Slide 1: Financial Results Third Quarter 2025
Financial Results Third Quarter 2025
Slide 2: Forward-Looking Statements & Non-GAAP Financial Measures
Forward-Looking Statements & Non-GAAP Financial Measures This presentation contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements with respect to the financial condition, results of operations
Slide 3: Key Business Highlights
Key Business Highlights Strategic Balance Sheet Optimization – Completed the sale of single tenant lease financing loans and repositioned deposits to enhance capital ratios and balance sheet flexibility for future growth Solid Revenue Momentum – Adjusted revenue up 30% with 8th consecutive quart
Slide 4: Credit & Lending Update – 3Q25
Credit & Lending Update – 3Q25 Building a Stronger Financial Foundation Proactive Credit Management – Increased reserves and resolved problem loans in small business and franchise finance portfolios – Cleaner credit profile sets the stage for future growth Franchise Finance Progress – Delinque
Slide 5: Third Quarter 2025 Highlights
Third Quarter 2025 Highlights Adjusted revenue of $43.5 million1, up almost 30% over Net interest margin of 2.04% and FTE NIM of 2.12%1,2, both 2Q25 and 3Q24 both up 8 bps from 2Q25 Adjusted pre-tax, pre-provision income (“PTPP”) of $18.1 Deposit costs declined 5 bps while the yield on inter
Slide 6: Loan Portfolio Overview
Loan Portfolio Overview Total portfolio loan balances decreased $732.2 million, or 16.8%, from 2Q25 – Excluding the impact of the loan sale, total loan balances increased $104.7 million, or 2.4%, from 2Q25 Commercial loan balances decreased $721.9 million, or 20.4%, from 2Q25 – Excluding the imp
Slide 7: Deposit Composition
Deposit Composition Total deposits decreased 7.2% from 2Q25 and are up 2.5% from 3Q24 Fintech partnership deposit production remained strong; moved over $700 million of deposits off-balance sheet to manage cash balances and size of balance sheet following loan sale Diversified deposit base com
Slide 8: Liquidity and 3Q25 Deposit Update
Liquidity and 3Q25 Deposit Update Cash and unused borrowing capacity totaled $2.9 billion as of September 30, 2025 – Currently represents 180% of total uninsured deposits and 216% of adjusted uninsured deposits – Off-balance sheet deposits can easily be moved back onto the balance sheet to support
Slide 9: Net Interest Income and Net Interest Margin
Net Interest Income and Net Interest Margin Net interest income on a GAAP and FTE basis were up Net Interest Income – GAAP and FTE1 8.4% and 8.1%, respectively, from 2Q25 Dollars in millions $31.5 $29.1 NIM and FTE NIM1 benefitted from declining interest- $24.7 $26.3 bearing liability costs whil
Slide 10: Net Interest Margin Drivers
Net Interest Margin Drivers Linked-quarter FTE NIM1 increased 8 bps from 2Q25; benefited from lower interest-bearing liability costs – Weighted average yield of 7.50% on funded portfolio originations during 3Q25, remaining well above total portfolio yield – Pay down of higher-cost FHLB advances la
Slide 11: Noninterest (Loss) Income
Noninterest (Loss) Income Noninterest (loss) income of ($24.6) million, down from $5.6 million in 2Q25 Recognized a net loss of $37.8 million on the sale of single tenant lease financing loans – Excluding the impact of the loan sale, noninterest income totaled $13.2 million, up 137.1% from 2Q25
Slide 12: Noninterest Expense
Noninterest Expense Noninterest expense of $25.5 million, up 16.8% from $21.8 million in 2Q25 Salaries and employee benefits increased $3.5 million, or 32.4%, due primarily to an increase in incentive compensation Loan expenses increased $0.3 million, or 21.7%, due mainly to collection expense
Slide 13: Asset Quality
Asset Quality Allowance for credit losses to total loans of 1.65% in 3Q25, up 58 bps from 2Q25 – Significantly increased the ACL related to small business lending – Small business lending ACL to unguaranteed balances of 7.94% Quarterly provision for credit losses was $34.8 million, compared to $
Slide 14: Capital
Capital Tangible common equity to tangible assets decreased 18 bps from 2Q25 to 6.17%1 Tangible book value per share of $39.881, down 9.9% from 2Q25 and down 9.1% from 3Q24 Regulatory capital ratios benefited from the sale of single tenant lease financing loans Tier 1 leverage ratio expected
Slide 15: Small Business Lending
Small Business Lending $401.6 million of balances as of September 30, 2025 Nationwide platform providing growth capital to entrepreneurs and small business owners 7th largest Small Business Administration 7(a) lender for the SBA’s 2025 fiscal year ended Managed SBA 7(a) Loans Portfolio Mix by
Slide 16: Construction and Investor Commercial Real Estate
Construction and Investor Commercial Real Estate $944.5 million of combined balances as of September 30, 2025 3Q25 unfunded commitment balances – Commercial construction/development: $352.5 million Average current loan balance of $16.5 million for investor CRE – Residential construction/develo
Slide 17: Single Tenant Lease Financing
Single Tenant Lease Financing $135.0 million of balances as of September 30, 2025 Strong historical credit performance Long-term financing of single tenant properties occupied No delinquencies in this portfolio by historically strong national and regional tenants Completed sale of $836.9 m
Slide 18: Public Finance
Public Finance $480.1 million of balances as of September 30, 2025 No delinquencies or losses since inception Provides a range of credit solutions for government and not-for-profit entities Borrowers’ needs include short-term financing, debt refinancing, infrastructure improvements, economic
Slide 19: C&I and Owner-Occupied Commercial Real Estate
C&I and Owner-Occupied Commercial Real Estate $256.3 million of combined balances as of September 30, Minimal office exposure; 0.4% of combined loan 2025 balances consisting of suburban office space Current C&I LOC utilization of 56% Average loan sizes C&I: $699,000 Owner-occupied CRE: $
Slide 20: Franchise Finance
Franchise Finance $450.3 million of balances as of September 30, 2025 Focused on providing growth financing to franchisees in a variety of industry segments Diversified by industry, geography and brand Average loan size of $723,000 Portfolio Mix by Borrower Use Portfolio Mix by State Portfol
Slide 21: Healthcare Finance
Healthcare Finance $150.5 million of balances as of September 30, 2025 Average loan size of $361,000 Borrower’s needs include practice finance or acquisition, acquiring or refinancing owner-occupied commercial real estate, equipment purchases and project loans Strong historical credit perfor
Slide 22: Residential Mortgage
Residential Mortgage $365.1 million of balances as of September 30, 2025 (includes home equity balances) Historically direct-to-consumer originations centrally located at corporate headquarters Focused on high quality borrowers – Average loan size of $197,000 – Average credit score at originat
Slide 23: Specialty Consumer
Specialty Consumer $423.0 million of balances as of September 30, 2025 Direct-to-consumer and nationwide dealer network originations Focused on high quality borrowers – Average credit score at origination of 779 – Average loan size of $27,000 Strong historical credit performance Concentratio
Slide 24: Appendix
Appendix 24
Slide 25: Loan Portfolio Composition
Loan Portfolio Composition Dollars in thousands 2022 2023 2024 1Q25 2Q25 3Q25 Commercial loans Commercial and industrial $ 126,108 $ 129,349 $ 120,175 $ 140,239 $ 174,475 $ 206,301 Owner-occupied commercial real estate 61,836 57,286 53,591 49,954 50,096 50,046 Investor commercial real estate 93,121
Slide 26: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Dollars in thousands, except for per share data 2019 2020 2021 2022 2023 2024 3Q25 Total equity - GAAP $304,913 $330,944 $380,338 $364,974 $362,795 $384,063 $352,168 Adjustments: Goodwill (4,687) (4,687) (4,687) (4,687) (4,687) (4,687) (4,687) Tangible c
Slide 27: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Dollars in thousands, except for per share data 3Q24 4Q24 1Q25 2Q25 3Q25 Total equity - GAAP $385,129 $384,063 $387,747 $390,239 $352,168 Adjustments: Goodwill (4,687) (4,687) (4,687) (4,687) (4,687) Tangible common equity $380,442 $379,376 $383,060 $385
Slide 28: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Dollars in thousands, except for per share data 3Q24 4Q24 1Q25 2Q25 3Q25 Total revenue - GAAP $33,794 $39,487 $35,523 $33,547 $5,705 Adjustments: Loss on sale of loans - - - - 37,823 Gain on prepayment of FHLB advance - (1,829) - - - Gain on termination
Slide 29: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Dollars in thousands, except for per share data 3Q24 4Q24 1Q25 2Q25 3Q25 Income (loss) before income taxes - GAAP $ 7,610 $ 8,329 $ 34 $ (1,861) $ (54,543) Adjustments: Loss on sale of loans - - - - 37,823 Gain on prepayment of FHLB advance - (1,829) - -
Slide 30: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Dollars in thousands, except for per share data 3Q24 4Q24 1Q25 2Q25 3Q25 Diluted average common shares outstanding 8,768,731 8,788,793 8,784,970 8,760,374 8,742,052 Diluted earnings per share - GAAP $ 0.80 $ 0.83 $ 0.11 $ 0.02 $ (4.76) Adjustments: Effec
Slide 31: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Dollars in thousands 3Q25 Tangible common equity $347,481 Adjustments: Accumulated other comprehensive loss 23,004 Adjusted tangible common equity $370,485 Tangible assets $5,634,487 Adjustments: Cash in excess of $300 million (487,661) Adjusted tangible