Financial Data and Key Metrics Changes - The company reported net income of $19,800,000 for Q2 2025, an increase from $17,000,000 in the same quarter last year, translating to $1.72 per share compared to $1.45 per share previously [5][12] - Net interest income rose to $51,000,000, an 8.9% increase from $46,800,000 a year ago, with an annualized net interest margin improving to 3.68%, up 25 basis points from the previous year [7][12] - Non-interest income decreased to $8,200,000, down 16.5% from the prior year, primarily due to unusual items affecting both periods [14][15] Business Line Data and Key Metrics Changes - Gross loans totaled $4,600,000,000, a decline of 3.3% from the previous year, with significant payoffs impacting the loan portfolio [7][8] - The largest loan categories remained multifamily and commercial real estate lending, with outstanding construction loans at $367,000,000 [8] - Non-performing assets were $8,100,000, representing 0.14% of total assets, with no provision for credit losses recorded [9][20] Market Data and Key Metrics Changes - Total deposits decreased by $73,900,000 or 1.6% from the previous quarter, but increased by $78,600,000 or 1.7% compared to the end of 2024 [8][19] - The company experienced a reduction in brokered deposits, which contributed to the overall decrease in total deposits [8][19] Company Strategy and Development Direction - The company emphasized maintaining strong credit quality while pursuing relationship-driven loan growth to support long-term stability [11][21] - There is a focus on prudent risk management and disciplined expense management to enhance financial resilience [6][10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for long-term growth but acknowledged a competitive lending environment with limited opportunities [26] - The company plans to continue managing expenses carefully, with some potential increases in technology-related costs anticipated [31][32] Other Important Information - The company redeemed $75,000,000 in subordinated notes to save on future interest costs [21] - A new stock repurchase authorization for an additional 1,000,000 shares was approved, with nearly 176,000 shares repurchased in Q2 2025 [22] Q&A Session Summary Question: Loan growth outlook for the second half of the year - Management is optimistic long-term but noted a competitive environment with limited origination opportunities in the near term [26][27] Question: Expected loan payoffs - Payoffs are unpredictable, and while there was a significant payoff in Q2, future payoffs are difficult to forecast [28][29] Question: Expense control for the second half of the year - Management expects expenses to remain consistent, with some minor increases due to technology investments and potential adjustments in compensation costs [30][31] Question: Rental income expectations - Rental income increased due to a larger OREO balance, and similar levels are expected unless leases expire [39][42] Question: Margin sustainability - Management indicated that while there may be slight improvements in margin, the termination of the interest rate swap in Q4 will present challenges [43][46]