Bancorp, Inc.
For the period ended Jun 30, 2025. Filed Aug 8, 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.
Jun 30, 2025 · Filed Aug 8, 2025
TBBK$48.25+1.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-05-08.
0001562762-25-000116
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-08-08.
0001562762-25-000202
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 228 previous paragraphs and 257 current paragraphs.
138 unchanged; 75 reworded; 30 added; 15 removed; 0 previous and 14 current paragraphs rearranged.
Tables are not compared: 33 previous and 38 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 (30)
Current report
The majority of the Company’s OREO property is comprised of an apartment complex. The underlying balance for this property is $42.9 million as of June 30, 2025. As previously disclosed, the property was under an agreement of sale. On June 24, 2025, the Company terminated the agreement of sale for the property and demanded the escrow agent release to Company all earnest money deposits received to date, totaling $3.0 million. On June 26, 2025, without providing any legal or contractual basis to do so, the purchaser objected to the release of the earnest money deposits. The Company believes it is entitled to the earnest money deposits and is pursuing release of the funds.
Current report
Comparison of second quarter of 2025 to second quarter of 2024
Current report
Our average investment securities of $1.47 billion for the second quarter of 2025 increased $13.7 million from $1.46 billion for the second quarter of 2024. Related tax equivalent interest income increased $5.0 million, reflecting $3.0 million of prior period interest on CRE-2, which was repaid as a result of the sale of underlying collateral. That security was the only remaining security from the Company's prior securitizations.
Current report
(3)The second quarter of 2025 included $3.0 million of interest income from a security that was known as “CRE-2” and which was related to the Company’s discontinued commercial real estate securitization business. The CRE-2 interest was repaid in the quarter as a result of the final sale of underlying collateral related to that security. CRE-2 was the last security remaining related to the Company’s discontinued commercial real estate securitization business. The $3.0 million of prior period interest income was excluded from change due to rate.
Current report
Leasing related income increased $702,000, or 49.1%, to $2.1 million for the second quarter of 2025 from $1.4 million for the second quarter of 2024.
Current report
FDIC insurance expense increased $333,000, or 38.3%, to $1.2 million for the second quarter of 2025 from $869,000 in the second quarter of 2024, reflecting an increase in the assessment rate in the second quarter of 2025.
Current report
Other non-interest expense increased $586,000, or 12.2%, to $5.4 million in the second quarter of 2025 from $4.8 million in the second quarter of 2024 reflecting an increase of $290,000 in marketing expense.
Current report
Net Income
Current report
Net income for the first six months of 2025 was $117.0 million, or $2.46 per diluted share, compared to $110.1 million, or $2.10 per diluted share, for the first six months of 2024. Income before income taxes was $154.9 million in the first six months of 2025 compared to $146.7 million in the first six months of 2024.
Current report
Net Interest Income
Current report
Our net interest income for the first six months of 2025 increased $1.0 million, or 0.5%, to $189.2 million from $188.2 million in the first six months of 2024. Our interest income for the first six months of 2025 increased to $283.0 million, an increase of $9.8 million, or 3.6%, from $273.1 million for the first six months of 2024. The increase in interest income reflected the impact of higher investment securities balances and $3.0 million of interest footnoted in the following “Average Daily Balances Table”. While our average loans and leases increased to $6.48 billion for the first six months of 2025 from $5.74 billion for the first six months of 2024, an increase of $739.9 million, or 12.9%, lower rates resulted in decreased interest income. Related interest income decreased $8.1 million on a tax equivalent basis. Additionally, fees on the majority of consumer fintech loan balances are recorded as non-interest income, which impacts both net interest income and net interest margin. The fees are included in non-interest income as most of the Bank’s current fintech loans do not charge interest to the consumer. The Bank generally earns fees on such loans based on transaction activity and volume; those fees are recorded as non-interest income. Of the total $8.1 million decrease in loan interest income on a tax equivalent basis, the largest decreases were $8.2 million for all real estate bridge loans and $5.9 million for SBLOC and IBLOC, while small business lending, investment advisor financing, and leasing increased $3.7 million, $1.8 million, and $1.2 million, respectively.
Current report
Our average investment securities of $1.48 billion for the first six months of 2025 increased $386.3 million from $1.10 billion for the first six months of 2024. Related tax equivalent interest income increased $13.5 million, reflecting an increase in balances and $3.0 million of prior period interest on CRE-2, which was repaid as a result of the sale of underlying collateral. That security was the only remaining security from the Company's prior securitizations.
Current report
Our net interest margin (calculated by dividing net interest income by average interest-earning assets) for the first six months of 2025 was 4.25% compared to 5.06% for the first six months of 2024, a decrease of 81 basis points. While the yield on interest-earning assets decreased 98 basis points, the cost of deposits and interest-bearing liabilities decreased 24 basis points, or a net change of 74 basis points. Average interest-earning deposits at the Federal Reserve Bank increased $337.5 million, or 55.5%, to $945.5 million in the first six months of 2025 from $608.0 million in the first six months of 2024. In the first six months of 2025, the average yield on our loans decreased to 6.83% from 7.99% for the first six months of 2024, a decrease of 116 basis points. The yield on taxable investment securities in the first six months of 2025 was 5.49% compared to 4.96% for the first six months of 2024, also reflecting the aforementioned $3.0 million of prior period interest on CRE-2.
Current report
Average Daily Balances
Current report
(3) The second quarter of 2025 included $3.0 million of interest income from a security that was known as “CRE-2” and which was related to the Company’s discontinued commercial real estate securitization business. The CRE-2 interest was repaid in the quarter as a result of the final sale of underlying collateral related to that security. CRE-2 was the last security remaining related to the Company’s discontinued commercial real estate securitization business. The $3.0 million of prior period interest income was excluded from change due to rate.
Current report
Our provision for credit losses was $91.2 million for the first six months of 2025 compared to a provision of $3.4 million for the first six months of 2024. The provision for credit losses for the first six months of 2025 was allocated as follows: $2.4 million for non-consumer fintech loans, $89.1 million for consumer fintech loans and ($253,000) for unfunded commitments. The provision for credit losses for the first six months of 2024 was allocated as follows: $3.8 million for non-consumer fintech loans and ($419,000) for unfunded commitments. The $89.1 million provision for consumer fintech loans correlates to $89.1 million of credit enhancement income included in non-interest income. The ACL was $59.4 million, or 0.91% of total loans, at June 30, 2025, compared to $44.9 million, or 0.73% of total loans, at December 31, 2024. We believe that our ACL is appropriate and supportable. For more information about our provision and ACL and our loss experience, see “Allowance for Credit Losses,” “Net Charge-offs,” and “Non-accrual Loans, Loans 90 Days Delinquent and Still Accruing, OREO and Modified Loans,” below and “Note 6. Loans” to the unaudited consolidated financial statements herein.
Current report
Non-Interest Income
Current report
Leasing related income increased $2.3 million, or 125.8%, to $4.1 million for the first six months of 2025 from $1.8 million for the first six months of 2024.
Current report
Other non-interest income increased $1.8 million, or 119.4%, to $3.4 for the first six months of 2025 from $1.5 million in the first six months of 2024 which reflected increased payoff fees on REBL loans.
Current report
Non-Interest Expense
Current report
Total non-interest expense was $110.5 million for the first six months of 2025, an increase of $12.4 million, or 12.6%, compared to $98.2 million for the first six months of 2024. Of the $12.4 million increase, $6.7 million resulted from an increase in salaries and benefits expense.
Current report
Data processing expense decreased $412,000, or 14.5%, to $2.4 million in the first six months of 2025 from $2.8 million in the first six months of 2024 reflecting the impact of newly effective contract terms.
Current report
Audit expense increased $521,000, or 76.8%, to $1.2 million in the first six months of 2025 from $678,000 in the first six months of 2024. The increase reflected higher expense for regulatory filings.
Current report
Legal expense increased $2.4 million, or 162.7%, to $3.8 million in the first six months of 2025 from $1.5 million in the first six months of 2024. The increase reflected payments related matters and higher expense for regulatory filings.
Current report
FDIC insurance expense increased $541,000, or 31.6%, to $2.3 million for the first six months of 2025 from $1.7 million in the first six months of 2024, reflecting an increase in the assessment rate in the second quarter of 2025.
Current report
Income Taxes
Current report
Loan Portfolio
Current report
(1)In the second quarter of 2025, a $26.9 million loan balance was transferred to non-accrual status. The loan is secured by an apartment building with an “as is” LTV of 75% and an “as stabilized” LTV of 65%, based on a December 2024 appraisal. On July 31, 2025 a purchase and sale agreement was executed with a new borrower who is expected to have greater financial capacity to complete the related project. The sale is expected to close in the third quarter of 2025 and a new loan is anticipated.
Current report
(1)In the second quarter of 2025, a $26.9 million loan was transferred to non-accrual status. The related $26.9 million loan was modified twice in 2024. The loan is secured by an apartment building with an “as is” LTV of 75% and an “as stabilized” LTV of 65%, based on a December 2024 appraisal. On July 31, 2025, a purchase and sale agreement for the property was executed with a new counterparty possessing greater financial capacity and experience. The sale is expected to close in the third quarter of 2025, and a new loan is anticipated in connection with the transaction.
Current report
On October 23, 2024, the Board approved a common stock repurchase program for the 2025 fiscal year (the “2025 Repurchase Program”), which authorizes the Company to repurchase $37.5 million in value of the Company’s common stock per fiscal quarter in 2025, for a maximum amount of $150.0 million. Under the 2025 Repurchase Program, the Company intends to repurchase shares through open market purchases, privately-negotiated transactions, block purchases or otherwise in accordance with applicable federal securities laws, including Rule 10b-18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The 2025 Repurchase Program may be modified or terminated at any time. During the three and six months ended June 30, 2025, the Company repurchased 753,898 and 1,438,343 shares of its common stock in the open market under the 2025 Repurchase Program at an average price of $49.75 per share and $52.15 per share, respectively. On July 7, 2025, the Board of the Company authorized the increase of the capacity of the Company’s existing share repurchase program for the third and fourth quarters of 2025 to $300 million and $200 million for 2026 (the “Repurchase Plan”). This increase cumulatively represents up to $500 million in share repurchases through year-end 2026. The Company expects to fund the Repurchase Plan with cash at hand and through the refinancing of $100 million of maturing senior unsecured debt with $200 million of new senior unsecured debt.
Removed paragraphs (15)
Previous report
In the first quarter of 2024, a $39.4 million apartment building rehabilitation bridge loan was transferred to nonaccrual status. On April 2, 2024, the same loan was transferred from nonaccrual status to other real estate owned. We completed the majority of the capital improvements at the property and have agreed to a sale with a sales price that is expected to cover the current balance plus the forecasted cost of improvements to the property. The March 31, 2025, other real estate owned balance of $42.5 million compares to a September 2023 third-party "as is" appraisal of $47.8 million, or an 86% "as is" LTV, after considering $1.6 million of earnest money deposits in connection with the property’s sale in process. We received an additional earnest money deposit of $1.4 million on May 1, 2025, and the purchaser has made additional investments, including providing insurance coverage at the property. The closing date remains May 23, 2025, with an option for two additional, 30-day extensions in exchange for additional consideration of $1.0 million per extension. Any additional such earnest money deposits, in addition to the $3.0 million already received, should accrue to the benefit of the Company should the sale not close.
Previous report
There was an $874,000 provision for credit losses on non-consumer fintech loans in the first quarter of 2025, compared to a provision for credit losses on non-consumer fintech loans of $2.4 million in the first quarter of 2024.
Previous report
Our average investment securities of $1.50 billion for the first quarter of 2025 increased $759.1 million from $736.5 million for the first quarter of 2024. Related tax equivalent interest income increased $8.5 million, primarily reflecting an increase in balances.
Previous report
Leasing related income increased $1.6 million, or 408.2%, to $2.0 million for the first quarter of 2025 from $388,000 for the first quarter of 2024. First quarter 2024 reflected $1.1 million of losses related to an auto auction company which ceased operations.
Previous report
Depreciation expense increased $155,000, or 16.3%, to $1.1 million in the first quarter of 2025 from $949,000 in the first quarter of 2024.
Previous report
Rent and related occupancy cost decreased $72,000, or 4.4%, to $1.6 million in the first quarter of 2025 from $1.6 million in the first quarter of 2024.
Previous report
FDIC insurance expense increased $208,000, or 24.6%, to $1.1 million for the first quarter of 2025 from $845,000 in the first quarter of 2024, reflecting increases in liabilities against which insurance rates are applied.
Previous report
Insurance expense decreased $81,000, or 6.1%, to $1.3 million in the first quarter of 2025 compared to $1.3 million in the first quarter of 2024.
Previous report
Telecom and IT network communications expense increased $62,000, or 22.9%, to $333,000 in the first quarter of 2025 from $271,000 in the first quarter of 2024.
Previous report
Consulting expense decreased $122,000, or 21.1%, to $456,000 in the first quarter of 2025 from $578,000 in the first quarter of 2024.
Previous report
Of the six securities purchased by the Bank from our securitizations, all have been repaid except one issued by CRE-2, which is included in the commercial mortgage-backed securities classification in investment securities. As of March 31, 2025, the principal balance of the Bank’s CRE-2-issued security was $3.2 million. The $3.2 million remains in non-accrual status. While the appraised value of the remaining property allocable to the Bank’s security exceeds the principal and unpaid interest, there can be no assurance as to the amounts received upon the servicer’s disposition of these properties, which will reflect additional servicing fees, actual disposition prices and other disposition costs.
Previous report
(2)In 2020, we began originating loans to investment advisors for purposes of debt refinancing, acquisition of another firm or internal succession. Maximum loan amounts are subject to LTV ratios of 70% of the business enterprise value based on a third-party valuation but may be increased depending upon the debt service coverage ratio. Personal guarantees and blanket business liens are obtained as appropriate.
Previous report
(1)The $12.3 million REBL shown for 2024 was repaid on January 2, 2025 without loss of principal. In January 2025, two loans totaling $9.8 million were transferred to non-accrual and were accordingly classified as substandard. The non-accrual balances as of March 31, 2025 are also reflected in the substandard loan totals.
Previous report
(1)Percentage represents the principal of loans deferred divided by the principal of the total loan portfolio.
Previous report
As a means of returning capital to shareholders, the Company implemented stock repurchase programs which totaled $60.0 million, $100.0 million, and $250.0 million, respectively, in 2022, 2023 and 2024, with $37.5 million per quarter planned for 2025. The planned amounts of such repurchases are generally determined in the fourth quarter of the preceding year by assessing the impact of budgetary earnings projections on regulatory capital requirements. The excess of projected earnings over amounts required to maintain capital requirements is the maximum available for capital return to shareholders, barring any need to retain capital for other purposes. A significant portion of such excess earnings has been utilized for stock repurchases in the amounts noted above, while cash dividends have not been paid. In determining whether capital is returned through stock repurchases or cash dividends, the Company calculates a maximum share repurchase price, based upon comparisons with what it concludes to be other exemplar peer share price valuations, with further consideration of internal growth projections. As these share prices, which are updated at least annually, have not been reached, capital return has consisted solely of stock repurchases. Exemplar share price comparisons are based upon multiples of earnings per share over time, with further consideration of returns on equity and assets. While repurchase amounts are planned in the fourth quarter of the preceding year, repurchases may be modified or terminated at any time, should capital need to be conserved.
Reworded paragraphs (75)
Previous wording
natural disasters, pandemics, other public health crises, acts of terrorism, geopolitical conflict, including trade disputes and tariffs, sanctions, war or armed conflict, such as the conflicts between Russia and Ukraine and Israel and Hamas and the possible expansion of such conflicts in surrounding areas, or other catastrophic events could disrupt the systems of us or third party service providers and negatively impact general economic conditions;
Current wording
natural disasters, pandemics, other public health crises, acts of terrorism, geopolitical conflict, including trade disputes and tariffs, sanctions, war or armed conflict, such as the conflicts between Russia and Ukraine and conflicts in the Middle East as well as the possible expansion of such conflicts in surrounding areas, or other catastrophic events could disrupt the systems of us or third party service providers and negatively impact general economic conditions;
Previous wording
Our net income increased to$57.2 million for the first quarter of 2025, from $56.4 million for the first quarter of 2024. Our cost of funds decreased to 2.28% in the first quarter of 2025 from 2.49% in the first quarter of 2024. See “Asset and Liability Management” in this MD&A for further discussion of how our funding sources and loans adjust to Federal Reserve rate changes.
Current wording
Our net income increased to$59.8 million for the second quarter of 2025, from $53.7 million for the second quarter of 2024. Our cost of funds decreased to 2.23% in the second quarter of 2025 from 2.50% in the second quarter of 2024. See “Asset and Liability Management” in this MD&A for further discussion of how our funding sources and loans adjust to Federal Reserve rate changes.
Previous wording
Fintech fees are the largest drivers of non-interest income. Such fees for the first quarter of 2025 increased $7.2 million over the comparable 2024 period.
Current wording
Fintech fees are the largest drivers of non-interest income. Such fees for the second quarter of 2025 increased $7.8 million over the comparable 2024 period.
Previous wording
In the first quarter of 2025, return on assets and return on equity amounted to 2.49% and 28.64% (annualized), respectively, compared to 2.97% and 27.95% (annualized) in the first quarter of 2024.
Current wording
In the second quarter of 2025, return on assets and return on equity amounted to 2.64% and 28.40% (annualized), respectively, compared to 2.77% and 27.10% (annualized) in the second quarter of 2024. For the six-month period ended June 30, 2025, return on assets, and return on equity amounted to 2.56% and 28.60% (annualized), respectively, compared to 2.86% and 27.95% (annualized) for the six-month period ended June 30, 2024.
Previous wording
At March 31, 2025, the ratio of equity to assets was 8.84%, compared to 10.32% at March 31, 2024, reflecting an increase in equity capital from retained earnings and an increase in unrealized income on securities partially offset by share repurchases. The ratio fell as a result of the increase in period end assets.
Current wording
At June 30, 2025, the ratio of equity to assets was 9.73%, compared to 9.54% at June 30, 2024, reflecting an increase in equity capital from retained earnings and an increase in unrealized income on securities partially offset by share repurchases.
Previous wording
Net interest margin was 4.07% in the first quarter of 2025, versus 5.15% in the first quarter of 2024, reflecting a $2.7 million decrease in net interest income in the first quarter of 2025 compared to the first quarter of 2024, which reflected the impact of Federal Reserve rate decreases beginningin September 2024. Additionally, fees on the majority of growing consumer fintech loan balances are recorded as non-interest income, which impacts both net interest income and net interest margin.
Current wording
Net interest margin was 4.44% in the second quarter of 2025, versus 4.97% in the second quarter of 2024 reflecting the impact of Federal Reserve rate decreases beginningin September 2024. Additionally, fees on the majority of consumer fintech loan balances are recorded as non-interest income, which impacts both net interest income and net interest margin.
Previous wording
Average loans and leases increased to $6.39 billion in the first quarter of 2025 compared to $5.72 billion in the first quarter of 2024. The provision for credit losses on non-consumer fintech loans was $874,000 in the first quarter of 2025 compared to a provision for credit losseson non-consumer fintech loans of $2.4 million in the first quarter of 2024.
Current wording
Average loans and leases increased to $6.57 billion in the second quarter of 2025 compared to $5.75 billion in the second quarter of 2024. The provision for credit losses on non-consumer fintech loans was $1.5 million in the second quarter of 2025 compared to a provision for credit losseson non-consumer fintech loans of $1.5 million in the second quarter of 2024.
Previous wording
Net income for the first quarter of 2025 was $57.2 million, or $1.19 per diluted share, compared to $56.4 million, or $1.06 per diluted share, for the first quarter of 2024. Income before income taxes was $75.2 million in the first quarter of 2025 compared to $74.9 million in the first quarter of 2024.
Current wording
Net income for the second quarter of 2025 was $59.8 million, or $1.27 per diluted share, compared to $53.7 million, or $1.05 per diluted share, for the second quarter of 2024. Income before income taxes was $79.6 million in the second quarter of 2025 compared to $71.8 million in the second quarter of 2024.
Previous wording
Our net interest income for the first quarter of 2025 decreased $2.7 million, or 2.8%, to $91.7 million from $94.4 million in the first quarter of 2024. Our interest income for the first quarter of 2025 increased to $139.8 million, an increase of $4.0 million, or 2.9%, from $135.8 million for the first quarter of 2024. The decrease in interest income reflected the impact of Federal Reserve rate decreases partially offset by higher investment securities andloan balances as our average loans and leases increased to $6.39 billion for the first quarter of 2025 from $5.72 billion for the first quarter of 2024, an increase of $664.5 million, or 11.6%. Related interest income decreased $5.3 million on a tax equivalent basis. Additionally, fees on the majority of growing consumer fintech loan balances are recorded as non-interest income, which impacts both net interest income and net interest margin. Of the total $5.3 million decrease in loan interest income on a tax equivalent basis, the largest decreases were $5.5 million for all real estate bridge loans, $3.8 million for SBLOC and IBLOC, while small business lending, investment advisor financing, and leasing increased $2.0 million, $894,000, and $773,000, respectively.
Current wording
Our net interest income for the second quarter of 2025 increased $3.7 million, or 3.9%, to $97.5 million from $93.8 million in the second quarter of 2024. Our interest income for the second quarter of 2025 increased to $143.1 million, an increase of $5.8 million, or 4.3%, from $137.3 million for the second quarter of 2024. The increase reflected higher securities interest reflecting higher securities balances and $3.0 million of interest footnoted in the following “Average Daily Balances Table”. While our average loans and leases increased to $6.57 billion for the second quarter of 2025 from $5.75 billion for the second quarter of 2024, an increase of $814.4 million, or 14.2%, lower rates resulted in decreased interest income. Related interest income decreased $2.7 million on a tax equivalent basis, reflecting the impact of the aforementioned Federal Reserve rate decreases. Additionally, fees on the majority of consumer fintech loan balances are recorded as non-interest income, which impacts both net interest income and net interest margin. The fees are included in non-interest income as most of the Bank’s current fintech loans do not charge interest to the consumer. The Bank generally earns fees on such loans based on transaction activity and volume; those fees are recorded as non-interest income. Of the total $2.7 million decrease in loan interest income on a tax equivalent basis, the largest decreases were $3.5 million for all real estate bridge loans and $2.1 million for SBLOC and IBLOC, while small business lending, investment advisor financing, and fintech increased $1.6 million, $861,000, and $486,000, respectively.
Previous wording
Our net interest margin (calculated by dividing net interest income by average interest-earning assets) for the first quarter of 2025 was 4.07% compared to 5.15% for the first quarter of 2024, a decrease of 108 basis points. While the yield on interest-earning assets decreased 121 basis points, the cost of deposits and interest-bearing liabilities decreased 21 basis points, or a net change of 100 basis points. Average interest-earning deposits at the Federal Reserve Bank increased $262.3 million, or 30.0%, to $1.14 billion in the first quarter of 2025 from $874.1 million in the first quarter of 2024. In the first quarter of 2025, the average yield on our loans decreased to 6.82% from 7.99% for the first quarter of 2024, a decrease of 117 basis points. Yields on taxable investment securities in the first quarter of 2025 was 4.87% compared to 5.25% for the first quarter of 2024.
Current wording
Our net interest margin (calculated by dividing net interest income by average interest-earning assets) for the second quarter of 2025 was 4.44% compared to 4.97% for the second quarter of 2024, a decrease of 53 basis points. While the yield on interest-earning assets decreased 76 basis points, the cost of deposits and interest-bearing liabilities decreased 27 basis points, or a net change of 49 basis points. Average interest-earning deposits at the Federal Reserve Bank increased $414.7 million, or 121.3%, to $756.6 million in the second quarter of 2025 from $341.9 million in the second quarter of 2024. In the second quarter of 2025, the average yield on our loans decreased to 6.84% from 8.00% for the second quarter of 2024, a decrease of 116 basis points. The yield on taxable investment securities in the second quarter of 2025 was 6.12% compared to 4.82% for the second quarter of 2024, also reflecting the aforementioned $3.0 million of prior period interest on CRE-2.
Previous wording
For the first quarter of 2025, average interest-earning assets increased to $9.02 billion, an increase of $1.69 billion, or 23.0%, from $7.33 billion in the first quarter of 2024. The increase reflected increased average interest-earning deposits at the Federal Reserve Bank of $262.3 million, increased average balances of loans and leases of $664.5 million, or 11.6%, and increased average investment securities of $759.1 million, or 103.1%. For those respective periods, average demand and interest checking deposits increased $1.72 billion, or 26.7%. The interest expense shown for demand and interest checking is primarily comprised of interest paid to our affinity groups.
Current wording
For the second quarter of 2025, average interest-earning assets increased to $8.80 billion, an increase of $1.24 billion, or 16.5%, from $7.55 billion in the second quarter of 2024. The increase reflected increased average interest-earning deposits at the Federal Reserve Bank of $414.7 million, increased average balances of loans and leases of $814.4 million, or 14.2%, and increased average investment securities of $13.7 million, or 0.9%. For those respective periods, average demand and interest checking deposits increased $1.33 billion, or 20.0%. The interest expense shown for demand and interest checking is primarily comprised of interest paid to our affinity groups.
Previous wording
Our provision for credit losses on non-consumer fintech loans was $874,000 for the first quarter of 2025 compared to a provision of $2.4 million for the first quarter of 2024. The ACL was $52.5 million, or 0.82% of total loans, at March 31, 2025, compared to $44.9 million, or 0.73% of total loans, at December 31, 2024. We believe that our ACL is appropriate and supportable. For more information about our provision and ACL and our loss experience, see “Item 2 – Allowance for Credit Losses,” “Item 2 – Net Charge-offs,” and “Item 2 – Non-accrual Loans, Loans 90 Days Delinquent and Still Accruing, OREO and Modified Loans,” below and “Note 6. Loans” to the unaudited consolidated financial statements herein.
Current wording
Our provision for credit losses was $44.4 million for the second quarter of 2025 compared to a provision of $1.3 million for the second quarter of 2024. The provision for credit losses for the second quarter of 2025 was allocated as follows: $1.5 million for non-consumer fintech loans, $43.2 million for consumer fintech loans and ($364,000) for unfunded commitments. The provision for credit losses for the second quarter of 2024 was allocated as follows: $1.5 million for non-consumer fintech loans and ($225,000) for unfunded commitments. The $43.2 million provision for consumer fintech loans correlates to $43.2 million of credit enhancement income included in non-interest income. The ACL was $59.4 million, or 0.91% of total loans, at June 30, 2025, compared to $44.9 million, or 0.73% of total loans, at December 31, 2024. We believe that our ACL is appropriate and supportable. For more information about our provision and ACL and our loss experience, see “Allowance for Credit Losses,” “Net Charge-offs,” and “Non-accrual Loans, Loans 90 Days Delinquent and Still Accruing, OREO and Modified Loans,” below and “Note 6. Loans” to the unaudited consolidated financial statements herein.
Previous wording
Non-interest income was $83.6 million in the first quarter of 2025 compared to $29.4 million in the first quarter of 2024. The $54.3 million, or 184.7%, increase between those respective periods reflected$45.9 million of consumer fintech loan credit enhancement income which correlated to a like amount for provision for credit losses on consumer fintech loans, and an increase in prepaid, debit card and related fees. The increase also reflected increased ACH, card and other payment processing fees. Prepaid, debit card and related fees increased $1.4 million, or 5.9%, to $25.7 million for the first quarter of 2025, compared to $24.3 million in the first quarter of 2024. The increase reflected higher transaction volume from new clients and organic growth from existing clients. ACH, card and other payment processing fees increased $2.2 million, or 73.1%, to $5.1 million for the first quarter of 2025, compared to $3.0 million in the first quarter of 2024, reflecting an increase in rapid funds transfer volume.
Current wording
Non-interest income was $83.7 million in the second quarter of 2025 compared to $30.7 million in the second quarter of 2024. The $53.0 million, or 172.6%, increase between those respective periods reflected$43.2 million of consumer fintech loan credit enhancement income which correlated to a like amount for provision for credit losses on consumer fintech loans, and an increase in prepaid, debit card and related fees. The increase also reflected increased ACH, card and other payment processing fees. Prepaid, debit card and related fees increased $1.4 million, or 5.5%, to $26.1 million for the second quarter of 2025, compared to $24.8 million in the second quarter of 2024. The increase reflected higher transaction volume from new clients and organic growth from existing clients. ACH, card and other payment processing fees increased $2.6 million, or 85.4%, to $5.6 million for the second quarter of 2025, compared to $3.0 million in the second quarter of 2024, reflecting an increase in rapid funds transfer volume.
Previous wording
Consumer credit fintech fees amounted to $3.6 million for the first quarter of 2025. The impact of such lending may also be reflected in a lower cost of deposits, as a result of associated deposits.
Current wording
Consumer credit fintech fees amounted to $4.0 million for the second quarter of 2025. The impact of such lending may also be reflected in a lower cost of deposits, as a result of deposits required for secured credit card loans.
Previous wording
Net realized and unrealized gains on commercial loans, at fair value, decreased $735,000, or 67.1%, to $361,000 for the first quarter of 2025 from $1.1 million for the first quarter of 2024, as related loan balances continue to paydown.
Current wording
Net realized and unrealized gains on commercial loans, at fair value, decreased $159,000, or 31.6%, to $344,000 for the second quarter of 2025 from $503,000 for the second quarter of 2024, as related loan balances continue to paydown.
Previous wording
Other non-interest income increased $347,000, or 53.5%, to $995,000 for the first quarter of 2025 from $648,000 in the first quarter of 2024 which reflected increased payoff fees on advisor financing loans.
Current wording
Other non-interest income increased $1.5 million, or 167.0%, to $2.4 million for the second quarter of 2025 from $895,000 in the second quarter of 2024 which reflected increased payoff fees on REBL loans.
Previous wording
Total non-interest expense was $53.3 million for the first quarter of 2025, an increase of $6.6 million, or 14.1%, compared to $46.7 million for the first quarter of 2024. Of the $6.6 million increase, $3.4 million resulted from an increase in salaries and benefits expense.
Current wording
Total non-interest expense was $57.2 million for the second quarter of 2025, an increase of $5.8 million, or 11.2%, compared to $51.4 million for the second quarter of 2024. Of the $5.8 million increase, $3.3 million resulted from an increase in salaries and benefits expense.
Previous wording
Salaries and employee benefits expense increased to $33.7 million for the first quarter of 2025, an increase of $3.4 million, or 11.2%, from $30.3 million for the first quarter of 2024. The 11.2% increase in salaries and employee benefits expense reflected higher stock and other incentive compensation, and employee insurance expense. The increase also reflected higher IT and cybersecurity, and higher financial crimes and risk management expense.
Current wording
Salaries and employee benefits expense increased to $37.1 million for the second quarter of 2025, an increase of $3.3 million, or 9.7%, from $33.9 million for the second quarter of 2024. The 9.7% increase in salaries and employee benefits expense reflected higher stock and other incentive compensation, and employee insurance expense. The increase also reflected higher IT and cybersecurity, and higher financial crimes and risk management expense.
Previous wording
Data processing expense decreased $216,000, or 15.2%, to $1.2 million in the first quarter of 2025 from $1.4 million in the first quarter of 2024 reflecting the impact of newly effective contract terms.
Current wording
Data processing expense decreased $196,000, or 13.8%, to $1.2 million in the second quarter of 2025 from $1.4 million in the second quarter of 2024 reflecting the impact of newly effective contract terms.
Previous wording
Audit expense increased $295,000, or 82.2%, to $654,000 in the first quarter of 2025 from $359,000 in the first quarter of 2024. The increase reflected higher expense for regulatory filings.
Current wording
Audit expense increased $226,000, or 70.8%, to $545,000 in the second quarter of 2025 from $319,000 in the second quarter of 2024. The increase reflected higher expense for regulatory filings.
Previous wording
Legal expense increased $1.1 million, or 138.4%, to $2.0 million in the first quarter of 2025 from $821,000 in the first quarter of 2024. The increase reflected payments related matters and higher expense for regulatory filings.
Current wording
Legal expense increased $1.2 million, or 194.3%, to $1.9 million in the second quarter of 2025 from $633,000 in the second quarter of 2024. The increase reflected payments related matters and higher expense for regulatory filings.
Previous wording
Software expense increased $524,000, or 11.7%, to $5.0 million in the first quarter of 2025 from $4.5 million in the first quarter of 2024. The increase reflected higher expenditures for information technology infrastructure including leasing, institutional banking, cybersecurity, and enterprise risk.
Current wording
Software expense increased $507,000, or 10.9%, to $5.1 million in the second quarter of 2025 from $4.6 million in the second quarter of 2024. The increase reflected higher expenditures for information technology infrastructure including leasing, institutional banking, cybersecurity, and enterprise risk.
Previous wording
Income tax expense was $18.1 million for the first quarter of 2025 compared to $18.5 million in the first quarter of 2024. The decrease reflected a lower effective tax rate in 2025. A 24.0% effective tax rate in 2025 and a 24.7% effective tax rate in 2024 primarily reflected a 21% federal tax rate and the impact of various state income taxes.
Current wording
Income tax expense was $19.8 million for the second quarter of 2025 compared to $18.1 million in the second quarter of 2024. A 24.9% effective tax rate in 2025 and a 25.2% effective tax rate in 2024 primarily reflected a 21% federal tax rate and the impact of various state income taxes.
Previous wording
Comparison of first quarter of 2025 to first quarter of 2024
Current wording
Comparison of first six months 2025 to first six months 2024
Previous wording
Other non-interest expense increased $1.3 million, or 35.0%, to $5.0 million in the first quarter of 2025 from $3.7 million in the first quarter of 2024 reflecting increases of $1.1 million in OREO expenses and $122,000 in other operating taxes expense. The $1.1 million increase in OREO expense reflected operating and real estate tax expenses on the apartment property and Florida mall. The OREO balances of those properties as of March 31, 2025 were $42.5 million apartment property (“See Recent Developments”) and $15.0 million balance Florida mall, respectively.
Current wording
Other non-interest expense increased $1.9 million, or 22.2%, to $10.4 million in the first six months of 2025 from $8.5 million in the first six months of 2024 reflecting increases of $1.0 million in OREO expenses, $495,000 in marketing expense, and $133,000 in other operating taxes expense. The $1.0 million increase in OREO expense reflected operating and real estate tax expenses on an apartment property and Florida mall. The OREO balances of those properties as of June 30, 2025 were $42.9 million for the apartment property (“See Recent Developments”) and $15.0 million for the Florida mall.
Previous wording
Our primary source of funding has been deposits. Average total deposits increased by $1.81 billion, or 27.8%, to $8.31 billion for the first quarter of 2025 compared to the first quarter of 2024. Federal Reserve average balances increased to $1.14 billion in the first quarter of 2025 from $874.1 million in the first quarter of 2024.
Current wording
Our primary source of funding has been deposits. Average total deposits increased by $1.34 billion, or 19.9%, to $8.06 billion for the second quarter of 2025 compared to the second quarter of 2024. Federal Reserve average balances increased to $756.6 million in the second quarter of 2025 from $341.9 million in the second quarter of 2024.
Previous wording
One source of contingent liquidity is available-for-sale securities, which amounted to $1.49 billion at March 31, 2025, compared to $1.50 billion at December 31, 2024. At March 31, 2025, outstanding loans amounted to $6.38 billion, compared to $6.11 billion at the prior year end, an increase of $266.5 million representing a use of funds. Commercial loans, at fair value, decreased to $211.6 million from $223.1 million between those respective dates, a decrease of $11.5 million, which provided funding. In 2019 and previous years, these loans were generally originated for securitization and sale, but in 2020 we decided to retain such loans on the balance sheet. While we suspended originating such loans after the first quarter of 2020, we resumed originations, which consist primarily of non-SBA commercial real estate bridge loans, in the third quarter of 2021. Such originations are held for investment and are included in “Loans, net of deferred loan fees and costs” on the balance sheet. Accordingly, commercial loans, at fair value will continue to run off. Our liquidity planning has not previously placed undue reliance on securitizations, and while our future planning excludes the impact of securitizations, other liquidity sources, primarily deposits, are determined to be adequate.
Current wording
One source of contingent liquidity is available-for-sale securities, which amounted to $1.48 billion at June 30, 2025, compared to $1.50 billion at December 31, 2024. At June 30, 2025, outstanding loans amounted to $6.54 billion, compared to $6.11 billion at the prior year end, an increase of $421.8 million representing a use of funds. Commercial loans, at fair value, decreased to $185.5 million from $223.1 million between those respective dates, a decrease of $37.6 million, which provided funding. In 2019 and previous years, these loans were generally originated for securitization and sale, but in 2020 we decided to retain such loans on the balance sheet. While we suspended originating such loans after the first quarter of 2020, we resumed originations, which consist primarily of non-SBA commercial real estate bridge loans, in the third quarter of 2021. Such originations are held for investment and are included in “Loans, net of deferred loan fees and costs” on the balance sheet. Accordingly, commercial loans, at fair value will continue to run off. Our liquidity planning has not previously placed undue reliance on securitizations, and while our future planning excludes the impact of securitizations, other liquidity sources, primarily deposits, are determined to be adequate.
Previous wording
While we do not have a traditional branch system, we believe that our core deposits, which include our demand, interest checking, savings and money market accounts, have similar characteristics to those of a bank with a branch system. The majority of our deposit accounts are obtained with the assistance of third-parties and as a result have historically been classified as brokered by the FDIC. Prior to December 2020, FDIC guidance for classification of deposit accounts as brokered was relatively broad, and generally included accounts which were referred to or “placed” with the institution by other companies. If the Bank ceases to be categorized as “well capitalized” under banking regulations, it will be prohibited from accepting, renewing or rolling over any of its deposits classified as brokered without the consent of the FDIC. In such a case, the FDIC’s refusal to grant consent to our accepting, renewing or rolling over brokered deposits could effectively restrict or eliminate the ability of the Bank to operate its business lines as presently conducted. In December 2020, the FDIC issued a new regulation which, in the third quarter of 2021, resulted in the majority of our deposits being reclassified from brokered to non-brokered. On July 30, 2024, the FDIC proposed a regulation eliminating certain automatic exceptions which resulted in the reclassification of significant amounts of our deposits from brokered to non-brokered as a result of the December 2020 rules changes, while retaining the ability of financial institutions to reapply. If the proposed regulation were to be adopted, significant amounts of our deposits could be reclassified as brokered, which could also result in an increase in our federal deposit insurance rate and expense. On January 21, 2025, the FDIC announced that the proposed regulation would not be adopted. Of our total deposits of $8.36 billion as of March 31, 2025, $672.4 million were classified as brokered and an estimated $464.9 million were not insured by FDIC insurance, which requires identification of the depositor and is limited to $250,000 per identified depositor. Uninsured accounts may represent a greater liquidity risk than FDIC-insured accounts should large depositors withdraw funds as a result of negative financial developments either at the Bank or in the economy. Significant amounts of our uninsured deposits are comprised of small balances, such as anonymous gift cards and corporate incentive cards for which there is no identified depositor. We do not believe that such uninsured accounts present a significant liquidity risk.
Current wording
While we do not have a traditional branch system, we believe that our core deposits, which include our demand, interest checking, savings and money market accounts, have similar characteristics to those of a bank with a branch system. The majority of our deposit accounts are obtained with the assistance of third-parties and as a result have historically been classified as brokered by the FDIC. Prior to December 2020, FDIC guidance for classification of deposit accounts as brokered was relatively broad, and generally included accounts which were referred to or “placed” with the institution by other companies. If the Bank ceases to be categorized as “well capitalized” under banking regulations, it will be prohibited from accepting, renewing or rolling over any of its deposits classified as brokered without the consent of the FDIC. In such a case, the FDIC’s refusal to grant consent to our accepting, renewing or rolling over brokered deposits could effectively restrict or eliminate the ability of the Bank to operate its business lines as presently conducted. In December 2020, the FDIC issued a new regulation which, in the third quarter of 2021, resulted in the majority of our deposits being reclassified from brokered to non-brokered. On July 30, 2024, the FDIC proposed a regulation eliminating certain automatic exceptions which resulted in the reclassification of significant amounts of our deposits from brokered to non-brokered as a result of the December 2020 rules changes, while retaining the ability of financial institutions to reapply. If the proposed regulation were to be adopted, significant amounts of our deposits could be reclassified as brokered, which could also result in an increase in our federal deposit insurance rate and expense. On January 21, 2025, the FDIC announced that the proposed regulation would not be adopted. Of our total deposits of $7.77 billion as of June 30, 2025, $458.1 million were classified as brokered and an estimated $560.1 million were not insured by FDIC insurance, which requires identification of the depositor and is limited to $250,000 per identified depositor. Uninsured accounts may represent a greater liquidity risk than FDIC-insured accounts should large depositors withdraw funds as a result of negative financial developments either at the Bank or in the economy. Significant amounts of our uninsured deposits are comprised of small balances, such as anonymous gift cards and corporate incentive cards for which there is no identified depositor. We do not believe that such uninsured accounts present a significant liquidity risk.
Previous wording
While consumer deposit accounts, including prepaid and debit card accounts, comprise the vast majority of our funding needs, we maintain secured borrowing lines with the FHLB and the Federal Reserve. Our collateralized line of credit with the Federal Reserve Bank had available accessible capacity of$2.01 billion as of March 31, 2025, and was collateralized by loans. We have also pledged in excess of $2.20 billion of multifamily loans to the FHLB. As a result, we have approximately $1.07 billion of availability on that line of credit which we can also access at any time. There wasno amount outstanding on the Federal Reserve line or on our FHLB line at March 31, 2025. We expect to continue to maintain our facilities with the FHLB and Federal Reserve.
Current wording
While consumer deposit accounts, including prepaid and debit card accounts, comprise the vast majority of our funding needs, we maintain secured borrowing lines with the FHLB and the Federal Reserve. Our collateralized line of credit with the Federal Reserve Bank had available accessible capacity of$2.05 billion as of June 30, 2025, and was collateralized by loans. We have also pledged in excess of $2.16 billion of multifamily loans to the FHLB. As a result, we have approximately $1.03 billion of availability on that line of credit which we can also access at any time. There wasno amount outstanding on the Federal Reserve line or on our FHLB line at June 30, 2025. We expect to continue to maintain our facilities with the FHLB and Federal Reserve.
Previous wording
As a holding company conducting substantially all our business through our subsidiaries, the Company’s near-term need for liquidity consists principally of cash for required interest payments on our subordinated debentures, consisting of 2038 Debentures, and senior debt, consisting of $100.0 million senior notes with an interest rate of 4.75% and maturing in August 2025 (the “2025 Senior Notes”). Semi-annual interest payments on the 2025 Senior Notes are approximately $2.4 million, and quarterly interest payments on the 2038 Debentures are approximately $300,000. As of March 31, 2025, we had cash reserves of approximately $9.5 million at the holding company. Stock repurchases are funded by dividends from the Bank, as are interest payments on the above debt instruments. Stock repurchases may be terminated at any time. The holding company’s sources of liquidity are primarily comprised of dividends paid by the Bank to the Company, and the issuance of debt.
Current wording
As a holding company conducting substantially all our business through our subsidiaries, the Company’s near-term need for liquidity consists principally of cash for required interest payments on our subordinated debentures, consisting of 2038 Debentures, and senior debt, consisting of $100.0 million senior notes with an interest rate of 4.75% and maturing in August 2025 (the “2025 Senior Notes”). Semi-annual interest payments on the 2025 Senior Notes are approximately $2.4 million, and quarterly interest payments on the 2038 Debentures are approximately $300,000. As of June 30, 2025, we had cash reserves of approximately $7.9 million at the holding company. Stock repurchases are funded by dividends from the Bank, as are interest payments on the above debt instruments. Stock repurchases may be terminated at any time. The holding company’s sources of liquidity are primarily comprised of dividends paid by the Bank to the Company, and the issuance of debt.
Previous wording
Included in our cash and cash-equivalents at March 31, 2025 were $1.01 billion of interest-earning deposits which primarily consisted of deposits with the Federal Reserve.
Current wording
Included in our cash and cash-equivalents at June 30, 2025 were $328.6 million of interest-earning deposits which primarily consisted of deposits with the Federal Reserve.
Previous wording
In 2025, $11.0 million of securities purchases were exceeded by $47.9 million of redemptions of securities redemptions. We had outstanding commitments to fund loans, including unused lines of credit, of $2.01 billion and $1.98 billion as of March 31, 2025, and December 31, 2024, respectively. The majority of our commitments are variable rate and originate with SBLOC. The recorded amount of such commitments has, for many accounts, been based on the full amount of collateral in a customer’s investment account. The funding requirements for such commitments occur on a measured basis over time and would be funded by normal deposit growth. Additionally, these loans are “demand” loans and as such, represent a contingent source of funding.
Current wording
In 2025, $53.1 million of securities purchases were exceeded by $126.0 million of redemptions of securities redemptions. We had outstanding commitments to fund loans, including unused lines of credit, of $1.91 billion and $1.98 billion as of June 30, 2025, and December 31, 2024, respectively. The majority of our commitments are variable rate and originate with SBLOC. The recorded amount of such commitments has, for many accounts, been based on the full amount of collateral in a customer’s investment account. The funding requirements for such commitments occur on a measured basis over time and would be funded by normal deposit growth. Additionally, these loans are “demand” loans and as such, represent a contingent source of funding.
Previous wording
The management of rate sensitive assets and liabilities is essential to controlling interest rate risk and optimizing interest margins. An interest rate sensitive asset or liability is one that, within a defined time period, either matures or experiences an interest rate change in line with general market rates. Interest rate sensitivity measures the relative volatility of an institution’s interest margin resulting from changes in market interest rates. While it is difficult to predict the impact of inflation and responsive Federal Reserve rate changes on our net interest income, the Federal Reserve has historically utilized increases in the overnight federal funds rate as one tool in fighting inflation. As a result of high rates of inflation, the Federal Reserve raised rates in each quarter of 2022 and in the first three quarters of 2023. In the third quarter of 2024 the Federal Reserve began lowering rates. Our largest funding source, prepaid and debit card deposit accounts, contractually adjusts to only a portion of increases or decreases in rates which are largely determined by such Federal Reserve actions. That pricing has generally supported the maintenance of a balance sheet for which net interest income tends to increase with increases in rates. While deposits reprice to only a portion of Federal Reserve rate changes, such changes are immediate. Interest-earning assets, comprised primarily of loans and securities, tend to adjust more fully to rate increases at lagged contractual pricing intervals. The majority of our loans and securities are variable rate and generally reprice monthly or quarterly, although some reprice over several years. Additionally, the impact of loan interest rate floors which must be exceeded before rates on certain loans increase, may result in decreases in net interest income with lesser increases in rates. Cumulative 2022 Federal Reserve interest rate increases resulted in contractual rates on loans generally exceeding rate floors beginning in the second quarter of 2022.
Current wording
The management of rate sensitive assets and liabilities is essential to controlling interest rate risk and optimizing interest margins. An interest rate sensitive asset or liability is one that, within a defined time period, either matures or experiences an interest rate change in line with general market rates. Interest rate sensitivity measures the relative volatility of an institution’s interest margin resulting from changes in market interest rates. While it is difficult to predict the impact of inflation and responsive Federal Reserve rate changes on our net interest income, the Federal Reserve has historically utilized increases in the overnight federal funds rate as one tool in fighting inflation. As a result of high rates of inflation, the Federal Reserve raised rates in 2022 and in 2023. In the third quarter of 2024 the Federal Reserve began lowering rates and has held rates steady in the first two quarters of 2025. Our largest funding source, prepaid and debit card deposit accounts, contractually adjusts to only a portion of increases or decreases in rates which are largely determined by such Federal Reserve actions. That pricing has generally supported the maintenance of a balance sheet for which net interest income tends to increase with increases in rates. While deposits reprice to only a portion of Federal Reserve rate changes, such changes are immediate. Interest-earning assets, comprised primarily of loans and securities, tend to adjust more fully to rate increases at lagged contractual pricing intervals. The majority of our loans and securities are variable rate and generally reprice monthly or quarterly, although some reprice over several years. Additionally, the impact of loan interest rate floors which must be exceeded before rates on certain loans increase, may result in decreases in net interest income with lesser increases in rates. Cumulative 2022 Federal Reserve interest rate increases resulted in contractual rates on loans generally exceeding rate floors beginning in the second quarter of 2022.
Previous wording
The following table sets forth the estimated maturity or repricing structure of our interest-earning assets and interest-bearing liabilities at March 31, 2025. Except as stated below, the amounts of assets or liabilities shown which reprice or mature during a particular period were determined in accordance with the contractual terms of each asset or liability. The majority of transaction and savings balances are assumed to be “core” deposits, or deposits that will generally remain with us regardless of market interest rates. We estimate the repricing characteristics of these deposits based on historical performance, past experience, judgmental predictions and other deposit behavior assumptions. However, we may choose not to reprice liabilities proportionally to changes in market interest rates for competitive or other reasons. Additionally, although non-interest-bearing transaction accounts are not paid interest, we estimate certain of the balances will reprice as a result of the contractual fees that are paid to the affinity groups which are based upon a rate index, and therefore are included in interest expense. We have adjusted the transaction account balances in the table downward, to better reflect the impact of their partial adjustment to changes in rates. Loans and security balances, which adjust more fully to market rate changes, are based upon actual balances. The table does not assume any prepayment of fixed-rate loans and mortgage-backed securities are scheduled based on their anticipated cash flow, including prepayments based on historical data and current market trends. The table does not necessarily indicate the impact of general interest rate movements on our net interest income because the repricing and related behavior of certain categories of assets and liabilities (for example, prepayments of loans and withdrawal of deposits) is beyond our control. As a result, certain assets and liabilities indicated as repricing within a stated period may in fact reprice at different times and at different rate levels.
Current wording
The following table sets forth the estimated maturity or repricing structure of our interest-earning assets and interest-bearing liabilities at June 30, 2025. Except as stated below, the amounts of assets or liabilities shown which reprice or mature during a particular period were determined in accordance with the contractual terms of each asset or liability. The majority of transaction and savings balances are assumed to be “core” deposits, or deposits that will generally remain with us regardless of market interest rates. We estimate the repricing characteristics of these deposits based on historical performance, past experience, judgmental predictions and other deposit behavior assumptions. However, we may choose not to reprice liabilities proportionally to changes in market interest rates for competitive or other reasons. Additionally, although non-interest-bearing transaction accounts are not paid interest, we estimate certain of the balances will reprice as a result of the contractual fees that are paid to the affinity groups which are based upon a rate index, and therefore are included in interest expense. We have adjusted the transaction account balances in the table downward, to better reflect the impact of their partial adjustment to changes in rates. Loans and security balances, which adjust more fully to market rate changes, are based upon actual balances. The table does not assume any prepayment of fixed-rate loans, mortgage and asset backed securities are scheduled based on their anticipated cash flow, including prepayments based on historical data and current market trends. The table does not necessarily indicate the impact of general interest rate movements on our net interest income because the repricing and related behavior of certain categories of assets and liabilities (for example, prepayments of loans and withdrawal of deposits) is beyond our control. As a result, certain assets and liabilities indicated as repricing within a stated period may in fact reprice at different times and at different rate levels.
Previous wording
General. Our total assets at March 31, 2025 were $9.39 billion, of which our total loans were $6.38 billion, and our commercial loans, at fair value, were $211.6 million. At December 31, 2024, our total assets were $8.73 billion, of which our total loans were $6.11 billion, and our commercial loans, at fair value were $223.1 million. The increase reflected loan growth in various loan categories, which offset decreases in commercial loans, at fair value as that portfolio continues to run off.
Current wording
General. Our total assets at June 30, 2025 were $8.84 billion, of which our total loans were $6.54 billion, and our commercial loans, at fair value, were $185.5 million. At December 31, 2024, our total assets were $8.73 billion, of which our total loans were $6.11 billion, and our commercial loans, at fair value were $223.1 million. The increase reflected loan growth in various loan categories, which offset decreases in commercial loans, at fair value as that portfolio continues to run off.
Previous wording
At March 31, 2025, we had a total of $1.01 billion of interest-earning deposits compared to $564.1 million at December 31, 2024, an increase of $447.5 million. These deposits were comprised primarily of balances at the Federal Reserve.
Current wording
At June 30, 2025, we had a total of $328.6 million of interest-earning deposits compared to $564.1 million at December 31, 2024, a decrease of $235.4 million. These deposits were comprised primarily of balances at the Federal Reserve.
Previous wording
For detailed information on the composition and maturity distribution of our investment portfolio, see“Note 5. Investment Securities” to the unaudited consolidated financial statements herein. Total investment securities decreased to $1.49 billion at March 31, 2025, a decrease of $14.7 million, or 1.0%, from December 31, 2024.
Current wording
For detailed information on the composition and maturity distribution of our investment portfolio, see“Note 5. Investment Securities” to the unaudited consolidated financial statements herein. Total investment securities decreased to $1.48 billion at June 30, 2025, a decrease of $21.4 million, or 1.4%, from December 31, 2024.
Previous wording
For the three months ended March 31, 2025 and 2024, we recognized no credit-related losses on our investment securities portfolio.
Current wording
For the six months ended June 30, 2025 and 2024, we recognized no credit-related losses on our investment securities portfolio.
Previous wording
Prior to 2020, the Company sponsored the structuring of commercial mortgage loan securitizations, and in 2020, the Company decided not to pursue additional securitizations. The loans previously sold to the commercial mortgage-backed securitizations were transitional commercial mortgage loans made to improve and rehabilitate existing properties which already had cash flow. Servicing rights were not retained. Each of the securitizations is considered a variable interest entity of which the Company is not the primary beneficiary. Further, true sale accounting has been applicable to each of the securitizations, as supported by a review performed by an independent third-party consultant. In each of the securitizations, the Company obtained a tranche of certificates which are accounted for as available-for-sale debt securities. The securities were recorded at fair value at acquisition, which was determined by an independent third-party based on the discounted cash flow method using unobservable (level 3) inputs.
Current wording
Prior to 2020, the Company sponsored the structuring of commercial mortgage loan securitizations, and in 2020, the Company decided not to pursue additional securitizations. The loans previously sold to the commercial mortgage-backed securitizations were transitional commercial mortgage loans made to improve and rehabilitate existing properties which already had cash flow. Servicing rights were not retained. Each of the securitizations is considered a variable interest entity of which the Company is not the primary beneficiary. Further, true sale accounting has been applicable to each of the securitizations, as supported by a review performed by an independent third-party consultant. In each of the securitizations, the Company obtained a tranche of certificates which are accounted for as available-for-sale debt securities. The securities were recorded at fair value at acquisition, which was determined by an independent third-party based on the discounted cash flow method using unobservable (level 3) inputs. As of June 30, 2025, all the Company’s securities related to its securitizations had been repaid.
Previous wording
Commercial loans, at fair value are comprised of non-SBA commercial real estate loans and SBA loans which had been originated for sale or securitization through the first quarter of 2020, and which are now being held on the balance sheet. SBA loans are valued on a pooled basis and commercial real estate bridge loans are valued individually. Commercial loans, at fair value decreased to $211.6 million at March 31, 2025 from $223.1 million at December 31, 2024, primarily reflecting the impact of loan repayments as this portfolio runs off. These loans continue to be accounted for at fair value. In the third quarter of 2021 we resumed originating non-SBA commercial real estate loans, after suspending such originations in the first quarter of 2020. These originations reflect lending criteria similar to the existing loan portfolio and are primarily comprised of multifamily (apartment buildings) collateral. The new originations, which are intended to be held for investment, are accounted for at amortized cost.
Current wording
Commercial loans, at fair value are comprised of non-SBA commercial real estate loans and SBA loans which had been originated for sale or securitization through the first quarter of 2020, and which are now being held on the balance sheet. SBA loans are valued on a pooled basis and commercial real estate bridge loans are valued individually. Commercial loans, at fair value decreased to $185.5 million at June 30, 2025 from $223.1 million at December 31, 2024, primarily reflecting the impact of loan repayments as this portfolio runs off. These loans continue to be accounted for at fair value. In the third quarter of 2021 we resumed originating non-SBA commercial real estate loans, after suspending such originations in the first quarter of 2020. These originations reflect lending criteria similar to the existing loan portfolio and are primarily comprised of multifamily (apartment buildings) collateral. The new originations, which are intended to be held for investment, are accounted for at amortized cost.
Showing the first 40 of 75 pairs. Open the source sections for the rest.
Rearranged current paragraphs (14)
Current report — wording carried from elsewhere
The following table presents the average daily balances of assets, liabilities and shareholders’ equity and the respective interest earned or paid on interest-earning assets and interest-bearing liabilities, as well as average annualized rates, for the periods indicated:
Current report — wording carried from elsewhere
For the first six months of 2025, average interest-earning assets increased to $8.91 billion, an increase of $1.46 billion, or 19.7%, from $7.44 billion in the first six months of 2024. The increase reflected increased average interest-earning deposits at the Federal Reserve Bank of $337.5 million, increased average balances of loans and leases of $739.9 million, or 12.9%, and increased average investment securities of $386.3 million, or 35.2%. For those respective periods, average demand and interest checking deposits increased $1.53 billion, or 23.3%. The interest expense shown for demand and interest checking is primarily comprised of interest paid to our affinity groups.
Current report — wording carried from elsewhere
Provision for Credit Losses on Loans
Current report — wording carried from elsewhere
Non-interest income was $167.4 million in the first six months of 2025 compared to $60.1 million in the first six months of 2024. The $107.3 million, or 178.5%, increase between those respective periods reflected$89.1 million of consumer fintech loan credit enhancement income which correlated to a like amount for provision for credit losses on consumer fintech loans, and an increase in prepaid, debit card and related fees. The increase also reflected increased ACH, card and other payment processing fees. Prepaid, debit card and related fees increased $2.8 million, or 5.7%, to $51.8 million for the first six months of 2025, compared to $49.0 million in the first six months of 2024. The increase reflected higher transaction volume from new clients and organic growth from existing clients. ACH, card and other payment processing fees increased $4.7 million, or 79.3%, to $10.7 million for the first six months of 2025, compared to $6.0 million in the first six months of 2024, reflecting an increase in rapid funds transfer volume.
Current report — wording carried from elsewhere
Consumer credit fintech fees amounted to $7.6 million for the first six months of 2025. The impact of such lending may also be reflected in a lower cost of deposits, as a result of deposits required for secured credit card loans.
Current report — wording carried from elsewhere
Net realized and unrealized gains on commercial loans, at fair value, decreased $894,000, or 55.9%, to $705,000 for the first six months of 2025 from $1.6 million for the first six months of 2024, as related loan balances continue to paydown.
Current report — wording carried from elsewhere
The following table presents the principal categories of non-interest expense for the periods indicated:
Current report — wording carried from elsewhere
Changes in non-interest expense were as follows:
Current report — wording carried from elsewhere
Salaries and employee benefits expense increased to $70.8 million for the first six months of 2025, an increase of $6.7 million, or 10.4%, from $64.1 million for the first six months of 2024. The 10.4% increase in salaries and employee benefits expense reflected higher stock and other incentive compensation, and employee insurance expense. The increase also reflected higher IT and cybersecurity, and higher financial crimes and risk management expense.
Current report — wording carried from elsewhere
Software expense increased $1.0 million or 11.3%, to $10.2 million in the first six months of 2025 from $9.1 million in the first six months of 2024. The increase reflected higher expenditures for information technology infrastructure including leasing, institutional banking, cybersecurity, and enterprise risk.
Current report — wording carried from elsewhere
Income tax expense was $37.9 million for the first six months of 2025 compared to $36.6 million in the first six months of 2024. A 24.5% effective tax rate in 2025 and a 25.0% effective tax rate in 2024 primarily reflected a 21% federal tax rate and the impact of various state income taxes.
Current report — wording carried from elsewhere
The current allowance for credit losses for REBL, is primarily based upon historical industry losses for multi-family loans, in the absence of significant charge-offs within the Company’s REBL portfolio. As a result of increasing amounts of loans classified as special mention and substandard, the Company evaluated potential related sensitivity for REBL in the third quarter of 2024. Such evaluation is inherently subjective as it requires material estimates that may be susceptible to change as more information becomes available. As a result, the Company added a new qualitative factor to its ACL analysis.
Current report — wording carried from elsewhere
There were $1.3 million and $2.6 million of total loans classified as modified for the three months ended June 30, 2025 and June 30, 2024, respectively, with no specific reserves.
Current report — wording carried from elsewhere
Financial instruments whose contract amounts represent potential credit risk for us, are our unused commitments to extend credit and standby letters of credit which were approximately $1.91 billion and $305,000, respectively, at June 30, 2025 and $1.97 billion and