Old Second Bancorp(OSBC) - 2025 Q3 - Quarterly Results

Executive Summary Q3 2025 Financial Highlights Q3 2025 GAAP net income was $9.9 million, diluted EPS $0.18, impacted by acquisition costs and credit loss provisions | Metric | Q3 2025 (Thousands of $) | Q2 2025 (Thousands of $) | Q3 2024 (Thousands of $) | | :-------------------------------- | :--------------- | :--------------- | :--------------- | | Net Income (GAAP) | $9,900 | $21,800 | $23,000 | | Diluted EPS (GAAP) | $0.18 | $0.48 | $0.50 | | Adjusted Net Income (Non-GAAP) | $28,400 | $22,800 | $24,000 | | Adjusted Diluted EPS (Non-GAAP) | $0.53 | $0.50 | $0.52 | | Net Interest and Dividend Income | $82,800 | $64,200 | $60,600 | | Provision for Credit Losses | $19,700 | $2,500 | $2,000 | | Noninterest Income | $13,100 | $10,900 | $10,600 | | Noninterest Expense | $63,200 | $43,400 | $39,300 | | Income Tax Provision | $3,200 | $7,400 | $6,900 | | Effective Tax Rate | 24.5% | 25.3% | 23.1% | - Net income decreased by $13.1 million year-over-year, primarily due to a $5.8 million increase in interest expense, a $17.7 million increase in credit loss provision, and a $23.9 million increase in noninterest expense, all stemming from the Bancorp Financial acquisition[3] - The company's Board of Directors declared a $0.07 per share cash dividend on October 21, 2025, payable on November 10, 2025[5] | Metric | Sep 30, 2025 (Thousands of $) | Jun 30, 2025 (Thousands of $) | Sep 30, 2024 (Thousands of $) | | :-------------------------------- | :--------------- | :--------------- | :--------------- | | Balance Sheet Summary | | | | | Total Assets | $6,991,754 | $5,701,294 | $5,671,760 | | Total Loans | $5,265,014 | $3,998,667 | $3,991,078 | | Total Deposits | $5,760,250 | $4,798,439 | $4,465,424 | | Total Equity | $866,685 | $718,649 | $661,390 | | Profitability Ratios | | | | | Return on Average Assets (ROAA) (%) | 0.56% | 1.53% | 1.63% | | Return on Average Equity (ROAE) (%) | 4.61% | 12.39% | 14.29% | | Net Interest Margin (Tax-Equivalent) (%) | 5.05% | 4.85% | 4.64% | | Efficiency Ratio (%) | 64.46% | 55.99% | 53.38% | | Per Share Data | | | | | Diluted EPS | $0.18 | $0.48 | $0.50 | | Tangible Book Value Per Share | $13.51 | $13.44 | $12.61 | | Company Capital Ratios | | | | | Common Equity Tier 1 Capital Ratio | 12.44% | 13.77% | 12.86% | | Tier 1 Risk-Based Capital Ratio | 12.85% | 14.31% | 13.39% | | Total Risk-Based Capital Ratio | 15.10% | 16.55% | 15.62% | | Tier 1 Leverage Ratio | 11.21% | 11.83% | 11.38% | CEO Commentary CEO Jim Eccher praised the Bancorp Financial acquisition, noting strong loan growth, improved asset yields, and robust financial health - The company acquired Bancorp Financial, Inc., a $1.4 billion bank holding company, and its subsidiary Evergreen Bank Group on July 1, 2025[9] - Core business performance post-acquisition was strong, including robust loan growth, positive business pipelines, and excellent core profitability[9] - Adjusted Return on Average Assets (ROAA) was 1.61%, Adjusted Return on Average Tangible Common Equity (ROATCE) was 16.69%, tax-equivalent net interest margin was 5.05%, and the adjusted efficiency ratio was 52.10%[9] - The balance sheet is strong with ample liquidity and sufficient reserves, reflected by a Common Equity Tier 1 Capital Ratio of 12.44%, a loan-to-deposit ratio of 91%, and a loan loss allowance of 1.43% of total loans[10] - The company plans to increase its common stock dividend by 17% in the fourth quarter, reflecting the bank's performance[10] Operating Results Analysis Net Interest Income Q3 2025 net interest and dividend income rose to $82.8 million, driven by the Bancorp Financial acquisition and higher earning asset yields | Metric | Sep 30, 2025 (Thousands of $) | Jun 30, 2025 (Thousands of $) | Sep 30, 2024 (Thousands of $) | | :-------------------------------- | :--------------- | :--------------- | :--------------- | | Net Interest Income (GAAP) | $82,775 | $64,234 | $60,578 | | Net Interest Income (TE) | $83,113 | $64,570 | $60,932 | | Net Interest Margin (GAAP) | 5.03% | 4.83% | 4.62% | | Net Interest Margin (TE) | 5.05% | 4.85% | 4.64% | | Average Yield on Earning Assets | 6.34% | 5.68% | 5.83% | | Average Cost of Interest-Bearing Liabilities | 1.96% | 1.36% | 1.91% | - The yield on earning assets increased by 66 basis points from the prior quarter, primarily driven by higher-yielding consumer loans and related accrued interest within the Bancorp Financial acquisition loan portfolio, which had an average yield of 8.65% before accrued interest[15] - Average interest-bearing deposit balances significantly increased from $3.12 billion in Q2 2025 to $4.15 billion in Q3 2025, with all interest-bearing deposit categories increasing due to the Bancorp Financial acquisition[18] - The cost of interest-bearing deposits rose from 130 basis points in Q2 2025 to 191 basis points in Q3 2025, primarily due to the increase in deposits from the Bancorp Financial acquisition[18] Noninterest Income Q3 2025 noninterest income increased to $13.1 million, driven by wealth management, BOLI gains, and power sports loan fees | Noninterest Income Category (Thousands of $) | Sep 30, 2025 | Jun 30, 2025 | Sep 30, 2024 | Change from Jun 30, 2025 (%) | Change from Sep 30, 2024 (%) | | :-------------------------------- | :--------------- | :--------------- | :--------------- | :----------------------- | :----------------------- | | Wealth Management | $3,515 | $3,103 | $2,787 | 13.3 | 26.1 | | Deposit Service Charges | $2,920 | $2,788 | $2,646 | 4.7 | 10.4 | | Gross Residential Mortgage Banking Income | $792 | $575 | $93 | 37.7 | 751.6 | | Change in BOLI Cash Surrender Value | $1,175 | $690 | $860 | 70.3 | 36.6 | | BOLI Death Benefit | $430 | $- | $12 | 100.0 | N/M | | Card Related Income | $2,739 | $2,716 | $2,589 | 0.8 | 5.8 | | Other Income | $1,539 | $1,026 | $1,595 | 50.0 | (3.5) | | Total Noninterest Income | $13,109 | $10,898 | $10,581 | 20.3 | 23.9 | - Noninterest income increased by $2.2 million from the prior quarter, driven by a $412,000 increase in wealth management income, a $485,000 increase in BOLI cash surrender value, a $430,000 BOLI death benefit, and a $513,000 increase in other income (primarily from power sports loan fees acquired in the Bancorp Financial acquisition)[22] - Noninterest income increased by $2.5 million from the prior year, primarily due to a $728,000 increase in wealth management income, a $315,000 increase in BOLI cash surrender value, and a $430,000 BOLI death benefit[23] Noninterest Expense Q3 2025 noninterest expense surged to $63.2 million, largely due to increased salaries, benefits, and operational costs from the Bancorp Financial acquisition | Noninterest Expense Category (Thousands of $) | Sep 30, 2025 | Jun 30, 2025 | Sep 30, 2024 | Change from Jun 30, 2025 (%) | Change from Sep 30, 2024 (%) | | :-------------------------------- | :--------------- | :--------------- | :--------------- | :----------------------- | :----------------------- | | Total Salaries and Employee Benefits | $39,723 | $26,950 | $24,676 | 47.4 | 61.0 | | Occupancy, Furniture and Equipment Expense | $4,937 | $4,477 | $3,876 | 10.3 | 27.4 | | Computer and Data Processing | $4,002 | $2,692 | $2,375 | 48.7 | 68.5 | | Core Deposit Intangible Amortization | $1,251 | $1,022 | $570 | 22.4 | 119.5 | | Consulting and Management Fees | $2,471 | $527 | $480 | 368.9 | 414.8 | | Other Expenses | $5,984 | $3,879 | $3,608 | 54.3 | 65.9 | | Total Noninterest Expense | $63,163 | $43,419 | $39,308 | 45.5 | 60.7 | | Efficiency Ratio (GAAP) | 64.46% | 55.99% | 53.38% | | | | Adjusted Efficiency Ratio (Non-GAAP) | 52.10% | 54.54% | 52.31% | | | - Noninterest expense increased by $19.7 million from the prior quarter, primarily due to a $12.8 million increase in salaries and employee benefits (of which $8.4 million was related to change-in-control, retention, and severance costs from the Bancorp Financial acquisition), and increases in computer and data processing, consulting and management fees, and other expenses due to the acquisition[26] - Noninterest expense increased by $23.9 million from the prior year, primarily due to a $15.0 million increase in salaries and employee benefits (including $8.4 million related to the Bancorp Financial acquisition), and increases in occupancy, computer and data processing, core deposit intangibles, consulting and management fees, and other expenses due to the First Merchants branch acquisition and the Bancorp Financial acquisition[27] Balance Sheet and Asset Quality Earning Assets Total loans reached $5.27 billion as of September 30, 2025, primarily driven by the Bancorp Financial acquisition, adding $1.19 billion in loans | Loan Category (Thousands of $) | Sep 30, 2025 | Jun 30, 2025 | Sep 30, 2024 | Change from Jun 30, 2025 (%) | Change from Sep 30, 2024 (%) | | :-------------------------------- | :--------------- | :--------------- | :--------------- | :----------------------- | :----------------------- | | Commercial | $786,095 | $718,927 | $814,668 | 9.3 | (3.5) | | Lease | $550,201 | $524,513 | $458,317 | 4.9 | 20.0 | | Commercial Real Estate – Investor | $1,257,328 | $1,118,782 | $1,045,060 | 12.4 | 20.3 | | Commercial Real Estate – Owner Occupied | $680,412 | $652,449 | $718,265 | 4.3 | (5.3) | | Construction | $176,387 | $251,692 | $206,458 | (29.9) | (14.6) | | Residential Real Estate – Investor | $69,362 | $50,976 | $50,332 | 36.1 | 37.8 | | Residential Real Estate – Owner Occupied | $231,547 | $220,672 | $208,227 | 4.9 | 11.2 | | Multi-Family | $378,213 | $333,787 | $375,394 | 13.3 | 0.8 | | Home Equity Lines of Credit (HELOC) | $234,885 | $111,265 | $102,611 | 111.1 | 128.9 | | Power Sports | $715,498 | $- | $- | N/M | N/M | | Other | $185,086 | $15,604 | $11,746 | N/M | N/M | | Total Loans | $5,265,014 | $3,998,667 | $3,991,078 | 31.7 | 31.9 | - Total loans increased by $1.27 billion, primarily due to the Bancorp Financial acquisition contributing $1.19 billion in loans, which expanded the company's consumer loan business and added a power sports lending segment[11][30] - Excluding Bancorp Financial acquired loans, organic loan growth (net of payoffs) in Q3 2025 was $72.3 million, a 1.8% increase from the prior quarter, driven by commercial, lease, and commercial real estate loans[11][30] | Securities Category (Thousands of $) | Sep 30, 2025 | Jun 30, 2025 | Sep 30, 2024 | Change from Jun 30, 2025 (%) | Change from Sep 30, 2024 (%) | | :-------------------------------- | :--------------- | :--------------- | :--------------- | :----------------------- | :----------------------- | | U.S. Treasury | $190,670 | $190,446 | $194,188 | 0.1 | (1.8) | | U.S. Government Agency | $38,264 | $38,141 | $37,976 | 0.3 | 0.8 | | U.S. Government Agency Mortgage-Backed Securities | $93,051 | $96,083 | $96,413 | (3.2) | (3.5) | | State and Political Subdivisions | $210,675 | $208,814 | $224,795 | 0.9 | (6.3) | | Mortgage Collateralized Bonds | $378,236 | $395,014 | $384,271 | (4.2) | (1.6) | | Asset-Backed Securities | $47,802 | $48,119 | $63,947 | (0.7) | (25.2) | | Collateralized Mortgage Obligations | $198,098 | $201,071 | $189,264 | (1.5) | 4.7 | | Equity Securities | $684 | $- | $- | 100.0 | 100.0 | | Total Available-for-Sale Securities | $1,157,480 | $1,177,688 | $1,190,854 | (1.7) | (2.8) | - The total available-for-sale securities portfolio was $1.16 billion, a decrease of $20.2 million from the prior quarter and $33.4 million from the prior year, consisting of high-quality fixed and floating rate securities, with over 99% of publicly traded securities rated AA or higher[11][31] - Total unrealized losses on securities were $47.7 million, a decrease from both the prior quarter and prior year, influenced by market interest rate fluctuations and changes in the securities portfolio composition[11] Asset Quality Q3 2025 asset quality showed increased nonperforming loans to $48.0 million, but credit loss allowance coverage improved to 219.9% of nonaccrual loans | Nonperforming Assets Category (Thousands of $) | Sep 30, 2025 | Jun 30, 2025 | Sep 30, 2024 | Change from Jun 30, 2025 (%) | Change from Sep 30, 2024 (%) | | :-------------------------------- | :--------------- | :--------------- | :--------------- | :----------------------- | :----------------------- | | Nonaccrual Loans | $34,126 | $31,902 | $52,171 | 7.0 | (34.6) | | Loans 90 Days or More Past Due and Still Accruing | $13,859 | $345 | $109 | N/M | N/M | | Total Nonperforming Loans | $47,985 | $32,247 | $52,280 | 48.8 | (8.2) | | Other Real Estate Owned | $6,416 | $6,486 | $8,202 | (1.1) | (21.8) | | Repossessed Assets | $2,088 | $234 | $- | 792.3 | N/M | | Total Nonperforming Assets | $56,489 | $38,967 | $60,482 | 45.0 | (6.6) | | Nonperforming Loans to Total Loans (%) | 0.9% | 0.8% | 1.3% | | | | Allowance for Credit Losses to Total Loans (%) | 1.4% | 1.1% | 1.1% | | | | Allowance for Credit Losses to Nonaccrual Loans (%) | 219.9% | 134.8% | 85.1% | | | - Nonperforming loans increased by $15.7 million, driven by a $13.5 million increase in loans 90 days or more past due and still accruing (primarily from two legacy relationships and $2.3 million in power sports loans) and a $2.2 million increase in nonaccrual loans (primarily from a $1.2 million commercial real estate investor relationship)[11] | Classified Loan Category (Thousands of $) | Sep 30, 2025 | Jun 30, 2025 | Sep 30, 2024 | Change from Jun 30, 2025 (%) | Change from Sep 30, 2024 (%) | | :-------------------------------- | :--------------- | :--------------- | :--------------- | :----------------------- | :----------------------- | | Commercial | $50,680 | $23,354 | $35,043 | 117.0 | 44.6 | | Commercial Real Estate – Owner Occupied | $72,020 | $51,335 | $41,820 | 40.3 | 72.2 | | Total Classified Loans | $134,260 | $97,620 | $112,823 | 37.5 | 19.0 | - As of September 30, 2025, classified loans increased by $36.6 million from the prior quarter, including $62.9 million in inflows (driven by the downgrade of two commercial relationships, five commercial real estate owner-occupied relationships, and 14 loans acquired from Bancorp Financial), partially offset by $26.2 million in outflows (primarily consisting of paid-off loans, upgraded loans, and loan charge-offs)[38] Allowance for Credit Losses As of September 30, 2025, total allowance for credit losses on loans was $75.0 million, with increased provision due to the Bancorp Financial acquisition - As of September 30, 2025, the total Allowance for Credit Losses (ACL) on loans was $75.0 million, with an additional $2.3 million for unfunded commitments[39] - In connection with the acquisition, the company recorded $17.5 million in day one purchase accounting credit marks and $13.2 million in day two non-PCD provision expense[39] - The standard provision expense for Q3 2025 included $6.5 million for the allowance for credit losses on loans and $38,000 for the allowance for credit losses on unfunded commitments[39] - Net charge-offs for Q3 2025 were $5.1 million, primarily concentrated in the power sports portfolio[39][41] | Loan Charge-offs (Net Recoveries) Category (Thousands of $) | Sep 30, 2025 | Jun 30, 2025 | Sep 30, 2024 | | :-------------------------------- | :--------------- | :--------------- | :--------------- | | Commercial | $385 | $1,093 | $(7) | | Lease | $848 | $(3) | $43 | | Power Sports | $2,980 | $- | $- | | Other | $805 | $67 | $45 | | Total Net Charge-offs / (Recoveries) | $5,108 | $785 | $(155) | Deposits Total deposits reached $5.76 billion as of September 30, 2025, a 20.0% increase driven by the Bancorp Financial acquisition - As of September 30, 2025, total deposits were $5.76 billion, an increase of $961.8 million or 20.0% from $4.80 billion as of June 30, 2025, primarily due to deposits acquired from the Bancorp Financial acquisition[45] - All deposit categories increased due to the acquisition, with time deposits increasing by $564.1 million and savings deposits by $213.5 million[45] - Annual average deposits increased by $1.44 billion or 32.2% year-over-year, primarily driven by the First Merchants branch acquisition in December 2024 and the Bancorp Financial acquisition in July 2025[46] - As of September 30, 2025, quarterly average time deposits included $96.9 million in brokered deposits, which were acquired with the Bancorp Financial acquisition and are expected to run off over the next few years[46] Borrowings As of September 30, 2025, short-term FHLB advances increased to $165.0 million, with $15.0 million long-term advances from the Bancorp Financial acquisition - As of September 30, 2025, other short-term borrowings were $165.0 million, compared to zero as of June 30, 2025, and $335.0 million as of September 30, 2024, all consisting of short-term FHLB advances[47] - The company also assumed $15.0 million in long-term FHLB advances from the Bancorp Financial acquisition, which are reported on the balance sheet as notes payable and other borrowings[47] Capital In Q3 2025, capital increased by $140.5 million from common stock issuance for the Bancorp Financial acquisition, offset by $5.9 million in share repurchases - In Q3 2025, the company issued 7.9 million shares of common stock, par value $1.00 per share, to existing Bancorp Financial shareholders as part of the acquisition, providing $140.5 million in capital[48] - The company repurchased 326,854 shares of common stock at $18.00 per share, resulting in a $5.9 million reduction in capital[48] Non-GAAP Financial Measures Non-GAAP Presentations Overview Management uses non-GAAP metrics like adjusted net income and tax-equivalent net interest margin to provide supplementary insights into core performance - Management discloses non-GAAP financial measures such as adjusted net income, tax-equivalent net interest income and net interest margin, and tax-equivalent efficiency ratio to evaluate and measure company performance[49] - These non-GAAP metrics, by excluding certain non-core expenses or assets or presenting on a tax-equivalent basis, aim to provide meaningful supplementary information to help investors assess the company's performance and balance sheet profitability[50] - Non-GAAP financial measures should not be considered as substitutes for GAAP financial measures and may not be standardized for comparison with other companies' non-GAAP metrics[51] Adjusted Net Income Reconciliation Q3 2025 adjusted net income was $28.363 million, significantly higher than GAAP, reflecting core profitability after excluding acquisition-related items | Metric (Thousands of $) | Sep 30, 2025 | Jun 30, 2025 | Sep 30, 2024 | | :-------------------------------- | :--------------- | :--------------- | :--------------- | | Income Before Income Taxes (GAAP) | $13,068 | $29,213 | $29,851 | | Pre-Tax Income Adjustments: | | | | | Provision for Credit Losses - Day Two | $13,153 | $- | $- | | BOLI Related Death Benefit | $(430) | $- | $(12) | | MSR Losses | $389 | $531 | $964 | | Merger Related Costs (Net of Branch Sale Gains) | $11,508 | $810 | $471 | | Adjusted Net Income Before Taxes | $37,688 | $30,554 | $31,274 | | Adjusted Net Income Tax Expense | $9,325 | $7,730 | $7,232 | | Adjusted Net Income (Non-GAAP) | $28,363 | $22,824 | $24,042 | | Adjusted Diluted EPS (Non-GAAP) | $0.53 | $0.45 | $0.52 | | Adjusted Return on Average Assets (Non-GAAP) | 1.61% | 1.60% | 1.70% | Net Interest Margin (Tax-Equivalent) Reconciliation Q3 2025 tax-equivalent net interest income was $83.113 million and net interest margin was 5.05%, offering a comprehensive profitability view | Metric (Thousands of $) | Sep 30, 2025 | Jun 30, 2025 | Sep 30, 2024 | | :-------------------------------- | :--------------- | :--------------- | :--------------- | | Interest and Dividend Income (GAAP) | $104,075 | $75,238 | $76,072 | | Tax-Equivalent Adjustments: | | | | | Loans | $10 | $9 | $11 | | Securities | $328 | $327 | $343 | | Interest and Dividend Income (TE) | $104,413 | $75,574 | $76,426 | | Interest Expense (GAAP) | $21,300 | $11,004 | $15,494 | | Net Interest Income (TE) | $83,113 | $64,570 | $60,932 | | Net Interest Income (GAAP) | $82,775 | $64,234 | $60,578 | | Average Earning Assets | $6,529,006 | $5,336,339 | $5,219,160 | | Net Interest Margin (TE) | 5.05% | 4.85% | 4.64% | | Net Interest Margin (GAAP) | 5.03% | 4.83% | 4.62% | Efficiency Ratio Reconciliation Q3 2025 adjusted efficiency ratio was 52.10%, lower than GAAP, indicating improved operational efficiency after excluding specific non-recurring items | Metric (Thousands of $) | Sep 30, 2025 | Jun 30, 2025 | Sep 30, 2024 | | :-------------------------------- | :--------------- | :--------------- | :--------------- | | Noninterest Expense | $63,163 | $43,419 | $39,308 | | Less: Core Deposit Amortization | $1,251 | $1,022 | $570 | | Less: Other Real Estate Owned Expense (Net) | $128 | $35 | $242 | | Less: Merger Related Costs (Net of Branch Sale Gains) | N/A | N/A | N/A | | Noninterest Expense Less Adjustments (GAAP) | $61,784 | $42,362 | $38,496 | | Noninterest Expense Less Adjustments (Non-GAAP) | $50,276 | $41,552 | $38,025 | | Net Interest Income (GAAP) | $82,775 | $64,234 | $60,578 | | Net Interest Income (TE) | $83,113 | $64,570 | $60,932 | | Noninterest Income (GAAP) | $13,109 | $10,898 | $10,581 | | Noninterest Income (TE) | $13,381 | $11,613 | $11,763 | | Efficiency Ratio (GAAP) | 64.46% | 55.99% | 53.38% | | Adjusted Efficiency Ratio (Non-GAAP) | 52.10% | 54.54% | 52.31% | Adjusted Return on Average Tangible Common Equity Reconciliation Q3 2025 adjusted ROATCE was 16.69%, significantly higher than GAAP ROAE, highlighting true profitability after excluding intangibles | Metric (Thousands of $) | Sep 30, 2025 | Jun 30, 2025 | Sep 30, 2024 | | :-------------------------------- | :--------------- | :--------------- | :--------------- | | Net Income (GAAP) | $9,871 | $21,822 | $22,951 | | Income Before Income Taxes (GAAP) | $13,068 | $29,213 | $29,851 | | Pre-Tax Income Adjustments: | | | | | Provision for Credit Losses - Day Two | $13,153 | $- | $- | | MSR Losses (Gains) | $389 | $531 | $964 | | Merger Related Costs (Net of Branch Sale Gains) | $11,508 | $810 | $471 | | BOLI Related Death Benefit | $(430) | $- | $(12) | | Core Deposit Intangible Amortization | $1,251 | $1,022 | $570 | | Adjusted Net Income (Excluding Intangible Amortization, Pre-Tax) | $38,939 | $31,576 $31,844 | | Adjusted Net Income Tax Expense | $9,631 | $7,989 | $7,363 | | Adjusted Net Income (Excluding Intangible Amortization, Non-GAAP) | $29,308 | $23,587 | $24,481 | | Average Total Common Equity | $849,998 | $706,254 | $639,151 | | Less: Average Goodwill and Intangible Assets | $153,412 | $113,694 | $96,245 | | Average Tangible Common Equity (Non-GAAP) | $696,586 | $592,560 | $542,906 | | Return on Average Common Equity (GAAP) | 4.61% | 12.39% | 14.29% | | Return on Average Tangible Common Equity (Non-GAAP) | 6.16% | 15.29% | 17.14% | | Adjusted Return on Average Tangible Common Equity (Non-GAAP) | 16.69% | 15.97% | 17.94% | Additional Information Cautionary Note Regarding Forward-Looking Statements This release contains forward-looking statements about future economic conditions and acquisition benefits, subject to various risks and uncertainties - This earnings release contains forward-looking statements regarding expectations for economic outlook, balance sheet growth, capital formation, and the strategic and financial benefits of the Bancorp Financial acquisition[52] - Forward-looking statements are subject to various risks, uncertainties, and other factors that could cause actual results to differ materially from expectations, including the strength of the U.S. economy, asset quality of the credit portfolio, legislative and regulatory changes, risks of future acquisitions, unfavorable capital market conditions, interest rate changes, inflation, and events beyond the company's control[52] - The company undertakes no obligation to publicly update or revise any forward-looking statements, except as required by law[52] Conference Call Details A conference call to discuss Q3 2025 financial results will be held on Thursday, October 23, 2025, at 10:00 AM ET - The company will host a conference call on Thursday, October 23, 2025, at 10:00 AM ET (9:00 AM CT) to discuss Q3 2025 financial results[53] - Investors can participate in the conference call by dialing 888-506-0062 and using entry code 740004[53] - A replay of the call will be available until 10:00 AM ET (9:00 AM CT) on October 30, 2025, by dialing 877-481-4010 and using conference ID 53047[54] Consolidated Financial Statements Consolidated Balance Sheets As of September 30, 2025, total assets reached $6.992 billion, with significant increases in net loans and total deposits due to the Bancorp Financial acquisition | Assets (Thousands of $) | Sep 30, 2025 | Dec 31, 2024 | | :-------------------------------- | :--------------- | :--------------- | | Cash and Due from Banks | $53,099 | $52,175 | | Interest-Bearing Deposits | $63,426 | $47,154 | | Cash and Cash Equivalents | $116,525 | $99,329 | | Available-for-Sale Securities | $1,157,480 | $1,161,701 | | Net Loans | $5,189,977 | $3,937,717 | | Goodwill | $130,262 | $93,260 | | Total Assets | $6,991,754 | $5,649,377 | | Liabilities (Thousands of $) | | | | Noninterest-Bearing Demand Deposits | $1,738,028 | $1,704,920 | | Interest-Bearing Deposits | $4,022,222 | $3,063,811 | | Total Deposits | $5,760,250 | $4,768,731 | | Other Short-Term Borrowings | $165,000 | $20,000 | | Total Liabilities | $6,125,069 | $4,978,343 | | Shareholders' Equity (Thousands of $) | | | | Common Stock | $53,015 | $44,908 | | Retained Earnings | $512,131 | $469,165 | | Total Shareholders' Equity | $866,685 | $671,034 | | Total Liabilities and Shareholders' Equity | $6,991,754 | $5,649,377 | Consolidated Statements of Income Q3 2025 consolidated income shows $82.78 million in net interest and dividend income, a $19.653 million provision for credit losses, and net income of $9.871 million | Metric (Thousands of $) | Sep 30, 2025 (Three Months) | Sep 30, 2024 (Three Months) | Sep 30, 2025 (Nine Months) | Sep 30, 2024 (Nine Months) | | :-------------------------------- | :-------------------- | :-------------------- | :-------------------- | :-------------------- | | Total Interest and Dividend Income | $104,075 | $76,072 | $252,878 | $222,625 | | Total Interest Expense | $21,300 | $15,494 | $42,965 | $42,574 | | Net Interest and Dividend Income | $82,775 | $60,578 | $209,913 | $180,051 | | Provision for Credit Losses | $19,653 | $2,000 | $24,553 | $9,250 | | Total Noninterest Income | $13,109 | $10,581 | $34,208 | $32,209 | | Total Noninterest Expense | $63,163 | $39,308 | $151,087 | $115,426 | | Income Before Income Taxes | $13,068 | $29,851 | $68,481 | $87,584 | | Income Tax Provision | $3,197 | $6,900 | $16,958 | $21,430 | | Net Income | $9,871 | $22,951 | $51,523 | $66,154 | | Diluted EPS | $0.18 | $0.50 | $1.06 | $1.45 | Quarterly Consolidated Average Balances Q3 2025 quarterly average balances show total assets at $6.999 billion, earning assets at $6.529 billion, and interest-bearing liabilities at $4.305 billion | Metric (Thousands of $) | Q3 2025 | Q2 2025 | Q1 2025 | Q4 2024 | Q3 2024 | | :-------------------------------- | :--------------- | :--------------- | :--------------- | :--------------- | :--------------- | | Assets | | | | | | | Cash and Due from Banks | $51,357 | $47,875 | $52,550 | $54,340 | $54,279 | | Interest-Bearing Deposits | $119,619 | $166,366 | $97,645 | $49,757 | $48,227 | | Available-for-Sale Securities | $1,165,900 | $1,190,123 | $1,181,257 | $1,180,024 | $1,173,948 | | Loans | $5,215,551 | $3,958,275 | $3,957,730 | $4,001,014 | $3,965,160 | | Total Assets | $6,999,253 | $5,736,706 | $5,674,317 | $5,664,658 | $5,615,142 | | Liabilities | | | | | | | Total Deposits | $5,928,062 | $4,850,180 | $4,799,104 | $4,599,715 | $4,485,420 | | Other Short-Term Borrowings | $25,978 | $- | $1,444 | $204,783 | $305,489 | | Total Liabilities | $6,149,255 | $5,030,452 | $4,990,739 | $4,996,777 | $4,975,991 | | Shareholders' Equity | | | | | | | Total Shareholders' Equity | $849,998 | $706,254 | $683,578 | $667,881 | $639,151 | | Total Earning Assets | $6,529,006 | $5,336,339 | $5,257,416 | $5,260,315 | $5,219,160 | | Total Interest-Bearing Liabilities | $4,305,330 | $3,241,585 | $3,216,946 | $3,217,604 | $3,230,088 | Quarterly Consolidated Statements of Income Q3 2025 quarterly income shows $82.78 million in net interest and dividend income, a $19.653 million provision for credit losses, and net income of $9.871 million | Metric (Thousands of $) | Q3 2025 | Q2 2025 | Q1 2025 | Q4 2024 | Q3 2024 | | :-------------------------------- | :--------------- | :--------------- | :--------------- | :--------------- | :--------------- | | Total Interest and Dividend Income | $104,075 | $75,238 | $73,565 | $75,279 | $76,072 | | Total Interest Expense | $21,300 | $11,004 | $10,661 | $13,695 | $15,494 | | Net Interest and Dividend Income | $82,775 | $64,234 | $62,904 | $61,584 | $60,578 | | Provision for Credit Losses | $19,653 | $2,500 | $2,400 | $3,500 | $2,000 | | Total Noninterest Income | $13,109 | $10,898 | $10,201 | $11,610 | $10,581 | | Total Noninterest Expense | $63,163 | $43,419 | $44,505 | $44,322 | $39,308 | | Income Before Income Taxes | $13,068 | $29,213 | $26,200 | $25,372 | $29,851 | | Income Tax Provision | $3,197 | $7,391 | $6,370 | $6,262 | $6,900 | | Net Income | $9,871 | $21,822 | $19,830 | $19,110 | $22,951 | | Diluted EPS (GAAP) | $0.18 | $0.48 | $0.43 | $0.42 | $0.50 |