Executive Summary

EPS of $0.28 beat S&P Global consensus of $0.24, marking the fifth consecutive quarter of margin improvement as net interest margin rose to 2.83%; net income increased 5% QoQ to $5.2M . EPS consensus values retrieved from S&P Global.*
Net interest income grew 18% YoY to $15.1M and NIM improved 36 bps YoY; cost of funds fell to 2.83% and cost of interest-bearing liabilities to 3.46%, supporting spread expansion .
Credit quality strengthened: nonperforming loans decreased to $10.7M (0.48% of assets) from $12.8M in Q4; net recoveries of $139K; ACL ratio remained ~0.98% .
Capital and shareholder returns: tangible common equity/TA rose to 10.98%; the board extended the share repurchase program through March 31, 2026 for up to 1.3M shares (~7% of outstanding) .
Management highlighted continued efficiency gains (58.1% efficiency ratio) and technology investments; the stock’s near-term catalyst is the EPS beat and margin/credit improvements, with repurchase authorization as incremental support .

What Went Well and What Went Wrong

What Went Well

Fifth straight quarter of margin improvement; NIM up 6 bps QoQ to 2.83% and 36 bps YoY, driven by lower funding costs and disciplined deposit repricing .
Strong credit trends: loans 30+ days past due fell 84% QoQ to $1.3M; NPLs declined to $10.7M and NPLs/assets improved to 0.48% from 0.58% in Q4 .
Management driving operating momentum: “our operating earnings increased 39% compared to the year ago quarter… improved earnings, net interest margin, and efficiency” — CEO David W. Pijor .

What Went Wrong

Noninterest expense ticked up 1% QoQ and 6% YoY to $9.1M, mainly from higher salaries/benefits and workout expenses; internet banking/software expense +$131K YoY .
Nonperforming loans, while improved from Q4, remain elevated vs Q3 due to a single large CRE nonaccrual; ACL coverage to NPLs at 171% implies adequate but not excessive buffer if macro weakens .
Noninterest income remains modest ($0.67M), and BOLI income is structurally lower post-2024 surrender; ACM contribution turned positive but is still small ($141K) .

Financial Results

Metric	Q3 2024	Q4 2024	Q1 2025
Diluted EPS ($)	$0.25	$0.26	$0.28
Net Interest Income ($USD Millions)	$14.214	$14.913	$15.052
Total Noninterest Income ($USD Millions)	$0.815	$0.452	$0.671
Net Interest Margin %	2.64%	2.77%	2.83%
Efficiency Ratio %	61.19%	58.58%	58.08%
Return on Average Assets %	0.85%	0.90%	0.94%
Cost of Interest-Bearing Liabilities %	3.80%	3.64%	3.46%

Balance Sheet & Credit	Q3 2024	Q4 2024	Q1 2025
Total Assets ($USD Billions)	$2.293	$2.199	$2.241
Total Loans, net ($USD Billions)	$1.875	$1.870	$1.882
Total Deposits ($USD Billions)	$1.961	$1.871	$1.907
Noninterest-Bearing Deposits / Total Deposits (%)	18.21%	19.55%	19.26%
Nonperforming Loans ($USD Millions)	$3.556	$12.823	$10.747
NPLs / Total Assets (%)	0.16%	0.58%	0.48%
ACL to Loans (%)	1.02%	0.97%	0.98%
Net Charge-offs (Recoveries) ($USD Thousands)	$(63)	$937	$(139)
TCE / TA (Bank) (%)	10.21%	10.87%	10.98%

KPIs and Operating Drivers:

Cost of deposits fell to 2.78% in Q1 (from 2.92% in Q4), demonstrating effective repricing and funding mix optimization .
Loan yield of 5.69% and earning asset yield of 5.31% in Q1; near-term loan repricing pipeline supports continued yield improvement .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Formal Financial Guidance (Revenue, EPS, Margins, OpEx, Taxes)	FY2025	None provided	None provided	Maintained (no formal guidance)
Share Repurchase Program	Through Mar 31, 2026	Prior authorization (initiated 2020)	Extended; up to 1,300,000 shares (~7% of outstanding)	Raised/Extended

Note: The company did not issue quantitative forward guidance on revenue/margins/OpEx/tax rate in Q1 2025 materials .

Earnings Call Themes & Trends

Note: No Q1 2025 earnings call transcript was available; themes reflect disclosures across Q3–Q1 press releases.

Topic	Previous Mentions (Q-2: Q3’24 and Q-1: Q4’24)	Current Period (Q1’25)	Trend
Net Interest Margin & Funding Costs	NIM improved to 2.64%; deposit rates lowered after Sep 2024 Fed cut; cost of interest-bearing liabilities 3.80%	NIM 2.83%; cost of funds 2.83% and cost of interest-bearing liabilities 3.46%; deposit costs down QoQ	Improving
Deposit Mix/Core Growth	Core inflows; reciprocal deposits $238.1M at Q3; time deposits matured	Deposits +$36M QoQ; reciprocal deposits $328.8M; consistent core inflows at lower rates	Improving
Loan Mix & Yields	Shift to C&I; loan yields +43 bps YoY; pipeline of repricing	C&I originations; loan yields 5.69%; detailed repricing schedule supports yield trajectory	Improving
Credit Quality	Classified loans down 86%; NPLs 0.16% of assets; net recoveries	NPLs down QoQ to $10.7M (0.48% assets); net recoveries $139K; ACL ~0.98%	Stable to improving QoQ (still above Q3)
Technology & Efficiency	Efficiency 61.2%; tech investments raise software expense	Efficiency 58.1%; internet banking/software expense +$131K YoY	Efficiency improving; tech spend steady
ACM (Mortgage Minority Interest)	ACM income $278K in Q3; positive YTD	ACM income $141K in Q1; improved YoY from loss	Positive contribution
CRE/Office Exposure	Office loans $137.4M at Q3; diversified CRE; strong monitoring	Office loans $121.9M; CRE diversified; one large nonaccrual with specific reserve	Managed exposure

Management Commentary

CEO David W. Pijor: “our operating earnings increased 39% compared to the year ago quarter… improved earnings, net interest margin, and efficiency,” underscoring relationship banking and technology use .
President Patricia A. Ferrick: “Management continues to execute its growth strategy to increase loans incrementally with improved margin and core deposits, while leveraging technological investments to enhance the customer experience and improve efficiencies” .

Q&A Highlights

No Q1 2025 earnings call transcript was available; therefore, there are no Q&A disclosures to report. Key areas investors would typically seek clarification include deposit cost trajectory, loan repricing schedule, CRE office exposure reserves, ACM contribution cadence, and share repurchase pacing [ListDocuments returned none; Internet search did not provide a transcript].

Estimates Context

Metric	Period	Consensus	Actual	# of Estimates
EPS (Primary)	Q1 2025	$0.24*	$0.28	1*
Revenue	Q1 2025	N/A*	$15.523M*	N/A*

Values retrieved from S&P Global.*
Interpretation: EPS beat by $0.04, aided by lower deposit costs and interest expense, while NIM expanded; revenue consensus unavailable, but reported operating components were net interest income $15.1M and noninterest income $0.67M .

Key Takeaways for Investors

EPS beat and margin expansion: The combination of lower deposit costs and reduced cost of interest-bearing liabilities supports continued spread recovery; NIM and ROAA trends are positive .
Funding discipline is working: Cost of deposits fell to 2.78% and wholesale funding costs edged down; continued repricing of commercial loans should bolster yields near term .
Credit risk manageable: NPLs declined QoQ and net recoveries resumed; ACL near 1% and specific reserve on the large nonaccrual suggest proactive credit management .
Capital strength and shareholder return: TCE/TA at ~11% and extended repurchase authorization (~7% of shares) provide strategic flexibility and potential support for the stock .
Operating efficiency is improving: Efficiency ratio down to ~58% as tech investments and process discipline take hold; watch for expense normalization vs growth investments .
Deposit growth at lower rates: Core deposit inflows and higher reciprocal balances indicate stable funding; sustained mix improvements are a medium-term thesis driver .
Near-term trading implication: Positive surprise on EPS and improving credit/NIM should be supportive; monitor trajectory of noninterest expense and any updates on the large CRE nonaccrual and repurchase execution pace .

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