FFB Bancorp Announces Third Quarter 2025 Results

FRESNO, Calif., Oct. 20, 2025 (GLOBE NEWSWIRE) — FFB Bancorp (the “Company”) (OTCQX: FFBB), the parent company of FFB Bank (the “Bank”), today reported net income of $6.24 million, or $2.06 per diluted share, for the third quarter of 2025, compared to $6.04 million, or $1.94 per diluted share, for the second quarter of 2025, and $8.56 million, or $2.69 per diluted share, for the third quarter of 2024.

For the nine months ended September 30, 2025, net income was $20.37 million, or $6.57 per diluted share, compared to $24.43 million, or $7.68 per diluted share, for the same period in 2024. All results are unaudited.

Third Quarter 2025 Summary: As of, or for the quarter ended September 30, 2025, compared to the quarter ended June 30, 2025 and September 30, 2024, respectively:

• Book value per common share increased 6% to $60.04, when compared to the previous quarter, and increased 17% from the same quarter of the prior year.
• Net interest margin of 5.15% improved 6 basis points from the previous quarter, and 4 basis points from the same quarter of the prior year.
• Operating revenue (net interest income, before the provision for credit losses, plus non-interest income) decreased 14% to $23.49 million from the previous quarter, and decreased 8% when compared to the same quarter of the prior year.
• Pre-tax, pre-provision income decreased 20% to $9.22 million from the previous quarter, and decreased 27% when compared to the same quarter of the prior year.
• Net income increased 3% to $6.24 million from the previous quarter, and decreased 27% when compared to the same quarter of the prior year.
• Total assets increased 2% to $1.50 billion from the previous quarter, and decreased 1% when compared to the same quarter of the prior year.
• Total portfolio of loans increased 3% to $1.12 billion from the previous quarter, and increased 12% when compared to the same quarter for the prior year.
• Total deposits increased 2% to $1.26 billion from the previous quarter, and decreased 2% when compared to the same quarter of the prior year.
• Shareholder equity increased 3% to $179.42 million from the previous quarter, and increased 10% when compared to the same quarter for the prior year.
• Return on average equity (“ROAE”) was 14.13%.
• Return on average assets (“ROAA”) was 1.67%.
• The Company’s tangible common equity ratio was 11.97%, while the Bank’s regulatory leverage capital ratio was 15.33%, and the total risk-based capital ratio was 20.94% at September 30, 2025.

“During the quarter we saw growth in the loan and deposit portfolios and continued to execute on our strategic plan, which includes technology and product and process improvement,” said Steve Miller, President & CEO. “In addition, we hired a Chief Banking Officer during the third quarter, further strengthening our leadership team and supporting our focus on executing a disciplined growth strategy. This role will be pivotal in driving sales performance, implementing more effective product cross-selling, attracting and developing future talent, and positions us to better capture business opportunities in our regions.”

Update on Stock Repurchase Program:

On January 22, 2025, the Company announced that it had authorized a plan to utilize up to $15.0 million of capital to repurchase shares of the Company’s common stock. As of September 30, 2025, the Company had fully utilized the $15.0 million authorization, repurchasing a total of 194,049 shares at an average price of $77.21. The repurchases represent approximately 7.73% of total shareholders’ equity at September 30, 2025.

During the third quarter of 2025 the Company repurchased 61,028 shares, at an average price of $78.11, totaling $4.77 million. These repurchases represented approximately 2.49% of total shareholders’ equity at September 30, 2025.

Results of Operations

Quarter ended September 30, 2025:

Operating revenue, consisting of net interest income before the provision for credit losses and non-interest income, decreased 8% to $23.49 million for the third quarter of 2025, compared to $25.40 million for the third quarter a year ago, and decreased 14% from $27.35 million for the second quarter of 2025. The decreases noted are the result of the decrease in non-interest income, primarily merchant services income.

Net interest income, before the provision for credit losses, increased 2% to $18.05 million for the third quarter of 2025, compared to $17.79 million for the same quarter a year ago, and decreased $52,000 from $18.11 million from last quarter. “Net interest income has benefited from strong loan portfolio growth, partially offset by higher funding costs,” said Bhavneet Gill, Chief Financial Officer. “We have been able to capitalize on a higher yielding loan portfolio, but interest income was impacted by a decrease in investment income resulting from sales in the previous quarter.”

The Company’s net interest margin (“NIM”) increased by 4 basis points to 5.15% for the third quarter of 2025, compared to 5.11% for the third quarter of 2024, and increased 6 basis points from 5.09% for the preceding quarter. “The increase in NIM is the result of retaining net interest income production, through higher yields, while average earnings assets have decreased. During the quarter, average non-interest bearing deposits decreased $61.61 million. The resulting shift in the deposit portfolio saw the cost of deposits increase 9 basis points,” noted Gill.

The yield on earning assets was 6.29% for the third quarter of 2025, compared to 6.15% for the third quarter a year ago, and 6.18% for the previous quarter. The cost to fund earning assets increased to 1.13% for the third quarter of 2025 compared to 1.09% for the previous quarter, and 1.04% for the same quarter a year earlier. This increase is the result of an increased reliance on wholesale funds during the quarter due to ISO deposit outflow that occurred in early June. As deposits for new and existing Bank customers, and existing ISO partners, increase over the next few quarters Management intends to reduce reliance on wholesale funding.

Total non-interest income was $5.44 million for the third quarter of 2025, compared to $7.62 million for the third quarter of 2024, and $9.24 million for the previous quarter. The decrease in non-interest income was primarily driven by a decrease in merchant services revenue, and lower gain on the sale of loans.

Merchant services revenue decreased 42% to $3.21 million for the third quarter of 2025, compared to $5.57 million from the third quarter of 2024. The decrease over prior year was attributed to planned ISO partner exits in the second and third quarter of 2025 and lower gross volume and revenue related to FFB Payments. Merchant services revenue decreased 51% from $6.61 million when compared to the second quarter of 2025 as a result of seasonal volume decreases related to the sports gaming vertical and the loss of a significant FFB Payments direct merchant in the previous quarter.

During the first and second quarters of 2025, ISO Partner Sponsorship volumes included $2.78 billion and $2.56 billion in volume, respectively, for the ISO partners that exited in the second quarter of 2025. Additionally, the first and second quarters of 2025 included ISO Partner Sponsorship revenues of $990,000 and $1.09 million, respectively, from the ISO partners that exited in the second quarter of 2025. “These ISO exits were driven by our efforts to comply with the Consent Order and designed to ensure best in class oversight. We anticipate replacing this volume and revenue through growth in FFB Payments and with our remaining ISO partners as we move forward,” said Miller. “Our Board of Directors recently approved an updated Merchant Services policy allowing the onboarding of new merchants in high-risk customer verticals. The new policy will enable FFB Payments and our remaining ISO partners to once again support all risk tiers in the payment space, while adhering to best in class compliance and AML/CFT standards.”

*ISO Partnership Sponsorship is recognized net of expense in Merchant Services Income. FFB Payments revenues are recognized on a gross basis in Merchant Services Income and Merchant Services expenses are recognized in Non-Interest Expense.

Total deposit fee income decreased 3% to $812,000 for the third quarter of 2025, compared to $837,000 for the third quarter of 2024, and decreased 5% from $854,000 for the previous quarter.

There was a $361,000 gain on the sale of loans during the third quarter of 2025, compared to a gain on the sale of loans of $636,000 during the third quarter 2024, and a gain on the sale of loans of $1.45 million in the previous quarter. There were no investment sales during the third quarter of 2025, and therefore, there was no loss on the sale of investments recorded, compared to a $16,000 gain recorded during the third quarter of 2024, and a $243,000 loss recorded in the previous quarter. The gain on the sale of loans during the quarter was the result of $4.77 million in SBA loan sales.

Non-interest expense decreased 9% to $14.27 million for the third quarter of 2025, compared to $15.77 million from the previous quarter, and increased 12%, compared to the $12.74 million recorded for the third quarter 2024. The increase on a year-over-year comparison was driven by increases in salaries and employee benefits expense, and increases in other operating expense, primarily data and software related expenses and professional fees. Compared to the second quarter of 2025 the decrease in non-interest expense was attributed to a decrease in merchant services operating expenses and salaries and employee benefit expense.

Salaries and employee benefits increased 19% to $7.67 million for the third quarter of 2025, compared to $6.47 million for the third quarter 2024. The increase year-over-year was primarily the result of expense associated with the increase in full-time employees. Full-time employees increased to 180 at September 30, 2025, compared to 163 full-time employees a year earlier. Total salaries and employee benefits decreased 4% from $8.00 million in the previous quarter.

Occupancy and equipment expenses increased 22% from a year ago, representing 3% of non-interest expense, and increased 30% from the previous quarter. These increases are the result of increases in depreciation and utilities expense. Merchant operating expense totaled $1.58 million for the third quarter of 2025, compared to $2.49 million for the third quarter of 2024 and $2.89 million for the previous quarter. The decrease in merchant operating expense is attributed to fluctuations in volume and revenue for the FFB Payments lines of business. Merchant operating expenses include interchange fees, chargebacks, partnership fees, and other card brand fees.

Other operating expense increased 34% or $1.17 million to $4.57 million from a year earlier and increased $41,000 from the previous quarter. The year-over-year increase was driven by increases of $294,000 in data and software related expense, $546,000 in professional fees, $145,000 in regulatory assessment expense, and $82,000 in operating losses. The increase in data and software expense and professional fees, which include legal, audit, and consulting fees, are primarily due to actions taken to enhance the Company’s AML/CFT, compliance, and merchant services programs.

The efficiency ratio was 60.76% for the third quarter of 2025, compared to 50.16% for the same quarter a year ago, and 57.15% for the previous quarter, which is the result of increases in other operating expenses. Additionally, the efficiency ratio can fluctuate period-over-period based on changes in merchant services’ gross revenues and associated expenses. The Company also calculates an adjusted efficiency ratio where the merchant services’ gross expense, which is included in non-interest expense, is netted against merchant services’ revenue in non-interest income. The adjusted efficiency ratio was 57.93% for the third quarter of 2025, compared to 44.75% for the same quarter a year ago, and 52.14% for the previous quarter.

“We continue to make intentional investments in people and technology to ensure that the bank can efficiently scale moving forward, and specifically to support our payment ecosystem, product development, regional expansion, and compliance/risk management initiatives. We saw elevated legal, audit, and technology related expenses throughout the year mostly related to addressing the Consent Order,” said Miller.

Nine months ended September 30, 2025:

For the nine months ended September 30, 2025, operating revenue increased 8% to $79.32 million, compared to $73.74 million for the same period in 2024. For the nine months ended September 30, 2025, net interest income before the provision for credit losses increased 7% to $55.06 million, compared to $51.23 million for the same period in 2024. The increase in revenue is attributed to growth in the loan portfolio, partially offset by a decrease in investment interest income. For the nine months ended September 30, 2025, the yield on earning assets was 6.26% compared to 6.06% for the same period in 2024, while the cost to fund earning assets was 1.06% for the nine months ended September 30, 2025, compared to 1.02% for the same period in 2024.

For the nine months ended September 30, 2025, non-interest income increased 8% to $24.26 million compared to $22.51 million for the same period in 2024. Deposit fee income increased 1% to $2.52 million resulting from growth in business demand deposit accounts. The year-over-year growth in non-interest income was also attributed to the decrease in loss on sale of investments and an increase in the gain on sale of loans.

For the nine months ended September 30, 2025, operating expenses increased by 20% to $46.51 million from $38.72 million for the same period in 2024. Salaries and employee benefits expense increased 20% to $23.73 million as a result of the increase in FTE. There was a 2% increase in merchant services operating expenses, to $7.64 million, which represents 16% of total operating expenses for nine months ended September 30, 2025. Other operating expenses increased 37% to $13.98 million due to a $1.00 million increase in technology related expenses, increases of $1.23 million in professional fees, $350,000 in marketing expense, and $376,000 in operational losses.

For the nine months ended September 30, 2025, the efficiency ratio was 58.46%, compared to 51.93% for the same period ended September 30, 2024. The adjusted efficiency ratio was 54.04%, compared to 46.55% for the same period ended September 30, 2024.

Balance Sheet Review

Total assets decreased 1% to $1.50 billion at September 30, 2025, compared to $1.51 billion at September 30, 2024, and increased 2% compared to $1.47 billion at June 30, 2025.

The total loan portfolio increased 12%, or $123.70 million, to $1.12 billion, compared to $998.22 million at September 30, 2024, and increased 3% from the $1.09 billion reported at June 30, 2025.

Commercial real estate loans increased 16% year-over-year to $709.89 million, representing 63% of total loans at September 30, 2025. The CRE portfolio includes approximately $279.50 million in multi-family loans originated by the Southern California team that the Company may consider selling at some point in the future for liquidity and concentration management. The multi-family portfolio includes $87.69 million in short-term bridge loans for transitional projects of multi-family properties. The short-term bridge loans are conservatively underwritten with minimum DSCR and liquidity requirements.

The real estate construction and land development loan portfolio decreased 49% from a year ago to $17.36 million, representing 2% of total loans, while residential RE 1-4 family loans totaled $20.36 million, or 2% of loans, at September 30, 2025, compared to $18.04 million one year ago.

The commercial and industrial (C&I) portfolio increased 13% to $269.90 million, at September 30, 2025, compared to $238.63 million a year earlier, and increased 1% from $266.81 million at June 30, 2025. C&I loans represented 24% of total loans at September 30, 2025.

Agriculture loans of $103.98 million represented 9% of the loan portfolio at September 30, 2025. At September 30, 2025, the SBA, USDA, and other government agencies guaranteed loans totaled $57.61 million, or 5.1% of the loan portfolio.

At September 30, 2025, loans held for sale totaled $23.46 million. These sales are expected to close early in the fourth quarter, and are the result of the timing needed to complete the transaction.

Investment securities totaled $248.28 million at September 30, 2025, compared to $345.43 million a year earlier, and decreased $5.90 million from $254.18 million at June 30, 2025. At September 30, 2025, the Company had a net unrealized loss position on its investment securities portfolio of $20.37 million, compared to a net unrealized loss of $25.41 million at June 30, 2025. The Company’s investment securities portfolio had an effective duration of 6.17 years at September 30, 2025, compared to 6.26 years at June 30, 2025.

Total deposits decreased 2%, or $28.69 million, to $1.26 billion at September 30, 2025, compared to $1.29 billion from a year earlier, and increased $23.61 million from $1.23 billion at June 30, 2025. Non-interest bearing demand deposits decreased 8% to $758.24 million at September 30, 2025, compared to $826.71 million at September 30, 2024, and decreased $1.06 million from $759.30 million at June 30, 2025. Non-interest bearing demand deposits represented 60% of total deposits at September 30, 2025. During the third quarter of 2025 non-interest bearing demand deposits were reduced by $4.95 million due to strategic ISO partner exits. Certificates of deposits increased 2%, or $3.40 million, during the quarter.

Included in non-interest bearing deposits at September 30, 2025 are $79.89 million from ISO partners for merchant reserves, $18.91 million from ISO partners for settlement, and $13.11 million in ISO partner operating accounts, totaling $111.91 million. These deposits represent 14.8% of non-interest bearing deposits and 8.9% of total deposits.

Within the $111.91 million in ISO partner deposits retained as of September 30, 2025 are $24.61 million in deposits for ISO partners exiting in the fourth quarter of 2025. The Bank plans to replace these non-interest bearing deposits with growth from new Bank customers in its markets and from the existing ISO partners it will continue to support.

There was $7.00 million in short-term borrowings at September 30, 2025, compared to no borrowings at September 30, 2024, and $16.00 million at June 30, 2025. The Company primarily utilizes FHLB advances and the Federal Reserve discount window for short-term borrowings. The following table summarizes the Company’s primary and secondary sources of liquidity which were available at September 30, 2025:

The total primary and secondary liquidity of $648.90 million at September 30, 2025 represents a decrease of $23.75 million in primary and secondary liquidity quarter-over-quarter.

Shareholders’ equity increased 10% to $179.42 million at September 30, 2025, compared to $163.64 million from a year ago, and increased 3% from the $173.91 million reported at June 30, 2025. Book value per common share increased 17% to $60.04, at September 30, 2025, compared to $51.52 at September 30, 2024, and increased 6% from $56.87 at June 30, 2025. The tangible common equity ratio was 11.97% at September 30, 2025, compared to 10.82% a year earlier, and 11.80% at June 30, 2025. Book value improved as a result of quarterly net income and a reduction in shares outstanding through share repurchases.

At the Bank level, unrealized losses and gains reflected in AOCI are not included in regulatory capital. As a result, Tier-1 capital at the Bank for regulatory purposes was $229.26 million at quarter end excluding the unrealized loss. The regulatory leverage capital ratio was 15.33% for the current quarter, while the total risk-based capital ratio was 20.94%, exceeding regulatory minimums to be considered well-capitalized.

Asset Quality

Nonperforming assets, which consists of nonperforming loans and other real estate owned, increased 2.54% to $27.93 million, or 1.86% of total assets, at September 30, 2025, compared to $27.23 million, or 1.85% of total assets, from the previous quarter. Of the $26.95 million in nonperforming loans, $11.64 million are covered by SBA guarantees. Total delinquent loans increased to $7.53 million at September 30, 2025, compared to $2.86 million at June 30, 2025.

Past due loans 30-60 days were $6.21 million at September 30, 2025, compared to $1.80 million at June 30, 2025, and $1.65 million at September 30, 2024. There were $355,000 in past due loans from 60-90 days at September 30, 2025, compared to $1.02 million at June 30, 2025 and $1.39 million in past due loans from 60-90 days a year earlier. Past due loans 90+ days at quarter end totaled $966,000 at September 30, 2025, compared to $46,000 at June 30, 2025 and $322,000 at September 30, 2024. The increase in loans past due 90+ days is the result of the migration of one SBA guaranteed loan.

Of the $7.53 million in past due loans at September 30, 2025, $1.17 million were purchased government guaranteed loans, which are guaranteed by the SBA for the full payment of the principal plus interest.

There was a $687,000 provision for credit losses in the third quarter of 2025, compared to $762,000 provision for credit losses in the third quarter a year ago, and a $3.16 million provision for credit losses booked in the second quarter of 2025. The provision recorded during the third quarter of 2025 is the result of portfolio growth and net charge-offs recognized.

The ratio of allowance for credit losses to total loans was 1.36% at September 30, 2025, compared to 1.15% a year earlier and 1.40% at June 30, 2025. The Company individually evaluates non-accrual loans in the allowance for credit losses which has resulted in carrying a higher level of reserve.

As of September 30, 2025 the Bank carried $978,000 in other real estate owned (“OREO”). This OREO was the result of a loan foreclosure completed during the second quarter of 2025 where the bank acquired a single-family-residence property as payment through collateral. The property is in good condition and is anticipated to sell during the fourth quarter of 2025.

“As SBA loans have historically been the primary driver of nonperforming loans, the portfolio is monitored very closely. Rates have increased rapidly in recent years putting pressure on borrowers. A majority of the loans within the portfolio are floating rate loans tied to WSJ Prime and reset quarterly. Borrowers saw an additional 25bps rate reduction during the quarter and may see further reductions going in to 2026,” added Miller. “The ratio of allowance for credit losses to the total, non-guaranteed, loan portfolio was 1.44%, as of September 30, 2025, and our total non-guaranteed exposure on these SBA loans is $46.40 million spread over 230 loans.”

“We incurred net charge offs of $571,000 during the current quarter, compared to $4,000 in net recoveries in the third quarter a year ago, and $605,000 in net charge offs in the previous quarter. The charge-offs recognized in the quarter were primarily attributed to several unsecured small business loans,” said Miller. “Our loan portfolio increased 12% from a year ago with commercial real estate (“CRE”) loans representing 63% of the total loan portfolio. Within the CRE portfolio, there are $48.24 million in loans for CRE office as shown in the table below. Since the majority of our CRE office exposure is concentrated in the Central Valley, we are experiencing less volatility than city center CRE markets. Our credit metrics remain strong as we continue to maintain conservative underwriting standards.”

About FFB Bancorp

FFB Bancorp, formerly Communities First Financial Corporation, a bank holding company established in 2014, is the parent company of FFB Bank, founded in 2005 in Fresno, California. As a leading SBA Lender in California’s Central Valley and one of the few direct acquiring banks in the United States, FFB Bank offers clients a range of personal and business checking accounts, payment processes, and loan programs. Among the Bank’s awards and accomplishments, it was ranked #1 on American Banker’s list of the Top 20 Publicly Traded Banks under $2 Billion in Assets for 2024. The Bank was also ranked by S&P Global as the #34 best performing US community bank under $3 billion in assets. The Company has also received recognition as part of the OTCQX Best 50 Companies for 2019, 2023, and 2024. For additional information, you can visit the Company’s website at www.ffb.bank or by contacting a representative at 559-439-0200.

Forward Looking Statements

This earnings release may contain forward-looking statements. Forward-looking statements provide current expectations or forecasts of future events and are not guarantees of future performance, nor should they be relied upon as representing management’s views as of any subsequent date. The forward-looking statements are based on managements’ expectations and are subject to a number of risks and uncertainties. Although management believes that the expectations reflected in such forward-looking statements are reasonable, actual results may differ materially from those expressed or implied in such statements. Risks and uncertainties that could cause actual results to differ materially include, without limitation, the Company’s ability to effectively execute its business plans; the impact of the Consent Order on our financial condition and results of operations; changes in general economic and financial market conditions; changes in interest rates, and in particular, actions taken by the Federal Reserve to try and control inflation; changes in the competitive environment; continuing consolidation in the financial services industry; new litigation or changes in existing litigation; losses, customer bankruptcy, claims and assessments; changes in banking regulations or other regulatory or legislative requirements affecting the Company’s business; international developments; the tariff strategy of the Trump administration, and its related effects on the agriculture industry and connected businesses in the Central Valley; and changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board or other regulatory agencies. The Company undertakes no obligation to release publicly the results of any revisions to the forward-looking statements included herein to reflect events or circumstances after today, or to reflect the occurrence of unanticipated events. The Company claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

Member FDIC

Contact: Steve Miller – President & CEO
Bhavneet Gill – EVP & CFO
(559) 439-0200