Financial Performance - Net income reached $25.4 million, a 60.6% increase from $15.8 million in 3Q24[8] - Core net income increased by 58.9% to $26.9 million, compared to $16.9 million in 3Q24[8] - Diluted EPS rose to $0.65, up from $0.44 per share in 3Q24[8] - Core diluted EPS increased to $0.69, up from $0.47 per share in 3Q24[8] Loan Production and Portfolio - Loan production hit a new record of $739.0 million, a 55.0% increase from 3Q24[6] - The total loan portfolio reached $6.3 billion in UPB as of September 30, 2025, a 32.0% increase from $4.8 billion in UPB as of September 30, 2024[6] - Portfolio net interest margin (NIM) for 3Q25 was 3.65%, an increase of 5 bps from 3.60% for 3Q24[8] - The UPB of fair value option (FVO) loans was $4.2 billion, or 66.3% of total loans, as of September 30, 2025, an increase from $2.2 billion in UPB, or 47.1% as of September 30, 2024[19] Asset Quality and Resolution - Nonperforming loans (NPL) as a % of HFI loans decreased to 9.8%, down from 10.6% as of September 30, 2024[6] - 3Q25 NPA resolutions realized gains of $2.8 million, or 102.6%, of UPB resolved[6] - NPA resolutions totaled $108.0 million in UPB, realizing 102.6% of UPB resolved, compared to $68.6 million in UPB and realization of 103.4% of UPB resolved for 3Q24[33] Financing and Capital - Completed the 1st single counterparty securitization totaling $190.9 million of securities issued with a large money manager in July, in addition to the VCC 2025-4 securitization totaling $457.5 million of securities issued[6,9] - Liquidity of $143.5 million, consisting of $99.0 million in unrestricted cash and $44.5 million in available borrowings from unpledged loans[9] - Total available warehouse line capacity of $600.3 million[9]

Financial Data and Key Metrics Changes - The company achieved record quarterly adjusted net income of $37 million or $2.17 per diluted share, reflecting strong performance across core businesses [21] - Earnings per share grew by 26% compared to the second quarter, driven by robust loan growth and net interest margin expansion [4][21] - Net interest income increased by $3 million or 18% annualized, supported by continued net interest margin expansion [21] Business Line Data and Key Metrics Changes - Loan growth accelerated significantly, increasing by $286 million or 17% annualized, with a 15% increase net of planned runoff from M2 Equipment Finance loans and leases [6][29] - Wealth management revenue grew by $5 million, an 8% increase over the prior quarter, and year-over-year revenue is up $1.5 million or 15% annualized [10][25] - Capital markets revenue rebounded to $24 million, up $14 million from the prior quarter, exceeding the upper end of guidance [21][25] Market Data and Key Metrics Changes - Core deposits increased by $410 million or 8% annualized year to date, reflecting the success of the relationship-driven strategy [29] - Total criticized loans decreased by 9% year to date, indicating improved asset quality [18][30] Company Strategy and Development Direction - The company operates through three primary lines of business: traditional banking, wealth management, and LITEC lending, all of which delivered improved performance [6][10] - The digital transformation initiative is on track, with key milestones achieved, including the successful conversion of the core operating system for one of the charters [7][9] - The company is focused on maintaining strong regulatory capital while exploring innovative ways to expand LITEC lending capacity [15][34] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about sustaining loan growth momentum, guiding for gross annualized loan growth in a range of 10% to 15% for the fourth quarter [6] - The company anticipates continued core margin expansion and is guiding for an increase in fourth quarter NIM TEY ranging from three to seven basis points [24] - Management noted that asset quality remains excellent, with net charge-offs declining compared to the second quarter [18][30] Other Important Information - The company returned $10 million of capital to shareholders through share repurchases and announced a new share repurchase program for up to 1.7 million shares [18][19] - The effective tax rate for the quarter was 9.5%, up from 5% in the prior quarter, primarily due to higher pretax income [36] Q&A Session Summary Question: Margin guidance and rate cuts - Management confirmed that the margin guidance of three to seven basis points does not include any rate cuts [39][40] Question: Future buyback activity - Management indicated that they will remain active in buybacks due to higher earnings per share and reduced need to retain capital for organic growth [42][44] Question: Appetite for additional securitizations - Management anticipates a large permanent loan securitization in the first half of next year, targeting around $350 million [50] Question: NII impact from construction loan sales - Management stated that any NII give-up from construction loan sales is expected to be replaced by improved capital markets revenue [52][54] Question: Loan growth expectations for next year - Management expects loan growth to be in the double digits based on current pipelines [61] Question: One-time costs related to conversions - Management indicated that there will be some one-time costs associated with conversions, estimated to be in the range of $4 million to $5 million for 2025 [77] Question: Trends in reserves - Management noted that reserves may continue to trend down as a percentage of loans, but they do not expect significant further reductions [81]

Financial Data and Key Metrics Changes - The company originated $640 million in new loans, a 69% increase year-over-year, driving a 27% increase in net revenue and a 17% increase in core pretax earnings [4][12] - Core earnings per share increased to $0.55 from $0.51 a year ago, marking the second-best quarterly earnings in company history [7] - The total loan portfolio reached just under $5.5 billion, a 7.8% increase from year-end 2024 and a 27.3% increase year-over-year [13][14] Business Line Data and Key Metrics Changes - The weighted average coupon on new held-for-investment originations was strong at 10.5%, with a five-quarter average trend of 10.8% [12] - The weighted average loan-to-value ratio for the quarter was just under 63%, indicating tight credit levels [13] - Non-performing loans remained stable at 10.8%, consistent with previous quarters [15][16] Market Data and Key Metrics Changes - The company reported strong demand across all property types, with a recent shift towards commercial loans [4] - The real estate markets are functioning well, with healthy investor demand and participation in offerings despite market volatility [5][21] Company Strategy and Development Direction - The company aims to grow its portfolio to $10 billion over the next five years, focusing on technology to scale the business without significantly increasing headcount [47][49] - The company has been active in capital markets, completing four successful debt transactions and issuing three new securitizations [5][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the future, citing strong production and healthy demand in real estate markets [21] - The company does not anticipate material impacts from external factors such as tariff discussions [21] Other Important Information - The company has a total liquidity of $75.6 million, comprised of cash and available liquidity on unfinanced collateral [19] - The CECL loan loss reserve at the end of the quarter was $5 million, slightly above the expected normal range due to macroeconomic forecasts [17][18] Q&A Session Summary Question: Will the NIM remain stable in Q2? - Management indicated that the NIM is expected to be around 3.35% to 3.5%, which is considered normal [23] Question: What is the outlook for new origination yields? - Management expects yields to remain stable, with potential for a decrease later in the year if the Federal Reserve continues to cut rates [25][26] Question: Is the increase in commercial demand due to borrowers being shut out of other channels? - Management clarified that the increase is primarily due to the establishment of a small commercial division rather than a demand issue [30] Question: What will the raised capital be used for? - The raised capital will be used to continue making more loans, with a focus on growing the portfolio [34] Question: What is the current total headcount and office locations? - The company has a total headcount of 323 and operates from five office locations [43][45] Question: What is the long-term vision for the company? - The company aims to grow its portfolio to $10 billion in five years while leveraging technology to enhance productivity [47][49]

Financial Performance - Net income reached $189 million, a 95% increase compared to $173 million in 1Q24[7] - Core net income increased by 110% to $203 million from $182 million in 1Q24[7] - Diluted EPS increased to $055, up from $051 per share in 1Q24[7] - GAAP book value per share increased by 32% to $1619 from $1570 as of December 31, 2024[14] Loan Production and Portfolio - Loan production reached a record of $6404 million in UPB, a 137% increase from 4Q24 and a 691% increase from 1Q24[7] - The total loan portfolio was $54 billion in UPB, a 273% increase from $43 billion in UPB as of March 31, 2024[7] - The UPB of fair value option (FVO) loans was $31 billion, or 577% of total loans[21] Asset Quality and Resolution - Nonperforming loans (NPL) as a % of HFI loans were 108%, relatively consistent with 107% as of December 31, 2024, and 101% as of March 31, 2024[7] - 1Q25 NPA resolutions realized gains of $19 million, or 1024%, of UPB resolved[7] - NPA resolutions totaled $764 million in UPB, realizing 1024% of UPB resolved, compared to $545 million in UPB and realization of 1023% of UPB resolved for 1Q24[32] Financing and Capital - The company completed one securitization during 1Q25, totaling $3428 million of securities issued with a weighted average rate of 67%[7] - Collapsed VCC 2023-1R which released $526 million of marketable retained securities after paying off the associated debt[7] - Issued 16 million common shares, realizing net proceeds of $288 million through Velocity's ATM offering program at an accretive to book value WAP of $1835[7]

Financial Data and Key Metrics Changes - The first quarter net income was $12.4 million, essentially flat compared to the fourth quarter of 2024, resulting in a return on assets (ROA) of 1.17% and a return on equity (ROE) of 12.4% [11] - Net interest income grew by 12.4% year-over-year but declined slightly from the previous quarter due to a decrease in Fed funds sold and other interest-earning assets [12] - Non-interest expenses increased by 3.2% or $878,000 in the first quarter, and were up 8.5% or $2.2 million compared to the same quarter last year [12] - The net interest margin improved by nine basis points to 3.8% [9][12] Business Line Data and Key Metrics Changes - The bank successfully executed a significant commercial real estate loan securitization, enhancing balance sheet management and generating fee income that will positively impact the net interest margin in the second quarter [7][8] - Loan growth in April was reported at over $50 million, with a quarterly average growth of $42.5 million [13] - Nonperforming loans declined by $9.3 million, improving the nonperforming loans to total loans ratio by 23 basis points from the prior quarter [15] Market Data and Key Metrics Changes - Deposits declined by $62 million for the quarter, resulting in a loan to deposit ratio of 93.9% [12] - The bank's investment securities increased by $13.4 million to $397 million, with an accumulated other comprehensive income (AOCI) gain of $10.3 million [12] Company Strategy and Development Direction - The company is focused on disciplined loan growth, robust credit management, and improving operational efficiencies while increasing shareholder value [6][9] - The management emphasized the importance of maintaining a healthy balance sheet and promoting long-term sustainable growth through proactive asset management strategies [8][20] - The bank is evaluating additional securitizations as a tool for managing concentrations and supporting sustainable profitable growth [20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's credit risk strategies and the overall economic outlook, noting that borrowers remain cautious but optimistic [27][29] - The company anticipates achieving $325 million in loan growth for the year, translating to an 8% annual run rate compared to the prior year [19][49] - Management acknowledged the potential for rate cuts and their impact on loan growth and customer behavior [48][49] Other Important Information - The bank's book value and tangible book value grew by 4.4% and 4.7% respectively over the prior quarter, and by 14.3% and 15.2% compared to the same period last year [9] - The company is considering a share buyback program due to capital accretion and stock price levels [13][51] Q&A Session Summary Question: Impact of securitization on net interest margin - Management confirmed that the securitization will primarily impact the margin, providing a five basis point benefit for the next quarter [23] Question: Loan growth confidence amid macro uncertainty - Management indicated that the loan growth in April was primarily due to fundings on revolving lines rather than new deals, and expressed optimism about the pipeline [25][26] Question: Fee income increase drivers - The increase in fee income was attributed to the treasury management division, which has seen significant growth in recent years [32][33] Question: Expectations for non-interest expenses - Management expects non-interest expenses to remain flat in the second quarter, around $28 million [36] Question: Outlook on loan production yields and margin - Management anticipates a stable margin around 3.75% to 3.8%, with the potential for improvement depending on interest rate movements [40][42] Question: Consideration of share buybacks - Management is seriously considering a buyback program due to attractive stock levels and capital accretion [51][52]