Financial Data and Key Metrics Changes - The company reported a net loss of $18.9 million in Q3 2025, compared to a net loss of $1.2 million in Q2 2025 [6] - A restructuring charge of $7.3 million was recorded during the quarter, contributing to the net loss [7] - Net interest income decreased to $11.3 million, down $1 million from Q2 2025, but up $9.4 million from the same quarter last year [10] - The net interest margin fell by 45 basis points to 3.61% in Q3 2025 [9] - Total deposit balances increased by $7.7 million, or 0.7%, during Q3 2025, reaching $1.17 billion [8] Business Line Data and Key Metrics Changes - The company is exiting the SBA 7(a) lending business, which had previously contributed to revenue but also brought material risk leading to operating losses [3] - Loans held for investment decreased by $127.1 million, or 11.3%, during Q3 2025 [8] - Non-interest income was negative $1 million for Q3 2025, a significant decrease from $10.8 million in Q2 2025, primarily due to the exit from SBA 7(a) lending [11] Market Data and Key Metrics Changes - The company reported that more than 84% of its deposits were insured by the FDIC as of September 30, 2025 [9] - The allowance for credit losses increased to 2.61% of total loans held for investment at amortized cost as of September 30, 2025, compared to 1.65% in June 2025 [13] Company Strategy and Development Direction - The company is focused on de-risking its balance sheet and positioning itself for long-term sustainable growth and enhanced shareholder value [2] - The strategy includes a shift towards community banking, emphasizing relationships with local individuals and businesses [4] - The company aims to return to profitability with a target of a positive return on assets of 40 to 70 basis points in 2026 [5] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that profitability has not met expectations but expressed confidence in building a stronger organization [4] - The company expects to improve asset quality and reduce non-performing loans without significant additional provisions for credit losses [16] - Management remains optimistic about future market opportunities and operational capabilities [5] Other Important Information - The company is undergoing significant leadership changes, including the retirement of the Sarasota market leader and the appointment of new leaders in key roles [17] - The restructuring efforts are aimed at enhancing operational efficiency and aligning the organization with community banking demands [19] Q&A Session Summary Question: How much of the SBA 7(a) loans did the company hold back? - The company anticipates holding back about $167 million of unguaranteed SBA 7(a) loan balances post-closing of the transaction with Banesco USA [23] Question: What kind of reserve or allowance was applied to the SBA 7(a) loans sold? - The portfolio sale was priced at a 3% discount, and the increase in the allowance for credit losses primarily relates to the unguaranteed balances going forward [25] Question: Is the company still originating SBA loans? - The company is exiting the SBA lending business and will focus on Tampa Bay-based commercial loans and consumer lending after the closing date [33] Question: What treasury management products has the company enhanced? - The company has improved its treasury management services, including the addition of lockbox services and a new software product designed for mid-market businesses [34] Question: How much of the loan portfolio was reviewed in the third quarter? - Approximately $70 million of the portfolio was reviewed by a third party, with a targeted review of about 8% to 10% of the total portfolio [41]