Loan Portfolio & Origination - The total loan portfolio reached $2,485 million as of June 30, 2025, reflecting a 4.2% increase compared to June 30, 2024[15] - Recreation loans constitute 62.2% of the total loan portfolio, amounting to $1,546.3 million as of June 30, 2025, a 3.3% increase year-over-year[15] - Home Improvement loans represent 32.3% of the portfolio, totaling $803.5 million, showing a 3.9% increase from the previous year[15] - Commercial loans account for 4.9% of the portfolio, reaching $121.4 million, a significant 10.2% increase compared to June 30, 2024[15] - Strategic Partnership loan originations totaled $168.6 million[13] Financial Performance - Net interest income for the second quarter of 2025 was $53.4 million[28, 35] - The company reported a net income attributable to Medallion Financial Corp of $11.1 million for the second quarter of 2025[31] - The net interest margin was 8.09% on gross loans and 8.42% on net loans[14, 35] - The company declared a dividend of $0.12 per share per quarter[14, 54] - Operating costs as a percentage of net interest income were 40% for the year-to-date period ending June 30, 2025[48]

Core Viewpoint - Franklin Financial Services Corporation (FRAF) reported strong financial performance for the second quarter of 2025, with significant year-over-year growth in net income and revenue, despite a recent decline in share price following earnings release [1][2]. Financial Performance - Net income for the second quarter surged 94.8% year-over-year to $5.9 million ($1.32 per diluted share) from $3 million (66 cents per diluted share) [2]. - For the first half of 2025, net income rose 53.7% to $9.8 million ($2.20 per diluted share) compared to $6.4 million ($1.43 per diluted share) in the same period of 2024 [3]. - Revenue growth was primarily driven by a 21.3% increase in net interest income to $17.2 million from $14.2 million a year earlier [2]. Key Business Metrics - Total assets increased 4.1% to $2.29 billion as of June 30, 2025 [4]. - Total net loans rose 8.7% to $1.5 billion, with a notable $68.9 million increase in commercial real estate loans, totaling $872.2 million [4]. - Deposits increased 4.3% to $1.89 billion, primarily driven by money management accounts [5]. Management Commentary - Management emphasized disciplined growth and asset quality management, despite an increase in non-performing loans from $266 thousand to $10.8 million [6]. - The allowance for credit losses remained steady at 1.26% of loans [6]. - Executives highlighted progress in commercial real estate lending and wealth management, with assets under management growing 6.9% year-over-year to $1.36 billion [7]. Performance Drivers - Loan portfolio growth, particularly in commercial real estate, was the primary driver of performance, leading to a 15.4% year-over-year increase in average loan balances [8]. - The yield on interest-earning assets improved to 5.30% from 5.10% in the prior-year period [8]. - Deposit costs rose from 1.74% to 1.95% year-over-year but moderated to 1.90% in the second quarter, contributing to a net interest margin increase to 3.21% from 2.99% [9]. Non-Interest Income and Expenses - Non-interest income climbed 17.3% to $5.1 million for the quarter, supported by higher wealth management fees and loan-related charges [10]. - Operating expenses increased only 0.4% year-over-year to $14.4 million, indicating cost discipline [10]. Other Developments - In January 2025, the company authorized a share repurchase plan for up to 150,000 shares, with 6,700 shares repurchased by June 30 [12]. - The board declared a third-quarter dividend of 33 cents per share, a 3.1% increase over the previous year [12].

Core Insights - LHV Group experienced significant growth in its loan portfolio in May, with a consolidated increase of EUR 104 million, while deposits decreased by EUR 34 million [1][3] - The company reported a consolidated net profit of EUR 10.3 million for May, with a return on equity of 17.3% [2] - The number of customers for LHV Pank grew by 2,800, surpassing 470,000, indicating strong customer acquisition [3][8] Loan and Deposit Performance - The loan growth was robust at EUR 83 million, with EUR 51 million from corporate loans and EUR 32 million from private loans [3] - The overall quality of the loan portfolio remains strong, with a resolution found for one of the largest non-performing loans, leading to a reduction in provisions [3] - Corporate banking deposits decreased less than expected, while retail banking deposits increased by EUR 88 million [3] Subsidiary Performance - AS LHV Pank earned a net profit of EUR 10.5 million, while LHV Bank Ltd, LHV Kindlustus, and LHV Varahaldus reported net profits of EUR 28 thousand, EUR 339 thousand, and EUR 297 thousand respectively [2] - LHV Kindlustus continued stable revenue growth, concluding new insurance contracts worth EUR 3.15 million, with a total of 274,000 valid contracts by the end of May [5] - LHV Varahaldus saw its larger pension funds grow by 1.2% and 2.3%, with the LHV Pensionifond Indeks increasing by 5.6% [6] Market Developments - LHV Bank launched its initial retail customer offer in the UK, allowing customers to use the bank app and perform various banking functions [4] - The company issued AT1 bonds worth EUR 50 million in April, with EUR 15 million called back in May, and increased share capital by EUR 366,721.30 through a share option program [7] Company Overview - LHV Group is the largest domestic financial group in Estonia, with key subsidiaries including LHV Pank, LHV Varahaldus, LHV Kindlustus, and LHV Bank Limited [8] - The group employs over 1,150 people and serves 471,000 banking customers, 111,000 pension fund customers, and 176,000 insurance customers [8]

Financial Data and Key Metrics Changes - The company originated $36.4 million in loans held for investment, an increase from $28.9 million in the prior sequential quarter [5] - Non-performing assets increased to $2.5 million from $2.1 million in the previous quarter [8] - The net interest margin increased to 2.91% for the quarter ended December 31, 2024, compared to 2.84% for the sequential quarter [9] - The average cost of deposits declined to 123 basis points, down by 4 basis points from the prior quarter [10] - The allowance for credit losses to gross loans held for investment increased by 5 basis points to 66 basis points [9] Business Line Data and Key Metrics Changes - Loans held for investment increased by approximately $5 million compared to the quarter ended September 30, 2024, with increases in single-family and commercial business loans [6] - Loan principal payments and payoffs were $34.3 million, slightly up from $34 million in the previous quarter [6] - The company has loosened some underwriting requirements to encourage higher loan origination volume [6] Market Data and Key Metrics Changes - Real estate investors have reduced their activity due to higher mortgage and interest rates, although moderate activity in loans held for investment continues [6] - There is increased consumer demand for single-family adjustable-rate mortgage products due to higher fixed-rate mortgage interest rates [6] Company Strategy and Development Direction - The company aims for disciplined growth of the loan portfolio, recognizing the shift in monetary policy and the reversal of the inverted yield curve [12] - The company is looking for operating efficiencies to lower operating expenses, with a focus on maintaining a run rate of approximately $7.5 million per quarter [12] - The company has repurchased approximately 64,000 shares of common stock in the December 2024 quarter and has a new stock repurchase plan approved [15] Management's Comments on Operating Environment and Future Outlook - Management believes that mortgage interest rates need to decline for significant acceleration in loan portfolio growth, with a current annual growth rate of approximately 1.9% [20] - There is optimism for growth in calendar 2025, supported by a flattening and upwardly sloping yield curve [21] - Management anticipates continued expansion of the net interest margin in future quarters, despite some headwinds from loan repricing [23][24] Other Important Information - The company has identified $23.7 million or 2.2% of its loans held for investment in areas affected by recent fires in Los Angeles [5] - The company has a strong capital position, exceeding well-capitalized capital ratios, allowing for effective execution of its business plan [14] Q&A Session Summary Question: Loan growth commentary and future acceleration - Management indicated that mortgage interest rates need to decline for significant loan portfolio growth, with a current growth rate of approximately 1.9% [20] Question: Margin trends and funding opportunities - Management expects net interest margin to expand in future quarters, with opportunities to reprice maturing wholesale funding downward [24]