Core Insights - The company reported a net income of $11.0 million, or $0.71 per share, representing a 56% increase year-over-year and an $847,000 increase over the prior quarter [5][17] - A follow-on capital raise generated $76.3 million net, which will be used to reduce overnight borrowings and fund new loans over time [8][22] - The company announced the acquisition of Farmers Savings Bank, expected to close in the fourth quarter, which will enhance core deposit funding and improve capital ratios [8][20] Financial Performance - Net interest income increased to $34.8 million, up $2.0 million or 6.2% sequentially, driven by a rise in earning asset yields [6][18] - Pre-provision net revenue rose by $3.3 million, or 37.5%, year-over-year, and by $770,000, or 6.7%, over the linked quarter [5][17] - Noninterest income decreased by $1.3 million, or 16.2%, from the previous quarter, primarily due to reduced leasing and residential fee revenues [3][22] Loan and Deposit Metrics - The loan-to-deposit ratio increased to 98.6%, higher than desired, with expectations for reduction following deposit initiatives and the Farmers acquisition [4][31] - Total loans and leases grew by $47.1 million, representing an annualized growth rate of 6.1%, with residential loans being the largest segment increase [6][26] - Total deposits declined by $42.7 million, or 1.3%, mainly due to the exit of a single municipal customer [7][29] Capital and Credit Quality - Pro forma capital ratios are projected to improve, with the tangible common equity ratio rising to 8.6% and the tier one leverage ratio to 10.6% post-capital raise and acquisition [9][33] - The allowance for credit losses to total loans was 1.28%, with an allowance for credit losses to nonperforming loans at 175%, up from 122% at the end of 2024 [9][35] - Criticized credits decreased by $2 million, indicating stable credit quality metrics [9][34] Strategic Initiatives - The company launched a new digital account opening platform aimed at attracting customers outside current branch locations [10][30] - Management aims to reduce the loan-to-deposit ratio to a target range of 90-95% through various deposit initiatives [31] - The acquisition of Farmers Savings Bank is seen as a strategic move to leverage their low-cost core deposits and enhance loan growth opportunities [20][21]