The financial results reflect a period of operational transition for the holding company. While the bank saw a 4% annualized loan growth rate—its first quarterly expansion in 13 quarters—the bottom line was impacted by the nonaccrual status of $11.4 million in out-of-market loans. Management established a $1.5 million reserve to address these specific credit issues, which they described as unique rather than systemic to the broader portfolio.

Despite the net loss, the company reported improved pre-tax, pre-provision income of $2.9 million when excluding severance expenses, up from $2.2 million in the previous quarter. This improvement was supported by disciplined cost-cutting, including a reduction in headcount to 269 employees, down from 333 a year ago. Interim CEO Harry Golliday noted that the bank is focusing on its community banking roots while exiting fintech lending partnerships, a shift that contributed to a decrease in average interest-earning assets to $2.28 billion. The firm’s capital position remains stable, with a tier 1 leverage ratio of 11.27% reported at the end of June.