Financial Performance - Net income for Q3 2025 increased by $3.4 million to $5.6 million, or $0.62 per diluted share, compared to $2.2 million, or $0.36 per diluted share, in Q3 2024[148] - For the nine months ended September 30, 2025, net income increased by $4.3 million to $12.2 million, or $1.35 per diluted share, compared to $7.9 million, or $1.26 per diluted share, in the same period of 2024[155] - Net income for the three months ended September 30, 2025, increased by $3.4 million to $5.6 million, or $0.62 per diluted share, compared to $2.2 million, or $0.36 per diluted share, for the same period in 2024[171] Interest Income and Margin - Net interest income increased by $6.5 million, driven by a $7.6 million increase in total interest income, with a 38.0% increase in average earning assets of $522.8 million[151] - Net interest income for the three months ended September 30, 2025, increased by $6.5 million, or 55.7%, to $18.3 million, driven by a $7.0 million increase in interest income and fees on loans[174] - The net interest margin for the third quarter of 2025 was 3.84%, an increase of 41 basis points compared to 3.43% for the same period in the prior year[177] - Net interest income for the nine months ended September 30, 2025, increased by $20.2 million, or 59.3%, to $54.3 million, with total interest income rising by $23.4 million[178] - The net interest margin for the nine months ended September 30, 2025, was 3.85%, compared to 3.36% for the same period in the prior year, reflecting a 49 basis point increase[182] Noninterest Income and Expenses - Noninterest income rose by $1.3 million in Q3 2025, primarily from increases in service charges and fees related to the Touchstone acquisition[153] - Noninterest income increased by $1.3 million, or 40.5%, to $4.5 million for Q3 2025 compared to Q3 2024[189] - Noninterest income for the nine months ended September 30, 2025, rose by $2.1 million, or 20.8%, to $12.0 million compared to the same period in 2024[190] - Noninterest expenses increased by $5.3 million, mainly due to a $2.6 million rise in salaries and employee benefits related to the Touchstone merger[154] - Noninterest expenses increased by $5.3 million, or 50.9%, to $15.8 million for Q3 2025 compared to Q3 2024, primarily due to a $2.6 million increase in salaries and employee benefits[191] - Noninterest expenses for the nine months ended September 30, 2025, rose by $18.3 million, or 59.0%, to $49.3 million compared to the same period in 2024[192] Credit Losses and Allowance - Provision for credit losses decreased by $1.5 million in Q3 2025, totaling $193 thousand, compared to $1.7 million in Q3 2024[152] - The provision for credit losses for the three-month period ended September 30, 2025, was $193 thousand, significantly lower than $1.7 million for the same period last year[187] - The allowance for credit losses to total loans ratio decreased to 1.01% at September 30, 2025, down from 1.28% at September 30, 2024[188] - The net charge-offs for the first nine months of 2025 totaled $3.8 million, compared to $2.4 million for the same period in 2024[188] Assets and Liabilities - Total assets as of September 30, 2025, were $2,022,958 thousand, an increase from $1,449,264 thousand in the prior year[183] - Total earning assets increased to $1,897,328 thousand with an average yield of 5.26%, compared to $1,374,566 thousand and 5.08% in the prior year[183] - Total deposits reached $1.810 billion as of September 30, 2025, reflecting a $5.8 million (0.6%) increase from December 31, 2024, and a $556.3 million (44.4%) increase from September 30, 2024[210] - Total interest-bearing liabilities increased to $1,310,653 thousand with an interest expense of $6,792 thousand, resulting in a cost of funds of 2.06%[183] - Loans totaled $1.419 billion at September 30, 2025, reflecting a decrease of $31.4 million, or 8.7%, from December 31, 2024[200] Capital and Liquidity - The Bank's total capital to risk-weighted assets ratio was 13.40% as of September 30, 2025, exceeding the minimum requirement of 8.00%[218] - The Tier 1 capital to risk-weighted assets ratio was 12.36% as of September 30, 2025, above the minimum requirement of 6.00%[218] - The common equity Tier 1 capital to risk-weighted assets ratio was 12.36% as of September 30, 2025, surpassing the minimum requirement of 4.50%[218] - Liquidity sources available to the Bank totaled $783.2 million on September 30, 2025, up from $758.0 million on December 31, 2024, and $499.1 million on September 30, 2024[213] - Estimated uninsured customer deposits amounted to $555.0 million on September 30, 2025, compared to $537.0 million on December 31, 2024, and $400.1 million on September 30, 2024[214] Merger and Acquisition Costs - The Company incurred merger costs totaling $2.0 million and $7.2 million for the nine months ended September 30, 2025, and the year ended December 31, 2024, respectively[147] - Noninterest expenses for the nine months increased by $18.3 million, primarily due to merger expenses of $2.0 million and additional operating costs from the Touchstone merger[160] Tax and Shareholder Equity - The effective tax rate for Q3 2025 was 18.6%, compared to 19.5% for Q3 2024[194] - Total shareholders' equity increased by $14.7 million during the first nine months of 2025, primarily from an $8.0 million increase in retained earnings[199] Other Financial Metrics - The efficiency ratio, a non-GAAP measure, is used to assess operational efficiency, calculated by dividing noninterest expenses by the sum of net interest income and noninterest income[161] - The efficiency ratio for the three months ended September 30, 2025, was 67.97%, compared to 67.95% for the same period in 2024[165] - The company experienced a $20.2 million increase in net interest income after provision for the nine months ended September 30, 2025, offset by an $18.3 million increase in noninterest expenses[173] - The Company had commitments to extend credit totaling $288.1 million as of September 30, 2025, compared to $212.9 million at the same date in 2024[221] - The Company recognized an $80 thousand gain on the early redemption of a $500 thousand tranche of subordinated debt during the second quarter of 2025[211] - The cash flow hedges related to interest rate swaps had a fair value of $2.3 million as of September 30, 2025[225]

Revenue and Financial Performance - The Company recognized leasing revenue of approximately $3,137,000 and $9,699,000 for the three and nine-month periods ended September 30, 2025, compared to $3,312,000 and $11,464,000 for the same periods in the prior year[99]. - Direct patient services revenues for the three and nine-month periods ended September 30, 2025, were approximately $4,034,000 and $10,655,000, compared to $3,687,000 and $7,807,000 for the same periods in the prior year[102]. - Revenues for Q3 2025 increased by $172,000 to $7,171,000 compared to $6,999,000 in Q3 2024, and for the nine-month period, revenues increased by $1,083,000 to $20,354,000 compared to $19,271,000 in the prior year[111]. - Direct patient services revenue increased by $347,000 to $4,034,000 for Q3 2025, and by $2,848,000 to $10,655,000 for the nine-month period, driven by the RI Companies acquisition and the Puebla facility[111]. - Radiation therapy revenues from the RI Companies and Puebla facility totaled $2,918,000 for Q3 2025 and $7,832,000 for the nine-month period, compared to $2,862,000 and $4,754,000 in the prior year[112]. - PBRT system revenues decreased by $189,000 to $2,127,000 for Q3 2025 and by $1,695,000 to $5,691,000 for the nine-month period, attributed to lower volumes[113]. - Gamma Knife revenue increased by $305,000 to $2,126,000 for Q3 2025 but decreased by $300,000 to $6,831,000 for the nine-month period, reflecting mixed performance across segments[115]. Costs and Expenses - Total costs of revenue decreased by $44,000 to $5,585,000 for Q3 2025 but increased by $2,906,000 to $16,196,000 for the nine-month period[117]. - Selling and administrative expenses decreased by $385,000 to $1,538,000 for Q3 2025 and by $606,000 to $5,092,000 for the nine-month period, primarily due to lower legal costs[121]. - Interest expense increased by $56,000 to $392,000 for Q3 2025 and by $183,000 to $1,253,000 for the nine-month period, driven by increased borrowings[123]. Assets and Liabilities - Accounts receivable balances under ASC 606 at September 30, 2025, were $7,981,000, compared to $5,357,000 at September 30, 2024[102]. - The company had cash and cash equivalents of $5,345,000 as of September 30, 2025, down from $11,275,000 at December 31, 2024, reflecting a decrease of $5,930,000 during the first nine months of 2025[129]. - Working capital decreased by $12,433,000 to $3,420,000 as of September 30, 2025, compared to $15,853,000 at December 31, 2024[130]. - Long-term debt was $16,933,000 as of September 30, 2025, down from $18,462,000 at December 31, 2024[135]. - The DFC Loan has an outstanding amount of $1,313,000 as of September 30, 2025, down from $1,806,000 at December 31, 2024[138]. Financing and Commitments - The Company has secured a total of $22,000,000 in credit facilities with Fifth Third Bank, which includes a $9,500,000 term loan and a $7,000,000 revolving line of credit[132]. - The Company received a limited waiver from Fifth Third regarding its failure to comply with the maximum funded debt to EBITDA ratio covenant as of June 30, 2025[137]. - The Company anticipates being able to secure financing for future projects, although there is no assurance that financing will be available on acceptable terms[130]. - Total commitments for purchasing and installing two Leksell Gamma Knife Esprit Systems and two Linear Accelerator systems amounted to $7,884,000 as of September 30, 2025[144]. - The Company has commitments to service and maintain its Gamma Knife, LINAC, and PBRT equipment totaling $6,870,000 as of September 30, 2025[146]. Related Party Transactions - Related party transactions totaled $1,521,000 for the three months ended September 30, 2025, compared to $694,000 for the same period in 2024[148]. Operational Overview - The Company acquired 60% of the equity interests of the RI Companies, which operate three radiation therapy facilities in Rhode Island, on May 7, 2024[93]. - The Company operates seven Gamma Knife systems and one PBRT system as of September 30, 2025, under leasing contracts with hospitals[92]. - The Company has stand-alone facilities in Lima, Peru, Guayaquil, Ecuador, and Puebla, Mexico, providing direct patient services[100]. - The Company’s PBRT system at Orlando Health operates under a revenue share contract within the leasing segment[98]. - The Company’s revenue sharing arrangements include a cost-sharing component, with operating costs recorded as other direct operating costs[99]. Reimbursement Rates - The Centers for Medicare and Medicaid established a 2025 reimbursement rate of approximately $7,645 for a Medicare Gamma Knife treatment, up from $7,420 in 2024[95]. - The approximate CMS reimbursement rates for PBRT treatments in 2025 are $578 for simple treatments and $1,276 for intermediate and complex treatments[95].

Financial Performance - Net income available to common shareholders increased by $805,000, or 19.2%, to $5.0 million for Q3 2025 compared to $4.2 million for Q3 2024[173] - Earnings per diluted common share were $0.73 for Q3 2025, up from $0.58 for Q3 2024[173] - For the nine months ended September 30, 2025, net income available to common shareholders increased by $3.1 million, or 32.3%, to $12.7 million compared to $9.6 million for the same period in 2024[173] - Annual return on average assets for Q3 2025 was 2.10%, compared to 2.29% for the same period in the prior year[174] - Annual return on average equity for Q3 2025 was 18.74%, compared to 16.89% for the same period in the prior year[174] Income and Expenses - The increase in net interest income for Q3 2025 was $2.7 million, contributing significantly to the rise in net income[173] - Non-interest income increased by $810,000 for Q3 2025 compared to Q3 2024[173] - The provision for credit losses increased by $1.4 million for Q3 2025 compared to the same period in 2024[173] - Total non-interest expense for the three months ended September 30, 2025, increased by $731,000, or 5.5%, and for the nine months, it increased by $4.5 million, or 11.6%[209] - Salaries and employee benefits for the three months ended September 30, 2025, increased by $295,000, or 3.3%, and for the nine months, they increased by $2.6 million, or 9.7%[210] Assets and Liabilities - Total assets increased by $200.5 million, or 23.2%, to $1.1 billion as of September 30, 2025, from $863.4 million as of December 31, 2024[176] - Shareholders' equity rose by $5.8 million, or 5.1%, to $119.2 million as of September 30, 2025, from $113.4 million as of December 31, 2024[177] - Total liabilities increased to $923,041,000 in September 2025, up from $712,953,000 in September 2024, representing a growth of 29.4%[193] - Total deposits increased by $200.8 million, or 28.2%, to $911.9 million as of September 30, 2025, compared to $711.1 million as of December 31, 2024[263] Interest Income and Margin - Net interest income for the nine months ended September 30, 2025, increased by $6.9 million, or 29.7%, from $23.3 million for the nine months ended September 30, 2024, to $30.2 million[188] - Net interest margin for the three months ended September 30, 2025, was 4.39%, an increase of 14 basis points from 4.25% for the same period in 2024[182] - The average yield on interest-earning assets decreased by 26 basis points from 8.42% for the nine months ended September 30, 2024, to 8.16% for the same period in 2025[190] - The average cost of interest-bearing liabilities decreased by 70 basis points from 5.27% for the nine months ended September 30, 2024, to 4.57% for the same period in 2025[191] Credit Losses - Provision for credit losses for loans was $1,863,000 for the three months ended September 30, 2025, compared to $467,000 in 2024, reflecting an increase of 298.5%[198] - The provision for credit losses for the nine months ended September 30, 2025 totaled $4.7 million, compared to $3.2 million for the same period in the prior year[230] - The allowance for credit losses increased to $10,764,000 in September 2025 from $8,282,000 in September 2024, indicating a rise of 17.9%[193] Loan Portfolio - Average loans increased by $193.4 million, or 32.8%, for the nine months ended September 30, 2025, compared to the same period in 2024[189] - As of September 30, 2025, total loans increased by $110.5 million to $779.9 million, compared to $669.4 million at December 31, 2024[245] - SBA loans comprised 65.1% of total loans at September 30, 2025, totaling $507.8 million, up from 61.5% at December 31, 2024[245] - Non-performing assets totaled $35.7 million, representing 4.57% of total loans as of September 30, 2025, compared to $15.9 million or 2.38% at December 31, 2024[250] Taxation - Income tax expense for the three and nine months ended September 30, 2025, was approximately $1.6 million and $4.1 million, respectively, with effective income tax rates of 22.2% and 22.4%[223] - The effective tax rate for the three and nine months ended September 30, 2025, was higher than the prior year, which was 16.7% and 19.5%, respectively[223] Capital Adequacy - The Company met all capital adequacy requirements as of September 30, 2025, and was classified as "well-capitalized" under applicable regulations[268] - The Total Capital to Risk Weighted Assets ratio for Tectonic Financial, Inc. was 17.24% as of September 30, 2025, compared to 17.65% on December 31, 2024[270] - The Common Equity Tier 1 ratio to Risk Weighted Assets for Tectonic Financial, Inc. was 13.18% as of September 30, 2025, slightly decreasing from 13.37% on December 31, 2024[270] Liquidity and Risk Management - The Company’s liquidity management is influenced by factors such as expected deposit flows and market interest rates, with a focus on maintaining public confidence[272] - Management believes the Company has adequate liquidity to meet obligations, but potential economic downturns could restrict funding sources[278] - Interest rate risk is a primary market risk for the Company, with strategies in place to manage exposure and minimize potential economic losses[280]

Sales Performance - Syringes accounted for 65.0% of sales in the first nine months of 2025, with EasyPoint® products at 31.3% and other products at 3.7%[88] - Domestic revenues increased by 18.0% for the nine months ended September 30, 2025, while domestic unit sales increased by 11.8%[114] - International revenues for the nine months ended September 30, 2025 increased by 38.1% compared to the same period in 2024[115] - Domestic unit sales represented 78.0% of total unit sales for the nine months ended September 30, 2025, down from 87.6% in the same period last year[114] - The mix of domestic and international sales affects the average sales price, with higher domestic sales generally leading to higher prices[127] Financial Performance - The loss from operations was $13.5 million for the nine months ended September 30, 2025, compared to a loss of approximately $13.9 million for the same period last year[117] - Cash flow used by operations was $6.5 million for the nine months ended September 30, 2025, primarily due to a net loss for the period[121] - The unrealized loss on debt and equity securities was $3.2 million due to decreased market values of those securities[118] - Operating expenses increased by 4.3% primarily due to product donations and higher bad debt expense[111] Costs and Expenses - Approximately $2.3 million was spent on tariff expenses in the first nine months of 2025, impacting overall costs significantly[116] - Payroll costs are expected to increase by approximately $825 thousand annually due to workforce increases in manufacturing[126] - The company expects to incur higher manufacturing costs in the near term while working to minimize reliance on imported products[129] - Tariffs and raw material costs have significantly impacted the company's margins, which have experienced fluctuations over the past two years[129] Future Outlook - The company anticipates a material decline in liquidity over the next 1-3 years due to new tariffs and increased domestic manufacturing costs[130] - The total potential future credits to be issued for prior purchases not yet claimed is estimated at $2.2 million, recognized as a liability[132] - The company believes it has adequate means to meet short-term operational needs for at least 12 months from the date of the financial statements[130] Investments and Settlements - The company received a settlement payment of $1.9 million in May 2025[125] - The conversion of existing equipment and purchase of additional molds for 0.5 mL syringes is expected to cost approximately $1 million, with 9.1% of overall domestic unit sales and 15.2% of domestic syringe unit sales attributed to these products for Q3 2025[126] - Approximately $1 million was expended in Q2 2025 for molds and equipment conversion to increase production at the U.S. facility[131] Pricing Dynamics - The average domestic selling price increased due to a shift in product mix, particularly more VanishPoint® unit sales[114]

Real Estate Assets - As of September 30, 2025, the total book value of the company's real estate assets is approximately $113.3 million, down from $127.6 million as of December 31, 2024, reflecting a decrease of about 11.5%[12] - The commercial portfolio includes 10 properties with a book value of approximately $74.2 million, contributing to the overall real estate assets[11] - The model homes portfolio consists of 84 properties with a total square footage of 250,281 sqft, generating an annual rent of approximately $3.65 million[13] - The company recorded an impairment charge of approximately $3.3 million related to the Dakota Center property, which is expected to be sold for $5.125 million[12] - The impairment of model homes was reported at $(200,625), reflecting challenges in the model home segment[24] Financial Performance - Total revenue for the three months ended September 30, 2025, was $4,196,142, a decrease of 11.1% compared to $4,723,374 for the same period in 2024[17] - Net loss attributable to common stockholders for the nine months ended September 30, 2025, was $6,026,871, compared to a net loss of $24,800,532 for the same period in 2024[21] - EBITDAre for the three months ended September 30, 2025, was $638,723, an increase from $558,376 in the same period of 2024[20] - FFO for the three months ended September 30, 2025, was $(839,846), compared to $(566,910) in the same period of 2024[21] - Core FFO for the nine months ended September 30, 2025, was $(1,627,404), compared to $(995,236) in 2024[21] - The company reported a net loss attributable to stockholders of $4,302,021 for the nine months ended September 30, 2025, primarily due to significant interest expenses and impairment charges[26] Assets and Liabilities - As of September 30, 2025, the total assets of the company amount to $127.8 million, a decrease from $142.6 million as of December 31, 2024[15] - The company reported existing secured debt of $94.6 million, which represents approximately 83.5% of the total book value of real estate assets[9] - The mortgage notes payable total approximately $93.7 million, down from $102.1 million as of December 31, 2024, indicating a reduction of about 8.5%[15] - Total stockholders' equity decreased to approximately $29.3 million as of September 30, 2025, from $34.9 million as of December 31, 2024[15] - Total assets decreased from $142,569,650 as of December 31, 2024, to $127,808,885 as of September 30, 2025, indicating a reduction in asset base[27] Cash Flow and Liquidity - Net cash used in operating activities for the nine months ended September 30, 2025, was $380,224, compared to $658,434 for the same period in 2024[19] - Net cash provided by investing activities for the nine months ended September 30, 2025, was $11,433,947, compared to $10,664,729 in 2024[19] - Cash, cash equivalents, and restricted cash at the end of the period on September 30, 2025, was $8,002,915, compared to $7,199,448 at the end of the same period in 2024[19] - Cash and cash equivalents increased to $1,575,384 from $564,922, indicating improved liquidity[27] Revenue Breakdown - Total revenues for the nine months ended September 30, 2025, amounted to $12,700,066, with a breakdown of $450,426 from retail, $9,193,982 from office/industrial, and $2,976,521 from model homes[24] - Net Operating Income (NOI) reached $8,090,256, with adjusted NOI at $8,473,575, reflecting strong operational performance[24] Operational Activities - The company has leased approximately 69% of the space previously occupied by Halliburton in the Shea Center II property, which represents about 31% of the total space[12] - The company is actively pursuing third-party tenants for the remaining space in the Shea Center II property, although there is no guarantee of success[12] - Rental operating costs totaled $4,609,810, with general and administrative expenses at $4,335,697, highlighting the cost structure of the business[26] Other Income and Expenses - The company recorded a gain on sales of real estate amounting to $5,078,302, contributing positively to the overall financial results[26] - The company’s total other income (expense), net, was $408,203, influenced by various factors including interest expenses and gains on real estate sales[26] Shareholder Information - Weighted average number of common shares outstanding for the three months ended September 30, 2025, was 1,215,943[21] Performance Metrics - The company defines Funds from Operations (FFO) as a key performance metric, which excludes gains from property sales and includes depreciation and amortization adjustments[30]

Real Estate Assets - As of September 30, 2025, the total book value of the company's real estate assets is approximately $113.3 million, down from $127.6 million as of December 31, 2024, reflecting a decrease of about 11.5%[12] - The commercial portfolio includes 10 properties with a book value of approximately $74.2 million, contributing to the overall real estate assets[11] - The model homes portfolio consists of 84 properties with a total square footage of 250,281 sqft, generating an annual rent of approximately $3.65 million[13] - The company recorded an impairment charge of approximately $3.3 million related to the Dakota Center property, which is expected to be sold for $5.125 million[12] - The company reported a gain on sales of real estate amounting to $5,078,302, contributing positively to overall financial results[26] - The company’s model home properties saw an increase in net assets from $37,416,000 in December 2024 to $39,040,072 by September 30, 2025[27] Financial Performance - Total revenue for the three months ended September 30, 2025, was $4,196,142, a decrease of 11.1% compared to $4,723,374 for the same period in 2024[17] - Net loss attributable to common stockholders for the nine months ended September 30, 2025, was $6,026,871, compared to a net loss of $24,800,532 for the same period in 2024[21] - EBITDAre for the three months ended September 30, 2025, was $638,723, an increase from $558,376 in the same period of 2024[20] - Total revenues for the nine months ended September 30, 2025, amounted to $12,700,066, with a breakdown of $450,426 from retail, $9,193,982 from office/industrial, and $2,976,521 from model homes[24] - Net Operating Income (NOI) reached $8,090,256, with adjusted NOI at $8,473,575, reflecting strong operational performance[24] - The company reported a net loss attributable to stockholders of $4,302,021 for the nine months ended September 30, 2025, primarily due to significant interest expenses and impairment charges[26] Debt and Equity - The company reported existing secured debt of $94.6 million, which represents approximately 83.5% of the total book value of real estate assets[9] - The mortgage notes payable total approximately $93.7 million, down from $102.1 million as of December 31, 2024, indicating a reduction of about 8.5%[15] - The total stockholders' equity as of September 30, 2025, is approximately $29.3 million, down from $34.9 million as of December 31, 2024, reflecting a decrease of about 16.1%[15] Cash Flow and Liquidity - Net cash used in operating activities for the nine months ended September 30, 2025, was $380,224, compared to $658,434 for the same period in 2024[19] - Net cash provided by investing activities for the nine months ended September 30, 2025, was $11,433,947, compared to $10,664,729 in 2024[19] - Cash, cash equivalents, and restricted cash at the end of the period on September 30, 2025, was $8,002,915, compared to $7,199,448 at the end of the same period in 2024[19] - Cash and cash equivalents increased to $1,575,384 from $564,922, indicating improved liquidity[27] Operational Costs - Rental operating costs totaled $4,609,810, indicating a cost management strategy amidst rising operational expenses[26] - General and administrative expenses were reported at $4,335,697, reflecting ongoing operational costs[26] Leasing and Tenant Activity - The company has leased approximately 69% of the space previously occupied by Halliburton in the Shea Center II property, which represents about 31% of the total space[12] - The company is actively pursuing third-party tenants for the remaining space in the Shea Center II property, although there is no guarantee of success in signing new tenants[12] Funds from Operations (FFO) - The company emphasizes the importance of Funds from Operations (FFO) as a key performance metric, which excludes certain non-core items to provide a clearer view of operational performance[30] - FFO for the three months ended September 30, 2025, was $(839,846), compared to $(566,910) in the same period of 2024[21] - Core FFO for the nine months ended September 30, 2025, was $(1,627,404), compared to $(995,236) in 2024[21] Asset Management - Total assets decreased from $142,569,650 in December 2024 to $127,808,885 by September 30, 2025, highlighting a contraction in asset base[27] - The company has recorded an increase in the weighted average number of common shares outstanding for the three months ended September 30, 2025, was 1,215,943, compared to 1,247,657 in 2024[21]

Financial Performance - For the three months ended September 30, 2025, net income was $626,000 compared to a net loss of $4,616,000 for the same period in 2024, representing a significant turnaround [14]. - For the nine months ended September 30, 2025, net income reached $3,631,000, a substantial increase from a net loss of $431,000 in the prior year [14]. - Comprehensive income for the three months ended September 30, 2025, totaled $2,227,000, contrasting with a comprehensive loss of $2,546,000 in the prior year [14]. - Basic earnings per common share for voting stock was $0.58 for the nine months ended September 30, 2025, compared to a loss of $0.09 in 2024 [34]. Shareholders' Equity and Dividends - Total shareholders' equity as of September 30, 2025, was $126,339,000, an increase from $121,100,000 as of September 30, 2024 [19]. - The company declared dividends of $0.10 per share for both voting and non-voting common stock during the three months ended September 30, 2025 [17]. Cash Flow and Investments - Net cash inflows from operating activities were $9,008,000 for the nine months ended September 30, 2025, down from $13,864,000 in 2024 [23]. - The company reported a net cash inflow from investing activities of $12,152,000 for the nine months ended September 30, 2025, compared to an outflow of $26,195,000 in 2024 [23]. - Cash and cash equivalents at the end of the period increased to $40,572,000 as of September 30, 2025, from $35,324,000 at the end of the same period in 2024 [23]. Credit Quality and Losses - The provision for credit losses decreased to $5,148,000 for the nine months ended September 30, 2025, from $9,985,000 in 2024, indicating improved credit quality [23]. - The allowance for credit losses on loans is $18.7 million as of September 30, 2025, compared to $17.2 million as of December 31, 2024, indicating an increase of approximately 8.5% [53]. - The total allowance for credit losses (ACL) as of September 30, 2025, was $19.6 million, up from $16.8 million at the end of Q3 2024 [81]. Loan Portfolio and Performance - The total residential mortgage loans decreased to $240.4 million as of September 30, 2025, from $256.2 million as of December 31, 2024, reflecting a decline of approximately 6.1% [53]. - Total loans as of September 30, 2025, amounted to $898,520 thousand, a decrease from $1,134,188 thousand in 2024 [61]. - The commercial real estate loan portfolio totaled $371,683 thousand, with a pass rating of $328,969 thousand, representing approximately 88.5% of the total [61]. Securities and Fair Value - As of September 30, 2025, the total amortized cost of available-for-sale investment securities is $301,979,000, with an estimated fair value of $294,457,000, reflecting a gross unrealized loss of $9,319,000 [36]. - The fair value of available-for-sale securities was $294,457,000 as of September 30, 2025, with $290,049,000 classified under Level 2 valuation techniques [103]. - The fair value of investment securities - available-for-sale was $290,049,000 as of September 30, 2025, compared to $264,880,000 as of December 31, 2024 [118]. Nonperforming Loans and Charge-offs - Nonaccrual loans increased to $36,894,000 as of September 30, 2025, compared to $23,305,000 as of December 31, 2024, reflecting a rise of 58.5% [67]. - The total past due loans reached $35,101,000 as of December 31, 2024, with 90 days or more past due loans at $22,084,000, indicating a significant concern for collectability [66]. - Charge-offs for the nine months ended September 30, 2024, amounted to $8,993 million, while recoveries were $174 million, resulting in a net charge-off of $8,819 million [82]. Interest Rate and Derivative Activities - The fair value of derivatives resulted in a net asset position of $1.2 million at September 30, 2025, compared to $3.2 million at December 31, 2024 [124]. - The Company manages credit exposure on interest rate swap transactions through bilateral credit support agreements, ensuring minimal credit risk [130]. - Participation in fair value hedging transactions increased investment security interest income by $879,000 for the nine months ended September 30, 2025 [126]. Noninterest Income and Expenses - For the three months ended September 30, 2025, the total noninterest income was $1,503,000, a decrease from $1,707,000 in the same period of 2024, representing a decline of approximately 12% [138]. - Service charges on deposit accounts increased to $404,000 for the three months ended September 30, 2025, compared to $392,000 in 2024, reflecting a growth of about 3% [138]. - Operating lease cost for the three months ended September 30, 2025, was $39,000, down from $49,000 in 2024, indicating a decrease of approximately 20% [140].

Financial Performance - For the three-month period ended September 30, 2025, net income was 1,291,504 million Korean Won, an increase from 916,978 million Korean Won in the same period of 2024, representing a growth of 40.9%[15] - Net income for the nine-month period ended September 30, 2025, was 2,885,803 million Korean Won, an increase from 2,717,398 million Korean Won in the same period of 2024, representing a growth of approximately 6.2%[20] - Total comprehensive income for the nine-month period ended September 30, 2025, was 2,699,429 million Korean Won, compared to 2,849,156 million Korean Won in 2024, reflecting a decrease of 5.3%[16] - Basic and diluted earnings per share for the three-month period was 1,651 Korean Won, compared to 1,162 Korean Won in the same period of 2024, reflecting an increase of 42.1%[16] - The net gain on financial instruments at FVTPL for the three-month period was 534,290 million Korean Won, a significant recovery from a loss of 120,117 million Korean Won in the same period of 2024[15] Assets and Liabilities - Total assets increased to KRW 586,956,410 million as of September 30, 2025, up from KRW 525,753,320 million at the end of 2024, representing a growth of approximately 11.4%[13] - Total liabilities reached KRW 549,804,902 million, up from KRW 489,858,051 million, indicating an increase of around 12.2%[13] - The total equity of the Group increased to KRW 37,151,508 million from KRW 35,895,269 million, representing a growth of about 3.5%[13] - The Group's cash and cash equivalents stood at KRW 29,232,549 million, compared to KRW 27,281,123 million, showing an increase of approximately 7.2%[13] - The total cash and cash equivalents at the end of the period were 29,232,549 million Won, down from 33,485,919 million Won in 2024, indicating a decrease of about 13%[21] Income and Expenses - Net interest income for the nine-month period increased to 6,730,587 million Korean Won from 6,614,592 million Korean Won, marking a rise of 1.8%[15] - The total interest expense for the nine-month period decreased to 9,055,065 million Korean Won from 9,802,138 million Korean Won, a reduction of 7.6%[15] - General and administrative expenses for the nine-month period ended September 30, 2025, were 3,689,177 million Won, compared to 3,158,105 million Won in 2024, indicating an increase of about 16.73%[130] - Non-interest income for the nine-month period ended September 30, 2025, was 1,443,303 million Won, compared to 1,378,313 million Won in 2024, indicating an increase of about 4.73%[130] Credit and Impairment - The impairment loss due to credit loss for the nine-month period was 1,518,969 million Korean Won, an increase from 1,253,770 million Korean Won, representing a rise of 21.2%[15] - The total credit impairment allowance was 3,918,889 million Won as of September 30, 2025, compared to 3,883,146 million Won at the end of 2024, indicating a slight increase of about 0.9%[94] - The total allowance for credit losses on other financial assets reached 315,048 million Korean Won, an increase from 213,014 million Korean Won at the end of 2024[162] - The ending balance of credit impairment for credit card accounts was (1,416,742) million Korean Won as of September 30, 2025[160] Investments and Acquisitions - The Parent company acquired 77.9% of Tongyang Life Insurance Co., Ltd. and 100% of ABL Life Insurance Co., Ltd. on July 1, 2025, expanding its insurance segment[34] - The Parent company paid 22,541,465 new shares to acquire the remaining 41.3% of Woori Investment Bank Co., Ltd. on August 8, 2023, making it a wholly-owned subsidiary[30] - The company issued hybrid securities amounting to 398,789 million Korean Won during the nine-month period ended September 30, 2025[20] - The Group's strategic acquisitions and mergers aim to strengthen its market position and expand its service offerings in the financial sector[45] Risk Management - The Group's risk management organization includes a Risk Management Committee and a Chief Risk Officer to oversee credit, market, and liquidity risks[71] - The Group applies K-IFRS 1109 to measure expected credit losses, classifying financial assets into three stages based on credit risk[78] - Liquidity risk management aims to prevent potential cash shortages due to mismatched maturity of assets and liabilities or unexpected cash outflows[110] - The Group manages liquidity risk by analyzing cash flow and maintaining the maturity gap ratio at or below the target limit[111] Ownership Structure - Woori Financial Group maintains 100% ownership in key subsidiaries including Woori Private Equity Asset Management Co., Ltd. and Woori Credit Information Co., Ltd. as of September 30, 2025[36] - The company has a 90.8% ownership in PT Bank Woori Saudara Indonesia 1906 Tbk, reflecting its strategic investment in the Indonesian market[36] - The financial statements indicate a consistent ownership structure across subsidiaries from 2024 to 2025, with no changes in percentage ownership reported[36] - The Group's subsidiaries include a variety of investment trusts, with ownership stakes ranging from 50% to 100% across different funds[46] Financial Instruments - The total fair value of financial assets measured at fair value was 107,157,660 million Korean Won, with Level 1 assets amounting to 37,221,327 million Korean Won[167] - The total financial assets at fair value through profit or loss (FVTPL) amounted to 12,379,386 million Won, an increase from 5,924,081 million Won as of September 30, 2024[178] - The net income from financial assets at FVTPL for the nine-month period ended September 30, 2025, was 81,521 million Won, compared to 47,984 million Won for the same period in 2024[178] - The total financial liabilities at fair value through profit or loss (FVTPL) remained stable at 1,402 million Won as of September 30, 2025, with no changes reported during the period[178]

Financial Performance - Total revenue for Q3 2025 was $101.434 million, a decrease of 50.8% compared to $205.961 million in Q3 2024[11] - New vehicle retail revenue was $60.150 million, down 50.7% from $122.291 million year-over-year[11] - Net loss for Q3 2025 was $82.381 million, compared to a net loss of $17.665 million in Q3 2024, representing a significant increase in losses[11] - The company reported a gross profit of $19.576 million for Q3 2025, down 56.7% from $45.313 million in Q3 2024[11] - For the nine months ended September 30, 2025, the company reported a net loss of $116.5 million, compared to a net loss of $83.9 million for the same period in 2024, representing a 39% increase in losses year-over-year[17] - Total revenue for the nine months ended September 30, 2025, was $398.5 million, a decrease of $313.1 million, or 44.0%, compared to the same period in 2024[197] Asset and Liability Management - Total current assets decreased to $203.106 million from $353.774 million as of December 31, 2024, a decline of 42.4%[10] - Total liabilities decreased to $359.473 million from $586.230 million as of December 31, 2024, a reduction of 38.7%[10] - Cash and cash equivalents decreased to $9.501 million from $24.702 million as of December 31, 2024, a decline of 61.6%[10] - Stockholders' equity showed a deficit of $26.302 million as of September 30, 2025, compared to equity of $89.600 million as of December 31, 2024[10] - The company had total debt obligations of $40.2 million related to mortgages, term loans, and revolving credit facilities, along with floor plan notes payable of $184.0 million[25] Impairment and Charges - The company incurred impairment charges of $63.915 million in Q3 2025, compared to no impairment charges in Q3 2024[11] - The company recorded a non-cash impairment charge of $22.9 million on indefinite-lived intangible assets in Q3 2025, driven by asset sales[188] - The company incurred impairment charges of $74.5 million during the nine months ended September 30, 2025[17] - The company recorded an impairment loss of $11.9 million on assets held for sale during Q3 2025, contributing to a total impairment charge of $15.3 million for the nine months ended September 30, 2025[69] Asset Sales and Liquidation - The company entered into an Asset Purchase Agreement on October 6, 2025, to sell substantially all of its assets, with proceeds expected to be used to repay outstanding obligations under the Credit Agreement[27] - The company expects to complete the Asset Sales between November 17, 2025, and November 26, 2025, with an outside date of December 1, 2025, for the agreement[27] - The company’s stockholders approved a Plan of Dissolution on October 14, 2025, which may lead to liquidation of remaining assets after the Asset Sales[29] - The company plans to liquidate its assets and dissolve after the final closing of the Asset Sales, with no remaining assets expected for distribution to stockholders[140] Operational Changes - The company had 12 dealerships as of September 30, 2025, all of which were reclassified to held for sale[19] - The company has notified employees of expected terminations effective November 16, 2025, in connection with the closing of the Asset Sales[145][146] - The company completed asset sales resulting in net proceeds of $113.9 million, which were used to repay $61.2 million of floor plan notes payable and $46.1 million of term loan and mortgage debt[57] Revenue Breakdown - New vehicle retail revenue decreased by $62.1 million, or 50.8%, primarily due to a 52.1% decrease in new vehicle retail units sold[177] - Pre-owned vehicle retail revenue decreased by $28.2 million, or 55.0%, driven by a 55.4% decrease in pre-owned retail units sold[179] - Vehicle wholesale revenue decreased by $1.3 million, or 73.5%, due to a strategic decision to right-size RV inventory[181] - Finance and insurance revenue fell by $8.0 million, or 48.7%, in Q3 2025, driven by a 50.6% decrease in total retail units sold[183] - Service, body, and parts revenue decreased by 34.2%, with gross profit down 38.3% in Q3 2025, largely due to divestitures resulting in a $5.3 million revenue drop[184] Stock and Shareholder Information - The weighted average shares used for EPS calculations in Q3 2025 were 3,745,484, compared to 481,329 in Q3 2024[11] - A reverse stock split of 1-for-30 was executed on July 11, 2025, to increase the per share market price to meet Nasdaq listing requirements[34] - The Company anticipates delisting its common stock from Nasdaq, with the delisting expected to occur on or about November 28, 2025[143] Future Projections and Concerns - The company is facing substantial doubt about its ability to continue as a going concern due to uncertainty regarding its financial condition and liquidity needs[31] - The Company is required to comply with certain financial covenants, including maintaining liquidity above $5.0 million during the waiver period[84] - The Company must complete asset sales and repay outstanding obligations under the Credit Agreement by the end of the September 2025 Waiver Period[86]

Financial Performance - Total revenue for Q3 2025 was $101.4 million, a decrease of 50.8% compared to $206.0 million in Q3 2024[11] - New vehicle retail revenue was $60.2 million, down 50.7% from $122.3 million year-over-year[11] - Net loss for Q3 2025 was $82.4 million, compared to a net loss of $17.7 million in Q3 2024, representing a 366.5% increase in losses[11] - The company reported a gross profit of $19.6 million for Q3 2025, down 56.7% from $45.3 million in Q3 2024[11] - For the nine months ended September 30, 2025, the company reported a net loss of $116.5 million, compared to a net loss of $83.9 million for the same period in 2024, representing a 39% increase in losses year-over-year[17] - Total revenue for the nine months ended September 30, 2025, was $398.5 million, a decrease of $313.1 million or 44.0% compared to the same period in 2024[197] - Total gross profit for the nine months ended September 30, 2025, was $97.6 million, down $32.9 million or 25.2% from the same period in 2024[197] Assets and Liabilities - Total current assets decreased to $203.1 million from $353.8 million as of December 31, 2024, a decline of 42.4%[10] - Total assets decreased to $333.2 million from $675.8 million as of December 31, 2024, a decline of 50.7%[10] - Total liabilities decreased to $359.5 million from $586.2 million as of December 31, 2024, a decline of 38.7%[10] - The company had cash and cash equivalents of $9.5 million as of September 30, 2025, down from $24.7 million at the end of 2024[10] - The company’s retained deficit increased to $231.3 million as of September 30, 2025, compared to $114.7 million at the end of 2024[10] - The company had total debt obligations of $40.2 million related to mortgages, term loans, and a revolving credit facility, along with floor plan notes payable of $184.0 million[25] Impairment and Charges - The company incurred impairment charges of $74.5 million during the nine months ended September 30, 2025[17] - The company recorded a non-cash impairment charge of $22.9 million on indefinite-lived intangible assets in Q3 2025 due to asset sales[188] - The company recorded an impairment loss of $11.9 million on assets held for sale during Q3 2025, contributing to a total of $15.3 million for the nine months ended September 30, 2025[69] Asset Sales and Dissolution - The company entered into an Asset Purchase Agreement on October 6, 2025, to sell substantially all of its assets, with proceeds expected to repay outstanding obligations under the Credit Agreement[27] - The company’s Board of Directors approved a plan of dissolution on October 14, 2025, subject to stockholder approval, following the Asset Sales[28] - The company expects no assets will remain for distribution to stockholders after paying outstanding liabilities to creditors under the Plan of Dissolution[140] - The company completed asset sales resulting in net proceeds of $113.9 million, which were used to repay $61.2 million of floor plan notes payable and $46.1 million of term loan and mortgage debt[57] Revenue Breakdown - New vehicle retail revenue decreased by $62.1 million, or 50.8%, primarily due to a 52.1% decrease in new vehicle retail units sold[177] - Pre-owned vehicle retail revenue decreased by $28.2 million, or 55.0%, driven by a 55.4% decrease in pre-owned retail units sold[179] - Vehicle wholesale revenue decreased by $1.3 million, or 73.5%, due to a strategic decision to right-size RV inventory[181] - Finance and insurance revenue fell by $8.0 million, or 48.7%, in Q3 2025, driven by a 50.6% decrease in total retail units sold[183] - Service, body, and parts revenue decreased by 34.2%, with gross profit down 38.3% in Q3 2025, largely due to divestitures resulting in a $5.3 million revenue drop[184] Stock and Employment - The company executed a 1-for-30 reverse stock split effective July 11, 2025, to meet the $1.00 per share minimum bid price for continued listing on Nasdaq[34] - The company anticipates that its common stock will be delisted from Nasdaq on or about November 28, 2025, following the filing of Form 25[143] - The company has notified employees of expected terminations effective November 16, 2025, in connection with the closing of the Asset Sales[146] - As of September 30, 2025, the company employs approximately 800 people and offers over 2,800 new and pre-owned RVs[152] Future Projections and Compliance - The company has raised substantial doubt about its ability to continue as a going concern due to uncertainty regarding its financial condition and liquidity needs[31] - The Company is required to comply with certain financial covenants, including maintaining liquidity above $5.0 million during the waiver period[84] - The Company must complete asset sales and repay outstanding obligations under the Credit Agreement by the end of the September 2025 Waiver Period[86]