Executive Summary

Q2 FY2025 delivered non-GAAP diluted EPS of $0.76 (GAAP $0.79) and net income of $5.5M, with margin expansion (tax-equivalent NIM 2.93%, +27 bps YoY) and improved asset quality (NPLs/gross loans 0.67%, down 20 bps QoQ) .
EPS and revenue beat Wall Street consensus: EPS $0.76 vs $0.59 estimate; operating revenue $19.79M vs $15.55M estimate; both beats were aided by lower interest expense and SBA gain-on-sale activity; 3 covering estimates for the quarter (EPS/revenue) [Values retrieved from S&P Global]*.
SBA Lending turned profitable ($0.43M net income) with solid SBA loan sales (guaranteed portion sold $15.7M; net gain 6.86%) while Core Banking remained the earnings anchor ($5.07M) .
Post-quarter, FSFG redeemed $20.0M of high-cost subordinated notes (7.66% floating), expected to further expand NIM; Board declared a $0.16 quarterly dividend—potential catalysts include continued margin expansion, sustained SBA profitability, and potential share repurchases if excess capital builds .

What Went Well and What Went Wrong

What Went Well

Margin expansion: NIM rose to 2.93% vs 2.66% a year ago; interest expense fell QoQ, aiding net interest income +11.6% YoY to $16.0M .
SBA profitability and production: SBA segment posted $0.43M net income; guaranteed portion sold $15.7M with 6.86% weighted average net gain; first profitable SBA quarter since March 2024 .
Asset quality improvement: Nonperforming loans fell to $12.7M; NPL/gross loans improved to 0.67% (-20 bps QoQ); allowance coverage of NPLs rose to 161% .

Quote: “We are pleased with the second fiscal quarter performance… The SBA Lending segment posted its first profitable quarter since March 2024… Asset quality improved… We are optimistic regarding the remainder of fiscal 2025 as we anticipate further expansion of the net interest margin…” — Larry W. Myers, President & CEO .

What Went Wrong

Expense pressure: Noninterest expense rose $1.9M YoY (compensation +$0.94M; other operating +$0.95M) reflecting higher bonus/incentives and fewer reversals of loss contingencies vs prior year .
Efficiency ratio deteriorated YoY (70.06% vs 65.26%), although improved sequentially with SBA turning profitable .
Noninterest income down $0.15M YoY due to lack of prior-year mortgage servicing rights sale gains (-$0.49M) .

Financial Results

Core P&L and Margins vs Prior Periods and Estimates

Metric	Q2 2024	Q1 2025	Q2 2025	Consensus (Q2 2025)
Net Interest Income ($USD Millions)	$14.34	$15.46	$15.99	—
Noninterest Income ($USD Millions)	$3.71	$6.10	$3.56	—
Operating Revenue ($USD Millions)	—	—	$19.79*	$15.55*
Diluted EPS (GAAP) ($)	$0.72	$0.89	$0.79	—
Diluted EPS (non-GAAP) ($)	$0.52	$0.62	$0.76	$0.59*
NIM (tax-equivalent, %)	2.66%	2.75%	2.93%	—
Efficiency Ratio (%)	65.26%	69.29%	70.06%	—

Note: Operating revenue reflects S&P Global definition; asterisks denote values retrieved from S&P Global*.

Segment Breakdown

Segment Metric	Q2 2024	Q1 2025	Q2 2025
Core Banking Net Income ($USD Millions)	$4.51	$6.37	$5.07
SBA Lending Net Income ($USD Millions)	$0.42	$(0.14)	$0.43
SBA Guaranteed Portion Sold ($USD Millions)	$15.14	$10.79	$15.72
SBA Net Gain on Sales (%)	6.28%	6.59%	6.86%

Key KPIs

KPI	Q2 2024	Q1 2025	Q2 2025
Return on Avg Assets (%)	0.69%	1.02%	0.93%
Return on Avg Equity (%)	9.86%	14.07%	12.24%
NPLs/Gross Loans (%)	0.91%	0.87%	0.67%
ACL/Gross Loans (%)	1.07%	1.09%	1.08%
Customer Deposits ($USD Millions)	$1,313.0	$1,395.8	$1,392.4
Brokered Deposits ($USD Millions)	$399.2	$437.0	$396.8
FHLB Borrowings ($USD Millions)	$425.0	$295.0	$325.3

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Net Interest Margin	FY2025	None	Management “anticipates further expansion of the net interest margin”	Raised (directional)
SBA Lending Profitability	FY2025	None	“Continued profitability from the SBA Lending segment”	Raised (directional)
HELOC Sales	FY2025	Transition to originate-for-sale model (initiated Q1)	“Additional sales of home equity lines of credit”	Maintained (execution focus)
Capital Actions	2025	Consider retiring high-cost debt/repurchases	Redeemed $20.0M sub notes; evaluating share repurchases contingent on excess capital	Executed redemption; repurchases possible
Dividend	Q2/Q3 2025	Prior $0.16 (ongoing history)	Declared $0.16 payable ~Jun 30, 2025	Maintained

No formal numerical ranges were provided; guidance is directional via management commentary .

Earnings Call Themes & Trends

Transcript unavailable; analysis based on press releases.

Topic	Previous Mentions (Q4 2024)	Previous Mentions (Q1 2025)	Current Period (Q2 2025)	Trend
Net Interest Margin	NIM 2.72%; modest improvement	NIM 2.75%; bulk HELOC sale supported lower funding	NIM 2.93%; expect further expansion	Improving
SBA Lending	Segment loss in Q4 2024 ($(0.42)M)	Slight loss ($(0.14)M)	Profit $0.43M; pipeline robust (noted for Q3)	Improving
Asset Quality	NPL/gross loans 0.85–0.91%	NPLs down to 16.6M; ACL/NPL 124.85%	NPL/gross loans 0.67%; ACL/NPL 161%	Improving
Funding Mix	Brokered deposits elevated	Brokered deposits -$72.1M QoQ; FHLB down	Brokered deposits -$40.2M QoQ; FHLB +$30.3M	Optimizing
Capital Actions	—	Plan to retire high-cost debt/consider buybacks	$20M sub notes redeemed; repurchases possible	Executing

Management Commentary

“We are optimistic regarding the remainder of fiscal 2025 as we anticipate further expansion of the net interest margin, continued profitability from the SBA Lending segment, additional sales of home equity lines of credit (“HELOCS”), and stable and strong asset quality.” — Larry W. Myers, President & CEO .
“We are very pleased to have redeemed and retired this excess, high-cost debt, which we expect will contribute to expansion in net interest margin… The redemption helps clear a path for the opportunity to repurchase Company common shares…” — Larry W. Myers .

Q&A Highlights

Not available; no Q2 FY2025 earnings call transcript was found after searching company filings and press materials in the specified period window (Mar–Aug 2025) [ListDocuments result: no earnings-call-transcript found].

Estimates Context

Q2 FY2025 delivered an EPS beat and revenue beat vs consensus: EPS $0.76 actual vs $0.59 estimate; operating revenue $19.79M actual vs $15.55M estimate; 3 estimates for EPS and revenue covered the quarter [Values retrieved from S&P Global]*.
Coverage remains limited (2–3 estimates), which can increase volatility around reported results [Values retrieved from S&P Global]*.

Metric	Q2 2025 Estimate	Q2 2025 Actual	# of Estimates
Primary EPS Consensus Mean ($)	0.59333*	0.76*	3*
Revenue Consensus Mean ($USD)	15.54967M*	19.78670M*	3*
Target Price Consensus Mean ($)	32.50*	32.50*	2*

Asterisks denote values retrieved from S&P Global.

Key Takeaways for Investors

Positive earnings quality: Beat on EPS and operating revenue versus consensus, driven by lower interest expense and SBA gain-on-sale, despite higher comp expense [Values retrieved from S&P Global]*.
NIM trajectory improving: sequential and YoY expansion with a tailwind from $20M subordinated notes redemption; watch for further funding mix optimization and deposit growth .
SBA Lending turning the corner: profitable quarter with healthy sales/gains; management expects continued profitability—pipeline mentions support near-term momentum .
Asset quality strengthening: lower NPLs and higher coverage reduce downside risks; continued monitoring of SBA unguaranteed exposures prudent .
Dividend continuity and potential buybacks: $0.16 quarterly dividend maintained; potential share repurchases if excess capital builds could be accretive .
Near-term trading: Favourable margin/estimate-beat narrative; watch upcoming quarter for repeatability of SBA gains and expense discipline.
Medium-term thesis: Execution on HELOC originate-for-sale strategy, sustained NIM expansion, and capital deployment (buybacks) can rerate earnings power; risks include rate shifts impacting securities AOCI and SBA cycle variability .

First Savings Financial Group, Inc. (FSFG)·Q2 2025 Earnings Summary