Financial Performance - For the three months ended September 30, 2025, the Company reported net income attributable to common shareholders of $25.6 million, or $0.55 per diluted share, compared to $13.0 million, or $0.28 per diluted share for the same period in 2024[146]. - For the nine months ended September 30, 2025, net income attributable to common shareholders was $58.7 million, or $1.28 per diluted share, down from $67.6 million, or $1.48 per diluted share for the same period in 2024[148]. - The Company’s net income tax expense increased by $13.0 million, from $8.4 million in the first nine months of 2024 to $21.4 million for the same period in 2025[151]. Interest Income and Assets - Net interest income for the three months ended September 30, 2025, increased by $18.5 million, or 19.1%, to $115.5 million compared to $97.0 million for the same period in 2024[153]. - Average interest-earning assets increased by $2.19 billion, or 19.0%, to $13.77 billion for the third quarter of 2025, compared to $11.57 billion for the third quarter of 2024[153]. - For the nine months ended September 30, 2025, net interest income increased by $46.8 million, or 16.8%, to $325.2 million compared to $278.4 million for the same period in 2024[155]. - Total interest-earning assets for the three months ended September 30, 2025, were $13.77 billion, generating interest income of $231.43 million[159]. - The yield on average interest-earning assets decreased by 51 basis points to 6.67% for the third quarter of 2025[153]. - The yield on average interest-earning assets decreased by 42 basis points to 6.72% for the nine months ended September 30, 2025[155]. Credit Losses and Provisions - The provision for credit losses decreased by $12.3 million, or 35.5%, to $22.2 million for the third quarter of 2025, compared to $34.5 million for the same period in 2024[149]. - For the nine months ended September 30, 2025, the provision for credit losses increased to $74.5 million, up $11.8 million from $62.6 million in the same period of 2024, driven by loan growth and charge-off impacts[167]. - The allowance for credit losses on loans and leases increased by $18.2 million, or 10.9%, to $185.7 million at September 30, 2025[213]. Noninterest Income and Expenses - Noninterest expense increased by $27.6 million, or 11.9%, primarily due to increased salaries and employee benefits of $11.9 million and technology expenses of $4.8 million[150]. - Total noninterest income for Q3 2025 decreased by $2.3 million, or 7.0%, to $30.6 million compared to $32.9 million in Q3 2024[173]. - For the nine months ended September 30, 2025, total noninterest income decreased by $2.5 million, or 2.6%, to $90.7 million compared to $93.2 million in the same period in 2024[175]. Loans and Leases - Loans and leases held for investment at historical cost reached $11.27 billion as of September 30, 2025, an increase of $1.79 billion, or 18.8%, compared to September 30, 2024[168]. - Net charge-offs for Q3 2025 were $16.8 million, or 0.61% of average quarterly loans, compared to $1.7 million, or 0.08%, in Q3 2024, marking an increase of 883.4%[169]. - Total loans and leases 90 or more days past due increased by $46.0 million, or 18.0%, compared to December 31, 2024[215]. Assets and Equity - Total assets at September 30, 2025, were $14.67 billion, an increase of $1.72 billion, or 13.3%, compared to $12.94 billion at December 31, 2024[192]. - Total deposits at September 30, 2025, were $13.29 billion, an increase of $1.53 billion, or 13.0%, from $11.76 billion at December 31, 2024[192]. - Total shareholders' equity at September 30, 2025, was $1.20 billion, an increase of $199.1 million, or 19.8%, from $1.00 billion at December 31, 2024[193]. Regulatory Capital Ratios - The Company's Common Equity Tier 1 Capital ratio as of September 30, 2025, was 10.51%, significantly above the minimum requirement of 4.50%[227]. - Total Capital to Risk-Weighted Assets ratio was 12.67% as of September 30, 2025, exceeding the minimum requirement of 8.00%[227]. Accounting Policies and Estimates - The Company’s critical accounting policy involves the allowance for credit losses, which requires subjective judgments about uncertain matters[229]. - Changes in the allowance for credit losses could materially impact the Company's financial position and results of operations[229]. - Understanding the accounting policies is essential for reviewing the Company's financial statements[229].

Financial Data and Key Metrics Changes - Q3 earnings per share increased by 8% quarter-over-quarter to $0.55, nearly doubling compared to Q3 2024 [10] - Core operating leverage improved by 24% year-over-year, with a 7% quarter-over-quarter increase [10][11] - Net interest income rose by $6 million, or 6% quarter-over-quarter, and $23 million, or 19% year-over-year [17] Business Line Data and Key Metrics Changes - Loan production increased by 22% year-over-year, with total loan origination in Q3 2025 reaching approximately $1.65 billion, an 8% increase from the previous quarter [5][13] - Customer deposit growth was 20% year-over-year, with checking balances increasing by 26% quarter-over-quarter to $363 million [15][16] - The small dollar SBA loan product, Live Oak Express, is ramping up significantly, contributing to a $12 million year-to-date gain on sale [22] Market Data and Key Metrics Changes - Market share in the SBA 7(a) lending program increased from 6.4% to 7.7%, with over $2.8 billion in loans provided to small businesses [5] - The total loan portfolio grew approximately 5% quarter-over-quarter and 17% year-over-year [14] Company Strategy and Development Direction - The company is focused on extending customer product offerings, including checking and small dollar SBA loan capabilities, to enhance customer relationships and reduce deposit costs [6][8] - Emphasis on AI-enabled solutions for loan origination to improve efficiency and speed in servicing customers [9][43] - The company aims for sustainable profitability with a target of 15% returns on equity and 15% EPS growth annually [88] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating economic uncertainties, emphasizing sound underwriting practices and proactive credit management [35][36] - The potential impact of government shutdowns on loan growth was discussed, with a strategy in place to manage SBA loan pipelines effectively [37][70] - The company is optimistic about leveraging AI to enhance productivity and customer experience, viewing it as a significant competitive advantage [40][42] Other Important Information - The company raised $100 million through a preferred offering, enhancing its capital position [11][25] - Non-interest expense decreased by approximately 2% quarter-over-quarter, reflecting a focus on efficiency [22] Q&A Session Summary Question: Can you provide more color around the increase in NPAs this quarter and talk about new default trends? - Management noted that the increase in non-accrual balances is manageable and related to the SBA portfolio, with a focus on sound underwriting and servicing [33][35] Question: How are you thinking about the potential for an extended government shutdown? - The company has a playbook for government shutdowns and has prepared by pooling PLPs to maintain loan growth [37][38] Question: Can you quantify the benefits of AI enhancements? - AI is expected to significantly improve productivity and customer experience, with ongoing efforts to automate processes [40][42] Question: What is the trajectory for the margin with the reentering of the rate cut cycle? - Management indicated that margin recovery is typically quick following Fed rate cuts, with a focus on net interest income growth [48][50] Question: Have you seen easing competition in the SBA space? - The company believes it has a strong position in the SBA market and continues to grow despite competition [52][54] Question: Have you adjusted underwriting standards in light of broader economic pressures? - Management stated that while underwriting standards are generally consistent, they may tighten criteria in specific verticals as needed [64][66] Question: What is the update on the embedded finance build-out? - The company is actively working on embedded finance and studying opportunities in stablecoins, viewing it as a potential growth area [78][79]

Financial Data and Key Metrics Changes - Q3 earnings per share increased by 8% quarter over quarter to $0.55, nearly doubling compared to Q3 2024 [10] - Core operating leverage improved by 24% year over year, with a 7% increase quarter over quarter [10] - Net interest income rose by $6 million, or 6% quarter over quarter, and $23 million, or 19% year over year [17] - Total loan portfolio grew approximately 5% in the quarter, with year-over-year loan balances increasing approximately 17% [14] - Customer deposit growth was outstanding at 20% year over year, with a 3% increase quarter over quarter [15] Business Line Data and Key Metrics Changes - Loan production increased by 22%, with loan outstandings growth up 17% [5] - The company originated approximately $1.65 billion in loans in Q3, an 8% increase quarter over quarter [13] - Checking balances increased by 26% quarter over quarter to $363 million, representing 4% of the total deposit base [16] - Small dollar SBA loan production, termed Live Oak Express, is ramping up significantly, contributing to gains on sale [8][22] Market Data and Key Metrics Changes - The company maintained its position as the number one SBA 7(a) lender for 2025, increasing market share from 6.4% to 7.7% [5] - The competitive landscape remains challenging, but the company continues to grow its verticals and customer base [53] Company Strategy and Development Direction - The company is focused on extending customer product offerings, including checking and small dollar SBA loan capabilities [6] - Emphasis on AI-enabled loan origination solutions to improve efficiency and speed in servicing customers [9] - The strategy includes enhancing non-interest-bearing deposits to improve margin efficiency and funding resilience [16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of small business owners despite economic uncertainties [36] - The company is prepared for potential government shutdowns, having a playbook in place to manage SBA loan pipelines [37] - Future net interest income and margin trajectories are expected to be positively impacted by the Fed's rate cuts [18] Other Important Information - The company successfully raised $100 million through a preferred offering, enhancing tier one capital [11] - Non-interest expense decreased by approximately 2% quarter over quarter, reflecting a focus on efficiency [22] Q&A Session Summary Question: Can you provide more color around the increase in NPAs this quarter? - Management noted that the increase in non-accrual balances is manageable and related to the SBA portfolio, with strong servicing efforts in place [33][35] Question: How do you view the potential impact of an extended government shutdown? - The company has a plan to manage SBA loans during shutdowns and does not anticipate significant impacts on growth if the shutdown is resolved quickly [37][38] Question: Can you quantify the benefits of AI enhancements? - Management believes AI could significantly improve productivity and reduce the need for a larger employee base to achieve revenue growth [40][42] Question: What is the outlook for net interest margin in the context of rate cuts? - The company expects a quick recovery in net interest margin following Fed rate cuts, supported by its asset-sensitive balance sheet [48][50] Question: Have you seen easing competition in the SBA space? - Management indicated that they continue to grow their market share and do not see significant changes in competition, focusing on their strengths in the SBA market [52][54] Question: Have underwriting standards been adjusted in light of current economic pressures? - The company maintains consistent underwriting standards but may tighten criteria in specific verticals as needed [64][66]

Financial Data and Key Metrics Changes - Q3 earnings per share reached $0.55, an 8% increase linked quarter and nearly doubled compared to 2024, driven by a 7% linked quarter increase in core operating leverage and lower provision expense [10][11][12] - Total loan portfolio grew approximately 5% linked quarter and 17% year over year, indicating strong growth in a competitive industry [14][15] - Customer deposits increased by 3% linked quarter and 20% year over year, showcasing robust deposit growth [15] Business Line Data and Key Metrics Changes - Loan production increased by 22%, with loan outstandings growing by 17% and customer deposit growth at 20% [6][10] - Q3 loan originations totaled approximately $1,650,000,000, an 8% increase linked quarter, primarily driven by the Commercial Banking segment [13] - Checking balances reached $363,000,000, up from 2% to 4% of total deposits year over year, reflecting a significant increase in customer relationships [7][15] Market Data and Key Metrics Changes - Market share in SBA lending increased from 6.4% to 7.7%, with over $2,800,000,000 in loans provided to small businesses, a 44% increase over last year [5][6] - The company remains focused on growing non-interest bearing business checking balances and originating small dollar SBA loans, which are expected to enhance profitability [11][15] Company Strategy and Development Direction - The company is extending customer product offerings by adding checking and small dollar SBA loan capabilities, aiming for sustainable growth [6][7] - AI-enabled loan origination solutions are being piloted to improve efficiency and speed in processing loans, indicating a strong focus on technology integration [9][45] - The company is committed to maintaining strong underwriting standards while adapting to market conditions, ensuring resilience in credit performance [68] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating economic uncertainties, emphasizing sound underwriting practices and proactive credit management [32][34] - The company anticipates that the Federal Reserve will implement further rate cuts, which could impact net interest income and margin, but expects a quick recovery due to its asset-sensitive balance sheet [17][51] - Management remains optimistic about maintaining a sustainable growth trajectory and achieving consistent returns on equity [90][91] Other Important Information - The company successfully raised $100,000,000 through a preferred offering, enhancing its capital position [11][23] - Non-accrual loans increased to $85,000,000, but management remains confident in the overall credit quality and reserve levels [22][32] Q&A Session Summary Question: Can you provide more color around the increase in NPAs this quarter? - Management noted that the increase in non-accrual balances was manageable and related to loans tracked over time, with a focus on sound underwriting and servicing [30][32] Question: How do you think about the potential for an extended government shutdown? - Management has a playbook for government shutdowns and has already pooled significant SBA loans to mitigate impacts on loan growth [36][38] Question: Can you quantify the benefits of AI enhancements? - Management believes AI could significantly improve productivity and reduce the need for a larger employee base, enhancing customer experience and operational efficiency [42][45] Question: What is the trajectory for the margin with upcoming rate cuts? - Management expects margin variation but believes that net interest income will continue to grow despite fluctuations in margin [51][52] Question: Have you seen easing competition in the SBA space? - Management indicated that they have a strong understanding of the SBA market and continue to grow despite competition, focusing on improving their offerings [56][57] Question: Are there any industries struggling more than others? - Management noted that stress is observed in industries with less pricing power, but overall performance remains in line with expectations [60][61] Question: What is the sustainable path for returns on equity? - Management aims for a consistent 15% return on equity with a focus on growth initiatives and expense discipline [90][91]

Financial Data and Key Metrics Changes - Q3 2025 earnings per share increased by 8% quarter-over-quarter to $0.55, nearly doubling compared to Q3 2024 [10] - Core operating leverage improved by 24% year-over-year, with a 7% quarter-over-quarter increase [10] - Net interest income rose by $6 million, or 6% quarter-over-quarter, and $23 million, or 19% year-over-year [17] Business Line Data and Key Metrics Changes - Loan production increased by 22%, with loan outstandings growing by 17% [5] - Small dollar SBA loan production, termed Live Oak Express, is ramping up significantly [6] - Checking balances increased to $363 million, representing 4% of total deposits, up from 2% a year ago [6] Market Data and Key Metrics Changes - The company maintained its position as the number one SBA 7(a) lender for 2025, providing over $2.8 billion in loans, a 44% increase from the previous year [5] - Customer deposit growth was 20% year-over-year, with a 3% increase quarter-over-quarter [14] Company Strategy and Development Direction - The company is focused on extending customer product offerings, including checking and small dollar SBA loan capabilities [6] - Emphasis on AI-enabled loan origination solutions to improve efficiency and speed [8] - The strategy includes enhancing non-interest-bearing deposits to improve margin efficiency and funding resilience [16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of small business owners despite economic uncertainties [32] - The company is prepared for potential government shutdowns, having pooled $900 million in PLPs to maintain operations [33] - Future net interest income and margin trajectories are expected to be positively impacted by the Fed's rate cuts [18] Other Important Information - The company raised $100 million through a preferred offering, enhancing tier one capital [11] - Non-interest expense decreased by approximately 2% quarter-over-quarter, reflecting a focus on efficiency [21] Q&A Session Summary Question: Can you provide more color around the increase in NPAs this quarter? - The increase in non-accrual balances was manageable and related to the SBA portfolio, with strong servicing efforts in place [30][32] Question: How are you thinking about the potential for an extended government shutdown? - The company has a playbook for government shutdowns and has prepared by pooling PLPs to ensure continued operations [33] Question: Can you quantify the benefits of AI enhancements? - AI is expected to significantly improve productivity and efficiency, allowing for better customer service and potentially reducing the need for a larger employee base [36][39] Question: What is the trajectory for the margin with the rate cut cycle? - The company anticipates a quick recovery in margin following Fed rate cuts, supported by its asset-sensitive balance sheet [44][46] Question: Have you seen easing competition in the SBA space? - The company believes it has a competitive edge in SBA lending and continues to grow its verticals despite market fluctuations [49][50] Question: Are there any industries struggling more than others? - Stress is observed in certain industries with less pricing power, but overall performance aligns with expectations [52] Question: Have you adjusted underwriting standards? - The company maintains consistent underwriting standards but may tighten criteria based on specific verticals [61][63] Question: How does the government shutdown impact organic growth? - The company expects to sustain its growth pace post-shutdown, leveraging its PLP reserves [66]

Group 1 - The article does not provide any relevant content regarding the company or industry [1]

Financial Performance - Net income available to common shareholders reached $26 million, a 96% increase year-over-year (YoY) and a 9% increase compared to the previous quarter[8],[23] - Diluted earnings per share (EPS) were $0.55, up 96% YoY and 8% quarter-over-quarter (QoQ)[8],[22],[23] - Adjusted Pre-Provision Net Revenue (PPNR) was $66 million, a 24% increase YoY and 7% QoQ[14],[16],[17],[18],[22] - Net interest income was $115 million, up 19% YoY and 6% QoQ[8],[22],[23] - Net interest margin was 333%, flat YoY and up 5 basis points QoQ[8],[22],[23] Loan and Deposit Growth - Total loans and leases reached $11916 million, a 17% increase YoY and 5% QoQ[8],[23] - Total deposits reached $13291 million, a 17% increase YoY and 6% QoQ[8],[23] - Business checking balances grew to $363 million, a 150% increase YoY and 26% QoQ[14],[22] Loan Origination and Sales - Loan and lease originations totaled $1649 million, a 6% decrease YoY and 8% increase QoQ[23],[26] - The company generated $12 million in year-to-date (YTD) gain on sales from Live Oak Express, a 4x increase compared to YTD 2024[14],[40] Credit Quality - Provision for credit losses was $22 million, a 36% decrease YoY and 4% decrease QoQ[8],[22],[23] - Unguaranteed Allowance for Credit Losses (ACL) to unguaranteed loans and leases was 222%[24],[44] Capital and Other Items - The company raised $963 million in net proceeds from a preferred stock offering[22],[24],[52] - The sale of Apiture settled in October, providing an estimated $24 million pre-tax gain in Q4[22],[52]

Core Insights - Live Oak Bancshares (LOB) reported revenue of $146.1 million for Q3 2025, a year-over-year increase of 12.4% [1] - The earnings per share (EPS) for the same period was $0.55, compared to $0.28 a year ago [1] - The reported revenue was a slight miss of -0.85% against the Zacks Consensus Estimate of $147.35 million [1] - The EPS fell short of the consensus estimate of $0.58, resulting in an EPS surprise of -5.17% [1] Performance Metrics - Net charge-offs to average loans and leases held for investment were 0.6%, higher than the estimated 0.4% [4] - Net Interest Margin stood at 3.3%, matching the average estimate [4] - Average balance of total interest-earning assets was $13.77 billion, exceeding the estimated $13.41 billion [4] - Efficiency Ratio was reported at 59.7%, significantly higher than the estimated 51.3% [4] - Total noninterest income was $30.61 million, below the average estimate of $33.71 million [4] - Net Interest Income reached $115.49 million, surpassing the estimated $112.25 million [4] Stock Performance - Shares of Live Oak Bancshares have returned -3.5% over the past month, while the Zacks S&P 500 composite increased by +1.1% [3] - The stock currently holds a Zacks Rank 2 (Buy), indicating potential for outperformance in the near term [3]

Live Oak Bancshares (LOB) came out with quarterly earnings of $0.55 per share, missing the Zacks Consensus Estimate of $0.58 per share. This compares to earnings of $0.28 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -5.17%. A quarter ago, it was expected that this bank holding company would post earnings of $0.52 per share when it actually produced earnings of $0.51, delivering a surprise of -1.92%.Over the last four quarte ...

[Third Quarter 2025 Earnings Release Overview](index=1&type=section&id=Earnings%20Release%20Overview) Live Oak Bancshares reported strong Q3 2025 financial results, driven by robust loan and deposit growth, improved net interest income, and strategic capital strengthening initiatives [Third Quarter 2025 Financial Highlights](index=1&type=section&id=Third%20Quarter%202025%20Financial%20Highlights) Live Oak Bancshares reported **$25.6 million** net income and **$0.55** diluted EPS for Q3 2025, with **16%** YoY asset growth to **$14.67 billion** and a **$24.0 million** pre-tax gain from the Apiture sale strengthening capital | Metric | 3Q 2025 | 2Q 2025 | 3Q 2024 | | :----------------------------------- | :------ | :------ | :------ | | Net income attributable to common shareholders (in millions) | $25.6 | $23.4 | $13.0 | | Diluted earnings per common share | $0.55 | $0.51 | $0.28 | | Total assets (in billions) | $14.67 | $13.83 | $12.61 | | Loan and lease production (in billions) | $1.65 | $1.53 | $1.76 | | Total deposits (in billions) | $13.29 | $12.59 | $11.40 | - Subsequent to September 30, 2025, the Company completed its sale of Apiture, Inc., resulting in a pre-tax gain of approximately **$24.0 million**[1](index=1&type=chunk) - Net interest income increased **5.7%** compared to Q2 2025 and **19.1%** compared to Q3 2024[5](index=5&type=chunk) - Net interest margin increased **five basis points** during Q3 2025 from **3.28%** to **3.33%**, remaining flat compared to Q3 2024[5](index=5&type=chunk) - **$96.3 million** in capital was raised from a preferred stock offering in Q3 2025[5](index=5&type=chunk) [Management Commentary](index=1&type=section&id=Management%20Commentary) Management highlighted strong core banking operations, leading SBA 7(a) lender status, and strategic capital strengthening through a preferred stock offering and the Apiture sale for continued growth - Live Oak's third quarter results reflect the strength of core banking operations and continued commitment to serving small businesses[2](index=2&type=chunk) - The company was named the SBA's **leading 7(a) lender** by dollar amount[2](index=2&type=chunk) - Strategic moves, including a successful preferred stock offering and the Apiture sale, strengthened the capital position for continued growth and resilience[2](index=2&type=chunk) [Corporate Information](index=1&type=section&id=Corporate%20Information) This section provides details on the upcoming conference call, forward-looking statements disclaimer, company overview, and contact information for investor and media relations [Conference Call Details](index=1&type=section&id=Conference%20Call%20Details) A conference call to discuss Q3 2025 financial results and business outlook is scheduled for October 23, 2025, at 9:00 a.m. ET, with telephone and webcast access available - A conference call to discuss financial results and business outlook is scheduled for **October 23, 2025, at 9:00 a.m. ET**[3](index=3&type=chunk) - Access is available via telephone (U.S.: **800.549.8228**, International: **+1 646.564.2877**) and webcast (**investor.liveoakbank.com**) using Conference ID: **72227**[3](index=3&type=chunk)[4](index=4&type=chunk) - A supplementary slide presentation will be posted, and a replay will be available for **12 months**[3](index=3&type=chunk) [Forward-Looking Statements Disclaimer](index=3&type=section&id=Forward-Looking%20Statements%20Disclaimer) This disclaimer highlights that forward-looking statements are subject to risks, including SBA rule changes, industry developments, technological risks, competition, and economic conditions, with no obligation to update - Forward-looking statements are not guarantees of future performance and involve significant risks and uncertainties[7](index=7&type=chunk) - Factors causing material differences include changes in SBA rules, banking industry developments, technological risks, competition, and market and economic conditions[7](index=7&type=chunk) - The Company specifically disclaims any obligation to update any forward-looking statements[7](index=7&type=chunk) [About Live Oak Bancshares, Inc.](index=3&type=section&id=About%20Live%20Oak%20Bancshares%2C%20Inc.) Live Oak Bancshares, Inc. (NYSE: LOB) is a financial holding company and parent of Live Oak Bank, focused on redefining banking through service and technology partnerships - Live Oak Bancshares, Inc. (**NYSE: LOB**) is a financial holding company and the parent company of Live Oak Bank[8](index=8&type=chunk) - The company partners with businesses focused on service and technology to redefine banking[8](index=8&type=chunk) [Contacts](index=3&type=section&id=Contacts) Contact information is provided for investor relations (Walter J. Phifer, CFO) and media relations (Claire Parker, Corporate Communications) - Investor Relations: **Walter J. Phifer, CFO**, **910.202.6926**[9](index=9&type=chunk) - Media Relations: **Claire Parker, Corporate Communications**, **910.597.1592**[9](index=9&type=chunk) [Financial Statements and Key Metrics](index=4&type=section&id=Financial%20Statements%20and%20Key%20Metrics) This section presents detailed quarterly and year-to-date income statements, balance sheets, selected financial data, average balances, net interest margin, and GAAP to non-GAAP reconciliations [Quarterly Statements of Income (Unaudited)](index=4&type=section&id=Quarterly%20Statements%20of%20Income) Q3 2025 quarterly income statements show **net interest income** growth of **5.7% QoQ** and **19.1% YoY**, with **net income attributable to common shareholders** increasing **9.1% QoQ** | Metric (Dollars in thousands) | 3Q 2025 | 2Q 2025 | 3Q 2024 | 3Q 2025 Change vs. 2Q 2025 (%) | 3Q 2025 Change vs. 3Q 2024 (%) | | :---------------------------- | :------ | :------ | :------ | :------------------------------ | :------------------------------ | | Total interest income | 231,428 | 224,284 | 208,936 | 3.2 | 10.8 | | Total interest expense | 115,943 | 115,063 | 111,936 | 0.8 | 3.6 | | Net interest income | 115,485 | 109,221 | 97,000 | 5.7 | 19.1 | | Provision for credit losses | 22,242 | 23,252 | 34,502 | (4.3) | (35.5) | | Total noninterest income | 30,614 | 34,526 | 32,932 | (11.3) | (7.0) | | Total noninterest expense | 87,285 | 89,293 | 77,589 | (2.2) | 12.5 | | Income before taxes | 36,572 | 31,202 | 17,841 | 17.2 | 105.0 | | Net income attributable to common shareholders | 25,562 | 23,428 | 13,025 | 9.1 | 96.3 | | Diluted EPS | 0.55 | 0.51 | 0.28 | 7.8 | 96.4 | [Quarterly Balance Sheets (Unaudited)](index=5&type=section&id=Quarterly%20Balance%20Sheets) Q3 2025 balance sheets show **total assets** growing **6.0% QoQ** to **$14.67 billion**, with **loans and leases** up **4.9% QoQ** and **total deposits** increasing **5.5% QoQ**, notably **noninterest-bearing deposits** up **25.6% QoQ** | Metric (Dollars in thousands) | 3Q 2025 | 2Q 2025 | 3Q 2024 | 3Q 2025 Change vs. 2Q 2025 (%) | 3Q 2025 Change vs. 3Q 2024 (%) | | :---------------------------- | :------ | :------ | :------ | :------------------------------ | :------------------------------ | | Total assets | 14,665,902 | 13,831,208 | 12,607,346 | 6.0 | 16.3 | | Loans and leases held for investment | 11,554,818 | 11,014,055 | 9,831,891 | 4.9 | 17.5 | | Net loans and leases | 11,369,118 | 10,831,824 | 9,663,154 | 5.0 | 17.7 | | Total deposits | 13,290,723 | 12,594,790 | 11,400,547 | 5.5 | 16.6 | | Noninterest-bearing deposits | 494,019 | 393,393 | 258,844 | 25.6 | 90.9 | | Interest-bearing deposits | 12,796,704 | 12,201,397 | 11,141,703 | 4.9 | 14.9 | | Total shareholders' equity | 1,202,549 | 1,067,265 | 1,007,756 | 12.7 | 19.3 | | Preferred stock | 96,266 | — | — | — | — | [Statements of Income (Unaudited) - Nine Months Ended September 30](index=6&type=section&id=Statements%20of%20Income%20(Nine%20Months%20Ended)) For the nine months ended September 30, 2025, **net interest income** increased **16.8%**, while **net income attributable to common shareholders** decreased **13.1%** due to higher credit loss provisions and increased noninterest expenses | Metric (Dollars in thousands) | 9 Months Ended Sep 30, 2025 | 9 Months Ended Sep 30, 2024 | Change (%) | | :---------------------------- | :-------------------------- | :-------------------------- | :--------- | | Total interest income | 668,817 | 599,804 | 11.5 | | Total interest expense | 343,579 | 321,373 | 6.9 | | Net interest income | 325,238 | 278,431 | 16.8 | | Provision for credit losses | 74,458 | 62,631 | 18.9 | | Total noninterest income | 90,721 | 93,188 | (2.6) | | Total noninterest expense | 260,595 | 232,982 | 11.8 | | Income before taxes | 80,906 | 76,006 | 6.4 | | Net income attributable to common shareholders | 58,707 | 67,574 | (13.1) | | Diluted EPS | 1.28 | 1.48 | (13.6) | [Quarterly Selected Financial Data](index=8&type=section&id=Quarterly%20Selected%20Financial%20Data) Q3 2025 key financial data shows improved profitability with **Return on Average Assets** at **0.72%** and **Return on Average Common Equity** at **9.32%**, an **efficiency ratio** of **59.74%**, and increased **unguaranteed nonperforming historical cost loans** | Metric | 3Q 2025 | 2Q 2025 | 3Q 2024 | | :------------------------------------------ | :------ | :------ | :------ | | Diluted net income per common share | $0.55 | $0.51 | $0.28 | | Dividends declared - common | $0.03 | $0.03 | $0.03 | | Book value per common share | $24.03 | $23.36 | $22.32 | | Return on average assets (annualized) | 0.72 % | 0.68 % | 0.43 % | | Return on average common equity (annualized)| 9.32 % | 8.85 % | 5.21 % | | Net interest margin | 3.33 % | 3.28 % | 3.33 % | | Efficiency ratio | 59.74 % | 62.12 % | 59.72 % | | Loans and leases originated (in thousands) | $1,648,711 | $1,526,592 | $1,757,856 | | Allowance for credit losses to loans and leases held for investment | 1.65 % | 1.70 % | 1.78 % | | Net charge-offs (in thousands) | $16,816 | $31,445 | $1,710 | | Unguaranteed nonperforming historical cost loans and leases (in thousands) | $76,887 | $59,555 | $49,398 | | Common equity tier 1 capital | 10.51 % | 10.67 % | 11.19 % | | Tier 1 leverage capital | 8.57 % | 7.90 % | 8.60 % | [Quarterly Average Balances and Net Interest Margin (Unaudited)](index=9&type=section&id=Quarterly%20Average%20Balances%20and%20Net%20Interest%20Margin) Q3 2025 average balances show **interest-earning assets** at **$13.77 billion** and **net interest margin** improving to **3.33%** from **3.28%** QoQ, with an **interest rate spread** of **2.99%** | Metric (Dollars in thousands) | 3Q 2025 Average Balance | 3Q 2025 Interest | 3Q 2025 Average Yield/Rate | 2Q 2025 Average Balance | 2Q 2025 Interest | 2Q 2025 Average Yield/Rate | | :---------------------------- | :---------------------- | :--------------- | :------------------------- | :---------------------- | :--------------- | :------------------------- | | Total interest-earning assets | 13,765,187 | 231,428 | 6.67 % | 13,361,491 | 224,284 | 6.73 % | | Total deposits | 12,379,653 | 114,266 | 3.66 % | 12,113,282 | 113,380 | 3.75 % | | Total interest-bearing liabilities | 12,486,397 | 115,943 | 3.68 % | 12,222,745 | 115,063 | 3.78 % | | Net interest income | | 115,485 | | | 109,221 | | | Net interest margin | | | 3.33 % | | | 3.28 % | | Interest rate spread | | | 2.99 % | | | 2.95 % | [GAAP to Non-GAAP Reconciliation](index=10&type=section&id=GAAP%20to%20Non-GAAP%20Reconciliation) This section reconciles GAAP to non-GAAP financial measures, including **tangible common shareholders' equity**, **tangible assets**, **tangible book value per common share**, and the **efficiency ratio**, used for performance assessment and comparability | Metric | 3Q 2025 | 2Q 2025 | 3Q 2024 | | :------------------------------------------ | :------ | :------ | :------ | | Total common shareholders' equity (in thousands) | $1,101,957 | $1,067,265 | $1,007,756 | | Tangible common shareholders' equity (a) (in thousands) | $1,098,707 | $1,063,977 | $1,004,353 | | Tangible assets (b) (in thousands) | $14,662,652 | $13,827,920 | $12,603,943 | | Tangible common shareholders' equity to tangible assets (a/b) | 7.49 % | 7.69 % | 7.97 % | | Tangible book value per common share (a/c) | $23.96 | $23.29 | $22.24 | | Efficiency ratio | 59.74 % | 62.12 % | 59.72 % | | Pre-provision net revenue (in thousands) | $58,814 | $54,454 | $52,343 | - Non-GAAP financial measures are used by management to assess performance and provide a meaningful base for period-to-period comparisons for regulators, investors, and analysts, acknowledging their inherent limitations[18](index=18&type=chunk)