Financial Data and Key Metrics Changes - The company reported net income of $35.2 million, an increase of 17% year-over-year, and earnings per diluted share of $1.57, up 28% compared to the previous year [16] - Return on average assets was 1.87%, compared to 1.61% in the same quarter last year, while return on average tangible equity was 26.7%, up from 25.5% [16] - Deposits totaled $6.4 billion, a decrease of $170 million year-over-year, primarily due to an increase in custodial deposits [16][17] Business Line Data and Key Metrics Changes - Net interest income from commercial finance increased by $9.2 million due to higher balances and slightly higher yields [14] - Non-interest income showed solid results, particularly in core card and deposit fees, with growth attributed to new partners [15] - Loans and leases increased to $5 billion, driven by a $531 million increase in commercial finance loans, partially offset by a $148 million decrease in consumer finance loans [17] Market Data and Key Metrics Changes - Average deposits during the quarter were approximately $90 million higher than the previous year, with favorable deposit balances due to a strong holiday season [17] - The company originated $1.9 billion in loans during the quarter, with $678 million in commercial finance and $1.2 billion in consumer finance [17] Company Strategy and Development Direction - The company aims to optimize its balance sheet by rotating from securities to loans, increasing net interest income without growing overall asset size [9] - The focus is on generating fee income from balance sheet velocity and originating loans while maintaining a steady balance sheet [10] - The company is committed to enhancing the client experience through an evolved operating model that supports partner growth and scalability [8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in revenue growth from new partnerships and the upcoming tax season, which is expected to drive more consumers into tax preparation offices [11][21] - The company anticipates that the changes in tax code for 2025 will positively impact consumer engagement [11] - Management remains optimistic about the pipeline of new partners and the normalization of pricing in the industry [44] Other Important Information - The company repurchased approximately 652,000 shares at an average price of $72.07, leaving 4.3 million shares available for repurchase [21] - The fiscal year 2026 guidance for earnings per share has been raised to a range of $8.55-$9.05, based on several assumptions including no additional rate cuts [21] Q&A Session Summary Question: What is the trajectory for adjusted NIM in Q2? - Management indicated that the adjusted NIM has shown an upward trajectory, with a starting point of 5.49% for Q2, assuming no rate cuts [25][26] Question: Can you quantify the recovery recorded within net charge-offs? - Management did not provide specific figures but mentioned that the details would be available in the earnings release [27] Question: How does the company view the threat of FinTechs obtaining their own bank charters? - Management believes that while there may be some competition, the scale and complexity of operations will limit the impact of new charters on their business [30][31] Question: What is the current partner pipeline and expectations for new announcements? - Management reported a full pipeline and expressed optimism about future partner announcements, indicating that the number of opportunities is increasing [44] Question: What factors will influence the updated guidance? - The timing of new partner contributions and the success of the tax season are key factors that could affect the guidance range [49][50]