Mission Bancorp Reports Second Quarter Earnings of $3.1 Million. Annualized Loan Growth of 18%.

Core Viewpoint - Mission Bancorp reported a significant decline in net income for the second quarter of 2025, primarily due to one-time, non-recurring expenses and increased provisions for credit losses, despite strong loan demand and growth in non-interest income. Financial Performance - Net income available to common shareholders for Q2 2025 was $3.1 million, or $1.11 per diluted share, down from $7.3 million, or $2.60 per diluted share in Q2 2024, and $7.2 million, or $2.53 per diluted share in Q1 2025 [1][3][22] - The decrease in net income was attributed to a $5.5 million increase in non-interest expenses, primarily due to one-time charges and higher credit loss provisions [17][19] - Non-interest income increased by $0.2 million to $1.8 million, driven by growth in service charges and fees [16] Loan and Deposit Growth - Gross loans increased by $123.7 million, or 10.0%, to $1.36 billion year-over-year, with significant growth in non-owner occupied commercial real estate and multi-family loans [14][27] - Total deposits rose by $143.5 million, or 9.7%, to $1.63 billion compared to the same period last year, although there was a slight decrease from the previous quarter [28] Interest Income and Expenses - Net interest income for Q2 2025 was $18.1 million, with a net interest margin of 4.07%, down from 4.47% in Q2 2024 [5][8] - Interest income increased by $1.1 million year-over-year, primarily due to loan portfolio growth, while interest expense rose by $1.5 million due to higher average balances and costs of interest-bearing deposits [6][10] Credit Quality and Provisions - The allowance for credit losses as a percentage of gross loans decreased to 1.50% as of June 30, 2025, reflecting a stable credit profile [32] - A provision for credit losses of $0.8 million was recorded for Q2 2025, compared to $0.2 million in Q1 2025, indicating adjustments for loan growth and macroeconomic conditions [15] Operating Efficiency - The operating efficiency ratio increased to 73.8% for Q2 2025, compared to 47.3% in Q2 2024, indicating a decline in operational efficiency [20] - Non-interest expense as a percentage of average assets was 3.15% for Q2 2025, up from 2.19% in Q2 2024 [20] Regulatory Capital - The Community Bank Leverage Ratio was 11.43% as of June 30, 2025, above the required 9.00% for being considered "well capitalized" [34]