Everspin Technologies Inc (MRAM) Q1 2025 Earnings Call Highlights: Surpassing Revenue ...
Non-GAAP EPS: $0.02 per diluted share.
MRAM Product Sales: $11.0 million.
Licensing, Royalty, Patent, and Other Revenue: $2.1 million, down from $3.6 million in Q1 2024.
GAAP Gross Margin: 51.4%, down from 56.5% in Q1 2024.
GAAP Operating Expenses: $8.7 million.
Non-GAAP Net Income: $0.4 million.
Cash and Cash Equivalents: $42.2 million.
Cash Flow from Operations: $1.4 million.
Q2 2025 Revenue Guidance: $12.5 million to $13.5 million.
Q2 2025 GAAP Net Loss Guidance: Between $0.05 loss and breakeven per basic share.
Q2 2025 Non-GAAP Net Income Guidance: Between breakeven and $0.05 per basic share.
Warning! GuruFocus has detected 4 Warning Signs with MRAM.
Release Date: April 30, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Everspin Technologies Inc (NASDAQ:MRAM) reported first-quarter revenue of $13.1 million, exceeding their guidance range.
The company achieved a non-GAAP EPS of $0.02, surpassing expectations.
Everspin continues to see strong product revenue, particularly from the PERSYST 1-gigabit STT-MRAM used in data center applications.
The company is involved in significant projects with major automotive and aerospace clients, including Lucid Motors and Blue Origin.
Everspin's balance sheet remains strong and debt-free, with cash and cash equivalents of $42.2 million.
Licensing, royalty, patent, and other revenue decreased to $2.1 million from $3.6 million in Q1 2024.
Gross margin decreased to 51.4% from 56.5% in Q1 2024 due to a lower mix of high-margin licensing revenue.
The company anticipates a non-GAAP net loss per basic share between $0.05 and breakeven for Q2 2025.
Everspin's revenue is expected to be more heavily weighted towards the second half of 2025, indicating potential short-term challenges.
There is uncertainty regarding potential tariff impacts, particularly concerning products manufactured in the US and shipped to China.
Q: Can you explain the potential impact of tariffs on your second-quarter guidance, especially concerning China? A: William Cooper, Chief Financial Officer, explained that while some wafers are sourced from GlobalFoundries in Germany and others from the US and Taiwan, direct sales to China are minimal. Therefore, the impact of tariffs is expected to be low. Most products are assembled in Taiwan, and the importer would be responsible for tariffs.
Q: Are you seeing signs of a cyclical recovery in the industrial segment of your business? A: William Cooper, Chief Financial Officer, confirmed that there are signs of improvement in backlog and traction on STT-MRAM products, indicating a potential cyclical recovery in the industrial segment.
Q: Can you provide insights into the gross margin dynamics and expectations for the rest of the year? A: William Cooper, Chief Financial Officer, noted that the gross margin was consistent between Q4 and Q1 at around 51%. He expects this consistency to continue throughout the year, maintaining a 50-plus gross margin.
Q: What factors are contributing to the expected second-half weighting of revenue in 2025? A: Sanjeev Aggarwal, President and CEO, mentioned that the backlog is building up, and there is a conversion of design wins into early production for STT products. This, along with the bottoming out of inventory correction, supports the expectation of higher revenue in the second half of 2025.
Q: How should we view operating expenses for the rest of the year? A: William Cooper, Chief Financial Officer, indicated that operating expenses are expected to remain in the same range throughout the year, with some product development work contributing to the expenses.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
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CB Financial Services, Inc. Announces Second Quarter 2025 Financial Results and Declares Quarterly Cash Dividend Increase of 4%
WASHINGTON, Pa.--(BUSINESS WIRE)--CB Financial Services, Inc. ('CB' or the 'Company') (NASDAQGM: CBFV), the holding company of Community Bank (the 'Bank'), today announced its second quarter and year-to-date 2025 financial results. Three Months Ended Six Months Ended 6/30/25 3/31/25 12/31/24 9/30/24 6/30/24 6/30/25 6/30/24 (Dollars in thousands, except per share data) (Unaudited) Net Income (GAAP) $ 3,949 $ 1,909 $ 2,529 $ 3,219 $ 2,650 $ 5,858 $ 6,847 Net Income Adjustments — 808 (562) (293) 24 808 (976) Adjusted Net Income (Non-GAAP) (1) $ 3,949 $ 2,717 $ 1,967 $ 2,926 $ 2,674 $ 6,666 $ 5,871 Earnings per Common Share - Diluted (GAAP) $ 0.74 $ 0.35 $ 0.46 $ 0.60 $ 0.51 $ 1.09 $ 1.33 Adjusted Earnings per Common Share - Diluted (Non-GAAP) (1) $ 0.74 $ 0.50 $ 0.35 $ 0.55 $ 0.52 $ 1.24 $ 1.14 Expand Income Before Income Tax Expense (GAAP) $ 4,715 $ 2,336 $ 3,051 $ 3,966 $ 3,210 $ 7,051 $ 8,327 Net Provision (Recovery) for Credit Losses 8 (40) 683 (41) (36) (32) (73) Pre-Provision Net Revenue ('PPNR') $ 4,723 $ 2,296 $ 3,734 $ 3,925 $ 3,174 $ 7,019 $ 8,254 Net Income Adjustments $ — $ 1,023 $ (711) $ (383) $ 31 $ 20 $ (992) Adjusted PPNR (Non-GAAP) (1) $ 4,723 $ 3,319 $ 3,023 $ 3,542 $ 3,205 $ 7,039 $ 7,262 Expand (1) Refer to Explanation of Use of Non-GAAP Financial Measures and reconciliation of adjusted net income and adjusted earnings per common share - diluted as presented later in this Press Release. Expand 2025 Second Quarter Financial Highlights Total assets were $1.52 billion at June 30, 2025, an increase of $34.5 million from March 31, 2025. Growth has been largely driven through strong commercial real estate and commercial and industrial loan production funded through a rise in core deposit accounts. The Bank also continues to focus efforts on repositioning the balance sheet to maximize earnings while maintaining its historic risk profile. These strategic movements include: Effectively managing cash and liquidity. Redeploying repayments of indirect automobile and residential mortgage loans into higher-yielding commercial loan products. Commercial loans totaled 59% of the Bank's loan portfolio at June 30, 2025 compared to 53% at June 30, 2024. Effecting changes in the Bank's deposit mix by focusing on growth in lower cost core deposit relationships and reducing reliance on time deposits. Net interest margin ('NIM') improved to 3.54% for the three months ended June 30, 2025 compared to 3.27% for the three months ended March 31, 2025. Main factors impacting the improved NIM included: A reduction in the cost of funds to 1.89% from 2.03% resulting from the favorable change in the Bank's deposit mix coupled with disciplined deposit pricing and the recent reduction in the federal funds rate. An increase in the yield on earning assets to 5.31% from 5.17% as the positive impact of the balance sheet repositioning strategies offset the effect of recent rate cuts on asset repricing. Noninterest expenses decreased $1.1 million to $8.7 million for the three months ended June 30, 2025 compared to $9.8 million for the three months ended March 31, 2025. During the quarter ended March 31, 2025, the Bank recognized $1.0 million in one-time expenses related to the previously announced reduction in force. Excluding these one-time charges, noninterest expense decreased $51,000 as ongoing savings from the reduction in force and other operational changes involving property management, recruitment and other activities are realized and expenses are actively managed and controlled. Asset quality remains strong as nonperforming loans to total loans was 0.16% at June 30, 2025. Book value per share and tangible book value per share (Non-GAAP) was $29.84 and $27.88, respectively at June 30, 2025. The improvements since year-end resulted from increased equity due to current period net income and a decrease in accumulated other comprehensive losses, partially offset by treasury shares repurchased under the Company's stock repurchase program and the payment of dividends. The Bank remains well-capitalized and is positioned for future growth. Management Commentary President and CEO John H. Montgomery commented, 'The first half of the year demonstrated solid loan growth and continued net interest margin improvement, with our strong second quarter operating results further reinforcing this positive momentum. Net interest margin expansion during the quarter was driven primarily by a reduction in our cost of funds, reflecting a more favorable deposit mix, disciplined deposit pricing and the recent federal funds rate cuts. Additionally, the yield on earning assets increased during the quarter, supported by the positive impact of our balance sheet repositioning strategies, which effectively mitigated the effects of recent rate reductions on asset repricing. Together, these factors demonstrate the effectiveness of our proactive management approach and position us to sustain strong margin performance moving forward. In navigating a fluctuating economic environment, we remain disciplined by maintaining a conservative balance sheet and actively managing risk. Since year-end, our loan portfolio grew by $18.2 million, or 1.7%, driven by increases in commercial real estate and commercial and industrial loans, partially offset by declines in construction, consumer and residential real estate loans. We were encouraged by loan growth during the quarter and anticipate steady loan demand throughout the year. Asset quality remains strong, with nonperforming loans representing just 0.16% of total loans and allowance for credit losses to nonperforming assets of 505.0% at quarter-end, reflecting our commitment to prudent credit management. In the second quarter we advanced the implementation of our Specialty Treasury Payments & Services program—an integral part of our long-term strategic plan to drive sustainable revenue growth and expand our core deposit base. All focus remains on building out the treasury products, personnel and technology to be fully operational by late 2025. While related expenses will modestly impact operating costs in the near term, we expect this to be a high-return investment in the strength and scalability of our franchise. We continue to prioritize strengthening core banking relationships and strategically reducing our reliance on time deposit-only accounts, contributing to a positive shift in our deposit mix. Since year-end, total time deposits declined by $16.7 million, driven by a $56.7 million reduction in organic time deposits, partially offset by a $40.0 million increase in brokered CDs. As we begin to scale our treasury deposit initiatives later this year, we anticipate the opportunity to reduce or fully replace brokered CDs, further aligning our funding mix with our long-term strategic objectives. As we move into the second half of the year, we maintain a positive outlook on the effectiveness of our strategic initiatives and believe we are well-positioned to achieve meaningful revenue growth by year-end.' Dividend Declaration The Company's Board of Directors has approved a 4.0% increase in the regular quarterly dividend by declaring a $0.26 quarterly cash dividend per outstanding share of common stock, payable on or about August 29, 2025, to stockholders of record as of the close of business on August 15, 2025. 2025 Second Quarter Financial Review Net Interest and Dividend Income Net interest and dividend income increased $1.1 million, or 9.3%, to $12.5 million for the three months ended June 30, 2025 compared to $11.5 million for the three months ended June 30, 2024. Net Interest Margin (NIM) (GAAP) increased to 3.54% for the three months ended June 30, 2025 compared to 3.18% for the three months ended June 30, 2024. Fully tax equivalent (FTE) NIM (Non-GAAP) increased 36 basis points ('bps') to 3.55% for the three months ended June 30, 2025 compared to 3.19% for the three months ended June 30, 2024. Interest and dividend income decreased $179,000, or 0.9%, to $18.8 million for the three months ended June 30, 2025 compared to $18.9 million for the three months ended June 30, 2024. Interest income on loans increased $822,000, or 5.6%, to $15.5 million for the three months ended June 30, 2025 compared to $14.7 million for the three months ended June 30, 2024. The average yield on loans increased 18 bps to 5.68% from 5.50% despite a 100bp reduction in the federal funds rate since September 2024. While this led to the downward repricing of variable and adjustable rate loans, the impact was negated by a reduction in lower yielding consumer loans due to the discontinuation of the indirect automobile loan product with the redeployment of those funds into higher yielding commercial loan products. The increase in the average yield caused a $489,000 increase in interest income on loans. Additionally, the average balance of loans increased $22.2 million to $1.10 billion from $1.08 billion, causing a $349,000 increase in interest income on loans. Interest income on taxable investment securities increased $16,000, or 0.6%, to $2.9 million for the three months ended June 30, 2025 compared to $2.8 million for the three months ended June 30, 2024 driven by a $18.5 million increase in average balances, partially offset by a 26 bp decrease in average yield. The increase in volume was driven by a $22.9 million increase in the average balance of collateralized loan obligation ('CLO') securities as the Bank executed a leverage strategy during 2024 to purchase these assets funded with cash reserves and brokered certificates of deposits. The decrease in yield resulted from the reductions in the federal funds rate since September 2024. Interest income on interest-earning deposits at other banks decreased $982,000 to $331,000 for the three months ended June 30, 2025 compared to $1.3 million for the three months ended June 30, 2024 driven by a 125 bp decrease in the average yield and a $67.7 million decrease in average balances. The decrease in the yield was directly related to the Federal Reserve's reductions in the federal funds rate. Interest expense decreased $1.2 million, or 16.7%, to $6.2 million for the three months ended June 30, 2025 compared to $7.5 million for the three months ended June 30, 2024. Interest expense on deposits decreased $1.3 million, or 19.0%, to $5.7 million for the three months ended June 30, 2025 compared to $7.1 million for the three months ended June 30, 2024. The cost of interest-bearing deposits declined 47 bps to 2.28% for the three months ended June 30, 2025 from 2.75% for the three months ended June 30, 2024 due to the change in the deposit mix and the recent Federal Reserve federal funds rate decreases. The decrease in the cost of interest-bearing deposits accounted for a $1.2 million reduction in interest expense. Average interest-bearing deposit balances decreased $27.2 million, or 2.6%, to $1.01 billion as of June 30, 2025 compared to $1.03 billion as of June 30, 2024, primarily as the Bank strategically reduced brokered deposits and time deposit only relationships. The decrease in average balances accounted for a $161,000 reduction in interest expense. Provision for Credit Losses A provision for credit losses of $8,000 was recorded for the three months ended June 30, 2025. The provision for credit losses - loans was a $136,000 recovery and was primarily due to a reduction of reserve required for individually assessed loans and changes in loan concentrations, partially offset by additional reserve required for overall loan growth and a change in qualitative factors relating to economic conditions. The provision for credit losses - unfunded commitments was $144,000 and was due to an increase in unfunded commitments and an increase in funding rates. This compared to a net recovery of $36,000 recorded for the three months ended June 30, 2024 as the provision for credit losses - loans was $12,000 and was primarily due to an increase in the reserve required for individually assessed loans, partially offset by a decrease in loan balances while the provision for credit losses - unfunded commitments was a recovery of $48,000 and was due to a decrease in loss rates. Noninterest Income Noninterest income increased $243,000, or 35.3%, to $931,000 for the three months ended June 30, 2025, compared to $688,000 for the three months ended June 30, 2024. This resulted primarily from a $205,000 increase in service fees primarily related to corporate deposit and Individual Covered Health Reimbursement Arrangement accounts. Noninterest Expense Noninterest expense decreased $236,000, or 2.6%, to $8.7 million for the three months ended June 30, 2025 compared to $9.0 million for the three months ended June 30, 2024. Occupancy expense decreased $324,000 due to environmental remediation costs related to a construction project on one of the Bank's office locations recognized only in 2024 and certain property management cost savings initiatives implemented in 2025. Intangible amortization decreased $264,000 as the Bank's core deposit intangibles were fully amortized in 2024. Data processing expense decreased $250,000 due to costs associated with the implementation of a new loan origination system and financial dashboard platform during mid-2024. Pennsylvania shares tax expense decreased $154,000 due to $217,000 of refunds received on amended returns filed for prior years. Legal and professional fees decreased $91,000 primarily due to timing differences related to internal and external audit and tax services. These decreases were partially offset as salaries and benefits increased $663,000, or 15.0%, to $5.1 million primarily due to merit increases, revenue producing staff additions and higher insurance benefit costs, partially offset by savings realized due to the reduction in force implemented earlier this year. Equipment expense increased $74,000 due to higher depreciation expense associated with interactive teller machines, security system upgrades and other equipment placed into service in 2024. Statement of Financial Condition Review Assets Total assets increased $36.4 million, or 2.5%, to $1.52 billion at June 30, 2025, compared to $1.48 billion at December 31, 2024. Cash and due from banks increased $14.9 million, or 30.1%, to $64.5 million at June 30, 2025, compared to $49.6 million at December 31, 2024. Securities increased $5.0 million, or 1.9%, to $267.2 million at June 30, 2025, compared to $262.2 million at December 31, 2024. The securities balance was primarily impacted by security purchases and an increase in the market value of the portfolio, partially offset by principal repayments on amortizing securities and the sale of equity securities. Loans and Credit Quality Total loans increased $18.2 million, or 1.7%, to $1.11 billion compared to $1.09 billion, and included increases in commercial real estate and commercial and industrial loans of $27.7 million and $26.2 million, respectively, partially offset by decreases in construction, consumer and residential real estate loans of $14.0 million, $13.1 million and $8.7 million, respectively. The decrease in consumer loans resulted from a reduction in indirect automobile loan production due to the discontinuation of this product offering as of June 30, 2023. This portfolio is expected to continue to decline as resources are allocated and production efforts are focused on more profitable commercial products. Excluding the $8.3 million decrease in indirect automobile loans, total loans increased $26.4 million, or 2.4%. Loan production totaled $97.0 million while $51.5 million of loans were paid off since December 31, 2024. The allowance for credit losses (ACL) was $9.7 million at June 30, 2025 and $9.8 million at December 31, 2024. As a result, the ACL to total loans was 0.88% at June 30, 2025 and 0.90% at December 31, 2024. During the current year, the Company recorded a net recovery for credit losses of $32,000. The allowance for credit losses to nonperforming assets was 505.0% at June 30, 2025 and 548.1% at December 31, 2024. Net recoveries for the three months ended June 30, 2025 were $39,000, or 0.01% of average loans on an annualized basis. Net charge-offs for the three months ended June 30, 2024 were $67,000, or 0.02% of average loans on an annualized basis. Net charge-offs for the six months ended June 30, 2025 were $15,000. Net charge-offs for the six months ended June 30, 2024 were $50,000. Nonperforming loans, which include nonaccrual loans and accruing loans past due 90 days or more, were $1.8 million at June 30, 2025 and December 31, 2024. Nonperforming loans to total loans ratio was 0.16% at June 30, 2025 and December 31, 2024. Liabilities Total liabilities increased $35.4 million, or 2.7%, to $1.37 billion at June 30, 2025 compared to $1.33 billion at December 31, 2024. Deposits Total deposits increased $25.9 million, or 2.0%, to $1.31 billion as of June 30, 2025 compared to $1.28 billion at December 31, 2024. Interest-bearing demand, non interest-bearing demand and savings deposits increased $36.7 million, $10.8 million and $1.5 million, respectively while time deposits decreased $16.7 million and money market deposits decreased $6.3 million, respectively. This favorable change in the deposit mix was the result of an increased focus on building core banking relationships while strategically reducing time deposit-only relationships. Brokered time deposits totaled $79.0 million as of June 30, 2025 and $39.0 million as of December 31, 2024, all of which mature within three months and were utilized to fund the purchase of floating rate CLO securities. At June 30, 2025, FDIC insured deposits totaled approximately 61.0% of total deposits while an additional 14.8% of total deposits were collateralized with investment securities. Accrued Interest Payable and Other Liabilities Accrued interest payable and other liabilities increased $9.5 million, or 59.6%, to $25.5 million at June 30, 2025, compared to $16.0 million at December 31, 2024 primarily due to $9.0 million of syndicated national credits not yet settled. Stockholders' Equity Stockholders' equity increased $984,000, or 0.7%, to $148.4 million at June 30, 2025, compared to $147.4 million at December 31, 2024. The key factors positively impacting stockholders' equity was $5.9 million of net income for the current year, a $2.9 million decrease in accumulated other comprehensive loss and $1.1 million of shares issued as a result of stock option exercises, partially offset by $6.8 million of treasury shares purchased under the stock repurchase program and the payment of $2.5 million in dividends since December 31, 2024. Book value per share Book value per common share was $29.84 at June 30, 2025 compared to $28.71 at December 31, 2024, an increase of $1.13. Tangible book value per common share (Non-GAAP) was $27.88 at June 30, 2025, compared to $26.82 at December 31, 2024, an increase of $1.06. Refer to 'Explanation of Use of Non-GAAP Financial Measures' at the end of this Press Release. About CB Financial Services, Inc. CB Financial Services, Inc. is the bank holding company for Community Bank, a Pennsylvania-chartered commercial bank. Community Bank operates its branch network in southwestern Pennsylvania and West Virginia. Community Bank offers a broad array of retail and commercial lending and deposit services. For more information about CB Financial Services, Inc. and Community Bank, visit our website at Statement About Forward-Looking Statements Statements contained in this press release that are not historical facts may constitute forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995 and such forward-looking statements are subject to significant risks and uncertainties. The Company intends such forward-looking statements to be covered by the safe harbor provisions contained in the Act. The Company's ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse effect on the operations and future prospects of the Company and its subsidiaries include, but are not limited to, general and local economic conditions, changes in market interest rates, deposit flows, demand for loans, real estate values and competition, competitive products and pricing, the ability of our customers to make scheduled loan payments, loan delinquency rates and trends, our ability to manage the risks involved in our business, our ability to control costs and expenses, inflation, market and monetary fluctuations, changes in federal and state legislation and regulation applicable to our business, actions by our competitors, and other factors that may be disclosed in the Company's periodic reports as filed with the Securities and Exchange Commission. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. The Company assumes no obligation to update any forward-looking statements except as may be required by applicable law or regulation. (Dollars in thousands, except share and per share data) (Unaudited) Three Months Ended Six Months Ended Interest and Dividend Income: Loans, Including Fees $ 15,492 $ 14,528 $ 14,930 $ 14,945 $ 14,670 $ 30,020 $ 29,508 Securities: Taxable 2,860 2,777 3,096 3,289 2,844 5,637 5,148 Dividends 9 28 27 28 27 37 54 Other Interest and Dividend Income 399 514 1,378 1,511 1,398 912 2,216 Total Interest and Dividend Income 18,760 17,847 19,431 19,773 18,939 36,606 36,926 Interest Expense: Deposits 5,721 6,111 7,492 7,892 7,065 11,833 13,056 Short-Term Borrowings 108 23 — — — 131 — Other Borrowings 391 402 407 407 404 792 808 Total Interest Expense 6,220 6,536 7,899 8,299 7,469 12,756 13,864 Net Interest and Dividend Income 12,540 11,311 11,532 11,474 11,470 23,850 23,062 (Recovery) Provision for Credit Losses - Loans (136 ) 68 483 25 12 (68 ) (130 ) Provision (Recovery) for Credit Losses - Unfunded Commitments 144 (108 ) 200 (66 ) (48 ) 36 57 Net Interest and Dividend Income After Net Provision (Recovery) for Credit Losses 12,532 11,351 10,849 11,515 11,506 23,882 23,135 Noninterest Income: Service Fees 559 462 460 451 354 1,021 769 Insurance Commissions 1 1 1 1 1 2 3 Other Commissions 66 63 63 104 22 129 84 Net Gain on Sales of Loans 26 22 3 18 9 49 30 Net (Loss) Gain on Securities — (69 ) 3 245 (31 ) (69 ) (197 ) Net Gain on Purchased Tax Credits 4 4 12 12 12 7 25 Gain on Sale of Subsidiary — — — 138 — — — Net Gain on Disposal of Premises and Equipment — — — — — — 274 Income from Bank-Owned Life Insurance 148 149 152 147 147 297 295 Net Gain on Bank-Owned Life Insurance Claims — — — — — — 915 Other Income 127 155 961 117 174 282 406 Total Noninterest Income 931 787 1,655 1,233 688 1,718 2,604 Noninterest Expense: Salaries and Employee Benefits 5,088 6,036 5,258 4,561 4,425 11,124 9,001 Occupancy 616 750 652 755 940 1,366 1,689 Equipment 372 330 313 280 298 702 562 Data Processing 761 797 832 772 1,011 1,558 1,703 Federal Deposit Insurance Corporation Assessment 203 176 172 177 161 379 290 Pennsylvania Shares Tax 143 257 301 265 297 400 595 Contracted Services 382 310 522 431 390 692 671 Legal and Professional Fees 117 262 268 297 208 378 420 Advertising 124 119 137 141 78 242 206 Other Real Estate Owned 1 — 34 2 37 2 14 Amortization of Intangible Assets — — 88 264 264 — 605 Other Expense 941 765 876 837 875 1,706 1,656 Total Noninterest Expense 8,748 9,802 9,453 8,782 8,984 18,549 17,412 Income Before Income Tax Expense 4,715 2,336 3,051 3,966 3,210 7,051 8,327 Income Tax Expense 766 427 522 747 560 1,193 1,480 Net Income $ 3,949 $ 1,909 $ 2,529 $ 3,219 $ 2,650 $ 5,858 $ 6,847 Expand Three Months Ended Six Months Ended Per Common Share Data 6/30/25 3/31/25 12/31/24 9/30/24 6/30/24 6/30/25 6/30/24 Dividends Per Common Share $ 0.25 $ 0.25 $ 0.25 $ 0.25 $ 0.25 $ 0.50 $ 0.50 Earnings Per Common Share - Basic 0.79 0.37 0.49 0.63 0.52 1.15 1.33 Earnings Per Common Share - Diluted 0.74 0.35 0.46 0.60 0.51 1.09 1.33 Weighted Average Common Shares Outstanding - Basic 5,022,813 5,125,577 5,126,782 5,137,586 5,142,139 5,073,911 5,136,021 Expand 6/30/25 3/31/25 12/31/24 9/30/24 6/30/24 Common Shares Outstanding 4,972,300 5,099,069 5,132,654 5,129,921 5,141,911 Book Value Per Common Share $ 29.84 $ 29.08 $ 28.71 $ 29.07 $ 27.79 Tangible Book Value per Common Share (1) 27.88 27.17 26.82 27.16 25.83 Stockholders' Equity to Assets 9.8 % 10.0 % 9.9 % 9.5 % 9.2 % Tangible Common Equity to Tangible Assets (1) 9.2 9.4 9.4 9.0 8.6 Expand Three Months Ended Six Months Ended Selected Financial Ratios (2) 6/30/25 3/31/25 12/31/24 9/30/24 6/30/24 6/30/25 6/30/24 Return on Average Assets 1.06 % 0.53 % 0.65 % 0.84 % 0.71 % 0.80 % 0.93 % Return on Average Equity 10.76 5.24 6.80 8.80 7.58 8.01 9.80 Average Interest-Earning Assets to Average Interest-Bearing Liabilities 135.33 134.70 133.33 133.26 135.69 135.02 136.36 Average Equity to Average Assets 9.88 10.07 9.63 9.54 9.36 9.97 9.54 Net Interest Rate Spread 2.91 2.61 2.41 2.36 2.44 2.76 2.55 Net Interest Rate Spread (FTE) (1) 2.93 2.63 2.42 2.38 2.46 2.78 2.56 Net Interest Margin 3.54 3.27 3.12 3.11 3.18 3.40 3.27 Net Interest Margin (FTE) (1) 3.55 3.28 3.13 3.12 3.19 3.42 3.28 Net Charge-Offs (Recoveries) to Average Loans (0.01 ) 0.02 0.06 0.03 0.02 — 0.01 Efficiency Ratio 64.94 81.02 71.68 69.11 73.89 72.55 67.84 Expand Asset Quality Ratios 6/30/25 3/31/25 12/31/24 9/30/24 6/30/24 Allowance for Credit Losses to Total Loans 0.88 % 0.90 % 0.90 % 0.89 % 0.88 % Allowance for Credit Losses to Nonperforming Loans (3) 550.20 414.48 548.07 463.07 513.03 Delinquent and Nonaccrual Loans to Total Loans (4) 0.49 0.54 0.72 0.98 0.53 Nonperforming Loans to Total Loans (3) 0.16 0.22 0.16 0.19 0.17 Nonperforming Assets to Total Assets (5) 0.13 0.16 0.12 0.14 0.13 Expand Capital Ratios (6) 6/30/25 3/31/25 12/31/24 9/30/24 6/30/24 Common Equity Tier 1 Capital (to Risk Weighted Assets) 15.28 % 14.94 % 14.78 % 14.79 % 14.62 % Tier 1 Capital (to Risk Weighted Assets) 15.28 14.94 14.78 14.79 14.62 Total Capital (to Risk Weighted Assets) 16.29 15.95 15.79 15.76 15.61 Tier 1 Leverage (to Adjusted Total Assets) 10.49 10.36 9.98 9.96 9.98 Expand (1) Refer to Explanation of Use of Non-GAAP Financial Measures in this Press Release for the calculation of the measure and reconciliation to the most comparable GAAP measure. (2) Interim period ratios are calculated on an annualized basis. (3) Nonperforming loans consist of all nonaccrual loans and accruing loans that are 90 days or more past due. (4) Delinquent loans consist of accruing loans that are 30 days or more past due. (5) Nonperforming assets consist of nonperforming loans and other real estate owned. (6) Capital ratios are for Community Bank only. Expand AVERAGE BALANCES AND YIELDS Three Months Ended June 30, 2025 March 31, 2025 December 31, 2024 September 30, 2024 June 30, 2024 (Dollars in thousands) (Unaudited) Assets: Interest-Earning Assets: Loans, Net (2) $ 1,098,698 $ 15,549 5.68 % $ 1,075,083 $ 14,584 5.50 % $ 1,066,304 $ 14,975 5.59 % $ 1,063,946 $ 14,987 5.60 % $ 1,076,455 $ 14,711 5.50 % Debt Securities Taxable 284,499 2,860 4.02 278,362 2,777 3.99 284,002 3,096 4.36 288,208 3,289 4.56 266,021 2,844 4.28 Equity Securities 1,000 9 3.60 2,674 28 4.19 2,693 27 4.01 2,693 28 4.16 2,693 27 4.01 Interest-Earning Deposits at Banks 33,564 331 3.94 45,056 459 4.07 114,245 1,338 4.68 111,131 1,448 5.21 101,277 1,313 5.19 Other Interest-Earning Assets 3,767 68 7.24 3,196 55 6.98 3,070 40 5.18 3,108 63 8.06 3,154 85 10.84 Total Interest-Earning Assets 1,421,528 18,817 5.31 1,404,371 17,903 5.17 1,470,314 19,476 5.27 1,469,086 19,815 5.37 1,449,600 18,980 5.27 Noninterest-Earning Assets 67,513 63,324 65,786 57,602 53,564 Total Assets $ 1,489,041 $ 1,467,695 $ 1,536,100 $ 1,526,688 $ 1,503,164 Liabilities and Stockholders' Equity: Interest-Bearing Liabilities: Interest-Bearing Demand Accounts $ 334,752 $ 1,677 2.01 % $ 317,799 $ 1,526 1.95 % $ 328,129 $ 1,838 2.23 % $ 316,301 $ 1,923 2.42 % $ 325,069 $ 1,858 2.30 % Money Market Accounts 238,195 1,747 2.94 230,634 1,726 3.04 227,606 1,821 3.18 217,148 1,726 3.16 214,690 1,646 3.08 Savings Accounts 174,055 42 0.10 172,322 41 0.10 170,612 45 0.10 175,753 46 0.10 184,944 52 0.11 Time Deposits 259,506 2,255 3.49 285,093 2,818 4.01 341,686 3,788 4.41 358,498 4,197 4.66 308,956 3,509 4.57 Total Interest-Bearing Deposits 1,006,508 5,721 2.28 1,005,848 6,111 2.46 1,068,033 7,492 2.79 1,067,700 7,892 2.94 1,033,659 7,065 2.75 Short-Term Borrowings 9,143 108 4.74 1,985 23 4.70 — — — — — — 2 — — Other Borrowings 34,733 391 4.52 34,723 402 4.70 34,713 407 4.66 34,702 407 4.67 34,692 404 4.68 Total Interest-Bearing Liabilities 1,050,384 6,220 2.38 1,042,556 6,536 2.54 1,102,746 7,899 2.85 1,102,402 8,299 2.99 1,068,353 7,469 2.81 Noninterest-Bearing Demand Deposits 270,729 265,522 267,598 263,650 272,280 Total Funding and Cost of Funds 1,321,113 1.89 1,308,078 2.03 1,370,344 2.29 1,366,052 2.42 1,340,633 2.24 Other Liabilities 20,789 11,854 17,883 15,043 21,867 Total Liabilities 1,341,902 1,319,932 1,388,227 1,381,095 1,362,500 Stockholders' Equity 147,139 147,763 147,873 145,593 140,664 Total Liabilities and Stockholders' Equity $ 1,489,041 $ 1,467,695 $ 1,536,100 $ 1,526,688 $ 1,503,164 Net Interest Income (FTE) (Non-GAAP) (3) $ 12,597 $ 11,367 $ 11,577 $ 11,516 $ 11,511 Net Interest-Earning Assets (4) 371,144 361,815 367,568 366,684 381,247 Net Interest Rate Spread (FTE) (Non-GAAP) (3) (5) 2.93 % 2.63 % 2.42 % 2.38 % 2.46 % Net Interest Margin (FTE) (Non-GAAP) (3)(6) 3.55 3.28 3.13 3.12 3.19 Expand (1) Annualized based on three months ended results. (2) Net of the allowance for credit losses and includes nonaccrual loans with a zero yield and Loans Held for Sale if applicable. (3) Refer to Explanation and Use of Non-GAAP Financial Measures in this Press Release for the calculation of the measure and reconciliation to the most comparable GAAP measure. (4) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities. (5) Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities. (6) Net interest margin represents annualized net interest income divided by average total interest-earning assets. Expand AVERAGE BALANCES AND YIELDS Six Months Ended June 30, 2024 Assets: Interest-Earning Assets: Loans, Net (2) $ 1,086,955 $ 30,132 5.59 % $ 1,082,172 $ 29,586 5.50 % Debt Securities Taxable 281,447 5,637 4.01 250,912 5,148 4.10 Marketable Equity Securities 1,832 37 4.04 2,693 54 4.01 Interest-Earning Deposits at Banks 39,278 789 4.02 80,082 2,045 5.11 Other Interest-Earning Assets 3,484 123 7.12 3,195 171 10.76 Total Interest-Earning Assets 1,412,996 36,718 5.24 1,419,054 37,004 5.24 Noninterest-Earning Assets 65,758 54,141 Total Assets $ 1,478,754 $ 1,473,195 Liabilities and Stockholders' Equity: Interest-Bearing Liabilities: Interest-Bearing Demand Accounts $ 326,322 $ 3,203 1.98 % $ 329,974 $ 3,653 2.23 % Savings Accounts 173,193 83 0.10 188,194 111 0.12 Money Market Accounts 234,436 3,473 2.99 209,279 3,159 3.04 Time Deposits 272,229 5,074 3.76 278,538 6,133 4.43 Total Interest-Bearing Deposits 1,006,180 11,833 2.37 1,005,985 13,056 2.61 Short-Term Borrowings 5,584 131 4.73 1 — — Other Borrowings 34,728 792 4.60 34,687 808 4.68 Total Interest-Bearing Liabilities 1,046,492 12,756 2.46 1,040,673 13,864 2.68 Noninterest-Bearing Demand Deposits 268,140 275,485 Total Funding and Cost of Funds 1,314,632 1.96 1,316,158 2.12 Other Liabilities 16,673 16,559 Total Liabilities 1,331,305 1,332,717 Stockholders' Equity 147,449 140,478 Total Liabilities and Stockholders' Equity $ 1,478,754 $ 1,473,195 Net Interest Income (FTE) (Non-GAAP) (3) 23,962 23,140 Net Interest-Earning Assets (4) 366,504 378,381 Net Interest Rate Spread (FTE) (Non-GAAP) (3)(5) 2.78 % 2.56 % Net Interest Margin (FTE) (Non-GAAP) (3)(6) 3.42 3.28 Expand (1) Annualized based on six months ended results. (2) Net of the allowance for credit losses and includes nonaccrual loans with a zero yield and Loans Held for Sale if applicable. (3) Refer to Explanation and Use of Non-GAAP Financial Measures in this Press Release for the calculation of the measure and reconciliation to the most comparable GAAP measure. (4) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities. (5) Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities. (6) Net interest margin represents annualized net interest income divided by average total interest-earning assets. Expand Explanation of Use of Non-GAAP Financial Measures In addition to financial measures presented in accordance with generally accepted accounting principles ('GAAP'), we use, and this Press Release contains or references, certain Non-GAAP financial measures. We believe these Non-GAAP financial measures provide useful information in understanding our underlying results of operations or financial position and our business and performance trends as they facilitate comparisons with the performance of other companies in the financial services industry. Non-GAAP adjusted items impacting the Company's financial performance are identified to assist investors in providing a complete understanding of factors and trends affecting the Company's business and in analyzing the Company's operating results on the same basis as that applied by management. Although we believe that these Non-GAAP financial measures enhance the understanding of our business and performance, they should not be considered an alternative to GAAP or considered to be more important than financial results determined in accordance with GAAP, nor are they necessarily comparable with similar Non-GAAP measures which may be presented by other companies. Where Non-GAAP financial measures are used, the comparable GAAP financial measure, as well as the reconciliation to the comparable GAAP financial measure, can be found herein. 6/30/25 3/31/25 12/31/24 9/30/24 6/30/24 (Dollars in thousands, except share and per share data) (Unaudited) Total Assets (GAAP) $ 1,517,984 $ 1,483,456 $ 1,481,564 $ 1,561,741 $ 1,560,259 Goodwill and Intangible Assets, Net (9,732 ) (9,732 ) (9,732 ) (9,820 ) (10,085 ) Tangible Assets (Non-GAAP) (Numerator) $ 1,508,252 $ 1,473,724 $ 1,471,832 $ 1,551,921 $ 1,550,174 Stockholders' Equity (GAAP) $ 148,362 $ 148,289 $ 147,378 $ 149,140 $ 142,882 Goodwill and Intangible Assets, Net (9,732 ) (9,732 ) (9,732 ) (9,820 ) (10,085 ) Tangible Common Equity or Tangible Book Value (Non-GAAP) (Denominator) $ 138,630 $ 138,557 $ 137,646 $ 139,320 $ 132,797 Stockholders' Equity to Assets (GAAP) 9.8 % 10.0 % 9.9 % 9.5 % 9.2 % Tangible Common Equity to Tangible Assets (Non-GAAP) 9.2 % 9.4 % 9.4 % 9.0 % 8.6 % Common Shares Outstanding (Denominator) 4,972,300 5,099,069 5,132,654 5,129,921 5,141,911 Book Value per Common Share (GAAP) $ 29.84 $ 29.08 $ 28.71 $ 29.07 $ 27.79 Tangible Book Value per Common Share (Non-GAAP) $ 27.88 $ 27.17 $ 26.82 $ 27.16 $ 25.83 Expand Three Months Ended Six Months Ended 6/30/25 3/31/25 12/31/24 9/30/24 6/30/24 6/30/25 6/30/24 (Dollars in thousands) (Unaudited) Net Income (GAAP) $ 3,949 $ 1,909 $ 2,529 $ 3,219 $ 2,650 $ 5,858 $ 6,847 Amortization of Intangible Assets, Net — — 88 264 264 — 605 Adjusted Net Income (Non-GAAP) (Numerator) $ 3,949 $ 1,909 $ 2,617 $ 3,483 $ 2,914 $ 5,858 $ 7,452 Annualization Factor 4.01 4.06 3.98 3.98 4.02 2.02 2.01 Average Stockholders' Equity (GAAP) $ 147,139 $ 147,763 $ 147,873 $ 145,593 $ 140,664 $ 147,449 $ 140,478 Average Goodwill and Intangible Assets, Net (9,732 ) (9,732 ) (9,758 ) (9,987 ) (10,242 ) (9,732 ) (10,398 ) Average Tangible Common Equity (Non-GAAP) (Denominator) $ 137,407 $ 138,031 $ 138,115 $ 135,606 $ 130,422 $ 137,717 $ 130,080 Return on Average Equity (GAAP) 10.76 % 5.24 % 6.80 % 8.80 % 7.58 % 8.01 % 9.80 % Return on Average Tangible Common Equity (Non-GAAP) 11.53 % 5.61 % 7.54 % 10.22 % 8.99 % 8.58 % 11.52 % Expand Three Months Ended Six Months Ended 6/30/25 3/31/25 12/31/24 9/30/24 6/30/24 6/30/25 6/30/24 (Dollars in thousands) (Unaudited) Interest Income (GAAP) $ 18,760 $ 17,847 $ 19,431 $ 19,773 $ 18,939 $ 36,606 $ 36,926 Adjustment to FTE Basis 57 56 45 42 41 112 78 Interest Income (FTE) (Non-GAAP) 18,817 17,903 19,476 19,815 18,980 36,718 37,004 Interest Expense (GAAP) 6,220 6,536 7,899 8,299 7,469 12,756 13,864 Net Interest Income (FTE) (Non-GAAP) $ 12,597 $ 11,367 $ 11,577 $ 11,516 $ 11,511 $ 23,962 $ 23,140 Net Interest Rate Spread (GAAP) 2.91 % 2.61 % 2.41 % 2.36 % 2.44 % 2.76 % 2.55 % Adjustment to FTE Basis 0.02 0.02 0.01 0.02 0.02 0.02 0.01 Net Interest Rate Spread (FTE) (Non-GAAP) 2.93 % 2.63 % 2.42 % 2.38 % 2.46 % 2.78 % 2.56 % Net Interest Margin (GAAP) 3.54 % 3.27 % 3.12 % 3.11 % 3.18 % 3.40 % 3.27 % Adjustment to FTE Basis 0.01 0.01 0.01 0.01 0.01 0.02 0.01 Net Interest Margin (FTE) (Non-GAAP) 3.55 % 3.28 % 3.13 % 3.12 % 3.19 % 3.42 % 3.28 % Expand Three Months Ended Six Months Ended 6/30/25 3/31/25 12/31/24 9/30/24 6/30/24 6/30/25 6/30/24 (Dollars in thousands) (Unaudited) Income Before Income Tax Expense (GAAP) $ 4,715 $ 2,336 $ 3,051 $ 3,966 $ 3,210 $ 7,051 $ 8,327 Net Provision (Recovery) for Credit Losses 8 (40 ) 683 (41 ) (36 ) (32 ) (73 ) PPNR (Non-GAAP) 4,723 2,296 3,734 3,925 3,174 7,019 8,254 Adjustments Net Loss (Gain) on Securities — 69 (3 ) (245 ) 31 69 197 Gain on Sale of Subsidiary — — — (138 ) — — — Net Gain on Disposal of Premises and Equipment — — — — — — (274 ) Earn-out Payment Related to the Sale of EU — (49 ) (708 ) — — (49 ) — Net Gain on Bank-Owned Life Insurance Claims — — — — — — (915 ) Reduction in Force Expenses — 1,003 — — — Adjusted PPNR (Non-GAAP) (Numerator) $ 4,723 $ 3,319 $ 3,023 $ 3,542 $ 3,205 $ 7,039 $ 7,262 Annualization Factor 4.01 4.06 3.98 3.98 4.02 2.02 2.01 Average Assets (Denominator) $ 1,489,041 $ 1,467,695 $ 1,536,100 $ 1,526,688 $ 1,503,164 $ 1,478,754 $ 1,473,195 Adjusted PPNR Return on Average Assets (Non-GAAP) 1.27 % 0.92 % 0.78 % 0.92 % 0.86 % 0.96 % 0.99 % Expand Three Months Ended Six Months Ended 6/30/25 3/31/25 12/31/24 9/30/24 6/30/24 6/30/25 6/30/24 (Dollars in thousands, except share and per share data) (Unaudited) Net Income (GAAP) $ 3,949 $ 1,909 $ 2,529 $ 3,219 $ 2,650 $ 5,858 $ 6,847 Adjustments Net Loss (Gain) on Securities — 69 (3 ) (245 ) 31 69 197 Gain on Sale of Subsidiary — — — (138 ) — — — Net Gain on Disposal of Premises and Equipment — — — — — — (274 ) Earn-out Payment Related to the Sale of EU — (49 ) (708 ) — — (49 ) — Net Gain on Bank-Owned Life Insurance Claims — — — — — — (915 ) Reduction in Force Expenses — 1,003 — — — 1,003 — Tax effect — (215 ) 149 90 (7 ) (215 ) 16 Adjusted Net Income (Non-GAAP) $ 3,949 $ 2,717 $ 1,967 $ 2,926 $ 2,674 $ 6,666 $ 5,871 Weighted-Average Diluted Common Shares and Common Stock Equivalents Outstanding 5,332,026 5,471,006 5,544,829 5,346,750 5,152,657 5,387,924 5,151,188 Earnings per Common Share - Diluted (GAAP) $ 0.74 $ 0.35 $ 0.46 $ 0.60 $ 0.51 $ 1.09 $ 1.33 Adjusted Earnings per Common Share - Diluted (Non-GAAP) $ 0.74 $ 0.50 $ 0.35 $ 0.55 $ 0.52 $ 1.24 $ 1.14 Net Income (GAAP) (Numerator) $ 3,949 $ 1,909 $ 2,529 $ 3,219 $ 2,650 $ 5,858 $ 6,847 Annualization Factor 4.01 4.06 3.98 3.98 4.02 2.02 2.01 Average Assets (Denominator) 1,489,041 1,467,695 1,536,100 1,526,688 1,503,164 1,478,754 1,473,195 Return on Average Assets (GAAP) 1.06 % 0.53 % 0.65 % 0.84 % 0.71 % 0.80 % 0.93 % Adjusted Net Income (Non-GAAP) (Numerator) $ 3,949 $ 2,717 $ 1,967 $ 2,926 $ 2,674 $ 6,666 $ 5,871 Annualization Factor 4.01 4.06 3.98 3.98 4.02 2.02 2.01 Average Assets (Denominator) 1,489,041 1,467,695 1,536,100 1,526,688 1,503,164 1,478,754 1,473,195 Adjusted Return on Average Assets (Non-GAAP) 1.06 % 0.75 % 0.51 % 0.76 % 0.72 % 0.91 % 0.80 % Expand Three Months Ended Six Months Ended 6/30/25 3/31/25 12/31/24 9/30/24 6/30/24 6/30/25 6/30/24 (Dollars in thousands) (Unaudited) Net Income (GAAP) (Numerator) $ 3,949 $ 1,909 $ 2,529 $ 3,219 $ 2,650 $ 5,858 $ 6,847 Annualization Factor 4.01 4.06 3.98 3.98 4.02 2.02 2.01 Average Equity (GAAP) (Denominator) 147,139 147,763 147,873 145,593 140,664 147,449 140,478 Return on Average Equity (GAAP) 10.76 % 5.24 % 6.80 % 8.80 % 7.58 % 8.01 % 9.80 % Adjusted Net Income (Non-GAAP) (Numerator) $ 3,949 $ 2,717 $ 1,967 $ 2,926 $ 2,674 $ 6,666 $ 5,871 Annualization Factor 4.01 4.06 3.98 3.98 4.02 2.02 2.01 Average Equity (GAAP) (Denominator) 147,139 147,763 147,873 145,593 140,664 147,449 140,478 Adjusted Return on Average Equity (Non-GAAP) 10.76 % 7.46 % 5.29 % 8.00 % 7.65 % 9.12 % 8.40 % Expand
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Manhattan Associates Reports Second Quarter Results
ATLANTA--(BUSINESS WIRE)--Leading Supply Chain and Omnichannel Commerce Solutions provider Manhattan Associates Inc. (NASDAQ: MANH) today reported revenue of $272.4 million for the second quarter ended June 30, 2025. GAAP diluted earnings per share for Q2 2025 was $0.93 compared to $0.85 in Q2 2024. Non-GAAP adjusted diluted earnings per share for Q2 2025 was $1.31 compared to $1.18 in Q2 2024. 'Manhattan delivered record second quarter results. Solid demand drove Q2 cloud revenue growth of 22% and RPO surpassing the $2 billion milestone,' said Manhattan Associates president and CEO Eric Clark. 'While the global macro environment remains challenging, we believe our cloud platform leadership advantage positions Manhattan as the clear choice for modern supply chain commerce solutions. We remain optimistic about our business fundamentals and our sustained growth opportunity. As technology and innovation cycles continue to accelerate, our unified cloud platform allows us to increase our leadership advantage over our competitors, expand our addressable market, and drive optimal results for our customers,' Mr. Clark concluded. SECOND QUARTER 2025 FINANCIAL SUMMARY: Consolidated total revenue was $272.4 million for Q2 2025, compared to $265.3 million for Q2 2024. Cloud subscription revenue was $100.4 million for Q2 2025, compared to $82.4 million for Q2 2024. License revenue was $1.5 million for Q2 2025, compared to $3.1 million for Q2 2024. Services revenue was $128.9 million for Q2 2025, compared to $136.8 million for Q2 2024. GAAP diluted earnings per share was $0.93 for Q2 2025, compared to $0.85 for Q2 2024. Adjusted diluted earnings per share, a non-GAAP measure, was $1.31 for Q2 2025, compared to $1.18 for Q2 2024. GAAP operating income was $73.8 million for Q2 2025, compared to $68.2 million for Q2 2024. Adjusted operating income, a non-GAAP measure, was $101.1 million for Q2 2025, compared to $92.9 million for Q2 2024. Cash flow from operations was $74.0 million for Q2 2025, compared to $73.3 million for Q2 2024. Days Sales Outstanding was 70 days at June 30, 2025, compared to 72 days at March 31, 2025. Cash totaled $230.6 million at June 30, 2025, compared to $205.9 million at March 31, 2025. During the three months ended June 30, 2025, the Company repurchased 262,341 shares of Manhattan Associates common stock under the share repurchase program authorized by our Board of Directors for a total investment of $49.6 million. In July 2025, our Board of Directors replenished the Company's remaining share repurchase authority to an aggregate of $100.0 million of our common stock. SIX MONTH 2025 FINANCIAL SUMMARY: Consolidated total revenue for the six months ended June 30, 2025, was $535.2 million, compared to $519.9 million for the six months ended June 30, 2024. Cloud subscription revenue was $194.7 million for the six months ended June 30, 2025, compared to $160.4 million for the six months ended June 30, 2024. License revenue was $10.8 million for the six months ended June 30, 2025, compared to $5.9 million for the six months ended June 30, 2024. Services revenue was $250.0 million for the six months ended June 30, 2025, compared to $269.0 million for the six months ended June 30, 2024. GAAP diluted earnings per share for the six months ended June 30, 2025, was $1.78, compared to $1.71 for the six months ended June 30, 2024. Adjusted diluted earnings per share, a non-GAAP measure, was $2.50 for the six months ended June 30, 2025, compared to $2.21 for the six months ended June 30, 2024. GAAP operating income was $137.0 million for the six months ended June 30, 2025, compared to $125.8 million for the six months ended June 30, 2024. Adjusted operating income, a non-GAAP measure, was $192.3 million for the six months ended June 30, 2025, compared to $172.6 million for the six months ended June 30, 2024. Cash flow from operations was $149.3 million for the six months ended June 30, 2025, compared to $128.0 million for the six months ended June 30, 2024. During the six months ended June 30, 2025, the Company repurchased 801,669 shares of Manhattan Associates common stock under the share repurchase program authorized by our Board of Directors, for a total investment of $149.6 million. In July 2025, our Board of Directors replenished the Company's remaining share repurchase authority to an aggregate of $100.0 million of our common stock. 2025 GUIDANCE Manhattan Associates provides the following revenue, operating margin, and diluted earnings per share guidance for the full year 2025: Manhattan Associates currently intends to make public certain expectations with respect to future financial performance. Those statements, including the guidance provided above, are forward looking. Actual results may differ materially. See our cautionary note regarding 'forward-looking statements' below. Manhattan Associates will make this earnings release and a recording of the conference call referenced below available on the investor relations section of the Manhattan Associates website at Following publication of this earnings release, any expectations with respect to future financial performance contained in this release or the conference call, including the guidance, should be considered historical only, and Manhattan Associates disclaims any obligation to update them. CONFERENCE CALL Manhattan Associates' conference call regarding its second quarter financial results will be held today, July 22, 2025, at 4:30 p.m. Eastern Time. The Company will also discuss its business and expectations for the year and next quarter in additional detail during the call. We invite investors to a live webcast of the conference call through the Investor Relations section of the Manhattan Associates website at To listen to the live webcast, please go to the website at least 15 minutes before the call to download and install any necessary audio software. The Internet webcast will be available until Manhattan Associates' third quarter 2025 earnings release. GAAP VERSUS NON-GAAP PRESENTATION Manhattan Associates provides adjusted operating income and margin, adjusted income tax provision, adjusted net income, and adjusted diluted earnings per share in this press release as additional information regarding the Company's historical and projected operating results. These measures are not in accordance with, or alternatives to, GAAP, and may be different from similarly titled non-GAAP measures used by other companies. The Company believes the presentation of these non-GAAP financial measures facilitates investors' ability to understand and compare the Company's results and guidance, because the measures provide supplemental information in evaluating the operating results of its business, as distinct from results that include items not indicative of ongoing operating results, and because the Company believes its peers typically publish similar non-GAAP measures. This release should be read in conjunction with the Company's Form 8-K earnings release filing for the three and six months ended June 30, 2025. Non-GAAP adjusted operating income and margin, adjusted income tax provision, adjusted net income, and adjusted diluted earnings per share exclude the impact of equity-based compensation, an expense related to an unusual health insurance claim, and restructuring expense – net of income tax effects, collectively. They also exclude the tax benefits or deficiencies of vested stock awards caused by differences in the amount deductible for tax purposes from the compensation expense recorded for financial reporting purposes. We include reconciliations of the Company's GAAP financial measures to non-GAAP adjustments in the supplemental information attached to this release. ABOUT MANHATTAN ASSOCIATES Manhattan Associates is a global technology leader in supply chain and omnichannel commerce. We unite information across the enterprise, converging front-end sales with back-end supply chain execution. Our software, platform technology, and unmatched experience help drive both top-line growth and bottom-line profitability for our customers. Manhattan Associates designs, builds, and delivers leading edge cloud solutions so that across the store, through your network, or from your fulfillment center, you are ready to reap the rewards of the omnichannel marketplace. For more information, please visit This press release contains 'forward-looking statements' relating to Manhattan Associates, Inc. Forward-looking statements in this press release include, without limitation, the information set forth under '2025 Guidance' and statements identified by words such as 'may,' 'expect,' 'forecast,' 'anticipate,' 'intend,' 'plan,' 'believe,' 'could,' 'seek,' 'project,' 'estimate,' and similar expressions. Prospective investors are cautioned that any of those forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those contemplated by those forward-looking statements. Among the important factors that could cause actual results to differ materially from those indicated by those forward-looking statements are: economic conditions, including disruption and transformation in the retail sector and our vertical markets; delays in product development; competitive and pricing pressures; software errors and information technology failures, disruption and security breaches; risks related to our products' technology and customer implementations; global instability, including the wars in Ukraine and the Middle East; and the other risk factors set forth in Item 1A of the Company's Annual Report on Form 10-K for the year ended December 31, 2024, and in Item 1A of Part II in subsequent Quarterly Reports on Form 10-Q. Manhattan Associates undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes in future operating results. Reconciliation of Selected GAAP to Non-GAAP Measures (in thousands, except per share amounts) Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Operating income $73,788 $68,188 $136,960 $125,818 Equity-based compensation (a) 24,275 24,666 53,101 46,761 Unusual health insurance claim (c) 3,000 - (658 ) - Restructuring expense (d) 8 - 2,937 - Adjusted operating income (Non-GAAP) $101,071 $92,854 $192,340 $172,579 Income tax provision $17,723 $16,336 $29,650 $21,161 Equity-based compensation (a) 3,156 3,848 7,496 7,284 Tax benefit of stock awards vested (b) 61 327 3,603 8,484 Unusual health insurance claim (c) 724 - (159 ) - Restructuring expense (d) 1 - 708 - Adjusted income tax provision (Non-GAAP) $21,665 $20,511 $41,298 $36,929 Net income $56,780 $52,766 $109,362 $106,567 Equity-based compensation (a) 21,119 20,818 45,605 39,477 Tax benefit of stock awards vested (b) (61 ) (327 ) (3,603 ) (8,484 ) Unusual health insurance claim (c) 2,276 - (499 ) - Restructuring expense (d) 7 - 2,229 - Adjusted net income (Non-GAAP) $80,121 $73,257 $153,094 $137,560 Diluted EPS $0.93 $0.85 $1.78 $1.71 Equity-based compensation (a) 0.35 0.34 0.74 0.63 Tax benefit of stock awards vested (b) - (0.01 ) (0.06 ) (0.14 ) Unusual health insurance claim (c) 0.04 - (0.01 ) - Restructuring expense (d) - - 0.04 - Adjusted diluted EPS (Non-GAAP) $1.31 $1.18 $2.50 $2.21 Fully diluted shares 61,074 62,118 61,300 62,305 Expand a) Adjusted results exclude all equity-based compensation, as detailed below, to facilitate comparison with our peers and for the other reasons explained in our Current Report on Form 8-K filed with the SEC. We do not receive a GAAP tax benefit for a portion of our equity-based compensation, mainly because of Section 162(m) of the Internal Revenue Code, which limits tax deductions for compensation granted to certain executives. Expand Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Cost of services $10,513 $11,358 $21,938 $20,647 Research and development 5,674 5,455 11,632 10,695 Sales and marketing 1,121 2,116 3,427 4,106 General and administrative 6,967 5,737 16,104 11,313 Total equity-based compensation $24,275 $24,666 $53,101 $46,761 Expand (b) Adjustments represent the excess tax benefits and tax deficiencies of the equity awards vested during the period. Excess tax benefits (deficiencies) occur when the amount deductible on our tax return for an equity award is more (less) than the cumulative compensation cost recognized for financial reporting purposes. As discussed above, we exclude equity-based compensation from adjusted non-GAAP results to be consistent with other companies in the software industry and for the other reasons explained in our Current Report on Form 8-K filed with the SEC. Therefore, we also exclude the related tax benefit (expense) generated upon their vesting. (c) In the fourth quarter of 2024, we recorded $7.0 million of expense for an unusual health insurance claim. During the first quarter of 2025, we received an insurance recovery of $4.7 million for this claim, partially offset by $1.0 million of ongoing expense for the claim. During the second quarter of 2025, we recorded an additional $3.0 million of expense for this unusual health insurance claim. Based on the uncommonly large magnitude and nature of the claim, we do not believe that this expense reflects our normal operating activities, and we have excluded the amount from adjusted non-GAAP results. (d) In January 2025, the Company eliminated about 100 positions to align our services capacity with customer demand, which has been impacted by macro-economic uncertainty. We recorded pre-tax restructuring expense in the first quarter of 2025 of approximately $2.9 million. The expense primarily consists of employee severance and outplacement services. We do not believe that the expense is a common cost that resulted from normal operating activities, and thus we have excluded the amount from adjusted non-GAAP results. Expand MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIES Condensed Consolidated Balance Sheets (in thousands, except share and per share data) June 30, 2025 (unaudited) ASSETS Current assets: Cash and cash equivalents $ 230,593 $ 266,230 Accounts receivable, net 209,843 205,475 Prepaid expenses and other current assets 42,910 31,559 Total current assets 483,346 503,264 Property and equipment, net 15,984 13,971 Operating lease right-of-use assets 47,339 47,923 Goodwill, net 62,244 62,226 Deferred income taxes 99,495 94,505 Other assets 36,276 35,662 Total assets $ 744,684 $ 757,551 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 23,897 $ 26,615 Accrued compensation and benefits 61,165 72,180 Accrued and other liabilities 22,001 22,275 Deferred revenue 299,836 277,970 Income taxes payable 266 1,264 Total current liabilities 407,165 400,304 Operating lease liabilities, long-term 48,585 47,794 Other non-current liabilities 10,175 10,327 Shareholders' equity: Preferred stock, no par value; 20,000,000 shares authorized, no shares issued or outstanding in 2025 and 2024 - - Common stock, $0.01 par value; 200,000,000 shares authorized; 60,468,401 and 60,921,191 shares issued and outstanding at June 30, 2025 and December 31, 2024, respectively 604 609 Retained earnings 304,480 329,439 Accumulated other comprehensive loss (26,325 ) (30,922 ) Total shareholders' equity 278,759 299,126 Total liabilities and shareholders' equity $ 744,684 $ 757,551 Expand MANHATTAN ASSOCIATES, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Cash Flows (in thousands) Six Months Ended June 30, 2025 2024 (unaudited) (unaudited) Operating activities: Net income $ 109,362 $ 106,567 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 3,125 2,982 Equity-based compensation 53,101 46,761 Gain on disposal of equipment (21 ) (124 ) Deferred income taxes (4,957 ) (12,519 ) Unrealized foreign currency loss 1,032 610 Changes in operating assets and liabilities: Accounts receivable, net 1,197 (11,153 ) Other assets (7,416 ) (2,088 ) Accounts payable, accrued and other liabilities (16,478 ) (18,082 ) Income taxes (4,505 ) (7,043 ) Deferred revenue 14,870 22,089 Net cash provided by operating activities 149,310 128,000 Investing activities: Purchase of property and equipment (4,871 ) (4,538 ) Net cash used in investing activities (4,871 ) (4,538 ) Financing activities: Repurchase of common stock (186,638 ) (189,546 ) Net cash used in financing activities (186,638 ) (189,546 ) Foreign currency impact on cash 6,562 (1,948 ) Net change in cash and cash equivalents (35,637 ) (68,032 ) Cash and cash equivalents at beginning of period 266,230 270,741 Cash and cash equivalents at end of period $ 230,593 $ 202,709 Expand MANHATTAN ASSOCIATES, INC. SUPPLEMENTAL INFORMATION 1. GAAP and adjusted earnings per share by quarter are as follows: 2024 2025 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Full Year 1st Qtr 2nd Qtr YTD Adjustments to GAAP: Equity-based compensation 0.30 0.34 0.33 0.31 1.27 0.40 0.35 0.74 Tax benefit of stock awards vested (0.13 ) (0.01 ) (0.01 ) - (0.15 ) (0.06 ) - (0.06 ) Restructuring expense - - - - - 0.04 - 0.04 Unusual health insurance claim - - - 0.09 0.09 (0.05 ) 0.04 (0.01 ) Adjusted Diluted EPS $1.03 $1.18 $1.35 $1.17 $4.72 $1.19 $1.31 $2.50 Fully Diluted Shares 62,493 62,118 61,948 62,009 62,183 61,527 61,074 61,300 Expand 3. Impact of Currency Fluctuation The following table reflects the increases (decreases) in the results of operations for each period attributable to the change in foreign currency exchange rates from the prior period as well as foreign currency gains (losses) included in other income, net for each period (in thousands): 2024 2025 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Full Year 1st Qtr 2nd Qtr YTD Revenue $648 $(531 ) $936 $316 $1,369 $(1,591 ) $2,724 $1,133 Costs and expenses 176 (673 ) 211 (227 ) (513 ) (1,966 ) 1,180 (786 ) Operating income 472 142 725 543 1,882 375 1,544 1,919 Foreign currency gains (losses) in other income (564 ) (577 ) (331 ) 519 (953 ) 131 (65 ) $66 $(92 ) $(435 ) $394 $1,062 $929 $506 $1,479 $1,985 Expand 7. Remaining Performance Obligations We disclose revenue that we expect to recognize from our remaining performance obligations ("RPO"). Over 98% of our RPO represents cloud native subscriptions with non-cancelable terms greater than one year (including cloud-deferred revenue as well as amounts we will invoice and recognize as revenue from our performance of cloud services in future periods). Maintenance contracts are typically one year and not included in the RPO. Our RPO as of the end of each period appears below (in thousands): March 31, 2024 June 30, 2024 September 30, 2024 December 31, 2024 March 31, 2025 June 30, 2025 Expand
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First BanCorp. Announces Earnings for the Quarter Ended June 30, 2025
SAN JUAN, Puerto Rico--(BUSINESS WIRE)--First BanCorp. (the 'Corporation' or 'First BanCorp.') (NYSE: FBP), the bank holding company for FirstBank Puerto Rico ('FirstBank' or 'the Bank'), today reported a net income of $80.2 million, or $0.50 per diluted share, for the second quarter of 2025, compared to $77.1 million, or $0.47 per diluted share, for the first quarter of 2025, and $75.8 million, or $0.46 per diluted share, for the second quarter of 2024. Expand Results for the Second Quarter of 2025 compared to the First Quarter of 2025 Profitability Net income – $80.2 million, or $0.50 per diluted share compared to $77.1 million, or $0.47 per diluted share. Income before income taxes – $102.9 million compared to $100.3 million. Adjusted pre-tax, pre-provision income (Non-GAAP) (2) – $123.5 million compared to $125.1 million. Net interest income – $215.9 million compared to $212.4 million. The increase includes approximately $1.6 million associated with the effect of an additional day in the second quarter of 2025. Net interest margin increased by 4 basis points to 4.56%, mostly driven by a decrease in the cost of funds. Provision for credit losses – $20.6 million compared to $24.8 million. The decrease in provision was mainly related to lower net charge-offs in the consumer loans and finance lease portfolios and updates in the macroeconomic forecast, particularly in the unemployment rate in the Puerto Rico region, partially offset by loan growth in the commercial and industrial ('C&I') loan portfolio. The first quarter of 2025 included $2.4 million in recoveries associated with a bulk sale of fully charged-off consumer loans and finance leases. Non-interest income – $30.9 million compared to $35.7 million. The decrease was primarily driven by $3.3 million in seasonal contingent insurance commissions recorded in the first quarter of 2025. Non-interest expenses – $123.3 million compared to $123.0 million. The efficiency ratio was 49.97%, compared to 49.58%. Income taxes – $22.7 million compared to $23.2 million. The second quarter of 2025 includes a $0.5 million tax contingency accrual released during the second quarter of 2025 in connection with the expiration of the statute of limitation on some uncertain tax positions. Balance Sheet Total loans – increased by $189.7 million to $12.9 billion, driven by a $156.1 million increase in C&I loans, of which $78.4 million was in the Florida region and $64.4 million was in the Puerto Rico region. Total loan originations, other than credit card utilization activity, of $1.3 billion, up $231.5 million, mainly in commercial and construction loans in the Puerto Rico region. Core deposits (other than brokered and government deposits) – decreased by $240.9 million to $12.7 billion, mostly driven by a decrease in large commercial accounts in the Puerto Rico region. Government deposits (fully collateralized) – decreased by $71.7 million to $3.4 billion, mainly in the Puerto Rico region. Brokered certificates of deposits ('CDs') – increased by $44.1 million to $526.5 million. Asset Quality Allowance for credit losses ('ACL') coverage ratio – amounted to 1.93%, compared to 1.95%. Annualized net charge-offs to average loans ratio decreased to 0.60%, compared to 0.68%, primarily reflecting a decrease in consumer loans and finance leases net charge-offs. The first quarter of 2025 includes the aforementioned recoveries associated with the bulk sale of fully charged-off consumer loans and finance leases, which reduced the ratio by 8 basis points. Non-performing assets – decreased by $1.4 million to $128.0 million, despite the inflow to nonaccrual status of a $4.3 million construction loan in the Puerto Rico region in the hospitality industry during the second quarter of 2025. Liquidity and Capital Liquidity – Cash and cash equivalents amounted to $736.7 million, compared to $1.3 billion. When adding $1.6 billion of free high-quality liquid securities that could be liquidated or pledged within one day and $1.0 billion in available lending capacity at the Federal Home Loan Bank ('FHLB'), available liquidity amounted to 17.58% of total assets, compared to 18.76%. Capital – Declared $29.0 million in common stock dividends, repurchased $28.2 million in common stock, and redeemed $11.1 million of junior subordinated debentures. Capital ratios exceeded required regulatory levels. The Corporation's estimated total capital, common equity tier 1 ('CET1') capital, tier 1 capital, and leverage ratios were 17.87%, 16.61%, 16.61%, and 11.41%, respectively, as of June 30, 2025. On a non-GAAP basis, the tangible common equity ratio (2) increased to 9.56%, when compared to 9.10%, driven by a decrease in tangible assets, quarterly earnings less dividends and repurchases of common stock, and a $41.2 million increase in the fair value of available-for-sale debt securities due to changes in market interest rates, which is recognized as part of accumulated other comprehensive loss. Expand NET INTEREST INCOME The following table sets forth information concerning net interest income for the last five quarters: Net interest income amounted to $215.9 million for the second quarter of 2025, an increase of $3.5 million, compared to $212.4 million for the first quarter of 2025, which includes approximately $1.6 million associated with the effect of an additional day in the second quarter of 2025. The increase in net interest income reflects the following: A $2.4 million decrease in interest expense on interest-bearing liabilities, consisting of: - A $2.5 million decrease in interest expense on borrowings, driven by the $180.0 million in FHLB advances that matured and were repaid in March 2025 and the full quarter effect of the $50.6 million redemption of trust-preferred securities ('TruPS') in March 2025. - A $1.2 million decrease in interest expense on interest-bearing checking and savings accounts, driven by the effect of lower interest rates, partially offset by a $0.3 million increase associated with the effect of an additional day in the second quarter of 2025. The average cost of interest-bearing checking and savings accounts in the second quarter of 2025 decreased 7 basis points to 1.38% when compared to the previous quarter. Partially offset by: - A $1.3 million increase in interest expense on time deposits, excluding brokered CDs, mainly due to a $141.6 million increase in the average balance and a $0.3 million increase associated with the effect of an additional day in the second quarter of 2025. A $1.2 million increase in interest income on loans driven by: - A $0.9 million increase in interest income on commercial and construction loans, driven by a $1.8 million increase in interest income associated with a $99.5 million increase in the average balance of this portfolio, and a $1.1 million increase associated with the effect of an additional day in the second quarter of 2025, partially offset by $1.2 million in interest income recognized during the first quarter of 2025 related to prepayment penalties and acceleration of unamortized net deferred fees associated with the payoff of a $73.8 million commercial mortgage loan in the Puerto Rico region. As of June 30, 2025, the interest rate on approximately 52% of the Corporation's commercial and construction loans was tied to variable rates, with 33% based upon SOFR of 3 months or less, 11% based upon the Prime rate index, and 8% based on other indexes. For the quarter ended June 30, 2025, the average one-month SOFR, three-month SOFR and Prime rate remained flat when compared to the first quarter of 2025. - A $0.2 million increase in interest income on residential mortgage loans, driven by a $12.7 million increase in the average balance. - A $0.1 million increase in interest income on consumer loans and finance leases, mainly due to a $1.0 million increase associated with the effect of an additional day in the second quarter of 2025, which was almost offset by a decrease in the average balance of personal loans and credit cards and lower income from late fees, mainly in the auto loans portfolio. Partially offset by: A $0.1 million net decrease in investment securities and interest-bearing cash balances, consisting of: - A $0.3 million decrease in interest income from interest-bearing cash balances, primarily driven by a $40.5 million decrease in the average balances, which consisted primarily of deposits maintained at the Federal Reserve Bank (the 'FED'). - A $0.2 million decrease in other investment securities, driven by a $6.5 million decrease in the average balance of FHLB stock. Partially offset by: - A $0.4 million increase in interest income on debt securities, mainly due to $397.1 million in purchases of higher-yielding available-for-sale debt securities with an average yield of 4.78% during the second quarter of 2025 replacing maturities of lower-yielding debt securities, partially offset by $0.3 million in higher U.S. agencies' MBS premium amortization expense associated with an increase in anticipated prepayments. Net interest margin for the second quarter of 2025 was 4.56%, a 4 basis points increase when compared to the first quarter of 2025, mostly reflecting a decrease in the cost of funds, and the change in asset mix associated with the deployment of cash flows from lower-yielding investment securities to fund loan growth and purchases of higher-yielding investment securities. The margin for the first quarter of 2025 includes a 4 basis points improvement associated with prepayment penalties in the commercial loan portfolio and higher income from late fees in the consumer loan portfolio. Non-interest income decreased by $4.8 million to $30.9 million for the second quarter of 2025, compared to $35.7 million for the first quarter of 2025, mainly due to $3.3 million in seasonal contingent insurance commissions recorded in the first quarter of 2025 based on the prior year's production of insurance policies and a $2.3 million decrease related to lower realized gains from purchased income tax credits. NON-INTEREST EXPENSES Non-interest expenses amounted to $123.3 million in the second quarter of 2025, an increase of $0.3 million, from $123.0 million in the first quarter of 2025. The $0.3 million increase reflects the following significant variances: A $2.6 million increase in credit and debit card processing expenses, mainly due to $2.2 million in credit and debit card expense reimbursements received during the first quarter of 2025. Partially offset by: A $2.1 million decrease in employees' compensation and benefits expenses, driven by a $2.1 million decrease in bonuses which include $1.9 million in stock-based compensation expense of retirement-eligible employees recognized during the first quarter of 2025, and a decrease in payroll taxes due to employees reaching maximum taxable amounts, partially offset by a $1.1 million increase in salary compensation in part due to the effect of an additional working day in the second quarter of 2025. A $0.5 million decrease in the net gain on other real estate owned ('OREO') operations, mainly due to a $0.3 million decrease in income recognized from rental payments associated with OREO income-producing properties and $0.2 million in write-downs of commercial OREO properties in the Puerto Rico region recorded during the second quarter of 2025. INCOME TAXES The Corporation recorded an income tax expense of $22.7 million for the second quarter of 2025, compared to $23.2 million for the first quarter of 2025. The decrease in income tax expense was driven by a lower estimated annual effective tax rate due to a higher proportion of exempt to taxable income and a $0.5 million tax contingency accrual released during the second quarter of 2025 in connection with the expiration of the statute of limitation on some uncertain tax positions. The Corporation's estimated annual effective tax rate, excluding entities with pre-tax losses from which a tax benefit cannot be recognized and discrete items, was 22.8% for the second quarter of 2025, compared to 23.7% for the first quarter of 2025. As of June 30, 2025, the Corporation had a deferred tax asset of $134.8 million, net of a valuation allowance of $103.3 million against the deferred tax assets. Non-Performing Assets The following table sets forth information concerning non-performing assets for the last five quarters: (Dollars in thousands) June 30, 2025 March 31, 2025 December 31, 2024 September 30, 2024 June 30, 2024 Nonaccrual loans held for investment: Residential mortgage $ 30,790 $ 30,793 $ 31,949 $ 31,729 $ 31,396 Construction 5,718 1,356 1,365 4,651 4,742 Commercial mortgage 22,905 23,155 10,851 11,496 11,736 Commercial and industrial ('C&I') 20,349 20,344 20,514 18,362 27,661 Consumer and finance leases 20,336 22,813 22,788 23,106 20,638 Total nonaccrual loans held for investment $ 100,098 $ 98,461 $ 87,467 $ 89,344 $ 96,173 OREO 14,449 15,880 17,306 19,330 21,682 Other repossessed property 11,868 13,444 11,859 8,844 7,513 Other assets (1) 1,576 1,599 1,620 1,567 1,532 Total non-performing assets (2) $ 127,991 $ 129,384 $ 118,252 $ 119,085 $ 126,900 Past due loans 90 days and still accruing (3) $ 29,535 $ 37,117 $ 42,390 $ 43,610 $ 47,173 Nonaccrual loans held for investment to total loans held for investment 0.78 % 0.78 % 0.69 % 0.72 % 0.78 % Nonaccrual loans to total loans 0.78 % 0.78 % 0.69 % 0.72 % 0.78 % Non-performing assets to total assets 0.68 % 0.68 % 0.61 % 0.63 % 0.67 % (1) Residential pass-through MBS issued by the Puerto Rico Housing Finance Authority ('PRHFA') held as part of the available-for-sale debt securities portfolio. (2) Excludes purchased-credit deteriorated ('PCD') loans previously accounted for under Accounting Standards Codification ('ASC') Subtopic 310-30 for which the Corporation made the accounting policy election of maintaining pools of loans as 'units of account' both at the time of adoption of current expected credit losses ('CECL') on January 1, 2020 and on an ongoing basis for credit loss measurement. These loans will continue to be excluded from nonaccrual loan statistics as long as the Corporation can reasonably estimate the timing and amount of cash flows expected to be collected on the loan pools. The portion of such loans contractually past due 90 days or more amounted to $4.9 million as of June 30, 2025 (March 31, 2025 - $5.7 million; December 31, 2024 - $6.2 million; September 30, 2024 - $6.5 million; June 30, 2024 - $7.4 million). (3) These include rebooked loans, which were previously pooled into Government National Mortgage Association ('GNMA') securities, amounting to $5.5 million as of June 30, 2025 (March 31, 2025 - $6.4 million; December 31, 2024 - $5.7 million; September 30, 2024 - $6.6 million; June 30, 2024 - $6.8 million). Under the GNMA program, the Corporation has the option but not the obligation to repurchase loans that meet GNMA's specified delinquency criteria. For accounting purposes, the loans subject to the repurchase option are required to be reflected on the financial statements with an offsetting liability. Expand Variances in credit quality metrics: Total non-performing assets decreased by $1.4 million to $128.0 million as of June 30, 2025, mainly due to a $3.0 million decrease in OREO and other repossessed assets and a $2.5 million decrease in consumer loans and finance leases, partially offset by the aforementioned inflow to nonaccrual status of a $4.3 million construction loan in the Puerto Rico region in the hospitality industry during the second quarter of 2025. Inflows to nonaccrual loans held for investment were $34.4 million in the second quarter of 2025, a decrease of $9.0 million, compared to inflows of $43.4 million in the first quarter of 2025. Inflows to nonaccrual commercial and construction loans were $5.2 million in the second quarter of 2025, a decrease of $8.6 million, compared to inflows of $13.8 million in the first quarter of 2025, driven by the inflow of a $12.6 million commercial mortgage loan in the Florida region during the first quarter of 2025, partially offset by the aforementioned inflow of the $4.3 million construction loan in the Puerto Rico region during the second quarter of 2025. Inflows to nonaccrual consumer loans were $24.3 million in the second quarter of 2025, a decrease of $0.7 million, compared to inflows of $25.0 million in the first quarter of 2025. Inflows to nonaccrual residential mortgage loans were $4.9 million in the second quarter of 2025, an increase of $0.3 million, compared to inflows of $4.6 million in the first quarter of 2025. See Early Delinquency for additional information. Adversely classified commercial loans decreased by $7.6 million to $93.3 million as of June 30, 2025, driven by the upgrade of a $12.0 million commercial mortgage loan in the Florida region, partially offset by the downgrade of a $3.0 million C&I relationship in the Puerto Rico region. Early Delinquency Total loans held for investment in early delinquency (i.e., 30-89 days past due accruing loans, as defined in regulatory reporting instructions) amounted to $134.0 million as of June 30, 2025, an increase of $2.8 million, compared to $131.2 million as of March 31, 2025. The variances by major portfolio are as follows: Consumer loans in early delinquency increased by $6.3 million to $104.8 million, driven by a $9.5 million increase in the auto loans portfolio, partially offset by a $2.7 million decrease in the finance leases portfolio. Consumer loans in early delinquency had decreased $19.5 million in the first quarter of 2025. Partially offset by: Residential mortgage loans in early delinquency decreased by $2.7 million to $26.2 million. Commercial and construction loans in early delinquency decreased by $0.8 million to $3.0 million. Allowance for Credit Losses The following table summarizes the activity of the ACL for on-balance sheet and off-balance sheet exposures during the second and first quarters of 2025: Allowance for Credit Losses for Loans and Finance Leases As of June 30, 2025, the ACL for loans and finance leases was $248.6 million, an increase of $1.3 million, from $247.3 million as of March 31, 2025. The increase was mainly in the ACL for commercial and construction loans, which increased by $2.7 million, mainly due to C&I loan growth. Also, the ACL for residential mortgage loans increased by $0.8 million mainly due to the longer expected life of newly originated loans, partially offset by improvements in the long-term projections of the unemployment rate and the Housing Price Index. Meanwhile, the ACL for consumer loans decreased by $2.2 million, driven by improvements in macroeconomic variables, mainly in the projection of the unemployment rate, and reductions in the unsecured loan portfolio volumes. The provision for credit losses on loans and finance leases was $20.4 million for the second quarter of 2025, compared to $24.8 million in the first quarter of 2025, as detailed below: Provision for credit losses for the commercial and construction loan portfolios was an expense of $1.8 million for the second quarter of 2025, compared to an expense of $4.6 million for the first quarter of 2025. The $2.8 million decrease in provision expense was driven by improvements in the macroeconomic forecast, and the provision recorded during the first quarter of 2025 as a result of updated financial information of certain commercial borrowers, partially offset by the aforementioned loan growth. Provision for credit losses for the consumer loan and finance lease portfolios was an expense of $17.8 million for the second quarter of 2025, compared to an expense of $19.2 million for the first quarter of 2025. The $1.4 million decrease in provision expense was driven by lower net charge-off, the aforementioned improvements in macroeconomic variables, and reductions in the unsecured loan portfolio volumes. The first quarter of 2025 included $2.4 million in recoveries associated with the bulk sale of fully charged-off consumer loans and finance leases. Provision for credit losses for the residential mortgage loan portfolio was an expense of $0.8 million for the second quarter of 2025, compared to an expense of $1.0 million for the first quarter of 2025. The decrease in provision expense was driven by improvements in macroeconomic variables at a higher degree than in the previous quarter, partially offset by loan growth. The ratio of the ACL for loans and finance leases to total loans held for investment was 1.93% as of June 30, 2025, compared to 1.95% as of March 31, 2025. The ratio of the total ACL for loans and finance leases to nonaccrual loans held for investment decreased to 248.33% as of June 30, 2025, compared to 251.13% as of March 31, 2025. Net Charge-Offs The following table presents ratios of net (recoveries) charge-offs to average loans held-in-portfolio for the last five quarters: (1) The net charge-offs for the quarter ended March 31, 2025 included $2.4 million in recoveries associated with the bulk sale of fully charged-off consumer loans and finance leases. These recoveries reduced the ratios of consumer loans and finance leases and total net charge-offs to related average loans for the quarter ended March 31, 2025 by 25 basis points and 8 basis points, respectively. Expand The ratios above are based on annualized net charge-offs and are not necessarily indicative of the results expected in subsequent periods. Net charge-offs were $19.1 million for the second quarter of 2025, or an annualized 0.60% of average loans, compared to $21.4 million, or an annualized 0.68% of average loans, in the first quarter of 2025. The $2.3 million reduction in net charge-offs was driven by a $1.7 million decrease in consumer loans and finance leases net charge-offs, and $0.8 million in C&I net recoveries in the Puerto Rico region during the second quarter of 2025. The first quarter of 2025 includes $2.4 million in recoveries in connection with the aforementioned bulk sale of fully charged-off loans. Allowance for Credit Losses for Unfunded Loan Commitments As of June 30, 2025, the ACL for off-balance sheet credit exposures increased to $3.4 million, compared to $3.1 million as of March 31, 2025. Allowance for Credit Losses for Debt Securities As of June 30, 2025, the ACL for debt securities was $1.3 million, of which $0.8 million was related to Puerto Rico municipal bonds classified as held-to-maturity, compared to $1.4 million and $0.9 million, respectively, as of March 31, 2025. STATEMENT OF FINANCIAL CONDITION Total assets were approximately $18.9 billion as of June 30, 2025, down $209.5 million from March 31, 2025. The following variances within the main components of total assets are noted: A $591.6 million decrease in cash and cash equivalents, mainly related to the overall decrease in deposits, loan growth, and the net cash outflow for the purchase of investment securities. A $178.9 million increase in investment securities, mainly due to purchases during the second quarter of 2025 of $200.3 million primarily in U.S. agencies' residential MBS at an average yield of 5.28% and $196.8 million in U.S. Treasury securities at an average yield of 4.27%, and a $41.2 million increase in the fair value of available-for-sale debt securities attributable to changes in market interest rates, partially offset by $134.4 million in maturities primarily of U.S. agencies' debentures and $125.0 million in principal repayments of U.S. agencies' MBS and debentures. A $189.7 million increase in total loans. On a portfolio basis, the variance consisted of increases of $167.8 million in commercial and construction loans, $16.5 million increase in residential mortgage loans, and $5.4 million in consumer loans. In terms of geography, the growth consisted of increases of $99.1 million in the Florida region, $77.3 million in the Puerto Rico region, and $13.3 million in the Virgin Islands region. The increase in commercial and construction loans reflects the origination of three C&I loans in the Florida region, each in excess of $10.0 million, totaling $57.1 million and the origination of a $50.0 million C&I term loan in the Puerto Rico region. Total loan originations, including refinancings, renewals, and draws from existing commitments (excluding credit card utilization activity), amounted to $1.3 billion in the second quarter of 2025, an increase of $231.5 million compared to the first quarter of 2025. Total loan originations in the Puerto Rico region amounted to $978.5 million in the second quarter of 2025, compared to $765.0 million in the first quarter of 2025. The $213.5 million increase in total loan originations was mainly in commercial and construction loans, driven by the aforementioned origination of a $50.0 million C&I term loan, the refinancing of a $25.0 million C&I term loan, higher utilization of C&I lines of credit during the second quarter of 2025, and the refinancing of four commercial mortgage loans totaling $78.4 million. Total loan originations in the Florida region amounted to $282.6 million in the second quarter of 2025, compared to $261.4 million in the first quarter of 2025. The $21.2 million increase in total loan originations was mainly related to a $14.1 million increase in residential mortgage loan originations and a $6.2 million increase in commercial and construction loan originations. Total loan originations in the Virgin Islands region decreased by $3.2 million to $44.8 million in the second quarter of 2025, compared to $48.0 million in the first quarter of 2025. Total liabilities were approximately $17.1 billion as of June 30, 2025, a decrease of $275.6 million from March 31, 2025. The following variances within the main components of total liabilities are noted: Total deposits decreased by $268.5 million consisting of: A $240.9 million decrease in deposits, excluding brokered CDs and government deposits, of which $222.1 million was in the Puerto Rico region. The decrease in such deposits includes a $262.7 million decrease in non-interest-bearing deposits, which consists of declines of $212.0 million in the Puerto Rico region, $48.8 million in the Florida region, and $1.9 million in the Virgin Islands region. The decrease in the Puerto Rico region was primarily driven by fluctuations in large commercial accounts. A $71.7 million decrease in government deposits, reflecting decreases of $54.2 million in the Puerto Rico region and $17.5 million in the Virgin Islands region. Partially offset by: A $44.1 million increase in brokered CDs in the Florida region. The increase consists of $92.2 million of new issuances with average maturities of approximately 0.9 years and an all-in cost of 4.33%, partially offset by maturing brokered CDs amounting to $48.1 million with an all-in cost of 5.21% that were paid off during the second quarter of 2025. An $11.1 million decrease in borrowings related to the redemption of the remaining TruPS issued by FBP Statutory Trust I, a financing trust that is wholly owned by the Corporation. Total stockholders' equity amounted to $1.8 billion as of June 30, 2025, an increase of $66.1 million from March 31, 2025, driven by the net income generated in the second quarter of 2025 and a $41.2 million increase in the fair value of available-for-sale debt securities due to changes in market interest rates recognized as part of accumulated other comprehensive loss, partially offset by $29.0 million in common stock dividends declared in the second quarter of 2025 and $28.2 million in common stock repurchases at an average price of $17.84. As of June 30, 2025, capital ratios exceeded the required regulatory levels for bank holding companies and well-capitalized banks. The Corporation's estimated CET1 capital, tier 1 capital, total capital and leverage ratios under the Basel III rules were 16.61%, 16.61%, 17.87%, and 11.41%, respectively, as of June 30, 2025, compared to CET1 capital, tier 1 capital, total capital, and leverage ratios of 16.62%, 16.62%, 17.96%, and 11.20%, respectively, as of March 31, 2025. Meanwhile, estimated CET1 capital, tier 1 capital, total capital and leverage ratios of our banking subsidiary, FirstBank, were 15.45%, 16.20%, 17.46%, and 11.13%, respectively, as of June 30, 2025, compared to CET1 capital, tier 1 capital, total capital and leverage ratios of 15.56%, 16.32%, 17.58%, and 11.00%, respectively, as of March 31, 2025. Liquidity Cash and cash equivalents decreased by $591.6 million to $736.7 million as of June 30, 2025. When adding $1.6 billion of free high-quality liquid securities that could be liquidated or pledged within one day, total core liquidity amounted to $2.3 billion as of June 30, 2025, or 12.17% of total assets, compared to $2.7 billion, or 14.25% of total assets as of March 31, 2025. In addition, as of June 30, 2025, the Corporation had $1.0 billion available for credit with the FHLB based on the value of the collateral pledged with the FHLB. As such, the basic liquidity ratio (which includes cash, free high-quality liquid assets such as U.S. government and government-sponsored enterprises' obligations that could be liquidated or pledged within one day, and available secured lines of credit with the FHLB to total assets) was approximately 17.58% as of June 30, 2025, compared to 18.76% as of March 31, 2025. In addition to the aforementioned available credit from the FHLB, the Corporation also maintains borrowing capacity at the FED Discount Window Program. The Corporation had approximately $2.7 billion available for funding under the FED's Borrower-In-Custody Program as of June 30, 2025. In the aggregate, as of June 30, 2025, the Corporation had $6.0 billion available to meet liquidity needs, or 133% of estimated uninsured deposits (excluding fully collateralized government deposits). The Corporation's total deposits, excluding brokered CDs, amounted to $16.0 billion as of June 30, 2025, compared to $16.3 billion as of March 31, 2025, which includes $3.4 billion in government deposits that are fully collateralized as of each of those periods. Excluding fully collateralized government deposits and FDIC-insured deposits, as of June 30, 2025, the estimated amount of uninsured deposits was $4.5 billion, which represents 28.10% of total deposits, compared to $4.6 billion, or 28.44% of total deposits, as of March 31, 2025. Refer to Table 11 in the accompanying tables (Exhibit A) for additional information about the deposits composition. Tangible Common Equity (Non-GAAP) On a non-GAAP basis, the Corporation's tangible common equity ratio increased to 9.56% as of June 30, 2025, compared to 9.10% as of March 31, 2025, driven by a decrease in tangible assets, quarterly earnings less dividends and repurchases of common stock, and the $41.2 million increase in the fair value of available-for-sale debt securities. Refer to Non-GAAP Disclosures- Non-GAAP Financial Measures for the definition of and additional information about this non-GAAP financial measure. The following table presents a reconciliation of the Corporation's tangible common equity and tangible assets to the most comparable GAAP items as of the indicated dates: Exposure to Puerto Rico Government Direct Exposure As of June 30, 2025, the Corporation had $286.9 million of direct exposure to the Puerto Rico government, its municipalities, and public corporations, compared to $288.1 million as of March 31, 2025. As of June 30, 2025, approximately $196.2 million of the exposure consisted of loans and obligations of municipalities in Puerto Rico that are supported by assigned property tax revenues and for which, in most cases, the good faith, credit, and unlimited taxing power of the applicable municipality have been pledged to their repayment, and $50.3 million consisted of loans and obligations which are supported by one or more specific sources of municipal revenues. The Corporation's total direct exposure to the Puerto Rico government also included $8.7 million in a loan extended to an affiliate of the Puerto Rico Electric Power Authority and $28.9 million in loans to public corporations of Puerto Rico. In addition, the total direct exposure included an obligation of the Puerto Rico government, specifically a residential pass-through MBS issued by the PRHFA, at an amortized cost of $2.8 million (fair value of $1.6 million as of June 30, 2025), included as part of the Corporation's available-for-sale debt securities portfolio. This residential pass-through MBS issued by the PRHFA is collateralized by certain second mortgages and had an unrealized loss of $1.2 million as of June 30, 2025, of which $0.3 million is due to credit deterioration. The aforementioned exposure to municipalities in Puerto Rico included $92.8 million of financing arrangements with Puerto Rico municipalities that were issued in bond form but underwritten as loans with features that are typically found in commercial loans. These bonds are accounted for as held-to-maturity debt securities. Indirect Exposure As of each of June 30, 2025 and March 31, 2025, the Corporation had $2.9 billion, respectively, of public sector deposits in Puerto Rico. Approximately 21% of the public sector deposits as of June 30, 2025 were from municipalities and municipal agencies in Puerto Rico, and 79% were from public corporations, the Puerto Rico central government and agencies, and U.S. federal government agencies in Puerto Rico. Additionally, as of June 30, 2025, the outstanding balance of construction loans funded through conduit financing structures to support the federal programs of Low-Income Housing Tax Credit ('LIHTC') combined with other federal programs amounted to $69.7 million, compared to $62.6 million as of March 31, 2025. The main objective of these programs is to spur development in new or rehabilitated and affordable rental housing. PRHFA, as program subrecipient and conduit issuer, issues tax-exempt obligations which are acquired by private financial institutions and are required to co-underwrite with PRHFA a mirror construction loan agreement for the specific project loan to which the Corporation will serve as ultimate lender but where the PRHFA will be the lender of record. The total amount of unfunded loan commitments related to these loans as of June 30, 2025 was $83.2 million. NON-GAAP DISCLOSURES This press release contains GAAP financial measures and non-GAAP financial measures. Non-GAAP financial measures are used when management believes that the presentation of these non-GAAP financial measures enhances the ability of analysts and investors to analyze trends in the Corporation's business and understand the performance of the Corporation. The Corporation may utilize these non-GAAP financial measures as guides in its budgeting and long-term planning process. Where non-GAAP financial measures are used, the most comparable GAAP financial measure, as well as the reconciliation of the non-GAAP financial measure to the most comparable GAAP financial measure, can be found in the text or in the tables in or attached to this press release. Any analysis of these non-GAAP financial measures should be used only in conjunction with results presented in accordance with GAAP. Certain non-GAAP financial measures, such as adjusted net income and adjusted earnings per share, and adjusted pre-tax, pre-provision income, exclude the effect of items that management believes are not reflective of core operating performance (the 'Special Items'). Other non-GAAP financial measures include adjusted net interest income and adjusted net interest income margin, tangible common equity, tangible book value per common share, and certain capital ratios. These measures should be read in conjunction with the accompanying tables (Exhibit A), which are an integral part of this press release, and the Corporation's other financial information that is presented in accordance with GAAP. Special Items The financial results for the quarter and six-month period ended June 30, 2024 included the following Special Item: FDIC Special Assessment Expense - Charges of $0.2 million ($0.1 million after-tax, calculated based on the statutory tax rate of 37.5%) and $1.1 million ($0.7 million after-tax, calculated based on the statutory tax rate of 37.5%) were recorded for the second quarter of 2024 and six-month period ended June 30, 2024, respectively, to increase the special assessment imposed by the FDIC in connection with losses to the Deposit Insurance Fund associated with protecting uninsured deposits following the failures of certain financial institutions during the first half of 2023. The estimated FDIC special assessment of $7.4 million was the revised estimated loss reflected in the FDIC invoice for the first quarterly collection period with a payment date of June 28, 2024. The FDIC deposit special assessment is reflected in the condensed consolidated statements of income as part of 'FDIC deposit insurance' expenses. Non-GAAP Financial Measures Adjusted Pre-Tax, Pre-Provision Income Adjusted pre-tax, pre-provision income is a non-GAAP performance metric that management uses and believes that investors may find useful in analyzing underlying performance trends, particularly in times of economic stress, including as a result of natural catastrophes or health epidemics. Adjusted pre-tax, pre-provision income, as defined by management, represents income before income taxes adjusted to exclude the provisions for credit losses on loans, unfunded loan commitments and debt securities. In addition, from time to time, earnings are also adjusted for certain items that management believes are not reflective of core operating performance, which are regarded as Special Items. Tangible Common Equity Ratio and Tangible Book Value per Common Share The tangible common equity ratio and tangible book value per common share are non-GAAP financial measures that management believes are generally used by the financial community to evaluate capital adequacy. Tangible common equity is total common equity less goodwill and other intangible assets. Tangible assets are total assets less goodwill and other intangible assets. Tangible common equity ratio is tangible common equity divided by tangible assets. Tangible book value per common share is tangible assets divided by common shares outstanding. Refer to Statement of Financial Condition - Tangible Common Equity (Non-GAAP) for a reconciliation of the Corporation's total stockholders' equity and total assets in accordance with GAAP to the non-GAAP financial measures of tangible common equity and tangible assets, respectively. Management uses and believes that many stock analysts use the tangible common equity ratio and tangible book value per common share in conjunction with other more traditional bank capital ratios to compare the capital adequacy of banking organizations with significant amounts of goodwill or other intangible assets, typically stemming from the use of the purchase method of accounting for mergers and acquisitions. Accordingly, the Corporation believes that disclosure of these financial measures may be useful to investors. Neither tangible common equity nor tangible assets, or the related measures, should be considered in isolation or as a substitute for stockholders' equity, total assets, or any other measure calculated in accordance with GAAP. Moreover, the manner in which the Corporation calculates its tangible common equity, tangible assets, and any other related measures may differ from that of other companies reporting measures with similar names. Net Interest Income Excluding Valuations, and on a Tax-Equivalent Basis Net interest income, interest rate spread, and net interest margin are reported excluding the changes in the fair value of derivative instruments and on a tax-equivalent basis in order to provide to investors additional information about the Corporation's net interest income that management uses and believes should facilitate comparability and analysis of the periods presented. The changes in the fair value of derivative instruments have no effect on interest due or interest earned on interest-bearing liabilities or interest-earning assets, respectively. The tax-equivalent adjustment to net interest income recognizes the income tax savings when comparing taxable and tax-exempt assets and assumes a marginal income tax rate. Income from tax-exempt earning assets is increased by an amount equivalent to the taxes that would have been paid if this income had been taxable at statutory rates. Refer to Table 4 in the accompanying tables (Exhibit A) for a reconciliation of the Corporation's net interest income to adjusted net interest income excluding valuations, and on a tax-equivalent basis. Management believes that it is a standard practice in the banking industry to present net interest income, interest rate spread, and net interest margin on a fully tax-equivalent basis. This adjustment puts all earning assets, most notably tax-exempt securities and tax-exempt loans, on a common basis that management believes facilitates comparison of results to the results of peers. NET INCOME AND RECONCILIATION TO ADJUSTED NET INCOME (NON-GAAP) The following table shows, for the second and first quarters of 2025 and six-month period ended June 30, 2025, net income and earnings per diluted share, and reconciles, for the second quarter of 2024 and six-month period ended June 30, 2024, net income to adjusted net income and adjusted earnings per diluted share, which are non-GAAP financial measures that exclude the significant Special Item discussed in the Non-GAAP Disclosures - Special Items section. INCOME BEFORE INCOME TAXES AND RECONCILIATION TO ADJUSTED PRE-TAX, PRE-PROVISION INCOME (NON-GAAP) The following table reconciles income before income taxes to adjusted pre-tax, pre-provision income for the last five quarters and for the six-month periods ended June 30, 2025 and 2024: Quarter Ended Six-Month Period Ended June 30, 2025 March 31, 2025 December 31, 2024 September 30, 2024 June 30, 2024 June 30, 2025 June 30, 2024 (Dollars in thousands) Income before income taxes $ 102,885 $ 100,299 $ 96,029 $ 96,386 $ 101,379 $ 203,184 $ 198,792 Add: Provision for credit losses expense 20,587 24,810 20,904 15,245 11,605 45,397 23,772 Add: FDIC special assessment expense - - - - 152 - 1,099 Adjusted pre-tax, pre-provision income (1) $ 123,472 $ 125,109 $ 116,933 $ 111,631 $ 113,136 $ 248,581 $ 223,663 Change from most recent prior period (amount) $ (1,637 ) $ 8,176 $ 5,302 $ (1,505 ) $ 2,609 $ 24,918 $ (12,436 ) Change from most recent prior period (percentage) -1.3 % 7.0 % 4.7 % -1.3 % 2.4 % 11.1 % -5.3 % (1) Non-GAAP financial measure. See Non-GAAP Disclosures above for the definition and additional information about this non-GAAP financial measure. Expand Conference Call / Webcast Information First BanCorp.'s senior management will host an earnings conference call and live webcast on Tuesday, July 22, 2025, at 10:00 a.m. (Eastern Time). The call may be accessed via a live Internet webcast through the Corporation's investor relations website, or through a dial-in telephone number at (833) 470-1428 or (404) 975-4839. The participant access code is 731851. The Corporation recommends that listeners go to the web site at least 15 minutes prior to the call to download and install any necessary software. Following the webcast presentation, a question and answer session will be made available to research analysts and institutional investors. A replay of the webcast will be archived in the Corporation's investor relations website, until July 22, 2026. A telephone replay will be available one hour after the end of the conference call through August 21, 2025, at (866) 813-9403. The replay access code is 506250. Safe Harbor This press release may contain 'forward-looking statements' concerning the Corporation's future economic, operational, and financial performance. The words or phrases 'expect,' 'anticipate,' 'intend,' 'should,' 'would,' 'will,' 'plans,' 'forecast,' 'believe,' and similar expressions are meant to identify 'forward-looking statements' within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are subject to the safe harbor created by such sections. The Corporation cautions readers not to place undue reliance on any such forward-looking statements, which speak only as of the date hereof, and advises readers that any such forward-looking statements are not guarantees of future performance and involve certain risks, uncertainties, estimates, and assumptions by us that are difficult to predict. Various factors, some of which are beyond our control, including, but not limited to, the uncertainties more fully discussed in Part I, Item 1A, 'Risk Factors' of the Corporation's Annual Report on Form 10-K for the year ended December 31, 2024, and the following, could cause actual results to differ materially from those expressed in, or implied by, such forward-looking statements: the effect of changes in the interest rate environment and inflation levels on the level, composition and performance of the Corporation's assets and liabilities, and corresponding effects on the Corporation's net interest income, net interest margin, loan originations, deposit attrition, overall results of operations, and liquidity position; volatility in the financial services industry, which could result in, among other things, bank deposit runoffs, liquidity constraints, and increased regulatory requirements and costs; the effect of continued changes in the fiscal, monetary and trade policies and regulations of the U.S. federal government, the Puerto Rico government and other governments, including those determined by the Federal Reserve Board, the Federal Reserve Bank of New York, the FDIC, government-sponsored housing agencies and regulators in Puerto Rico, the U.S., and the U.S. and British Virgin Islands, that may affect the future results of the Corporation; uncertainty as to the ability of FirstBank to retain its core deposits and generate sufficient cash flow through its wholesale funding sources, such as securities sold under agreements to repurchase, FHLB advances, and brokered CDs, which may require us to sell investment securities at a loss; adverse changes in general political and economic conditions in Puerto Rico, the U.S., and the U.S. and British Virgin Islands, including in the interest rate environment, unemployment rates, market liquidity and volatility, trade policies, housing absorption rates, real estate markets, and U.S. capital markets, which may affect funding sources, loan portfolio performance and credit quality, market prices of investment securities, and demand for the Corporation's products and services, and which may reduce the Corporation's revenues and earnings and the value of the Corporation's assets; the impact of government financial assistance for hurricane recovery and other disaster relief on economic activity in Puerto Rico, and the timing and pace of disbursements of funds earmarked for disaster relief; the ability of the Corporation, FirstBank, and third-party service providers to identify and prevent cyber-security incidents, such as data security breaches, ransomware, malware, 'denial of service' attacks, 'hacking,' identity theft, and state-sponsored cyberthreats, and the occurrence of and response to any incidents that occur, which may result in misuse or misappropriation of confidential or proprietary information, disruption, or damage to our systems or those of third-party service providers on which we rely, increased costs and losses and/or adverse effects to our reputation; general competitive factors and other market risks as well as the implementation of existing or planned strategic growth opportunities, including risks, uncertainties, and other factors or events related to any business acquisitions, dispositions, strategic partnerships, strategic operational investments, including systems conversions, and any anticipated efficiencies or other expected results related thereto; uncertainty as to the implementation of the debt restructuring plan of Puerto Rico and the fiscal plan for Puerto Rico as certified on June 5, 2024, by the oversight board established by the Puerto Rico Oversight, Management, and Economic Stability Act, or any revisions to it, on our clients and loan portfolios, and any potential impact from future economic or political developments and tax regulations in Puerto Rico; the impact of changes in accounting standards, or determinations and assumptions in applying those standards, and of forecasts of economic variables considered for the determination of the ACL; the ability of FirstBank to realize the benefits of its net deferred tax assets; the ability of FirstBank to generate sufficient cash flow to pay dividends to the Corporation; environmental, social, and governance ('ESG') matters, including our climate-related initiatives and commitments, as well as the impact and potential cost to us of any policies, legislation, or initiatives in opposition to our ESG policies; the impacts of natural or man-made disasters, widespread health emergencies, geopolitical conflicts (including sanctions, war or armed conflict, such as the ongoing conflict in Ukraine, the conflict in the Middle East, the possible expansion of such conflicts in surrounding areas and potential geopolitical consequences, and the threat of conflict from neighboring countries in our region), terrorist attacks, or other catastrophic external events, including impacts of such events on general economic conditions and on the Corporation's assumptions regarding forecasts of economic variables; the risk that additional portions of the unrealized losses in the Corporation's debt securities portfolio are determined to be credit-related, resulting in additional charges to the provision for credit losses on the Corporation's debt securities portfolio, and the potential for additional credit losses that could emerge from further downgrades of the U.S.'s Long-Term Foreign-Currency Issuer Default Rating and negative ratings outlooks; the impacts of applicable legislative, tax, or regulatory changes or changes in legislative, tax, or regulatory priorities, the reduction in staffing at U.S. governmental agencies, potential government shutdowns, and political impasses, including uncertainties regarding the U.S. debt ceiling and federal budget, as well as the current U.S. presidential administration and Puerto Rico government administration, on the Corporation's financial condition or performance; the risk of possible failure or circumvention of the Corporation's internal controls and procedures and the risk that the Corporation's risk management policies may not be adequate; the risk that the FDIC may further increase the deposit insurance premium and/or require further special assessments, causing an additional increase in the Corporation's non-interest expenses; any need to recognize impairments on the Corporation's financial instruments, goodwill, and other intangible assets; the risk that the impact of the occurrence of any of these uncertainties on the Corporation's capital would preclude further growth of FirstBank and preclude the Corporation's Board of Directors from declaring dividends; and uncertainty as to whether FirstBank will be able to continue to satisfy its regulators regarding, among other things, its asset quality, liquidity plans, maintenance of capital levels, and compliance with applicable laws, regulations and related requirements. The Corporation does not undertake to, and specifically disclaims any obligation to update any 'forward-looking statements' to reflect occurrences or unanticipated events or circumstances after the date of such statements, except as required by the federal securities laws. About First BanCorp. First BanCorp. is the parent corporation of FirstBank Puerto Rico, a state-chartered commercial bank with operations in Puerto Rico, the U.S., and the British Virgin Islands and Florida, and of FirstBank Insurance Agency. First BanCorp.'s shares of common stock trade on the New York Stock Exchange under the symbol FBP. Additional information about First BanCorp. may be found at EXHIBIT A Table 1 – Condensed Consolidated Statements of Financial Condition As of June 30, 2025 March 31, 2025 December 31, 2024 (In thousands, except for share information) ASSETS Cash and due from banks $ 735,384 $ 1,327,075 $ 1,158,215 Money market investments: Time deposit with another financial institution 500 500 500 Other short-term investments 826 700 700 Total money market investments 1,326 1,200 1,200 Available-for-sale debt securities, at fair value (ACL of $513 as of June 30, 2025, $516 as of March 31, 2025; and $521 as of December 31, 2024) 4,496,803 4,312,884 4,565,302 Held-to-maturity debt securities, at amortized cost, net of ACL of $765 as of June 30, 2025; $843 as of March 31, 2025; and $802 as of December 31, 2024 (fair value of $299,846 as of June 30, 2025; $305,501 as of March 31, 2025 and $308,040 as of December 31, 2024) 306,521 311,964 316,984 Total debt securities 4,803,324 4,624,848 4,882,286 Equity securities 45,202 44,813 52,018 Total investment securities 4,848,526 4,669,661 4,934,304 Loans, net of ACL of $248,578 as of June 30, 2025; $247,269 as of March 31, 2025; and $243,942 as of December 31, 2024 12,621,424 12,428,129 12,502,614 Mortgage loans held for sale, at lower of cost or market 9,857 14,713 15,276 Total loans, net 12,631,281 12,442,842 12,517,890 Accrued interest receivable on loans and investments 71,548 63,777 71,881 Premises and equipment, net 128,425 130,469 133,437 OREO 14,449 15,880 17,306 Deferred tax asset, net 134,772 134,346 136,356 Goodwill 38,611 38,611 38,611 Other intangible assets 4,535 5,715 6,967 Other assets 288,672 277,407 276,754 Total assets $ 18,897,529 $ 19,106,983 $ 19,292,921 LIABILITIES Deposits: Non-interest-bearing deposits $ 5,343,588 $ 5,629,383 $ 5,547,538 Interest-bearing deposits 11,210,450 11,193,146 11,323,760 Total deposits 16,554,038 16,822,529 16,871,298 Advances from the FHLB 320,000 320,000 500,000 Other borrowings - 11,143 61,700 Accounts payable and other liabilities 178,036 173,969 190,687 Total liabilities 17,052,074 17,327,641 17,623,685 STOCKHOLDERSʼ EQUITY Common stock, $0.10 par value, 223,663,116 shares issued (June 30, 2025 - 161,507,795 shares outstanding; March 31, 2025 - 163,104,181 shares outstanding; and December 31, 2024 - 163,868,877 shares outstanding) 22,366 22,366 22,366 Additional paid-in capital 959,629 957,380 964,964 Retained earnings 2,137,421 2,086,276 2,038,812 Treasury stock, at cost (June 30, 2025 - 62,155,321 shares; March 31, 2025 - 60,558,935 shares; and December 31, 2024 - 59,794,239 shares) (832,671 ) (804,185 ) (790,350 ) Accumulated other comprehensive loss (441,290 ) (482,495 ) (566,556 ) Total stockholdersʼ equity 1,845,455 1,779,342 1,669,236 Total liabilities and stockholdersʼ equity $ 18,897,529 $ 19,106,983 $ 19,292,921 Expand Table 2 – Condensed Consolidated Statements of Income Table 3 – Selected Financial Data Quarter Ended Six-Month Period Ended June 30, 2025 March 31, 2025 June 30, 2024 June 30, 2025 June 30, 2024 (Shares in thousands) Per Common Share Results: Net earnings per share - basic $ 0.50 $ 0.47 $ 0.46 $ 0.97 $ 0.90 Net earnings per share - diluted $ 0.50 $ 0.47 $ 0.46 $ 0.97 $ 0.90 Cash dividends declared $ 0.18 $ 0.18 $ 0.16 $ 0.36 $ 0.32 Average shares outstanding 160,884 162,934 164,945 161,903 166,043 Average shares outstanding diluted 161,513 163,749 165,543 162,625 166,670 Book value per common share $ 11.43 $ 10.91 $ 9.10 $ 11.43 $ 9.10 Tangible book value per common share (1) $ 11.16 $ 10.64 $ 8.81 $ 11.16 $ 8.81 Common stock price: end of period $ 20.83 $ 19.17 $ 18.29 $ 20.83 $ 18.29 Selected Financial Ratios (In Percent): Profitability: Return on average assets 1.69 1.64 1.61 1.66 1.59 Return on average equity 17.79 17.90 20.80 17.85 20.17 Interest rate spread (2) 3.89 3.79 3.41 3.84 3.38 Net interest margin (2) 4.71 4.65 4.32 4.68 4.29 Efficiency ratio (3) 49.97 49.58 51.23 49.78 51.84 Capital and Other: Average total equity to average total assets 9.49 9.14 7.74 9.32 7.87 Total capital 17.87 17.96 18.21 17.87 18.21 Common equity Tier 1 capital 16.61 16.62 15.77 16.61 15.77 Tier 1 capital 16.61 16.62 15.77 16.61 15.77 Leverage 11.41 11.20 10.63 11.41 10.63 Tangible common equity ratio (1) 9.56 9.10 7.66 9.56 7.66 Dividend payout ratio 36.12 38.06 34.80 37.07 35.59 Basic liquidity ratio (4) 17.58 18.76 18.50 17.58 18.50 Core liquidity ratio (5) 12.17 14.25 13.37 12.17 13.37 Loan to deposit ratio 77.80 75.44 75.00 77.80 75.00 Uninsured deposits, excluding fully collateralized deposits, to total deposits (6) 28.10 28.44 28.46 28.10 28.46 Asset Quality: Allowance for credit losses for loans and finance leases to total loans held for investment 1.93 1.95 2.06 1.93 2.06 Net charge-offs (annualized) to average loans outstanding 0.60 0.68 0.69 0.64 0.53 Provision for credit losses for loans and finance leases to net charge-offs 106.86 115.47 56.84 111.42 77.27 Non-performing assets to total assets 0.68 0.68 0.67 0.68 0.67 Nonaccrual loans held for investment to total loans held for investment 0.78 0.78 0.78 0.78 0.78 Allowance for credit losses for loans and finance leases to total nonaccrual loans held for investment 248.33 251.13 264.66 248.33 264.66 Allowance for credit losses for loans and finance leases to total nonaccrual loans held for investment, excluding residential estate loans 358.66 365.41 392.94 358.66 392.94 Expand ____________________ (1) Non-GAAP financial measures. Refer to Non-GAAP Disclosures and Statement of Financial Condition - Tangible Common Equity (Non-GAAP) above for additional information about the components and a reconciliation of these measures. (2) Non-GAAP financial measures reported on a tax-equivalent basis and excluding changes in the fair value of derivative instruments. Refer to Non-GAAP Disclosures and Table 4 below for additional information and a reconciliation of these measures. (3) Non-interest expenses to the sum of net interest income and non-interest income. (4) Defined as the sum of cash and cash equivalents, free high quality liquid assets that could be liquidated within one day, and available secured lines of credit with the FHLB to total assets. (5) Defined as the sum of cash and cash equivalents and free high quality liquid assets that could be liquidated within one day to total assets. (6) Exclude insured deposits not covered by federal deposit insurance. Expand Table 4 – Reconciliation of Net Interest Income to Net Interest Income Excluding Valuations and on a Tax-Equivalent Basis The following table reconciles net interest income in accordance with GAAP to net interest income excluding valuations, and net interest income on a tax-equivalent basis for the second and first quarters of 2025, the second quarter of 2024, and the six-month periods ended June 30, 2025 and 2024, respectively. The table also reconciles net interest spread and net interest margin to these items excluding valuations, and on a tax-equivalent basis. ____________________ (1) Includes, among other things, the ACL on loans and finance leases and debt securities, as well as unrealized gains and losses on available-for-sale debt securities. Expand Table 5 – Quarterly Statement of Average Interest-Earning Assets and Average Interest-Bearing Liabilities (On a Tax-Equivalent Basis) Average Volume Interest Income (1) / Expense Average Rate (1) (Dollars in thousands) Interest-earning assets: Money market and other short-term investments $ 1,070,545 $ 1,111,087 $ 667,564 $ 11,897 $ 12,205 $ 9,060 4.46 % 4.45 % 5.44 % Government obligations (2) 1,839,445 1,971,327 2,619,778 7,519 6,970 8,947 1.64 % 1.43 % 1.37 % MBS 3,289,215 3,308,964 3,359,598 17,979 17,497 14,339 2.19 % 2.14 % 1.71 % FHLB stock 26,114 32,661 34,032 645 790 818 9.91 % 9.81 % 9.64 % Other investments 20,525 19,977 17,637 174 247 244 3.40 % 5.01 % 5.55 % Total investments (3) 6,245,844 6,444,016 6,698,609 38,214 37,709 33,408 2.45 % 2.37 % 2.00 % Residential mortgage loans 2,854,624 2,841,918 2,807,639 41,674 41,484 40,686 5.86 % 5.92 % 5.81 % Construction loans 245,906 232,295 245,219 5,839 5,596 4,955 9.52 % 9.77 % 8.10 % C&I and commercial mortgage loans 5,892,848 5,806,929 5,528,607 100,761 99,759 100,919 6.86 % 6.97 % 7.32 % Finance leases 903,286 901,768 873,908 17,693 17,854 17,255 7.86 % 8.03 % 7.92 % Consumer loans 2,846,145 2,849,591 2,817,443 81,156 80,898 79,888 11.44 % 11.51 % 11.37 % Total loans (4) (5) 12,742,809 12,632,501 12,272,816 247,123 245,591 243,703 7.78 % 7.88 % 7.96 % Total interest-earning assets $ 18,988,653 $ 19,076,517 $ 18,971,425 $ 285,337 $ 283,300 $ 277,111 6.03 % 6.02 % 5.86 % Interest-bearing liabilities: Time deposits $ 3,190,402 $ 3,048,778 $ 3,002,159 $ 26,747 $ 25,468 $ 26,588 3.36 % 3.39 % 3.55 % Brokered CDs 487,787 483,774 676,421 5,491 5,461 8,590 4.52 % 4.58 % 5.09 % Other interest-bearing deposits 7,662,793 7,693,900 7,528,378 26,400 27,568 28,493 1.38 % 1.45 % 1.52 % Advances from the FHLB 320,000 468,667 500,000 3,518 5,190 5,610 4.41 % 4.49 % 4.50 % Other borrowings 9,429 53,892 161,700 175 981 3,336 7.44 % 7.38 % 8.27 % Total interest-bearing liabilities $ 11,670,411 $ 11,749,011 $ 11,868,658 $ 62,331 $ 64,668 $ 72,617 2.14 % 2.23 % 2.45 % Net interest income $ 223,006 $ 218,632 $ 204,494 Interest rate spread 3.89 % 3.79 % 3.41 % Net interest margin 4.71 % 4.65 % 4.32 % Expand ____________________ (1) Non-GAAP financial measures reported on a tax-equivalent basis. The tax-equivalent yield was estimated by dividing the interest rate spread on exempt assets by 1 less the Puerto Rico statutory tax rate of 37.5% and adding to it the cost of interest-bearing liabilities. When adjusted to a tax-equivalent basis, yields on taxable and exempt assets are comparable. Changes in the fair value of derivative instruments are excluded from interest income because the changes in valuation do not affect interest paid or received. Refer to Non-GAAP Disclosures - Non-GAAP Financial Measures and Table 4 above for additional information and a reconciliation of these measures. (2) Government obligations include debt issued by government-sponsored agencies. (3) Unrealized gains and losses on available-for-sale debt securities are excluded from the average volumes. (4) Average loan balances include the average of non-performing loans. (5) Interest income on loans includes $3.7 million, $5.4 million, and $3.1 million, for the quarters ended June 30,2025, March 31, 2025, and June 30,2024, respectively, of income from prepayment penalties and late fees related to the Corporation's loan portfolio. The results for the first quarter of 2025 include the aforementioned prepayment penalties associated with the payoff of a $73.8 million commercial mortgage loan and higher income from late fees in the consumer loans and finance leases portfolios. Expand Table 6 – Year-to-Date Statement of Average Interest-Earning Assets and Average Interest-Bearing Liabilities (On a Tax-Equivalent Basis) Average Volume Interest Income (1) / Expense Average Rate (1) Six-Month Period Ended June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024 (Dollars in thousands) Interest-earning assets: Money market and other short-term investments $ 1,090,704 $ 600,655 $ 24,102 $ 16,314 4.46 % 5.45 % Government obligations (2) 1,905,022 2,651,974 14,489 18,000 1.53 % 1.36 % MBS 3,299,035 3,405,445 35,476 29,577 2.17 % 1.74 % FHLB stock 29,370 34,334 1,435 1,672 9.85 % 9.77 % Other investments 20,253 17,094 421 310 4.19 % 3.64 % Total investments (3) 6,344,384 6,709,502 75,923 65,873 2.41 % 1.97 % Residential mortgage loans 2,848,306 2,808,972 83,158 81,159 5.89 % 5.79 % Construction loans 239,138 232,036 11,435 9,492 9.64 % 8.20 % C&I and commercial mortgage loans 5,850,126 5,516,695 200,520 199,993 6.91 % 7.27 % Finance leases 902,531 868,796 35,547 34,382 7.94 % 7.94 % Consumer loans 2,847,858 2,813,829 162,054 159,528 11.48 % 11.37 % Total loans (4) (5) 12,687,959 12,240,328 492,714 484,554 7.83 % 7.94 % Total interest-earning assets $ 19,032,343 $ 18,949,830 $ 568,637 $ 550,427 6.03 % 5.83 % Interest-bearing liabilities: Time deposits $ 3,119,981 $ 2,947,257 $ 52,215 $ 50,998 3.37 % 3.47 % Brokered CDs 485,792 713,091 10,952 18,270 4.55 % 5.14 % Other interest-bearing deposits 7,678,261 7,531,361 53,968 57,428 1.42 % 1.53 % Advances from the FHLB 393,923 500,000 8,708 11,220 4.46 % 4.50 % Other borrowings 31,538 161,700 1,156 6,686 7.39 % 8.29 % Total interest-bearing liabilities $ 11,709,495 $ 11,853,409 $ 126,999 $ 144,602 2.19 % 2.45 % Net interest income $ 441,638 $ 405,825 Interest rate spread 3.84 % 3.38 % Net interest margin 4.68 % 4.29 % Expand ____________________ (1) Non-GAAP financial measures reported on a tax-equivalent basis. The tax-equivalent yield was estimated by dividing the interest rate spread on exempt assets by 1 less the Puerto Rico statutory tax rate of 37.5% and adding to it the cost of interest-bearing liabilities. When adjusted to a tax-equivalent basis, yields on taxable and exempt assets are comparable. Changes in the fair value of derivative instruments are excluded from interest income because the changes in valuation do not affect interest paid or received. Refer to Non-GAAP Disclosures - Non-GAAP Financial Measures and Table 4 above for additional information and a reconciliation of these measures. (2) Government obligations include debt issued by government-sponsored agencies. (3) Unrealized gains and losses on available-for-sale debt securities are excluded from the average volumes. (4) Average loan balances include the average of non-performing loans. (5) Interest income on loans includes $9.1 million and $6.3 million for the six-month periods ended June 30, 2025 and 2024, respectively, of income from prepayment penalties and late fees related to the Corporation's loan portfolio. The results for the six-month period ended June 30, 2025 include the aforementioned prepayment penalties associated with the payoff of a $73.8 million commercial mortgage loan and higher income from late fees in the consumer loans and finance leases portfolios. Expand Table 7 – Loan Portfolio by Geography As of June 30, 2025 Puerto Rico Virgin Islands United States Consolidated (In thousands) Residential mortgage loans $ 2,190,283 $ 153,611 $ 515,264 $ 2,859,158 Commercial loans: Construction loans 191,610 12,875 40,865 245,350 Commercial mortgage loans 1,700,173 74,058 728,244 2,502,475 C&I loans 2,204,658 162,342 1,149,008 3,516,008 Commercial loans 4,096,441 249,275 1,918,117 6,263,833 Finance leases 901,256 - - 901,256 Consumer loans 2,772,532 67,354 5,869 2,845,755 Loans held for investment 9,960,512 470,240 2,439,250 12,870,002 Mortgage loans held for sale 9,857 - - 9,857 Total loans $ 9,970,369 $ 470,240 $ 2,439,250 $ 12,879,859 As of March 31, 2025 Puerto Rico Virgin Islands United States Consolidated (In thousands) Residential mortgage loans $ 2,181,346 $ 153,307 $ 503,193 $ 2,837,846 Commercial loans: Construction loans 183,220 10,571 40,650 234,441 Commercial mortgage loans 1,706,319 75,083 720,287 2,501,689 C&I loans 2,140,246 149,032 1,070,590 3,359,868 Commercial loans 4,029,785 234,686 1,831,527 6,095,998 Finance leases 905,035 - - 905,035 Consumer loans 2,762,208 68,833 5,478 2,836,519 Loans held for investment 9,878,374 456,826 2,340,198 12,675,398 Mortgage loans held for sale 14,713 - - 14,713 Total loans $ 9,893,087 $ 456,826 $ 2,340,198 $ 12,690,111 As of December 31, 2024 Puerto Rico Virgin Islands United States Consolidated (In thousands) Residential mortgage loans $ 2,166,980 $ 156,225 $ 505,226 $ 2,828,431 Commercial loans: Construction loans 181,607 2,820 43,969 228,396 Commercial mortgage loans 1,800,445 67,449 698,090 2,565,984 C&I loans 2,192,468 133,407 1,040,163 3,366,038 Commercial loans 4,174,520 203,676 1,782,222 6,160,418 Finance leases 899,446 - - 899,446 Consumer loans 2,781,182 69,577 7,502 2,858,261 Loans held for investment 10,022,128 429,478 2,294,950 12,746,556 Loans held for sale 14,558 434 284 15,276 Total loans $ 10,036,686 $ 429,912 $ 2,295,234 $ 12,761,832 Expand Table 8 – Non-Performing Assets by Geography As of June 30, 2025 (In thousands) Puerto Rico Virgin Islands United States Total Nonaccrual loans held for investment: Residential mortgage $ 12,967 $ 6,987 $ 10,836 $ 30,790 Construction 4,760 958 - 5,718 Commercial mortgage 2,360 8,170 12,375 22,905 C&I 19,506 642 201 20,349 Consumer and finance leases 19,791 527 18 20,336 Total nonaccrual loans held for investment 59,384 17,284 23,430 100,098 OREO 10,834 3,615 - 14,449 Other repossessed property 11,789 79 - 11,868 Other assets (1) 1,576 - - 1,576 Total non-performing assets (2) $ 83,583 $ 20,978 $ 23,430 $ 127,991 Past due loans 90 days and still accruing (3) $ 29,054 $ 481 $ - $ 29,535 As of March 31, 2025 (In thousands) Puerto Rico Virgin Islands United States Total Nonaccrual loans held for investment: Residential mortgage $ 15,081 $ 6,820 $ 8,892 $ 30,793 Construction 396 960 - 1,356 Commercial mortgage 2,583 8,075 12,497 23,155 C&I 19,672 672 - 20,344 Consumer and finance leases 22,460 335 18 22,813 Total nonaccrual loans held for investment 60,192 16,862 21,407 98,461 OREO 12,265 3,615 - 15,880 Other repossessed property 13,309 127 8 13,444 Other assets (1) 1,599 - - 1,599 Total non-performing assets (2) $ 87,365 $ 20,604 $ 21,415 $ 129,384 Past due loans 90 days and still accruing (3) $ 34,056 $ 3,061 $ - $ 37,117 As of December 31, 2024 (In thousands) Puerto Rico Virgin Islands United States Total Nonaccrual loans held for investment: Residential mortgage $ 16,854 $ 6,555 $ 8,540 $ 31,949 Construction 403 962 - 1,365 Commercial mortgage 2,716 8,135 - 10,851 C&I 19,595 919 - 20,514 Consumer and finance leases 22,538 205 45 22,788 Total nonaccrual loans held for investment 62,106 16,776 8,585 87,467 OREO 13,691 3,615 - 17,306 Other repossessed property 11,637 219 3 11,859 Other assets (1) 1,620 - - 1,620 Total non-performing assets (2) $ 89,054 $ 20,610 $ 8,588 $ 118,252 Past due loans 90 days and still accruing (3) $ 39,307 $ 3,083 $ - $ 42,390 Expand ____________________ (1) Residential pass-through MBS issued by the PRHFA held as part of the available-for-sale debt securities portfolio. (2) Excludes PCD loans previously accounted for under ASC Subtopic 310-30 for which the Corporation made the accounting policy election of maintaining pools of loans as 'units of account' both at the time of adoption of CECL on January 1, 2020 and on an ongoing basis for credit loss measurement. These loans will continue to be excluded from nonaccrual loan statistics as long as the Corporation can reasonably estimate the timing and amount of cash flows expected to be collected on the loan pools. The portion of such loans contractually past due 90 days or more amounted to $4.9 million as of June 30, 2025 (March 31, 2025 - $5.7 million; December 31, 2024 - $6.2 million). (3) These include rebooked loans, which were previously pooled into GNMA securities, amounting to $5.5 million as of June 30, 2025 (March 31, 2025 - $6.4 million; December 31, 2024 - $5.7 million). Under the GNMA program, the Corporation has the option but not the obligation to repurchase loans that meet GNMA's specified delinquency criteria. For accounting purposes, the loans subject to the repurchase option are required to be reflected on the financial statements with an offsetting liability. Expand Table 9 – Allowance for Credit Losses on Loans and Finance Leases Quarter Ended Six-Month Period Ended June 30, 2025 March 31, 2025 June 30, 2024 June 30, 2025 June 30, 2024 (Dollars in thousands) Allowance for credit losses on loans and finance leases, beginning of period $ 247,269 $ 243,942 $ 263,592 $ 243,942 $ 261,843 Provision for credit losses on loans and finance leases expense 20,381 24,837 11,930 45,218 24,847 Net recoveries (charge-offs) of loans and finance leases: Residential mortgage 15 (18 ) (45 ) (3 ) (289 ) Construction 13 14 14 27 24 Commercial mortgage 51 40 393 91 433 C&I 760 77 613 837 5,200 Consumer loans and finance leases (1) (19,911 ) (21,623 ) (1) (21,965 ) (41,534 ) (1) (37,526 ) (1) Net charge-offs (1) (19,072 ) (21,510 ) (1) (20,990 ) (40,582 ) (1) (32,158 ) (1) Allowance for credit losses on loans and finance leases, end of period $ 248,578 $ 247,269 $ 254,532 $ 248,578 $ 254,532
