Financial Data and Key Metrics Changes - The company reported net income of $18.4 million or $0.12 per share, with adjusted net income of $48.4 million or $0.31 per share, reflecting a strong performance in the second quarter [12][13] - Net interest income increased by 3.4% from the prior quarter to $240 million, driven by strong loan growth and higher loan yields [14] - The net interest margin expanded to 3.1%, supported by a three basis point increase in average loan yields to 5.93% [14][15] Business Line Data and Key Metrics Changes - Total annualized loan growth reached 9%, with significant contributions from lender finance, fund finance, and purchased single-family residential loans [5][14] - Core held for sale loans increased by 12% annualized, while construction loans declined due to payoffs and completed projects [7][8] - Non-interest income totaled $32.6 million, down 3% from the prior quarter, primarily due to fluctuations in CRA-related equity investments [18] Market Data and Key Metrics Changes - The company experienced strong production levels in loan origination, achieving the highest level of originations since the merger at $1.2 billion [7] - Average core deposits increased by 5% annualized, although the average balance per account faced pressure due to seasonal and macroeconomic factors [16][19] - The multifamily portfolio, representing 26% of the loan portfolio, has significant repricing opportunities with $3.2 billion maturing over the next two and a half years [17] Company Strategy and Development Direction - The company is focused on optimizing its balance sheet through strategic sales of loans, aiming for high-quality, consistent, and sustainable earnings growth [5][10] - There is a strong emphasis on maintaining disciplined pricing and underwriting standards while proactively managing credit risk [9][11] - The company aims to capitalize on growth opportunities in California, leveraging its position as a leading business bank in the region [25][26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the market and strong demand for products and services, despite uncertainties in the broader macroeconomic environment [11] - The outlook for the second half of 2025 includes expectations for continued growth in core profitability and mid-single-digit increases in net interest income [21][22] - Management highlighted the importance of maintaining a strong credit quality profile while pursuing growth opportunities [20][21] Other Important Information - The company repurchased $150 million of common stock, representing about 6.8% of shares, with $150 million remaining in the buyback program [6] - A one-time non-cash income tax expense of $9.8 million was recorded, primarily related to the revaluation of deferred tax assets [13] - The company anticipates $243 million of loan sales to close in the third quarter, with a focus on maintaining a healthy capital position [13][19] Q&A Session Summary Question: Loan sales and balance sheet impact - Management clarified that loan sales do not necessitate a one-to-one relationship with unwinding wholesale funding, as they have been growing rapidly and providing leverage on sold loans [31][34] Question: Expense guidance and ECR - Management indicated that while expenses came in below guidance, they expect to settle at the lower end of the range due to investments in compensation and infrastructure [38][39] Question: Asset quality and provisioning expectations - Management expects normalized provisioning to be around $10 to $12 million per quarter, depending on the type of loans being grown [109][110] Question: M&A considerations - Management emphasized the focus on organic growth and maintaining independence, while remaining open to opportunities if market conditions normalize [112][114]

Group 1 - The Hang Seng Index closed at 24,498.95 points, down 0.08% on July 17 [1] - Qingdao Holdings (00499.HK) closed at HKD 0.128 per share, up 14.29%, with a trading volume of 20,700 shares and a turnover of HKD 26,300 [1] - Over the past month, Qingdao Holdings has seen a cumulative increase of 8.74%, but a year-to-date decline of 15.79%, underperforming the Hang Seng Index by 22.22% [1] Group 2 - For the fiscal year ending December 31, 2024, Qingdao Holdings reported total revenue of HKD 44.334 million, a year-on-year increase of 4.8%, and a net loss attributable to shareholders of HKD 15.312 million, a year-on-year increase of 67.64% [1] - The gross profit margin stands at 57.61%, with a debt-to-asset ratio of 53.35% [1] - Currently, there are no institutional investment ratings for Qingdao Holdings [2] Group 3 - The average price-to-earnings (P/E) ratio for the support services industry is 3.73 times, with a median of 3.77 times; Qingdao Holdings has a P/E ratio of -6.76 times, ranking 75th in the industry [2] - Other companies in the Chinese education sector have P/E ratios ranging from 1.47 times to 2.8 times [2] - Qingdao Holdings primarily engages in investment property leasing, production and sales of digital Chinese calligraphy education equipment, and provides loan financing [2]