Financial Performance - The company reported a net loss of $1,200,000 in Q2 2025, driven by higher provision expenses and write-downs on loans measured at fair value, compared to a net loss of $335,000 in Q1 2025 [3][7] - Loans held for investment increased by $41,000,000 (3.8%) during Q2 2025, totaling $1,130,000,000, and increased by $117,500,000 (11.7%) year-over-year [7][8] - Deposits increased by $35,500,000 (3.1%) in Q2 2025, totaling $1,160,000,000, with a year-over-year increase of $121,400,000 (11.6%) [8] - Net interest income rose to $12,300,000 in Q2 2025, an increase of $1,300,000 from Q1 2025 and $3,200,000 from the same quarter last year [9] - The net interest margin improved by 29 basis points to 4.06% in Q2 2025 [4][9] Business Line Performance - The company originated $157,000,000 in loans during the quarter and sold $66,800,000 of government guaranteed loan balances [8][10] - The government guaranteed loan origination platform originated $106,400,000 in new loans, with $67,900,000 being BOLT loans, showing stability from the previous quarter [6] - The trendsetter deposit portfolio has over 2,100 accounts, representing more than $200,000,000 in balances, with a growth of 60 households year-to-date [5] Market Performance - Nonperforming assets were 1.79% of total assets as of June 30, 2025, down from 2.08% as of March 31, 2025 [14] - The ratio of allowance for credit losses to total loans held for investment was 1.65% as of June 30, 2025, slightly up from 1.61% in Q1 2025 [15] Company Strategy and Industry Competition - The company is undergoing a comprehensive strategic review aimed at derisking unguaranteed SBA seven balances and positioning for long-term growth [3] - Management has increased collections and portfolio management staff to proactively manage credit quality amid economic challenges [16] - The company is evaluating its small loan program and related underwriting processes, with further announcements expected [17] Management Commentary on Operating Environment and Future Outlook - Management noted that asset quality trends in the SBA seven small loan program continue to decline due to rising interest rates and inflation [16] - The company remains committed to building household relationships and enhancing its community banking presence in Tampa Bay and Sarasota [18] - Future growth is expected to be supported by a strong community bank model in a desirable market [18] Other Important Information - The board has suspended common and preferred stock dividend payments and board of director fees to offset the impact of charge-offs [4] - The company is well-capitalized but is exploring strategic alternatives to enhance shareholder value [28] Q&A Session Summary Question: How would a 25 basis point cut in Fed funds affect NIM? - Management indicated that the company is asset sensitive and expects a slight temporary compression in NIM, but stability should return by the end of the next quarter [26][27] Question: Is there a probability of raising additional capital? - Management stated that the bank is currently well-capitalized and exploring options, but no imminent actions have been decided [28][29] Question: Is the company still making small SBA loans? - Management confirmed that they are focusing on core loans and evaluating the credit losses and profitability of the small loan program [76] Question: What is the current status of the BOLT loans? - Management noted that BOLT loan volume has been steady, but additional credit underwriting has been instituted to manage risks [52] Question: Are there geographic concentrations in credit issues? - Management clarified that credit issues are broad and not concentrated in specific geographic areas, although certain NAICS codes have been identified as problematic [55]

Financial Data and Key Metrics Changes - The company reported a net loss of $335,000 from continuing operations in Q1 2025, compared to a net income of $9,800,000 in Q4 2024 [9] - Total assets increased by $3,700,000 to $1,290,000,000, representing a 0.3% growth during the quarter, and a 12.9% increase year-over-year [10] - Net interest margin improved by 17 basis points to 3.77%, with net interest income rising to $11,000,000, up $300,000 from the previous quarter [11] - Noninterest income decreased to $8,800,000 from $22,300,000 in Q4 2024, primarily due to a prior gain from a sale leaseback transaction [11][12] - Provision for credit losses was $4,400,000, slightly down from $4,500,000 in the previous quarter [14] Business Line Data and Key Metrics Changes - Loans held for investment grew by $18,300,000 or 1.7% during the quarter, with total loans held for investment at $1,290,000,000 [10] - The government guaranteed loan origination platform originated $106,300,000 in new loans, with $60,500,000 being BOLT loans, showing stability but falling short of targeted expectations [6] - The conventional loan portfolio grew by $140,000,000 or 26% year-over-year, totaling $686,000,000 at quarter end [19] Market Data and Key Metrics Changes - Total deposits decreased by $15,000,000 or 1.3% during the first quarter, ending at $1,130,000,000 [10] - Nonperforming assets to total assets increased to 1.94%, up from 1.47% year-over-year, driven by larger, well-collateralized loans [15] Company Strategy and Development Direction - The company is initiating a comprehensive strategic review aimed at derisking the balance sheet and positioning for long-term growth and enhanced shareholder value [8] - The focus is on improving credit quality, particularly for SBA loans, and enhancing credit risk management with new leadership additions [19] Management's Comments on Operating Environment and Future Outlook - Management noted challenges such as higher provision expenses, write-downs on loans, and lower loan demand due to economic conditions [4] - There is a commitment to resilience and innovation to align with the dynamic banking landscape [21] Other Important Information - The company has seen a consistent growth in community bank loans and core deposits, positioning itself as a premier community bank in Tampa Bay [6] - The tangible book value decreased slightly to $22.77 per share from $22.95 per share at the end of Q4 2024 [10] Q&A Session Summary Question: No questions were raised during the Q&A session - The operator noted that there were no questions, concluding the conference call [23]