Financial Data and Key Metrics Changes - In Q2 2025, total revenue increased by 22% year over year to $764 million, with originations rising 28% to $1.8 billion [9][20][28] - Adjusted EPS grew by 48% year over year to $3.23 per diluted share, reflecting efficient marketing and lower cost of funds [10][28] - The consolidated net charge-off ratio improved to 8.1%, down from 8.6% in the previous quarter and 7.7% a year ago [10][22] Business Line Data and Key Metrics Changes - Small business revenue increased by 30% year over year to a record $326 million, with originations reaching $1.2 billion, marking a 35% year-over-year growth [9][20][21] - Consumer revenue rose by 17% year over year to $428 million, with originations growing 15% to $564 million [20][21] - Small business products accounted for 65% of the loan portfolio, while consumer products made up 35% [9] Market Data and Key Metrics Changes - The U.S. economy added 147,000 jobs in June, with the unemployment rate falling to 4.1%, indicating resilience in the labor market [11] - Small businesses are increasingly optimistic, with over 90% expecting moderate to significant growth over the next year [15] Company Strategy and Development Direction - The company is focused on sustainable and profitable growth through a diversified business model and advanced technology [17][19] - Leadership changes are part of a planned transition to ensure continued strategic direction and growth [5][6][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate economic fluctuations, citing strong credit quality and operational adjustments [12][39] - The company anticipates revenue growth of around 20% for the full year 2025, with adjusted EPS growth of approximately 30% [32] Other Important Information - The company has a strong liquidity position with $1.1 billion in liquidity, including $388 million in cash and marketable securities [28] - The marketing expense was 19% of total revenue, slightly below expectations, indicating efficient marketing strategies [10][26] Q&A Session Summary Question: Can you elaborate on the consumer portfolio's credit issues? - Management clarified that the elevated defaults were isolated to one of five consumer products and have since been addressed through tightened credit models [34][36][39] Question: What factors contributed to the strong small business performance? - Management noted that the small business segment has shown consistent strength, with stable credit and a favorable competitive environment [40][42] Question: How do macro trends affect originations and revenue growth? - Management emphasized the importance of balancing growth and risk, stating that while macro trends are positive, the company remains cautious in its approach [78][80] Question: How stable are the fair value marks in light of delinquency fluctuations? - Management indicated that fair value marks have remained stable, reflecting the overall stability of the credit outlook [98][100] Question: What is the sensitivity of the company's debt to interest rates? - Approximately 50% of the company's debt is floating rate, primarily sensitive to SOFR [102]

Financial Data and Key Metrics Changes - The company reported GAAP earnings per share of $0.97, an increase of $0.06 or 6.6% year-over-year and up $0.04 or 4.3% from the previous quarter [10] - Operating earnings per share were $1.04, compared to $0.95 a year prior and $0.98 in the linked first quarter [10] - Total operating revenues reached $199.3 million, up $16.1 million or 8.8% year-over-year and up $3.3 million or 1.7% from the previous quarter [10][11] - Net interest income was $124.7 million, representing a $4.5 million or 3.8% increase from the previous quarter and a $15.3 million or 14% improvement year-over-year [11] - The company's operating margin increased to 23%, driving operating pretax earnings expansion of 70% year-to-date [6] Business Line Data and Key Metrics Changes - The Employee Benefits Services business remained flat year-over-year and quarter-over-quarter, with recordkeeping growing at high single digits while Fiduciary Trust faced headwinds [5] - Wealth Management Services experienced muted revenue growth year-over-year but saw a 16% increase in pretax operating earnings [6] - Banking fee income remained strong, with credit results impacted by the resolution of two large nonperforming assets [4] Market Data and Key Metrics Changes - Ending loans increased by $98 million or 0.9% during the second quarter, primarily driven by growth in the consumer indirect lending portfolio [13] - Total deposits increased by $563.9 million or 4.3% year-over-year but decreased by $190.3 million or 1.4% from the previous quarter due to seasonal outflows [14] - The company's liquidity position remains strong, with readily available sources of liquidity totaling $5.9 billion, representing 246% of estimated uninsured deposits [16] Company Strategy and Development Direction - The company announced a branch acquisition that will enhance its presence in a strategically important market, with no share issuance involved [8][19] - The acquisition aligns with the company's retail growth strategy and is expected to close in the fourth quarter of this year [7][19] - The company aims to continue deploying capital productively in the second half of the year [9] Management's Comments on Operating Environment and Future Outlook - Management noted that competition in lending has intensified, with competitors trying to regain market share [21] - The company expects to outperform peers and is optimistic about market share gains in the upcoming quarters [22] - Management expressed confidence in achieving growth targets, with a focus on maintaining a diversified revenue profile and strong liquidity [19] Other Important Information - The company recorded a provision for credit losses of $4.1 million during the second quarter, compared to $2.7 million in the prior year's second quarter [12] - Nonperforming loans totaled $53.3 million or 51 basis points of total loans outstanding, a decrease from the previous quarter [17] Q&A Session Summary Question: Can you speak to the competitive landscape you're seeing in terms of lending? - Management acknowledged increased competition in the lending market, with competitors trying to make up for previous inactivity [21][22] Question: How are you feeling about the quarterly NIM expansion from here? - Management indicated expectations of a range closer to three to five basis points for NIM expansion [25] Question: Will the acquired deposits boost liquidity and be invested over time? - Management views the acquired deposits as a source for future loan growth, with initial proceeds likely to remain in short-term instruments [26] Question: Can you talk about OpEx trends from here? - Management expects OpEx to remain flat moving forward, with a focus on ensuring investments push the business forward [32][34] Question: How is the branch acquisition progressing? - Management confirmed that the acquisition is on track and complements the organic strategy in the market [35][36] Question: Can you provide an update on the pipeline and financial targets? - Management reiterated a target of mid-single-digit growth across lending portfolios, with expectations of returning to historical growth rates [42][45]

Financial Data and Key Metrics Changes - The company reported a net income of $12 million and earnings per share of $0.50 for the quarter [5] - Net interest income grew by 7% to $51.4 million compared to the previous year [13] - The net interest margin on gross loans was 7.94%, up 10 basis points from the previous quarter [13] - The net book value per share increased to $16.36 from $16 in the prior quarter and $14.93 a year ago [17] Business Line Data and Key Metrics Changes - The consumer lending business originated $136 million in loans, maintaining a loan book of $2.4 billion [5] - Recreation loans originated totaled $86.8 million at an average rate of 16.06%, while home improvement loans were $48.8 million at an average rate of 11.5% [14] - The commercial lending division originated new and follow-on loans totaling $9.7 million [6] Market Data and Key Metrics Changes - The company reported $2.6 million in cash collections from the taxi medallion business, consistent with the previous quarter [9] - The strategic partnership program achieved over $125 million in originations for the second consecutive quarter [10] Company Strategy and Development Direction - The company is focused on a methodical approach to growth, ensuring it continues to expand correctly [11] - The strategic partnership program is expected to diversify offerings, including loans for employee benefits and medical procedures [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the stability of cash collections from the taxi medallion business and identified recovery opportunities from charge-off loans [9] - The company anticipates continued gains from equity investments, although the timing of exits is unpredictable [8][27] Other Important Information - The company repurchased approximately 60,000 shares and has nearly $15 million remaining under its share repurchase plan [11] - A 9% increase in the quarterly dividend to $0.12 per share was approved by the Board [12] Q&A Session Summary Question: Were there any nonrecurring expense items aside from those highlighted? - Management noted elevated professional fees, including $300,000 in technology costs and $600,000 related to the annual meeting [20] Question: Any update on the SEC matter? - Management believes the matter has been resolved, pending board approval and a judge's sign-off [22] Question: What flexibility exists in building reserves? - Management confirmed flexibility in determining allowances, using qualitative factors in Q1 [23] Question: Are there any anticipated capital gains from Medallion Capital for the rest of the year? - Management expects one or two more capital gains this year, though timing is uncertain [27] Question: What is the outlook on margins and total loan growth for the rest of the year? - Management anticipates margins to remain stable and expects loan growth of 5% to 7% for the year [49][50]