September 30, 2025, as compared to 0.68% as of June 30, 2025, and 0.45% at September 30, 2024. At September 30, 2025, the ACL represented 190% of non-performing loans
The financial results reported in this document are preliminary and unaudited. Final financial results and other disclosures will be reported on Form 10-Q for the period ended September 30, 2025, and may differ materially from the results and disclosures in this document due to, among other things, the completion of final review procedures, the occurrence of subsequent events, or the discovery of additional information.
Three months ended
(dollars and shares in thousands, except per share data)
Total loans outstanding were $7.0 billion as of September 30, 2025, an increase of $322.9 million or 4.8% over September 30, 2024, and an increase of $47.8 million or 2.7% annualized as compared to the trailing quarter ended June 30, 2025. Investments decreased by $80.8 million and $260.3 million for the three and twelve month periods ended September 30, 2025, respectively, and ended the quarter with a balance of $1.86 billion or 18.8% of total assets. Quarterly average earning assets to quarterly total average assets was 91.8% on September 30, 2025, compared to 92.0% at September 30, 2024. The loan-to-deposit ratio was 84.1% on September 30, 2025, as compared to 83.2% at September 30, 2024. The Company did not utilize brokered deposits during 2025 or 2024 and continues to rely on organic deposit customers to fund cash flow timing differences.
Total shareholders' equity increased by $37.5 million during the quarter ended September 30, 2025, as net income of $34.0 million and a $16.4 million decrease in accumulated other comprehensive losses were partially offset by $11.7 million in cash dividends on common stock and $2.3 million in share repurchase activity. As a result, the Company's book value increased to $40.12 per share at
September 30, 2025, compared to $38.92 at June 30, 2025. The Company's tangible book value per share, a non-GAAP measure, calculated by subtracting goodwill and other intangible assets from total shareholders' equity and dividing that sum by total shares outstanding, was $30.61 per share at September 30, 2025, as compared to $29.40 at June 30, 2025. Changes in the fair value of available-for-sale investment securities, net of deferred taxes, continue to create moderate levels of volatility in tangible book value per share.
Loans outstanding increased by $47.8 million or 2.7% on an annualized basis during the quarter ended September 30, 2025. During the quarter, loan originations/draws totaled approximately $424.6 million while payoffs/repayments of loans totaled $377.1 million, which compares to originations/draws and payoffs/repayments during the trailing quarter ended of $457.7 million and $329.3 million, respectively. Origination volume was down relative to the robust prior quarter but remains in-line with forecasted levels. As interest rates continue to contract from the highs experienced in early 2025, and the macro-economic outlook remains optimistic for borrowers following the passage of tax and spending legislation that is expected to promote continued economic expansion, in addition to progress made finalizing tariff policies with the United States' largest trade partners. The activity within loan payoffs/repayments, while elevated in the most recent quarter, remains spread amongst numerous borrowers, regions and loan types.
Investment security balances decreased $80.8 million or 16.7% on an annualized basis during the quarter as a result of net prepayments/maturities of $143.6 million, and sales of $28.5 million, partially offset by net increases in the market value of securities of
$12.8 million and purchases of $73.4 million. Investment security purchases were comprised of fixed rate agency mortgage-backed securities, non-agency collateralized mortgage securities and collateralized loan obligations. While management intends to primarily utilize cash flows from the investment security portfolio and organic deposit growth to support loan growth, excess liquidity will be utilized for purchases of investment securities to support net interest income growth and net interest margin expansion.
Deposit balances decreased by $41.3 million or 2.0% annualized during the period due to declines in primarily savings deposit account balances.
The Company's yield on loans for the third quarter was 5.75%, a decrease of 1 basis point from 5.76% as of the trailing quarter end and a decrease of 8 basis points as compared to 5.83% for the period ended September 30, 2024. The tax equivalent yield on the Company's investment security portfolio was 3.49% for the quarter ended September 30, 2025, an increase of 19 basis points from the trailing quarter end of 3.30% and an increase of 3 basis points from the 3.46% earned during the three months ended September 30, 2024. As compared to the trailing quarter, costs on interest-bearing deposits increased by 2 basis points and interest-bearing liabilities were unchanged. The cost of total interest-bearing deposits decreased by 24 basis points, while the costs of total interest-bearing liabilities decreased by 35 basis points, respectively, between the three-month periods ended September 30, 2025 and 2024, respectively.
The FOMC cut short-term interest rates during the current quarter by 25 basis points, the first change in 2025 following 100 basis points in cuts during the fourth quarter in 2024. The fully tax-equivalent net interest income and net interest margin was $89.8 million and 3.92%, respectively, for the quarter ended September 30, 2025, and was $86.8 million and 3.88%, respectively, for the quarter ended June 30, 2025. More specifically, the net interest rate spread improved by 4 basis points to 3.20% for the quarter ended September 30, 2025, as compared to the trailing quarter, while the net interest margin similarly increased by 4 basis points to 3.92% over the same period.
The Company continues to manage its cost of deposits through the use of various pricing and product mix strategies. As of
September 30, 2025, June 30, 2025, and September 30, 2024, deposits priced utilizing these customized strategies totaled $1.0 billion,
$1.0 billion, and $1.4 billion and carried weighted average rates of 3.33%, 3.38% and 3.80%, respectively.
Net interest income (FTE) during the three months ended September 30, 2025, increased $3.0 million or 3.5% to $89.8 million compared to $86.8 million during the three months ended June 30, 2025. Net interest margin totaled 3.92% for the three months ended September 30, 2025, an increase of 4 basis points from the trailing quarter. The increase in net interest income is primarily attributed to a $3.6 million improvement in interest income on earning assets, led by elevated loan income totaling $2.3 million, primarily related to the benefit from new originations and fee income from increased refinance activity. The net interest margin was further enhanced by reductions in interest expense on junior subordinated debt of $0.7 million as compared to the trailing quarter, resulting from the early extinguishment of subordinated debt with a face value of $57.7 million, a recorded book value of $59.9 million, and a weighted average