Core Insights - Bigbank's total gross loan portfolio reached a record high of 2.58 billion euros, reflecting a quarter-on-quarter increase of 142 million euros (+6%) and a year-on-year increase of 521 million euros (+25%) [1] - The bank's net profit for the first nine months of 2025 was 30.2 million euros, compared to 27.6 million euros for the same period in 2024, while the third-quarter net profit was 11.5 million euros, a slight decrease of 0.3 million euros (-2%) from the previous year [3] - The total deposit portfolio grew by 80 million euros (+3%) quarter on quarter and by 462 million euros (+20%) year on year, reaching 2.7 billion euros [2] Loan Portfolio - The business loan portfolio increased by 74 million euros (+9%) to 937 million euros, while the home loan portfolio grew by 55 million euros (+8%) to 772 million euros, and the consumer loan portfolio increased by 18 million euros (+2%) to 878 million euros [1] - The quality of the loan portfolio remained stable, with expenses on expected credit losses decreasing by 0.8 million euros year on year to 2.5 million euros, and the share of non-performing loans fell to 4.4% [5] Interest and Income - Interest income for the third quarter was 46.5 million euros, an increase of 0.5 million euros (+1%) year on year, while net interest income grew by 0.6 million euros (+2%) to 27.4 million euros [4] - Total net operating income for the third quarter was 28.5 million euros, with net fee and commission income rising to 2.7 million euros [10] Deposits and Accounts - The savings deposit portfolio grew by 85 million euros to 1.4 billion euros (+7%), while the term deposit portfolio decreased by 11 million euros to 1.3 billion euros [2] - Bigbank launched current accounts for retail customers in Lithuania, resulting in a growth of current account balances by 6 million euros to 9 million euros [2] Employee and Operational Insights - Bigbank's employee count remained stable at 613, with salary expenses for the third quarter totaling 8.7 million euros, an increase of 1.9 million euros (+29%) year on year [6] - The bank's investment property portfolio increased to 82.3 million euros, driven by additional investments and revaluation of agricultural land [7] Strategic Developments - The bank confirmed its strategy's effectiveness with significant growth in its loan portfolio and deposit base, while expanding daily banking services to Lithuania [11] - An intragroup merger occurred, resulting in the deletion of an inactive subsidiary from the commercial register, which did not affect the Group's operations [9]

Banking Industry Performance & Outlook - The banking industry anticipates a strong quarter, projecting earnings per share growth of 7%, with expectations rising to 14% for the following year [1] - Revenue growth is observed within the industry, a trend not seen recently [2] - Credit costs are expected to remain well-managed [2] - Net interest income growth for the sector is projected at 9% this year [5] Loan Growth & Market Confidence - Loan growth experienced softness at the end of the first quarter and the beginning of the second quarter, but is expected to finish the second quarter stronger [2][3] - Increased confidence and market stabilization contributed to improved performance during the quarter [4] - Reduced nervousness regarding the uncertainty of a new administration is contributing to a pickup in loan growth [6] Economic Factors - The yield curve has steepened, allowing banks to function more effectively [4] - The percentage expectation for a recession continues to decrease [7] - Positive job growth and a declining unemployment rate are observed [7] - GDP growth is present, albeit slow [8] - Inflation has not significantly increased, contributing to increased comfort levels [8]

Financial Data and Key Metrics Changes - The company reported total operating revenue growth of over 2% quarter-over-quarter and more than 22% year-over-year [13][14] - Net interest income for the first quarter was $25.1 million, up 6.6% from the previous quarter [42] - The net interest margin for the first quarter was 1.82%, representing an increase of 15 basis points compared to the linked quarter [43] Business Line Data and Key Metrics Changes - Small business lending originations were down compared to the fourth quarter, but year-over-year origination and loan sale volume were up 223% and 236%, respectively [20][19] - The weighted average rate on funded originations was 7.78%, up 50 basis points from the prior quarter [18] - Construction and investor commercial real estate balances increased by $86 million, with nearly $70 million in new commitments originated [28] Market Data and Key Metrics Changes - Total deposits from fintech partners were up 37% from the fourth quarter, totaling $881 million at quarter end [36] - The average balance of deposits increased by $111 million or over 2% during the first quarter [35] - Nonperforming loans to total loans were 80 basis points, with an increase attributed to franchise finance and small business lending [24] Company Strategy and Development Direction - The company aims to continue improving its loan mix and reduce deposit costs, positioning itself for stronger earnings in the coming quarters [137] - The focus remains on expanding fintech partnerships and enhancing revenue diversification [137] - The company anticipates loan yields to increase and deposit costs to decline, projecting a 40% increase in net interest income over 2024's full-year amount [55] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ongoing improvement of net interest income and net interest margin throughout 2025, assuming no further rate actions from the Fed [16] - The elevated provision for loan losses was acknowledged, with management indicating a cautious approach to problem loans [21][60] - There is optimism regarding a slowdown in new delinquencies, suggesting potential moderation in the provision for credit losses in the second half of the year [60] Other Important Information - The company recognized $9.7 million in net charge-offs during the quarter, primarily related to franchise finance and small business lending portfolios [21] - Noninterest income for the quarter was $10.4 million, down 35% from the fourth quarter, largely due to lower net servicing revenue [47] - The tangible common equity ratio was 6.55%, with a common equity Tier one ratio of 9.16% [53] Q&A Session Summary Question: Expected one-time impact on fees in Q2 - Management estimated a range of $5 million to $6 million for the quarter, with a return to normalized levels in the latter half of the year [63] Question: Average loan size and impact of SBA fees - The average loan size is just over $1 million, and the company does not expect significant impact from the reinstated fees on smaller loans [68] Question: Impact of a 25 basis point rate cut on NII - A 25 basis point rate cut would result in an annualized impact of about $3.6 million on net interest income [71] Question: Updated thoughts on SBA loss assumptions - Management indicated that while the higher rate environment affects payments, economic uncertainty is a more significant factor influencing loss assumptions [80] Question: Share buybacks and balance sheet growth - The company is preparing to consider share buybacks if the stock price remains below 50% of book value [89] Question: Update on fintech partnerships and pipeline - The company is experiencing strong growth in fintech partnerships, with expectations to expand existing relationships rather than significantly increase the number of programs [124][127]