans held-for-sale, as well as an increase of $410.9 million, or 10.5%, in the average balance of loans, including loans held-for-sale. Additionally, the average balance of securities increased $194.5 million, or 26.9%, and the yield earned on the securities portfolio increased 22 bps for the six months ended June 30, 2025 compared to the six months ended June 30, 2024. The increase in total interest income was partially offset as the yield on other earning assets decreased 100 bps and the average balance of other earning assets decreased $30.7 million, or 6.8%. The increase in the yield earned on loans and securities was due to the impact of the continued elevated interest rate environment on both existing and newly-originated interest-earning assets. The yield on funded portfolio loan originations was 7.57% for the six months ended June 30, 2025, a decrease of 119 bps compared to the six months ended June 30, 2024.
Current wording
The increase in total interest income for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 was due primarily to an increase in interest earned on loans, resulting from an increase of 26 bps in the yield on loans, including loans held-for-sale, as well as an increase of $406.6 million, or 10.3%, in the average balance of loans, including loans held-for-sale. Additionally, the average balance of securities increased $164.8 million, or 22.1%, and the yield earned on the securities portfolio increased 17 bps for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. The increase in total interest income was partially offset as the yield on other earning assets decreased 107 bps and the average balance of other earning assets decreased $5.6 million, or 1.2%. The increase in the yield earned on loans and securities was due to both existing and newly-originated interest-earning assets, despite the lowered interest rates in September. The yield on funded portfolio loan originations was 7.58% for the nine months ended September 30, 2025, a decrease of 127 bps compared to the nine months ended September 30, 2024.
Previous wording
The increase in total interest expense for the second quarter 2025 compared to the second quarter 2024 was due primarily to increases of $7.2 million, or 280.5%, in interest expense associated with interest-bearing demand deposits and $1.0 million, or 18.7%, in interest expense associated with other borrowed funds, partially offset by decreases of $2.0 million, or 15.2%, in interest expense associated with money market accounts and $1.6 million, or 5.9%, in interest expense associated with certificates and brokered deposits. When combined with deposits formerly classified as fintech – brokered deposits, the increase in interest expense related to interest-bearing demand deposits was driven by an increase in the average balance of $632.7 million, or 106.5%, compared to the second quarter of 2024 due to continued growth in fintech deposits, while the cost of funds increased 57 bps due to the change in deposit mix. The decrease in interest expense related to money market accounts was driven by a decrease in the average deposit balance of $55.2 million, or 4.4%, as well as a 49 bp decrease in the cost of these deposits. The decrease in interest expense related to certificates and brokered deposits was driven by a decrease of 37 bps in the cost of these deposits, partially offset by an increase in the average deposit balance of $43.8 million. The increase in the average balance of these deposits was driven by strong consumer and small business demand for certificates of deposits, partially offset by lower brokered deposit balances as the Company used on-balance sheet liquidity to pay down higher-cost brokered deposits, which is expected to positively impact deposit costs in future periods. The increase in interest expense related to other borrowed funds was driven by an increase of 114 bps in the cost of funds, partially offset by a decrease in the average balance of $84.6 million, or 13.0%.
Current wording
The increase in total interest expense for the third quarter 2025 compared to the third quarter 2024 was due primarily to increases of $8.9 million, or 307.7%, in interest expense associated with interest-bearing demand deposits, partially offset by decreases of $3.2 million, or 10.9%, in interest expense associated with certificates and brokered deposits, $1.2 million, or 9.3%, in interest expense associated with money market accounts and $1.9 million, or 32.8%, in interest expense associated with other borrowed funds. When combined with deposits formerly classified as fintech – brokered deposits, the increase in interest expense related to interest-bearing demand deposits was driven by an increase in the average balance of $734.9 million, or 110.6%, compared to the third quarter 2024 due to continued growth in fintech deposits, while the cost of funds increased 109 bps due to the change in deposit mix. The decrease in interest expense related to certificates and brokered deposits was driven by a decrease of 52 bps in the cost of these deposits, as well as a decrease in the average balance of these deposits of $8.9 million, or 0.4%. The decrease in interest expense related to money market accounts was driven by a 49 bp decrease in the cost of these deposits, partially offset by an increase in the average balance of these deposits of $25.7 million, or 2.1%. The decrease in interest expense related to other borrowed funds was driven by a decrease in the average balance of $254.9 million, or 41.1%, partially offset by an increase of 51 bps in the cost of funds.
Previous wording
The increase in total interest expense for the six months ended June 30, 2025 compared to the six months ended June 30, 2024 was due primarily to increases of $12.1 million, or 259.4%, in interest expense associated with interest-bearing demand deposits and $1.2 million, or 2.3%, in interest expense associated with certificates and brokered deposits, partially offset by decreases of $3.3 million, or 12.8%, in interest expense associated with money market deposits and $0.2 million, or 2.2%, in interest expense associated with other borrowed funds. When combined with deposits formerly classified as fintech - brokered deposits, the increase in interest expense related to interest-bearing demand deposits was due primarily to a 56 bp increase in the cost of these deposits, as well as an increase of $545.0 million, or 99.6%, in the average balance of these deposits. The increase in interest expense related to certificates and brokered deposits was driven by an increase of $206.8 million, or 9.1%, in the average balance of these deposits, partially offset by a decrease of 28 bps in the cost of these deposits. The increase in the average balance of these deposits was driven by strong consumer and small business demand for certificates of deposits, partially offset by lower brokered deposit balances as the Company used on-balance sheet liquidity to pay down higher-cost brokered deposits. The decrease in interest expense related to money market accounts was driven primarily by a decrease of $25.8 million, or 2.1%, in the average balance of these deposits as well as a decrease of 45 bps in the cost of these deposits. The decrease in interest expense related to other borrowed funds was driven by a decrease in the average balance of $199.6 million, or 29.2%, partially offset by a 118 bp increase in the cost of these funds.
Current wording
The increase in total interest expense for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 was due primarily to an increase of $20.9 million, or 277.9%, in interest expense associated with interest-bearing demand deposits, partially offset by decreases of $4.5 million, or 11.6%, in interest expense associated with money market accounts, $2.1 million, or 13.2%, in interest expense associated with other borrowed funds and $2.0 million, or 2.4%, in interest expense associated with certificates and brokered deposits. When combined with deposits formerly classified as fintech - brokered deposits, the increase in interest expense related to interest-bearing demand deposits was due primarily to a 103 bp increase in the cost of these deposits, as well as an increase of $609.1 million, or 103.9%, in the average balance of these deposits. The decrease in interest expense related to money market accounts was driven primarily by a decrease of 46 bps in the cost of these deposits, as well as a decrease of $8.5 million, or 0.7%, in the average balance of these deposits. The decrease in interest expense related to other borrowed funds was driven by a decrease in the average balance of $218.3 million, or 32.9%, partially offset by a 96 bp increase in the cost of these funds. The increase in interest expense related to certificates and brokered deposits was driven by an increase of $134.3 million, or 5.7%, in the average balance of these deposits, partially offset by a decrease of 36 bps in the cost of these deposits. The increase in the average balance of these deposits was driven by the continued benefit from CD repricing, partially offset by lower brokered deposit balances as the Company used on-balance sheet liquidity to pay down higher-cost short term FHLB advances, which is expected to positively impact deposit costs in future periods.
Previous wording
Overall, the cost of total interest-bearing liabilities for the second quarter 2025 decreased 18 bps to 3.96% from 4.14% for the second quarter 2024. The cost of total interest-bearing liabilities for the six months ended June 30, 2025 decreased 11 bps to 3.99% from 4.10% for the six months ended June 30, 2024.
Current wording
Overall, the cost of total interest-bearing liabilities for the third quarter 2025 decreased 33 bps to 3.90% from 4.23% for the third quarter 2024. The cost of total interest-bearing liabilities for the nine months ended September 30, 2025 decreased 18 bps to 3.96% from 4.14% for the nine months ended September 30, 2024.
Previous wording
Net interest margin (“NIM”) was 1.96% for the second quarter 2025 compared to 1.67% for the second quarter 2024, an increase of 29 bps. On a fully-taxable equivalent (“FTE”) basis, NIM was 2.04% for the second quarter 2025 compared to 1.76% for the second quarter 2024, an increase of 28 bps. NIM was 1.89% for the six months ended June 30, 2025 compared to
Current wording
Net interest margin (“NIM”) was 2.04% for the third quarter 2025 compared to 1.62% for the third quarter 2024, an increase of 42 bps. On a fully-taxable equivalent (“FTE”) basis, NIM was 2.12% for the third quarter 2025 compared to 1.70% for the third quarter 2024, an increase of 42 bps. NIM was 1.94% for the nine months ended September 30, 2025 compared to
Previous wording
1.67% for the six months ended June 30, 2024, an increase of 22 bps. FTE NIM was 1.97% for the six months ended June 30, 2025 compared to 1.76% for the six months ended June 30, 2024, an increase of 21 bps.
Current wording
1.65% for the nine months ended September 30, 2024, an increase of 29 bps. FTE NIM was 2.02% for the nine months ended September 30, 2025 compared to 1.74% for the nine months ended September 30, 2024, an increase of 28 bps.
Previous wording
The increase in the second quarter and six months ended June 30, 2025 NIM and FTE NIM compared to the second quarter and six months ended June 30, 2024 reflects the combination of deploying cash balances into higher yielding loans and securities and continued improvement in the cost of funds related to deposits.
Current wording
The increase in the third quarter and nine months ended September 30, 2025 NIM and FTE NIM compared to the third quarter and nine months ended September 30, 2024 reflects the combination of deploying cash balances into higher yielding loans and securities and continued improvement in the cost of funds related to deposits.
Previous wording
The following table shows noninterest income for each of the periods presented.
Current wording
The following table shows noninterest (loss) income for each of the periods presented.
Previous wording
During the second quarter 2025, noninterest income was $5.6 million, representing a decrease of $5.4 million, or 49.6%, compared to $11.0 million for the second quarter 2024. The decrease in noninterest income was due primarily to a decrease in gain on sale of loans, partially offset by increases in other revenue and net loan servicing revenue. The decrease of $6.6 million, or 79.8%, in gain on sale of loans was due to a decrease in the volume of U.S. Small Business Administration (“SBA”) 7(a) guaranteed loans sales, as the Company implemented a process change to hold SBA loans for a longer period of time before selling them in the secondary market. The increase of $0.9 million, or 49.9%, in other noninterest income was due primarily to a planned distribution from a fund investment. The increase of $0.2 million, or 28.9%, in net loan servicing was due to growth in the balance of the Company’s SBA 7(a) servicing portfolio, partially offset by the fair value adjustment to the loan servicing asset.
Current wording
During the third quarter 2025, there was a loss in noninterest income of $24.6 million, representing a decrease of $36.7 million, or 304.9%, compared to $12.0 million of noninterest income for the third quarter 2024. The decrease in noninterest income was due primarily to a decrease in gain on sale of loans, partially offset by an increase in other noninterest income. The decrease of $37.0 million, or 372.9%, in gain on sale of loans was due to the sale of $836.9 million of single tenant lease financing loans that was completed during the quarter, which resulted in a pre-tax loss of $37.8 million. Excluding the loss on the loan sale, adjusted noninterest income totaled $13.2 million for the third quarter 2025, an increase of $1.1 million, compared to the third quarter 2024. The increase was driven by higher gain on sale revenue, which consisted almost entirely of sales of U.S. Small Business Administration (“SBA”) 7(a) guaranteed loans. The increase in other noninterest income of $0.2 million, or 3.3%, was due primarily to distributions from fund investments.
Previous wording
During the six months ended June 30, 2025, noninterest income was $16.0 million, a decrease of $3.4 million, or 17.5%, compared to $19.4 million for the six months ended June 30, 2024. The decrease in noninterest income was due primarily to a decrease in gain on sale of loans, partially offset by increases in other income and net loan servicing revenue. The decrease of $4.5 million, or 30.4%, in gain on sale of loans was due to a decrease in the volume of SBA 7(a) guaranteed loans sales, as the Company implemented a process change to hold SBA for a longer period of time before selling them in the secondary market. The increase of $0.9 million, or 36.7%, in other noninterest income was due primarily to a planned distribution from a fund investment. The increase of $0.1 million, or 6.4%, in net loan servicing was due to growth in the balance of the Company’s SBA 7(a) servicing portfolio, partially offset by the fair value adjustment to the loan servicing asset.
Current wording
During the nine months ended September 30, 2025, there was a loss in noninterest income of $8.7 million, a decrease of $40.1 million, or 127.6%, compared to $31.4 million for the nine months ended September 30, 2024. The decrease in noninterest income was due primarily to a decrease in gain on sale of loans, partially offset by an increase in other noninterest income. The decrease of $41.5 million, or 167.8%, in gain on sale of loans was due primarily to the sale of $836.9 million of single tenant lease financing loans that was completed during the quarter, which resulted in a pre-tax loss of $37.8 million. Excluding the loss on the loan sale, adjusted noninterest income totaled $29.2 million for the nine months ended September 30 2025, a decrease of $2.2 million, compared to the nine months ended September 2024. The decrease was driven by lower gain on sale revenue, which was due to a decrease in the volume of SBA 7(a) guaranteed loans sales, as the Company implemented a process change to hold SBA loans for a longer period of time before selling them in the secondary market. The increase in other noninterest income of $1.2 million, or 31.9%, was due primarily to distributions from fund investments.
Previous wording
Noninterest expense for the second quarter 2025 was $21.8 million, representing a decrease of $0.5 million, or 2.4%, compared to $22.3 million for the second quarter 2024. The decrease in noninterest expense was due primarily to decreases in salaries and employee benefits, partially offset by increases in other expenses, deposit insurance premium and premises and equipment. The decrease of $1.6 million, or 12.8%, in salaries and employee benefits was driven primarily by a reduction in incentive compensation. The increase of $0.6 million, or 32.7%, in other expense was due primarily to higher fintech volume activity. The increase of $0.4 million, or 33.4%, in deposit insurance premium was due to year-over-year asset growth and changes in the composition of the loan portfolio. The increase of $0.1 million, or 4.0%, in premises and equipment was due primarily to software maintenance expense.
Current wording
Noninterest expense for the third quarter 2025 was $25.5 million, representing an increase of $2.7 million, or 11.7%, compared to $22.8 million for the third quarter 2024. The increase in noninterest expense was due primarily to increases in salaries and employee benefits, premises and equipment, deposit insurance premium, other expense and loan expenses. The increase of $0.9 million, or 6.9%, in salaries and employee benefits was driven primarily by an increase in incentive compensation. The increase of $0.7 million, or 22.4%, in premises and equipment was due primarily to software maintenance expense. The increase of $0.4 million, or 29.9%, in deposit insurance premium was due to changes in the composition of the loan portfolio. The increase in other expenses of $0.4 million, or 26.1%, was due primarily to higher fintech volume activity. The increase of $0.3 million, or 21.4%, in loan expenses was due primarily to collection expense, as well as third party servicing associated with SBA and fintech lending.
Previous wording
Noninterest expense for the six months ended June 30, 2025 was $45.4 million, an increase of $2.0 million, or 4.6%, compared to $43.4 million for the six months ended June 30, 2024. The increase was due primarily to increases in other expense, deposit insurance premium, premises and equipment, and consulting and professional fees, partially offset by a decrease in salaries and employee benefits. The increase of $0.8 million, or 23.7%, in other expense was due primarily to higher fintech volume activity. The increase of $0.6 million, or 27.8%, in deposit insurance premium was due to year-over-year asset growth and changes in the composition of the loan portfolio. The increase of $0.4 million, or 7.0%, in premises and equipment was due primarily to software maintenance expense. The increase of $0.3 million, or 15.4%, in consulting and professional fees was due mainly to increased legal and audit fees. The decrease of $0.3 million, or 1.2%, in salaries and employee benefits was driven primarily by a reduction in incentive compensation.
Current wording
Noninterest expense for the nine months ended September 30, 2025 was $70.8 million, an increase of $4.7 million, or 7.0%, compared to $66.2 million for the nine months ended September 30, 2024. The increase was due primarily to increases in other expense, premises and equipment, deposit insurance premium, salaries and employee benefits, consulting and professional fees and loan expenses. The increase in other expense of $1.2 million, or 24.4%, was due primarily to higher fintech volume activity. The increase of $1.1 million, or 12.0%, in premises and equipment was due primarily to software maintenance expense. The increase of $1.0 million, or 28.6%, in deposit insurance premium was due to changes in the composition of the loan portfolio. The increase of $0.6 million, or 1.7%, in salaries and employee benefits was due primarily to an increase in incentive compensation. The increase of $0.4 million, or 13.2%, in consulting and professional fees was due mainly to increased legal and audit fees. The increase of $0.3 million, or 7.3%, in loan expenses was due primarily to collection expense, as well as third party servicing associated with SBA and fintech lending.
Previous wording
The Company recorded an income tax benefit of $2.1 million for the second quarter 2025, compared to an income tax provision of $0.2 million and an effective tax rate of 3.6% for the second quarter 2024. The Company recorded an income tax benefit of $3.0 million for the six months ended June 30, 2025, compared to an income tax provision of $0.6 million and an effective tax rate of 5.6% for the six months ended June 30, 2024. The income tax benefits recognized during the second quarter 2025 and the six months ended June 30, 2025 reflect lower pre-tax earnings, as well as the benefit of tax exempt income. The variance from the federal statutory rate for the second quarter 2024 and the six months ended June 30, 2024 was due primarily to tax-exempt income. Interest income on certain loans or securities issued by governmental, municipal and not-for-profit entities, and earnings from bank-owned life insurance were the primary components of tax-exempt income.
Current wording
The Company recorded an income tax benefit of $13.0 million for the third quarter 2025, compared to an income tax provision of $0.6 million and an effective tax rate of 8.1% for the third quarter 2024. The Company recorded an income tax benefit of $15.9 million for the nine months ended September 30, 2025, compared to an income tax provision of $1.3 million and an effective tax rate of 6.6% for the nine months ended September 30, 2024. The income tax benefits recognized during the third quarter 2025 and the nine months ended September 30, 2025 reflect lower pre-tax earnings, as well as the benefit of tax exempt income. The variance from the federal statutory rate for the third quarter 2024 and the nine months ended September 30, 2024 was due primarily to tax-exempt income. Interest income on certain loans or securities issued by governmental, municipal and not-for-profit entities, and earnings from bank-owned life insurance were the primary components of tax-exempt income.
Previous wording
As of June 30, 2025, total shareholders’ equity was $390.2 million, an increase of $6.2 million, or 1.6%, compared to December 31, 2024. The increase in shareholders’ equity was due primarily to a decrease in accumulated other comprehensive loss as unrealized losses on securities decreased during the six months ended June 30, 2025. Tangible common equity totaled $385.6 million as of June 30, 2025, representing an increase of $6.2 million, or 1.6%, compared to December 31, 2024. The ratio of total shareholders’ equity to total assets decreased to 6.43% as of June 30, 2025 from 6.69% as of December 31, 2024, and the ratio of tangible common equity to tangible assets decreased to 6.35% as of June 30, 2025 from 6.62% as of December 31, 2024.
Current wording
As of September 30, 2025, total shareholders’ equity was $352.2 million, a decrease of $31.9 million, or 8.3%, compared to December 31, 2024. The decrease in shareholders’ equity was due primarily to the net loss during 2025, partially offset by a decrease in accumulated other comprehensive loss as unrealized losses on securities decreased during the nine months ended September 30, 2025. Tangible common equity totaled $347.5 million as of September 30, 2025, representing a decrease of $31.9 million, or 8.4%, compared to December 31, 2024. The ratio of total shareholders’ equity to total assets decreased to 6.25% as of September 30, 2025 from 6.69% as of December 31, 2024, and the ratio of tangible common equity to tangible assets decreased to 6.17% as of September 30, 2025 from 6.62% as of December 31, 2024.
Previous wording
Book value per common share increased 1.1% to $44.79 as of June 30, 2025 from $44.31 as of December 31, 2024. Tangible book value per share increased 1.1% to $44.25 as of June 30, 2025 from $43.77 as of December 31, 2024. The increase in both book value per common share and tangible book value per share was driven primarily by the increases in total shareholders’ equity and tangible common equity. Refer to the “Reconciliation of Non-GAAP Financial Measures” section of Part I, Item 2 of this report, Management’s Discussion and Analysis of Financial Condition and Results of Operations for additional information.
Current wording
Book value per common share decreased 8.8% to $40.42 as of September 30, 2025 from $44.31 as of December 31, 2024. Tangible book value per share decreased 8.9% to $39.88 as of September 30, 2025 from $43.77 as of December 31, 2024. The decrease in both book value per common share and tangible book value per share was driven primarily by the decreases in total shareholders’ equity and tangible common equity. Refer to the “Reconciliation of Non-GAAP Financial Measures” section of Part I, Item 2 of this report, Management’s Discussion and Analysis of Financial Condition and Results of Operations for additional information.
Previous wording
1 Includes carrying value adjustments of $21.2 million and $22.9 million related to terminated interest rate swaps associated with public finance loans as of June 30, 2025 and December 31, 2024, respectively.
Current wording
1 Includes carrying value adjustments of $20.2 million and $22.9 million related to terminated interest rate swaps associated with public finance loans as of September 30, 2025 and December 31, 2024, respectively.
Previous wording
Total loans were $4.4 billion as of June 30, 2025, an increase of $191.9 million, or 4.6%, compared to December 31, 2024. Total commercial loan balances were $3.5 billion as of June 30, 2025, up $197.7 million, or 5.9%, from December 31, 2024. Total consumer loan balances were $797.2 million as of June 30, 2025, a decrease of $4.2 million, or 0.5%, compared to December 31, 2024. Compared to December 31, 2024, in connection with the Company’s focus on variable rate products, as well as capitalizing on the overall higher interest rate environment, the increase in commercial loan balances was driven by growth in the investor commercial real estate, commercial and industrial, small business lending and single tenant lease financing portfolios. These increases were partially offset by decreases in the construction, franchise finance and public finance portfolios, as well as continued runoff in the healthcare finance portfolio. The decrease in construction balances was partially due to completed projects that were moved to investor commercial real estate upon entering their stabilization period. The slight decrease in consumer loan balances was due primarily to a decrease in the residential mortgage portfolio, partially offset by origination activity in the other consumer loans portfolio.
Current wording
Total loans were $3.6 billion as of September 30, 2025, a decrease of $567.1 million, or 13.6%, compared to December 31, 2024. Total commercial loan balances were $2.8 billion as of September 30, 2025, down $551.0 million, or 16.5%, from December 31, 2024. Total consumer loan balances were $788.1 million as of September 30, 2025, a decrease of $13.3 million, or 1.66%, compared to December 31, 2024. Compared to December 31, 2024, the decrease in commercial loan balances was driven by the sale of $836.9 million of single tenant lease financing loans that was completed during the third quarter, as well as decreases in construction, franchise finance and continued run off in the healthcare finance portfolio. The decreases were partially offset by increases in investor commercial real estate, which was driven by completed construction projects that were moved to investor commercial real estate upon entering their stabilization period, as well as growth in the commercial and industrial and small business lending portfolios. The slight decrease in consumer loan balances was due primarily to a decrease in the residential mortgage portfolio, partially offset by origination activity in the other consumer loans portfolio.
Previous wording
Total nonperforming loans increased $15.1 million, or 53.2%, to $43.5 million as of June 30, 2025 compared to $28.4 million as of December 31, 2024 due primarily to an increase in nonperforming loans in the franchise finance, single tenant lease financing and small business lending portfolios during the year. Total nonperforming assets increased $16.6 million, or 57.6%, to $45.5 million as of June 30, 2025, compared to $28.9 million as of December 31, 2024, due primarily to the increase in nonperforming loans mentioned above and an increase in OREO related to small business lending. As of June 30, 2025, the Company had two small business lending properties and one residential mortgage property in OREO with carrying values of
Current wording
Total nonperforming loans increased $24.8 million, or 87.4%, to $53.3 million as of September 30, 2025 compared to $28.4 million as of December 31, 2024 due primarily to an increase in nonperforming loans in the franchise finance and small business lending portfolios during the year. Total nonperforming assets increased $26.3 million, or 91.1%, to $55.2 million as of September 30, 2025, compared to $28.9 million as of December 31, 2024, due primarily to the aforementioned increase in nonperforming loans and an increase in OREO related to small business lending. As of September 30, 2025, the Company had two small business lending properties in OREO with carrying values of $1.8 million. As of December 31, 2024, the Company had one residential mortgage property in OREO with a carrying value of $0.3 million.
Previous wording
The allowance for credit losses - loans (“ACL”) was $46.5 million as of June 30, 2025, compared to $44.8 million as of December 31, 2024. The increase in the ACL reflects the addition of specific reserves related to franchise finance loans that were placed on nonaccrual during the six month period ended June 30, 2025 and growth in the overall loan portfolio, partially offset by the removal of specific reserves for small business lending and franchise finance loans that were charged off. The ACL as a percentage of total loans was 1.07% at both June 30, 2025 and December 31, 2024. The ACL as a percentage of nonperforming loans decreased to 106.8% as of June 30, 2025, compared to 157.5% as of December 31, 2024 as the percentage increase in nonperforming loans outpaced the increase in the overall loan portfolio.
Current wording
The allowance for credit losses - loans (“ACL”) was $59.9 million as of September 30, 2025, compared to $44.8 million as of December 31, 2024. The increase in the ACL reflects updated assumptions to the Company’s CECL model, including updates that significantly increased the ACL related to small business lending, as well as additional specific reserves related to franchise finance loans that were placed on nonaccrual during the nine month period ended September 30, 2025, partially offset by the removal of specific reserves for small business lending and franchise finance loans that were charged off. Furthermore, the ACL as a percentage of total loans was impacted by lower total loan balances following the sale of $836.9 million of single tenant lease financing loans. The ACL as a percentage of total loans was 1.66% at September 30, 2025, compared to 1.07% at December 31, 2024. The ACL as a percentage of nonperforming loans decreased to 112.5% as of September 30, 2025, compared to 157.5% as of December 31, 2024, as the increase in nonperforming loans outweighed the increase in the ACL.
Previous wording
Net charge-offs of $14.3 million were recognized during the second quarter 2025, resulting in net charge-offs to average loans of 1.31%, compared to net charge-offs of $1.4 million, or 0.14% of average loans, for the second quarter 2024. Net charge-offs in the second quarter 2025 were elevated as the Company continued to take action to resolve problem loans in the small business lending and franchise finance portfolios. Approximately $11.9 million of net charge-offs recognized during the quarter were related to small business lending and $2.2 million were related to franchise finance loans, with $7.3 million of existing specific reserves previously applied to these loans.
Current wording
Net charge-offs of $21.0 million were recognized during the third quarter 2025, resulting in net charge-offs to average loans of 1.89%, compared to net charge-offs of $1.5 million, or 0.15% of average loans, for the third quarter 2024. Net charge-offs in the third quarter 2025 were elevated as the Company continued to take action to resolve problem loans in the small business lending and franchise finance portfolios. Approximately $15.2 million of net charge-offs recognized during the quarter were related to small business lending and $5.3 million were related to franchise finance loans, with $3.5 million of existing specific reserves previously applied to these loans.
Previous wording
During the six months ended June 30, 2025, the Company recorded net charge-offs of $24.0 million, compared to net charge-offs of $1.9 million during the six months ended June 30, 2024. The increase in net charge-offs for the six months ended June 30, 2025 was driven primarily by $15.5 million in net charge-offs related to small business lending and $8.1 million in net charge-offs related to franchise finance loans, as the Company continued to take action to resolve problem loans in these portfolios.
Current wording
During the nine months ended September 30, 2025, the Company recorded net charge-offs of $45.0 million, compared to net charge-offs of $3.4 million during the nine months ended September 30, 2024. The increase in net charge-offs for the nine months ended September 30, 2025 was driven primarily by $30.6 million in net charge-offs related to small business lending and $13.4 million in net charge-offs related to franchise finance loans, with $13.4 million of existing specific reserves previously applied to these loans.
Previous wording
The provision for credit losses - loans in the second quarter 2025 was $13.6 million, compared to $3.9 million for the second quarter 2024. The increase in the provision for credit losses - loans for the second quarter 2025 was driven primarily by the net charge-offs and additional specific reserves discussed above, as well as overall growth in the loan portfolio, partially offset by the decrease in specific reserves related to small business lending and franchise finance loans that were charged off.
Current wording
The provision for credit losses - loans in the third quarter 2025 was $34.4 million, compared to $3.9 million for the third quarter 2024. The increase in the provision for credit losses - loans for the third quarter 2025 was driven primarily by the net charge-offs, additional specific reserves and the increase in the ACL related to small business lending discussed above, partially offset by the decrease in the ACL resulting from the sale of the single tenant lease financing loans mentioned above and by the decrease in specific reserves related to franchise finance loans that were charged off.
Previous wording
The provision for credit losses - loans during the six months ended June 30, 2025 was $25.7 million, compared to $6.5 million for the six months ended June 30, 2024. The increase in the provision for credit losses - loans for the six months ended June 30, 2025 was driven primarily by the net charge-offs and additional specific reserves discussed above, as well as overall growth in the loan portfolio, partially offset by the decrease in specific reserves related to small business lending and franchise finance loans that were charged off.
Current wording
The provision for credit losses - loans during the nine months ended September 30, 2025 was $60.1 million, compared to $10.4 million for the nine months ended September 30, 2024. The increase in the provision for credit losses - loans for the nine months ended September 30, 2025 was driven primarily by the net charge-offs, additional specific reserves and the increase in the ACL related to small business lending discussed above, partially offset by the decrease in the ACL resulting from the sale of the single tenant lease financing loans mentioned above and by the decrease in specific reserves related to small business lending and franchise finance loans that were charged off.
Previous wording
The approximate fair value of available-for-sale investment securities increased $57.3 million, or 9.8%, to $644.7 million as of June 30, 2025, compared to $587.4 million as of December 31, 2024. The increase was due primarily to an increase of $88.4 million in agency mortgage-backed securities - residential, partially offset by decreases of $10.1 million in U.S. Government-sponsored agencies, $6.4 million in private label mortgage-backed securities - residential, $6.2 million in corporate securities, $4.3 million in asset-backed securities, $2.2 million in municipal securities and $1.9 million in agency mortgage-backed securities - commercial. The Company deployed liquidity during the first half of 2025 into new purchases of available-for-sale variable-rate agency mortgage-backed securities - residential, partially offset by net pay down activity in other security types. As of June 30, 2025, the Company had securities with a net carrying value of $271.7 million designated as held-to-maturity, compared to $249.8 million as of December 31, 2024. The increase was due primarily to purchases of CRA-eligible agency mortgage-backed securities - residential.
Current wording
The approximate fair value of available-for-sale investment securities increased $38.6 million, or 6.6%, to $625.9 million as of September 30, 2025, compared to $587.4 million as of December 31, 2024. The increase was due primarily to an increase of $85.8 million in agency mortgage-backed securities - residential, partially offset by decreases of $15.3 million in U.S. Government-sponsored agencies, $12.9 million in corporate securities, $8.9 million in private label mortgage-backed securities - residential, $6.3 million in asset-backed securities, $2.8 million in agency mortgage-backed securities - commercial and $1.1 million in municipal securities. The Company deployed liquidity during 2025 into new purchases of available-for-sale variable-rate agency mortgage-backed securities - residential, partially offset by net pay down activity in other security types. As of September 30, 2025, the Company had securities with a net carrying value of $261.7 million designated as held-to-maturity, compared to $249.8 million as of December 31, 2024. The increase was due primarily to purchases of CRA-eligible agency mortgage-backed securities - residential made in the first quarter 2025.
Previous wording
Accrued income and other assets increased $9.6 million, or 15.3%, to $72.6 million at June 30, 2025, compared to $63.0 million at December 31, 2024. The increase was due primarily to increases of $5.3 million in equity fund investments, $3.3 million in prepaid assets and $0.8 million in deferred tax assets.
Current wording
Accrued income and other assets increased $21.0 million, or 33.3%, to $84.0 million at September 30, 2025, compared to $63.0 million at December 31, 2024. The increase was due primarily to increases of $12.7 million in deferred tax assets, $6.6 million in equity fund investments and $1.5 million in prepaid assets.
Previous wording
Accrued expenses and other liabilities decreased $5.8 million, or 32.4%, to $12.1 million at June 30, 2025, compared to $17.9 million at December 31, 2024. The decrease was due primarily to decreases of $5.1 million in accrued salary and benefits and $0.8 million in other liabilities.
Current wording
Accrued expenses and other liabilities decreased $2.5 million, or 13.9%, to $15.5 million at September 30, 2025, compared to $17.9 million at December 31, 2024. The decrease was due primarily to decreases of $2.7 million in accrued salary and benefits and $1.2 million in other accrued expenses, partially offset by increases of $1.2 million in unfunded commitments and $0.3 million in the reserve for unfunded loan commitments.
Previous wording
Uninsured deposit balances represented 27% of total deposits at June 30, 2025, up from 25% at December 31, 2024. These balances include Indiana-based municipal deposits, which are insured by the Indiana Board for Depositories, as well as larger balance accounts under contractual agreements that only allow withdrawal under certain conditions. After subtracting these types of deposits, the adjusted uninsured deposit balance drops to 22% as of June 30, 2025, compared to 20% as of December 31, 2024.
Current wording
Uninsured deposit balances represented 33% of total deposits at September 30, 2025, up from 25% at December 31, 2024. These balances include Indiana-based municipal deposits, which are insured by the Indiana Board for Depositories, as well as larger balance accounts under contractual agreements that only allow withdrawal under certain conditions. After subtracting these types of deposits, the adjusted uninsured deposit balance drops to 27% as of September 30, 2025, compared to 20% as of December 31, 2024.
Previous wording
Various factors determine the amount and timing of our share repurchases, including our capital requirements, organic growth and other strategic opportunities, economic and market conditions (including the trading price of our stock), and regulatory and legal considerations. See Part II, Item 2, of this report for information regarding recent repurchase activity and our remaining authority under the program.
Current wording
Various factors determine the amount and timing of our share repurchases, including our capital requirements, organic growth and other strategic opportunities, economic and market conditions (including the trading price of our stock), and regulatory and legal considerations.
Previous wording
Liquidity management is the process used by the Company to manage the continuing flow of funds necessary to meet its financial commitments on a timely basis and at a reasonable cost while also maintaining safe and sound operations. Liquidity, represented by cash and investment securities, is a product of the Company’s operating, investing and financing activities. The primary sources of funds are deposits, principal and interest payments on loans and investment securities, maturing loans and investment securities, access to wholesale funding sources and collateralized borrowings. While scheduled payments and maturities of loans and investment securities are relatively predictable sources of funds, deposit flows are greatly influenced by interest rates, general economic conditions and competition. Therefore, the Company supplements deposit growth and enhances interest rate risk management through borrowings and wholesale funding, which are generally advances from the Federal Home Loan Bank (“FHLB”) and brokered deposits.
Current wording
Liquidity management is the process used by the Company to manage the continuing flow of funds necessary to meet its financial commitments on a timely basis and at a reasonable cost while also maintaining safe and sound operations. Liquidity, represented by cash and investment securities, is a product of the Company’s operating, investing and financing activities. The primary sources of funds are deposits, principal and interest payments on loans and investment securities, maturing loans and investment securities, access to wholesale funding sources and collateralized borrowings. In addition, the Company may elect to hold certain deposit balances off-balance sheet, with optionality to bring them back onto the balance sheet as funding needs evolve. While scheduled payments and maturities of loans and investment securities are relatively predictable sources of funds, deposit flows are greatly influenced by interest rates, general economic conditions and competition. Therefore, the Company supplements deposit growth and enhances interest rate risk management through borrowings and wholesale funding, which are generally advances from the Federal Home Loan Bank (“FHLB”) and brokered deposits.
Previous wording
The Company holds cash and investment securities that qualify as liquid assets to maintain adequate liquidity to ensure safe and sound operations and meet its financial commitments. At June 30, 2025, on a consolidated basis, the Company had $1.1 billion in cash and cash equivalents and investment securities available-for-sale and $126.5 million in loans held-for-sale that were generally available for its cash needs. The Company can also generate funds from wholesale funding sources and collateralized borrowings. At June 30, 2025, the Bank had the ability to borrow an additional $1.9 billion from the FHLB, the Federal Reserve and correspondent bank Fed Funds lines of credit, which when combined with cash balances, totaled $2.3 billion and represented 200% of adjusted uninsured deposit balances.
Current wording
The Company holds cash and investment securities that qualify as liquid assets to maintain adequate liquidity to ensure safe and sound operations and meet its financial commitments. At September 30, 2025, on a consolidated basis, the Company had $1.4 billion in cash and cash equivalents and investment securities available-for-sale and $141.6 million in loans held-for-sale that were generally available for its cash needs. Further, the Company retains the ability draw upon any deposit balances held off-balance sheet, with optionality to recall $717.7 million of such funds onto the balance sheet at September 30, 2025. The Company can also generate funds from wholesale funding sources and collateralized borrowings. At September 30, 2025, the Bank had the ability to borrow an additional $1.4 billion from the FHLB, the Federal Reserve and correspondent bank Fed Funds lines of credit, which when combined with cash balances and off-balance sheet deposits, totaled $2.9 billion and represented 216% of adjusted uninsured deposit balances.
Previous wording
The Company is a separate legal entity from the Bank and must provide for its own liquidity. In addition to its operating expenses, the Company is responsible for paying any dividends declared to its common shareholders and interest and principal on outstanding debt. The Company’s primary sources of funds are cash maintained at the holding company level and dividends from the Bank, the payment of which is subject to regulatory limits. At June 30, 2025, the Company, on an unconsolidated basis, had $13.6 million in cash for debt servicing and operating expenses.
Current wording
The Company is a separate legal entity from the Bank and must provide for its own liquidity. In addition to its operating expenses, the Company is responsible for paying any dividends declared to its common shareholders and interest and principal on outstanding debt. The Company’s primary sources of funds are cash maintained at the holding company level and dividends from the Bank, the payment of which is subject to regulatory limits. At September 30, 2025, the Company, on an unconsolidated basis, had $15.3 million in cash for debt servicing and operating expenses.
Previous wording
The Company uses its sources of funds primarily to meet ongoing financial commitments, including withdrawals by depositors, credit commitments to borrowers, operating expenses and capital expenditures. At June 30, 2025, approved outstanding loan commitments, including unused lines of credit and standby letters of credit, amounted to $584.5 million. Certificates of deposits and brokered deposits scheduled to mature in one year or less at June 30, 2025 totaled $1.5 billion.
Current wording
The Company uses its sources of funds primarily to meet ongoing financial commitments, including withdrawals by depositors, credit commitments to borrowers, operating expenses and capital expenditures. At September 30, 2025, approved outstanding loan commitments, including unused lines of credit and standby letters of credit, amounted to $594.8 million. Certificates of deposits and brokered deposits scheduled to mature in one year or less at September 30, 2025 totaled $1.5 billion.
Showing the first 40 of 42 pairs. Open the source sections for the rest.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
On October 20, 2025, the Board of Directors of the Company authorized the repurchase of up to $25.0 million of the Company's outstanding common stock from time to time on the open market or in privately negotiated transactions. The stock repurchase authorization is scheduled to expire on September 30, 2027.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
During the second quarter 2024, the Company recognized $0.5 million in IT termination fees and $0.1 million in anniversary expenses. Excluding these items, adjusted net income for the second quarter 2024 was $6.2 million and adjusted diluted earnings per share was $0.72. Additionally, for the second quarter 2024, adjusted ROAA, adjusted ROAE and adjusted ROATCE were 0.48%, 6.77% and 6.85%, respectively.
Previous report — wording carried elsewhere
$1.5 million and $0.2 million, respectively. As of December 31, 2024, the Company had one residential mortgage property in OREO with a carrying value of $0.3 million.