I believe that our relentless focus on these three simple metrics accounts for the extraordinary total shareholder return we've produced over more than two decades now. Other metrics like net interest margin, cost of funds, deposit betas, efficiency ratios are all interesting, but in my opinion, they're not highly correlated with total shareholder returns. And so that's why we're so dogging in our pursuit of revenue, EPS, and tangible book value per share growth. In 2Q twenty five, revenue was up 15.1% over the same quarter last year.
And as you can see on the leftmost chart, peers have been unable to grow net interest income while we grew 7%. It's been a time of slow economic growth leading to very limited loan growth over the last couple of years. And so you can see in the center chart, peers have been unable to grow their earning assets while our model produced double digit earning asset growth. Remember those two double digit balance sheet growth metrics, 10% earning asset growth and 13% core deposit growth even in a difficult operating environment when peers struggle to grow.
Now, I'm always cautious when I'm telling the story about our ability to produce such rapid and reliable balance sheet growth. In my opinion, we've become the employer of choice for many of those revenue producers at our largest competitors. So if you think through that idea right there, generally we're hiring revenue producers with nearly two decades of experience. And what that means is they can move their book quickly, which produces both rapid and reliable growth, and they intentionally leave their bad credits behind, which in my view produces outstanding asset quality.
| Metric | Period | Current guidance |
|---|---|---|
| End-of-period loan growth | FY2025 | 9%-11% (low end adjusted) |
| Total deposit growth | FY2025 | 7%-10% (maintained) |
| Net interest income growth | FY2025 | 12%-13% (tightened lower end) |
| Net interest margin | FY2025 | flattish with some upward bias |
| Net charge-offs | FY2025 | 18-20 basis points (low end up two basis points) |
| Provision to average loans | FY2025 | 24-25 basis points (upper end lowered) |
| Non-interest income growth | FY2025 | 12%-15% |
| BHG earnings growth | FY2025 | approximately 40% over 2024 |
| Total expenses | FY2025 | $1.145 billion-$1.155 billion |
| Associate incentive payout | FY2025 | 115% of target (as of June 30) |
| Effective tax rate | FY2025 | not restated |
| Fed funds rate assumption | FY2025 | one rate cut forecast in October |
| Metric | YoY | Note |
|---|---|---|
| Revenue | +15.1% | Sustained balance sheet growth from recruiting revenue producers and consolidating their books |
| Adjusted EPS | +22.7% | Operating leverage on outsized revenue growth |
| Tangible book value per share | +10.9% | Reliable balance sheet and earnings compounding |
| Net interest income (since 2Q23) | +7% while peers were unable to grow | Double-digit earning asset growth through the inverted-yield-curve cycle |
| Core deposits (since 2Q23) | +13%, roughly five times the peer median | Market-share takeaway model producing deposit growth despite a shrinking money supply |
| C&I loans | +22% annualized | Broad-based growth across the franchise with no single industry concentration |
| BHG fee revenue | over $26 million in the quarter | Strong production and community-bank-network loan sales at the largest spread since 2022 |
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Organic hiring model | 12% CAGR in revenue producer hiring | 71 producers hired year to date with 59 offers outstanding; 2020-2024 cohort projected to add ~$19 billion in assets through 2029 | — |
| Market-share takeaway strategy | Long-standing targeting of vulnerable share leaders | Reinforced as the safest growth path, capitalizing on competitors' poor client and associate experience | — |
| BHG | 20% 2025 growth estimate | Raised to ~40% on better credit (described as pivoted), lower operating costs, and strong lead flow; roughly 70/30 consumer/commercial mix; monetization possible as the market improves | — |
| Client sentiment and loan demand | Expected pickup earlier in the year | Cautious clients keeping the clutch in on tariff and macro uncertainty; upside to loan growth if broader demand returns | — |
| CRE re-entry | Lowered concentration limits | Re-entered the market three to four months ago in multifamily and industrial; targeting ~70% of capital for construction and 225% for total CRE | — |
| Regulatory environment | — | More positive tone from regulators, including FDIC easing on M&A and dialogue on the $100 billion threshold | — |