0001295401-26-000004
SEC filingNet income rose 5.1% to $60.1M, driven by higher non-interest income and lower provision, partially offset by net interest margin compression.
Net income for the first quarter of 2026 was $60.1 million, up 5.1% from $57.2 million in the prior year quarter. Diluted earnings per share increased 18.5% to $1.41, reflecting both higher net income and a reduction in diluted shares outstanding from share repurchases. The earnings improvement was driven by growth in non-interest income, particularly from fintech fees, and a lower provision for credit losses, partially offset by net interest margin compression.
Non-interest income benefited from strong performance in consumer credit fintech fees, which increased due to continued organic volume growth with existing partners and the impact of new products launched within the past year. Prepaid and debit card gross dollar volume also rose, contributing to higher prepaid, debit card and related fees. Additionally, ACH, card and other payment processing fees increased, reflecting higher rapid funds transfer volume.
The provision for credit losses decreased significantly compared to the prior year quarter, primarily due to improved performance in the fintech loan portfolio. This decline in provision supported net income despite lower net interest income.
Net interest margin compressed as the loan mix continued to shift toward lower-yielding fintech loans. The company expects this trend to persist as it increases the proportion of fintech loans in its portfolio in 2026 and beyond. The cost of deposits and interest-bearing liabilities decreased, driven by a lower rate environment, which partially mitigated the margin compression.