stal Financial (US:CCB)2025-08-08 13:28Financial Performance - Net income for the three months ended June 30, 2025, was $11.0 million, or $0.71 per diluted share, compared to $11.6 million, or $0.84 per diluted share, for the same period in 2024[159]. - Net interest income for the three months ended June 30, 2025, was $76.7 million, an increase of $10.6 million, or 16.0%, compared to the same period in 2024[163]. - Net interest income for the six months ended June 30, 2025, was $152.8 million, an increase of $24.4 million, or 19.0%, compared to $128.4 million for the same period in 2024[179]. - Noninterest income for the three months ended June 30, 2025, was $42.7 million, a decrease of 38.2% from $69.1 million for the same period in 2024[206]. - For the six months ended June 30, 2025, noninterest income was $106.2 million, down $49.1 million or 31.6% from $155.3 million in the prior year, primarily due to lower BaaS indemnification income[208]. Asset and Loan Growth - As of June 30, 2025, total assets were $4.48 billion, total loans receivable were $3.54 billion, total deposits were $3.91 billion, and total shareholders' equity was $461.7 million[150]. - Total loans, net of deferred fees, increased by $23.0 million, or 0.7%, during the three months ended June 30, 2025[155]. - CCBX average loans receivable increased by $326.1 million, or 23.9%, for the quarter ended June 30, 2025, compared to the same period in 2024[164]. - Total interest earning assets increased to $4.36 billion for the quarter ended June 30, 2025, compared to $3.74 billion in the prior year[173]. - Loans receivable increased to $3.54 billion in 2025, generating $197.0 million in interest income, up from $176.8 million in 2024, a rise of 11.4%[191]. Deposit Trends - Deposits increased by $122.3 million, or 3.2%, to $3.91 billion as of June 30, 2025[155]. - Total deposits as of June 30, 2025, were $3.91 billion, an increase of $328.2 million, or 9.2%, compared to $3.59 billion as of December 31, 2024[306]. - CCBX deposits increased by $296.1 million, or 14.3%, to $2.36 billion as of June 30, 2025, compared to $2.06 billion as of December 31, 2024[307]. - Core deposits ended the quarter at $3.44 billion, compared to $3.12 billion at December 31, 2024[306]. Interest Income and Expense - Interest income from interest-earning deposits with other banks was $8.1 million for the quarter ended June 30, 2025, an increase of $2.4 million, or 42.3%[165]. - Interest expense was $31.1 million for the quarter ended June 30, 2025, a decrease of $190,000 from the same period in 2024[166]. - The average rate paid on total deposits decreased to 3.10% for the three months ended June 30, 2025, down from 3.58% for the same period in 2024[313]. - The average rate paid on interest-bearing demand and money market accounts decreased by 0.67% for the three months ended June 30, 2025, compared to the same period in 2024[313]. Credit Quality and Losses - For the six months ended June 30, 2025, the provision for credit losses - loans was $85.3 million, a decrease of 39.8% from $141.4 million for the same period in 2024[202]. - Net charge-offs for the six months ended June 30, 2025, totaled $97.5 million, or 5.55% of total average loans, compared to $109.9 million, or 6.91% for the same period in 2024[203]. - The allowance for credit losses as a percentage of loans was 4.65% at June 30, 2025, up from 4.48% at June 30, 2024[196]. - The provision for credit losses for CCBX partner loans was $87.7 million for the six months ended June 30, 2025, reflecting an improvement in the performance of the CCBX portfolio[289]. Noninterest Expenses - Noninterest expense for the three months ended June 30, 2025, was $72.8 million, an increase of $14.9 million or 25.7% from $58.0 million in the same period of 2024[214]. - Salaries and employee benefits increased by $4.4 million or 26.1% to $21.4 million for the three months ended June 30, 2025, compared to $17.0 million in 2024[214]. - Total noninterest expenses for the community bank increased by $5.1 million or 28.3% to $23.0 million as of June 30, 2025, reflecting investments in technology and risk management[246]. CCBX Segment Performance - The CCBX segment had 29 partners as of June 30, 2025, with ongoing efforts to refine partnership criteria and expand product offerings[156]. - CCBX total assets increased by $299.5 million, or 14.3%, to $2.40 billion as of June 30, 2025, compared to $2.10 billion as of December 31, 2024[238]. - CCBX net interest income rose to $52.5 million for the quarter ended June 30, 2025, an increase of $8.2 million or 18.4% compared to $44.3 million for the same quarter in 2024[243]. - CCBX noninterest income decreased by $49.2 million, or 32.2%, to $103.6 million for the six months ended June 30, 2025, primarily due to a $55.7 million decrease in BaaS credit enhancements[247]. Economic and Regulatory Environment - The company continues to face economic uncertainties due to factors such as inflation, changing interest rates, and geopolitical tensions, which may impact asset quality[297]. - The Company maintains a minimum liquidity ratio target of 15% and can utilize wholesale funds up to 30% of assets in a liquidity emergency[331]. - As of June 30, 2025, the Company and the Bank were compliant with all regulatory capital requirements, with the Bank classified as "well capitalized"[333].