stal Financial (US:CCB)2025-10-29 11:12Financial Performance - Net income for Q3 2025 was $13.6 million, or $0.88 per diluted share, compared to $11.0 million, or $0.71 per diluted share in Q2 2025, and $13.5 million, or $0.97 per diluted share in Q3 2024[1]. - Return on average assets (ROA) for Q3 2025 was 1.19%, an increase of 0.20% from Q2 2025 and a decrease of 0.15% from Q3 2024[8]. - Net interest income for the quarter ended September 30, 2025 was $77.9 million, an increase of $1.2 million, or 1.5%, from the previous quarter and an increase of $5.6 million, or 7.8%, from the same quarter last year[32]. - Noninterest income was $66.8 million for the three months ended September 30, 2025, an increase of $24.1 million from the previous quarter, primarily due to a $23.7 million increase in total BaaS income[38]. - Total shareholders' equity increased by $13.6 million since June 30, 2025, primarily due to net earnings[49]. Asset and Loan Growth - Loans receivable increased by $163.5 million, representing a 4.6% rise, while deposits grew by $59.0 million, or 1.5%[2]. - Average loans receivable increased by $68.7 million to $1.80 billion as of September 30, 2025, despite selling $1.62 billion in loans during the same quarter[9]. - The community bank's net loans increased by $39.6 million, or 2.1%, to $1.90 billion in Q3 2025[29]. - Total assets increased by $72.5 million, or 1.6%, to $4.55 billion at September 30, 2025, driven by a $163.5 million increase in loans receivable[46]. - Total liabilities stood at $4,077,799 thousand, up from $4,018,850 thousand in the previous quarter, reflecting an increase of 1.5%[70]. Noninterest Expenses and Efficiency - Total noninterest expense decreased by $2.7 million, or 3.7%, to $70.2 million compared to $72.8 million in Q2 2025[3]. - Noninterest expenses decreased compared to Q2 2025 but increased compared to Q3 2024, primarily due to higher salaries and employee benefits[8]. - The efficiency ratio improved to 48.50% in Q3 2025 from 60.98% in Q2 2025[12]. - The increase in noninterest expenses compared to the same quarter last year was largely due to a $3.1 million increase in salary and employee benefits and a $1.5 million increase in data processing and software licenses[42]. Credit Quality and Allowance for Losses - Nonperforming assets to total assets ratio improved to 1.31% from 1.36% in Q2 2025[6]. - The allowance for credit losses was $173.8 million, representing 4.69% of loans receivable at September 30, 2025, compared to 4.65% in the previous quarter and 5.03% a year ago[51]. - Net charge-offs totaled $49.2 million for the quarter ended September 30, 2025, slightly down from $49.3 million in the previous quarter and up from $48.8 million year-over-year[52]. - The ratio of nonperforming loans to loans receivable improved to 1.61% from 1.72% in June 2025 and 1.94% in September 2024[59]. - CCBX recorded net charge-offs of $49.2 million for the quarter, indicating a higher level of expected losses compared to community bank loans[60]. BaaS Program and Income - Total BaaS program fee income was $7.6 million, an increase of $764,000, or 11.3%, from Q2 2025[3]. - The net BaaS loan income for the quarter ended September 30, 2025 was $36.8 million, reflecting an increase from the previous quarter[37]. - BaaS program income for the three months ended September 30, 2025, was $7,554,000, with no nonrecurring income reported for this period[85]. - BaaS loan interest income increased to $69.6 million for the quarter ended September 30, 2025, compared to $68.3 million in the previous quarter, reflecting a growth trend[106]. - BaaS indemnification income, which includes credit and fraud enhancements, totaled $57.5 million for the quarter ended September 30, 2025, compared to $34.1 million in the previous quarter[106]. Deposits and Funding - Average deposits were $3.97 billion, an increase of $40.7 million, or 1.0%, over Q2 2025[3]. - Total Community Bank deposits rose by $44.2 million, or 2.8%, to $1.60 billion as of September 30, 2025, with noninterest bearing deposits accounting for $499.7 million, or 31.3% of total deposits[31]. - Cost of funds decreased to 3.07% for the quarter ended September 30, 2025, down six basis points from the previous quarter and 55 basis points from the same quarter last year[36]. - Uninsured deposits increased to $617.9 million as of September 30, 2025, compared to $579.9 million at the end of the previous quarter[48]. - The company had a cash balance of $43.9 million as of September 30, 2025, with additional borrowing capacity of $707.1 million from various sources[47].