Executive Summary

Q2 FY2025 (quarter ended Dec 31, 2024) printed a GAAP net loss of $(0.99)mm and $(0.12) EPS, primarily driven by $0.73mm of merger-related expenses; core net loss was $(0.74)mm (core EPS $(0.09)) as underlying costs were otherwise stable .
Net interest margin held essentially flat at 2.27% vs 2.28% YoY and 2.29% QoQ, as deposit costs offset loan yield, while noninterest income rose on a $0.21mm fixed-asset sale gain .
Asset quality improved: NPAs/Assets fell to 0.30% (from 0.38% Sep-24), ACL/Loans held ~0.55%, and NPL/Loans declined to 0.51% .
Balance sheet positioning improved (borrowings down to $28mm; deposits stable), TBV/share increased vs June-24 ($12.93 vs $12.78), and capital remained robust (CBLR 16.66%) .
Near-term stock catalysts are merger milestones with Mid Penn (regulatory approvals, shareholder vote, close targeted for Q2 CY2025) and dividend continuity ($0.03/share declared) .

What Went Well and What Went Wrong

What Went Well
- Asset quality strengthened: NPAs/Assets down to 0.30% from 0.38% in Sep-24; NPL/Loans fell to 0.51% from 0.67% QoQ .
- Noninterest income uplift from $0.21mm fixed-asset sale (two buildings), helping offset margin pressure .
- CEO emphasized “solid growth in our loan portfolio” QoQ and “continued improvement in our asset quality,” with core expenses “well controlled aside from expenditures directly related to the proposed merger” .
What Went Wrong
- Loss driven by merger costs: $0.73mm in Q2 merger-related expenses; GAAP efficiency ratio elevated to 122.9% (core 118.0%) .
- Net interest income softened ($4.06mm vs $4.21mm YoY; $4.14mm QoQ), reflecting lower securities income and deposit cost pressure; NIM edged to 2.27% .
- Sequential decline in deposits across noninterest-bearing, savings and money market (offset by CDs), constraining funding mix leverage .

Financial Results

Metric	Q2 FY2024 (3M ended 12/31/2023)	Q1 FY2025 (3M ended 9/30/2024)	Q2 FY2025 (3M ended 12/31/2024)
Net Interest Income ($mm)	4.211	4.141	4.056
Noninterest Income ($mm)	0.828	0.650	0.975
Total Other Expense ($mm)	5.071	5.323	6.182
Provision (Recovery) for Credit Losses ($mm)	0.025	(0.395)	0.014
Net (Loss) Income ($mm)	0.011	(0.021)	(0.988)
Diluted EPS ($)	0.00	(0.00)	(0.12)
Net Interest Margin (%)	2.28%	2.29%	2.27%
Efficiency Ratio (GAAP) (%)	100.64%	111.10%	122.88%

KPIs and balance sheet

KPI	Q2 FY2024 (12/31/2023)	Q1 FY2025 (9/30/2024)	Q2 FY2025 (12/31/2024)
Nonperforming Loans / Total Loans (%)	0.64%	0.67%	0.51%
NPAs / Total Assets (%)	0.38%	0.38%	0.30%
ACL / Total Loans (%)	0.76%	0.54%	0.55%
Deposits ($mm)	626.663	629.789	627.436
FHLB Borrowings ($mm)	54.000	39.000	28.000
Tangible BV/Share ($)	N/A	13.35	12.93
Bank CBLR / Tier 1 Leverage (%)	N/A	16.52%	16.66%

Commentary: YoY NII declined 3.7% and QoQ 2.1% amid higher funding costs and lower securities balances; noninterest income rose on asset sale gains; expenses swelled on merger costs, driving a GAAP loss, while asset quality and capital stayed strong .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Quarterly Dividend/Share	Q3 FY2025	$0.03	$0.03 (declared for Feb 6, 2025)	Maintained
Merger Timing (Mid Penn)	Close expectation	“First half 2025” (announced)	“Second calendar quarter 2025 expected”	Maintained timing window

No formal revenue/expense guidance issued; management reiterated merger timeline and continued dividend.

Earnings Call Themes & Trends

Note: No public earnings call transcript was available for Q2 FY2025 in our document set.

Topic	Q3 FY2024 (Mar 2024)	Q1 FY2025 (Sep 2024)	Q2 FY2025 (Dec 2024)	Trend
Net interest margin	NIM pressure from higher deposit/borrowings costs (2.15% for Q3’24)	NIM 2.29% with deposit cost pressure	NIM 2.27% flat YoY/QoQ	Stabilizing at ~2.25–2.30%
Asset quality	Strong metrics; NPAs 0.41%; CECL recoveries	NPAs 0.38%; recovery driven by lower delinquencies	NPAs 0.30%; ACL/Loans ~0.55%	Improving
Expenses/efficiency	Lower salaries from headcount actions	Modest increase; legal fees up	Merger costs drove spike; GAAP efficiency 122.9%	Near-term elevated, core controlled
Liquidity/funding	Liquidity ratio ~38.9%; borrowings increased to fund buybacks	Liquidity ratio 39.5%; FHLB down $9mm	FHLB borrowings cut to $28mm	Improving
Strategic/corporate	Cost control, TBV discipline	Announced merger with Mid Penn (10/31/24)	CEO: focus on balance sheet, merger execution	Merger progress is the key narrative

Management Commentary

“We remain focused on the continued strength of our balance sheet and the sound execution of our business model. During the quarter ended December 31, 2024, we had solid growth in our loan portfolio and continued improvement in our asset quality…recurring operating expenses remained well controlled aside from expenditures directly related to the proposed merger with Mid Penn Bancorp, Inc.” — Kenneth J. Stephon, Chairman, President & CEO .
MD&A highlighted NIM stability YoY (2.27% vs 2.28%) with lower average securities and borrowings balancing higher deposit costs; noninterest income increase driven by $0.21mm fixed-assets gain; merger-related professional fees of $0.73mm were the primary driver of the quarterly loss .

Q&A Highlights

No earnings call transcript was available in the document set; thus no Q&A highlights to report.

Estimates Context

Wall Street consensus from S&P Global/Capital IQ for WMPN’s Q2 FY2025 EPS and revenue was unavailable (missing mapping); therefore, we cannot assess beat/miss versus consensus for this quarter. We attempted retrieval via S&P Global; data was not available for WMPN in our mapping.

Key Takeaways for Investors

Core profitability headwinds are temporary and principally merger-related; underlying cost run-rate is more stable than GAAP suggests (core efficiency 118% vs GAAP 123%) .
NIM is stabilizing near ~2.27% with deposit costs largely offsetting asset yields; further expansion likely hinges on funding mix and merger synergies post-close .
Asset quality remains a bright spot: NPAs/Assets at 0.30%, NPL/Loans at 0.51%, with ACL coverage steady ~0.55% .
Balance sheet de-risking: FHLB borrowings reduced to $28mm and TBV/share improved vs June-24; capital robust (CBLR 16.66%) offering flexibility through the merger .
Dividend continuity ($0.03) signals confidence in earnings durability and capital despite near-term merger expense drag .
Trading implication: Near-term prints likely remain noisy from integration costs; stock narrative should be driven by merger milestones (regulatory/shareholder approvals, closing) and eventual cost synergies realization .
Medium-term thesis: Pro forma combination with Mid Penn can enhance scale, funding, and operating efficiency; maintain focus on credit quality and funding mix to protect NIM and TBV through integration .

Supporting documents used: Q2 FY2025 8-K press release and exhibits –; Q2 FY2025 10-Q (filed Feb 6, 2025) –; Q1 FY2025 10-Q (filed Nov 4, 2024) –; Q3 FY2024 10-Q (filed May 3, 2024) –.

William Penn Bancorporation (WMPN)·Q2 2025 Earnings Summary