Core Points - The company reported a net loss of 11.4millionforQ22024,comparedtoanetlossof2.9 million in Q1 2024 and 8.6millioninQ22023,largelyduetoa6.7 million after-tax negative fair value adjustment related to a fintech investment [2][5][21] - The company is winding down its fintech Banking-as-a-Service (BaaS) operations, with BaaS deposits now representing approximately 7% of total deposits, a significant decrease from the previous year [5][9] - A capital raise of 161.6millionwascompletedthroughprivateplacementstosupportbusinesstransformationandmeetregulatorycapitalrequirements[5][18]FinancialPerformance−NetinterestincomeforQ22024was20.1 million, a slight decline from 20.3millioninQ12024,primarilyduetoreducedaveragebalancesofinterest−earningassets[2][8]−Noninterestincomedroppedto0.3 million in Q2 2024 from 7.8millioninQ12024,mainlyduetoanegativefairvalueadjustmentof8.5 million on an equity investment [3][21] - Noninterest expenses decreased to 29.3millioninQ22024from32.5 million in Q1 2024, attributed to lower salaries and regulatory remediation expenses [3][21] Asset Quality - The provision for credit losses was 3.1millioninQ22024,comparedtoarecoveryof1.0 million in Q1 2024, reflecting increased reserves for certain purchased loans [3][21] - Nonperforming loans improved to 46.0million,or1.5753.2 million, or 1.73%, in the prior quarter [7][27] - The allowance for credit losses as a percentage of total loans held for investment was 1.24% at the end of Q2 2024, down from 1.46% in the previous quarter [3][27] Capital and Liquidity - The company's tangible common stockholders' equity to tangible total assets ratio improved to 10.3% from 5.8% in the prior quarter, reflecting the recent capital raise [3][27] - As of June 30, 2024, the bank's tier 1 leverage ratio and total risk-based capital ratio exceeded the minimum capital ratios set forth in the Consent Order [3][18] - Total assets decreased to 2.93billionfrom3.08 billion in the prior quarter, as the bank reduced assets to meet liquidity needs [3][9]
