(Bloomberg) — The big red billboard planted by a solar company alongside a Southern California freeway warns passersby that the “Solar Tax Credit Is Expiring,” beckoning homeowners to install solar panels and batteries before the Trump administration eliminates the generous incentive on Jan. 1. The deadline has helped drive a big spike in business for solar installers as buyers rush to qualify for the 30% tax credit before it disappears. But California installers said lengthy utility permitting times coul ...

Financial Data and Key Metrics Changes - The company reported net income of $65.6 million and diluted earnings per share of $1.20, representing an 18% increase from the same quarter last year [9] - Pre-provision net revenue was $88.3 million, with a return on average assets of 1.47% and a return on common equity of 14.9% [9] - The book value grew by an annualized 14% from the previous quarter, ending at $32.37 per share [10] - Net interest income for the quarter was $133.4 million, with a normalized net interest margin of 3.19% [10][12] Business Line Data and Key Metrics Changes - Loan growth was below expectations, with loan paybacks increasing by $500 million over the prior two quarters [3] - The loan pipeline increased by over 10% in October compared to September and is 40% higher than a year ago [3][4] - Non-performing assets rose to $930 million, an increase of approximately $96 million during the quarter [7] Market Data and Key Metrics Changes - The company experienced a reduction in high-cost municipal deposits, offset by large corporate deposit inflows [4] - All markets are now profitable, a first since the company's inception [5] Company Strategy and Development Direction - The company aims to manage down total deposit costs as the Federal Reserve reduces the Fed Funds rate [4] - Focus on organic loan and deposit growth while maintaining competitive pricing [14] - The company is exploring opportunities in Texas, emphasizing the importance of local relationships [43] Management's Comments on Operating Environment and Future Outlook - Management noted that lending activity softened in Q3 but has been robust moving into Q4 [6] - The company expects continued margin expansion due to anticipated Federal Reserve rate cuts [11][26] - Management expressed confidence in resolving non-performing loans and maintaining credit quality [8][18] Other Important Information - The company recognized a loss of $7.8 million on the sale of bonds and invested in a solar tax credit, benefiting from a reduced tax provision [9][15] - The company has a total NDFI exposure of $71 million, which is less than 1% of the loan portfolio, indicating a cautious approach to risk [16][17] Q&A Session Summary Question: What pushed the borrower to non-performing status? - Management indicated that substantial additional collateral was taken, and a large payment expected did not materialize, leading to the non-accrual status [21] Question: What is the loan-to-value on the loans? - The loan-to-value is believed to be below one-to-one, with adequate security to cover the loans [23] Question: What is the expected margin improvement with upcoming Federal Reserve cuts? - Management expects a 7 to 10 basis points improvement in margin each quarter, with current normalized rates at 3.28% [25][41] Question: Are there new markets of interest for the company? - The company is particularly interested in Texas, emphasizing the need for local relationships to succeed in that market [43] Question: What is the effective tax rate going forward? - The effective tax rate is expected to remain around 18.9% for the year, with efforts to keep it below 20% [39]

Core Viewpoint - SolarEdge Technologies (SEDG) shares are experiencing a decline following a downgrade from Hold to Sell by GLJ Research analyst Gordon L. Johnson II, amid ongoing struggles in the U.S. and European markets [1] Group 1: Market Challenges - SolarEdge is facing significant headwinds, with analysts noting that the anticipated revival of the 48E 30% tax credit for solar companies is unlikely to benefit the company [1] - The Senate's tax-and-spend bill indicates that U.S. residential solar finance companies will lose the ability to sell tax credits to third parties, posing a potential existential threat to those reliant on inflated solar system values [2] Group 2: Performance Metrics - In April 2025, while the overall sales of inverters in California increased by 23.0% year-over-year, SolarEdge's sales only grew by 2.3% year-over-year, indicating a lack of demand pull-forward for the company [4] - As of the latest check, SEDG shares have dropped by 34.4%, trading at $15.74 [4]