Category: Banking

MIL-OSI Economics: AuraSwiss: BaFin also warns consumers about the website auraswiss.co

Source: Bundesanstalt für Finanzdienstleistungsaufsicht – In English

The Federal Financial Supervisory Authority (BaFin) again warns consumers about the company AuraSwiss and the services it is offering. BaFin has already issued a warning, on 3 January 2025, about AuraSwiss and its website auraswiss.net, which has since been deactivated. The unknown operators are now using the nearly identical website auraswiss.co. BaFin suspects the operators of the websites of offering consumers financial, investment and cryptoasset services without the required authorisation.

The content of the websites is identical to other platforms that BaFin has previously warned consumers about and that display the same opening sentence: “Invest in Success Prosper with Confidence!”

Anyone conducting banking business or providing financial, investment or cryptoasset services in Germany may do so only with authorisation from BaFin. However, some companies offer these services without the necessary authorisation. Information on whether a particular company has been granted authorisation by BaFin can be found in BaFin’s database of companies.

BaFin is issuing this information on the basis of section 37 (4) of the German Banking Act (Kreditwesengesetz – KWG) and section 10 (7) of the German Cryptomarkets Supervision Act (Kryptomaerkteaufsichtsgesetz).

Please be aware:

BaFin, the German Federal Criminal Police Office (Bundeskriminalamt – BKA) and the German state criminal police offices (Landeskriminalämter) recommend that consumers seeking to invest money online should exercise the utmost caution and do the necessary research beforehand in order to identify fraud attempts at an early stage.

MIL-OSI Global: Trump pulls out of WHO and Paris – how did international bodies get through deglobalisation last time around?

Source: The Conversation – UK – By Perri 6, Emeritus Professor of Public Management, Queen Mary University of London

Donald Trump has ordered the US to leave the World Health Organization. Skorzewiak / Shutterstock

Following Donald Trump’s return to the White House, much attention has been given to his plans for tariffs on imported goods, deportations of illegal migrants, and cuts to federal government spending. Fewer column inches have addressed the implications of his presidency for global regulatory bodies.

Just as he did during his first term, Trump has announced the withdrawal of the US from the World Health Organization (WHO) and from the Paris climate accords.

And because his tariffs programme will challenge World Trade Organization (WTO) rules, Trump is likely to continue the US policy of stymieing the WTO’s appellate body, which adjudicates on trade disputes between states. US withdrawals from other international regulatory bodies are also possible.

Each of the bodies from which Trump withdrew last time around survived. However, threats to global regulatory bodies today could be greater than they were during Trump’s first term.

In the US and beyond, deglobalisation has so far been evident only in state policies, and not in trade flows. China, for example, has set up and now dominates several regional investment and trade organisations to provide alternatives to the International Monetary Fund and World Bank.

However, tariff retaliation and bloc-based regulatory standards could soon turn “slowbalisation” – a trend whereby political support for open trade has gradually weakened and the rate of growth in world trade has slowed – into trade deglobalisation.

We have been here before. The 1930s were characterised by high tariffs, breakup of trade into blocs, and withdrawals and expulsions of major powers from global bodies. In the 1940s, which saw the breakout of the second world war, trade was conducted almost exclusively among allies.

Yet almost all international regulatory bodies survived during this period, albeit they were bruised and were able to achieve less as a result.

Our study, which was published in 2021, distinguished pathways through which three distinct groups of global regulatory bodies either survived or else handed over their archives, networks and organisational capacity to their UN-era successors.

Preserving rule sets

One inter-war group of industry-specific global regulators oversaw capital-intensive and infrastructure-heavy international industries such as telecommunications and railways. This group included the International Telecommunications Union and a modest alphabet soup of closely cooperating railway bodies.

In these fields, interconnection depended on common but frequently updated and adjusted rule sets for technology, accounting and routing management. They also required continuous statistical collections by international bureaus.

Unable to agree major regulatory innovation after the global economic crisis began in 1931, these bodies reduced their focus to managing and maintaining their existing rule sets and information services.

On the outbreak of war in Europe, their bureaus went into a phase of severely reduced activity, with many of their activities suspended. However, they continued to collect and publish statistics, maintained their networks within member states, and developed ambitious plans for peacetime.

The International Telecommunications Union and the railway authorities resumed operations shortly after the end of hostilities with their rule sets intact.

Individual brokering work

A second cluster were generic bodies, responsible for the oversight of labour relations and aspects of capital flows. These are faster-moving fields than infrastructure-heavy industries. These bodies included the International Labour Organization (ILO) and the Economic and Financial Organisation of the League of Nations (EFO).

They provided expertise for negotiating agreements on particular problems. In the case of the ILO, this included conventions on working time, women’s working conditions, and forced labour. The EFO brokered financial support with strict conditions for Austria and Hungary, then new and struggling states which faced acute financial crises in the early 1920s.

These organisations faced increasing difficulties during the deglobalisation of the 1930s. But they continued to provide bilaterally negotiated support for many countries. The ILO, for example, provided technical assistance to some south American governments on the design of social insurance schemes, while the EFO’s financial committee worked with central banks.

Survival or bequest was secured by the brokering work of key individual leaders who were able to exploit fluid networks among states, firms and unions in global labour and capital debates.

The EFO secured the transfer of key staff, networks and traditions to post-war bodies including the UN Economic and Social Council and the UN Food and Agriculture Organization. And the ILO’s director-general, Edward Phelan, was crucial in negotiating with the US to relaunch the organisation with a new programme for the post-war era.

New international clubs

A third group of regulatory bodies was created precisely in response to the 1930s global economic crisis. These were international commodity unions for goods such as tin, rubber, tea and sugar.

Most were publicly run cartels, often backed by the imperial blocs that dominated the fragmenting world trade system. Like many cartels, their cohesion was fragile. But many of those that were successfully established managed to survive the 1930s and the war that followed.

Their survival depended less on the formal administrative organisation of the infrastructure bodies or the individual brokering work that sustained the capital and labour bodies. It was dependent more on their ability to draw upon club-like collective bonds both among major producing and exporting firms and among officials across key producer states and imperial authorities.

Within the tightly bonded International Tin Committee, for example, a succession of agreements on prices, quotas and voting rights were settled. Despite initial US reluctance to see these international commodity unions continue into peacetime, President Harry Truman was persuaded of their temporary value for economic order during reconstruction.

Some even continued until the 1970s, when they collapsed in that decade’s global economic turmoil. Freer markets then superseded intergovernmental cartels.

Trump’s policies, as well as those of China, Russia and other major powers, may again endanger the roles of global regulatory bodies. But some will survive by focusing on the routine maintenance services provided by their bureaus, and some will empower individual leaders to negotiate their way to reinvention and survival.

Others will pass their capacity to new agencies when deglobalisation eventually abates. And some new international bodies may emerge in response to conditions in industries most adversely affected by the changing terms of trade.

Our work has led us to conclude that which strategy is chosen depends on two things. First, on the features of the field being regulated. And second on the informal social organisation within the international bodies and member states, which shapes how people can act and the skills they can sustain.

It remains to be seen how informal social organisation in the WHO and climate treaty system will now evolve after US withdrawal.

Eva Heims has received funding from the ESRC.

Martha Prevezer and Perri 6 do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.

– ref. Trump pulls out of WHO and Paris – how did international bodies get through deglobalisation last time around? – https://theconversation.com/trump-pulls-out-of-who-and-paris-how-did-international-bodies-get-through-deglobalisation-last-time-around-247919

MIL OSI – Global Reports –

MIL-OSI: Capital City Bank Group, Inc. Reports Fourth Quarter 2024 Results

Source: GlobeNewswire (MIL-OSI)

TALLAHASSEE, Fla., Jan. 28, 2025 (GLOBE NEWSWIRE) — Capital City Bank Group, Inc. (NASDAQ: CCBG) today reported net income attributable to common shareowners of $13.1 million, or $0.77 per diluted share, for the fourth quarter of 2024 compared to $13.1 million, or $0.77 per diluted share, for the third quarter of 2024, and $11.7 million, or $0.70 per diluted share, for the fourth quarter of 2023.

For the full year of 2024, net income attributable to common shareowners totaled $52.9 million, or $3.12 per diluted share, compared to net income of $52.3 million, or $3.07 per diluted share, for the same period of 2023.

QUARTER HIGHLIGHTS (4^thQuarter 2024 versus 3^rdQuarter 2024)

Income Statement

Tax-equivalent net interest income totaled $41.2 million compared to $40.3 million for the prior quarter
- Net interest margin increased 5 basis points to 4.17% (total deposit costs down 6 basis points partially offset by a 1 basis point decrease in earning asset yield).
Stable credit quality metrics and credit loss provision – net loan charge-offs were 25 basis points (annualized) of average loans – allowance coverage ratio was 1.10% at December 31, 2024
Noninterest income decreased $0.8 million, or 3.9%, driven by lower mortgage banking revenues
Noninterest expense decreased $1.1 million, or 2.7%, primarily due to lower other expense which included a gain from the sale of a banking office

Balance Sheet

Loan balances decreased $16.1 million, or 0.6% (average), and $31.5 million, or 1.2% (end of period)
Deposit balances increased $28.4 million, or 0.8% (average), and increased $92.9 million, or 2.6% (end of period), reflective of the seasonal increase in public fund balances
Tangible book value per share increased $1.05, or 4.6%, due in part to a favorable year-end re-measurement adjustment for the pension plan ($0.60 per diluted share)

FULL YEAR 2024 HIGHLIGHTS

Income Statement

Tax-equivalent net interest income totaled $159.2 million for 2024 compared to $159.4 million for 2023 driven by higher yields across our earning assets, partially offset by higher deposit cost which was well controlled at 89 basis points for the year – net interest margin was 4.08% for 2024 compared to 4.05% for 2023
Credit quality metrics remained strong throughout the year – allowance coverage ratio remained stable at 1.10% – net loan charge-offs were 21 basis points of average loans for 2024 versus 18 basis points for 2023
Noninterest income increased $4.4 million, or 6.1%, driven by higher mortgage banking revenues and wealth management fees
Noninterest expense increased $8.3 million, or 5.3%, primarily due to higher compensation expense reflective of higher incentive compensation, merit raises, and higher health insurance costs

Balance Sheet

Loan balances increased $50.1 million, or 1.9% (average), and decreased $82.4 million, or 3.0% (end of period)
Deposit balances decreased $72.2 million, or 2.0% (average), and decreased $29.8 million, or 0.8% (end of period)
Tangible book value per share increased $3.20, or 15.6%, driven by strong earnings and favorable investment security and pension plan accumulated other comprehensive loss adjustments

“In 2024, we delivered record earnings and advanced our commitment to creating shareholder value, which is demonstrated by a 15.6% increase in tangible book value per share, a 15.8% increase in the dividend, and the repurchase of 83,000 shares,” said William G. Smith, Jr., President, Chairman and CEO of Capital City Bank Group. “Our associates also earned us recognition for the 12^th consecutive year as one of the best banks to work for—an achievement that underscores the strength of our organization and the core values we embrace. We remain focused on soundness, profitability, growth, and making strategic investments that add long-term value. Our fortress balance sheet, diversified revenues, and growth markets together position us well for 2025 and beyond.”

Discussion of Operating Results

Net Interest Income/Net Interest Margin

Tax-equivalent net interest income for the fourth quarter of 2024 totaled $41.2 million, compared to $40.3 million for the third quarter of 2024, and $39.3 million for the fourth quarter of 2023. For 2024, tax-equivalent net interest income totaled $159.2 million compared to $159.4 million for 2023. Compared to the third quarter of 2024, the increase reflected higher investment securities interest due to new investment purchases at higher yields, in addition to lower deposit interest expense, partially offset by lower loan interest due to lower balances. Compared to 2023, the slight decrease reflected an increase in deposit interest expense and a decrease in investment securities interest that was offset by increases in loan interest and overnight funds interest.

Our net interest margin for the fourth quarter of 2024 was 4.17%, an increase of five basis points over the third quarter of 2024 and an increase of 10 basis points over the fourth quarter of 2023. For the month of December 2024, our net interest margin was 4.18%. For 2024, our net interest margin was 4.08%, an increase of three basis points over 2023. Compared to the third quarter of 2024, the increase reflected higher yield in the investment portfolio driven by new purchases during the quarter, in addition to lower deposit interest expense. The increase over 2023 reflected a combination of earning assets re-pricing at higher interest rates and higher average loan balances, partially offset by a higher cost of deposits. For the fourth quarter of 2024, our cost of funds was 88 basis points, a decrease of five basis points from the third quarter of 2024 and an increase of 15 basis points over the fourth quarter of 2023. Our total cost of deposits (including noninterest bearing accounts) was 86 basis points, 92 basis points, and 66 basis points, respectively, for the same periods.

Provision for Credit Losses

We recorded a provision expense for credit losses of $0.7 million for the fourth quarter of 2024 compared to $1.2 million for the third quarter of 2024 and $2.0 million for the fourth quarter of 2023. Compared to the third quarter of 2024, the provision expense reflected a $0.8 million decrease in the provision for loans held for investment (“HFI”) and a $0.3 million decrease in the provision benefit for unfunded loan commitments. The decrease in the provision for loans HFI was primarily due to lower loan balances and slightly lower loss rates.

For 2024, we recorded a provision expense for credit losses of $4.0 million compared to $9.7 million for 2023. The decrease reflected a $4.5 million decrease in the provision for loans HFI and a $1.2 million decrease in the provision for unfunded loan commitments. The decrease in the provision for loans HFI was primarily due to lower new loan volume and loan balances in 2024 and favorable loan grade migration. The decrease in the provision for unfunded loan commitments reflected a lower level of loan commitments. We discuss the allowance for credit losses further below.

Noninterest Income and Noninterest Expense

Noninterest income for the fourth quarter of 2024 totaled $18.8 million compared to $19.5 million for the third quarter of 2024 and $17.2 million for the fourth quarter of 2023. Compared to the third quarter of 2024, the $0.7 million decrease from the third quarter of 2024 reflected a $0.8 million decrease in mortgage banking revenues attributable to lower production volume and a $0.3 million decrease in deposit fees that was partially offset by a $0.4 million increase in wealth management fees, primarily from retail brokerage. The $1.6 million increase over the fourth quarter of 2023 was driven by higher mortgage banking revenues of $0.8 million driven by a higher gain on sale margin and wealth management fees of $0.9 million, primarily from retail brokerage and to a lesser extent trust.

For 2024, noninterest income totaled $76.0 million compared to $71.6 million for 2023, primarily attributable to a $3.9 million increase in mortgage banking revenues and a $2.8 million increase in wealth management fees, partially offset by a $2.2 million decrease in other income. The increase in mortgage banking revenues was due to a higher gain on sale margin. The increase in wealth management fees was primarily driven by higher retail brokerage fees and to a lesser extent trust fees, primarily attributable to both new account growth and higher account values driven by higher market returns. The decrease in other income was primarily attributable to a $1.4 million gain from the sale of mortgage servicing rights in 2023, and to a lesser extent a decrease in vendor bonus income and miscellaneous income.

Noninterest expense for the fourth quarter of 2024 totaled $41.8 million compared to $42.9 million for the third quarter of 2024 and $40.0 million for the fourth quarter of 2023. The $1.1 million decrease from the third quarter of 2024 was primarily attributable to lower other expense of $1.2 million and occupancy expense of $0.2 million that was partially offset by a $0.3 million increase in compensation expense. The decrease in other expense was primarily attributable to a $1.0 million decrease in other real estate expense driven by the sale of a banking office and lower miscellaneous expense of $0.5 million which reflected a non-routine VISA Class B swap payment in the third quarter of 2024. The decrease in occupancy expense reflected lower property tax and software license expense. The increase in compensation was driven by higher incentive plan compensation. Compared to the fourth quarter of 2023, the $1.8 million increase was driven by a $2.3 million increase in compensation expense that was partially offset by a $0.2 million decrease in occupancy expense and a $0.3 million decrease in other expense. The unfavorable variance in compensation expense reflected a $1.4 million increase in salary expense and a $0.9 million increase in other benefit expense with the salary expense driven by higher incentive compensation and merit adjustments and the associate benefit expense reflective of higher health insurance cost.

For 2024, noninterest expense totaled $165.3 million compared to $157.0 million for 2023, primarily attributable to increases in compensation expense of $6.9 million, occupancy expense of $0.3 million, and other expense of $1.1 million. The increase in compensation reflected a $5.4 million increase in salary expense and a $1.6 million increase in other associate benefit expense. The increase in salary expense was primarily due to a lower level of realized loan cost (credit offset to salary expense) of $3.1 million (lower new loan volume), higher base salary expense of $2.2 million (primarily annual merit raises), and a $1.2 million increase in cash incentive compensation that was partially offset by lower commission expense of $1.4 million (lower residential mortgage volume). The unfavorable variance in other associate benefit expense was due to a $0.9 million increase in associate insurance cost and a $0.6 million increase in stock compensation expense. The increase in occupancy expense was attributable to increases in software license and maintenance agreement expenses. The increase in other expense was driven by a $1.1 million increase in other real estate expense and a $1.4 million increase in processing expense that was partially offset by a $1.4 million decrease in miscellaneous expense. The increase in other real estate expense reflected a lower level of gains from the sale of banking offices in 2024. The increase in processing expense reflected both inflationary increases on contract renewals and the outsourcing of our core processing system. The decrease in miscellaneous expense was attributable to lower pension plan expense for the non-service related component of the plan.

Income Taxes

We realized income tax expense of $4.2 million (effective rate of 24.3%) for the fourth quarter of 2024 compared to $3.0 million (effective rate of 19.1%) for the third quarter of 2024 and $2.9 million (effective rate of 20.3%) for the fourth quarter of 2023. Compared to the third quarter of 2024, the increase in our effective tax rate was attributable to a lower than projected level of pre-tax income from Capital City Home Loans (“CCHL”) in relation to our consolidated income as the non-controlling interest adjustment for CCHL is accounted for as a permanent tax adjustment. Further, we realized a higher than projected Internal Revenue Code (“IRC”) Section 162(m) limitation related to current and future compensation. For 2024, we realized income tax expense of $13.9 million (effective rate of 21.2%) compared to $13.0 million (effective rate of 20.4%) for 2023 with the increase in the effective tax rate primarily attributable to a higher IRC Section 162(m) limitation and lower tax-exempt interest income. Absent discrete items or new tax credit investments, we expect our annual effective tax rate to approximate 24% for 2025.

Discussion of Financial Condition

Earning Assets

Average earning assets totaled $3.922 billion for the fourth quarter of 2024, an increase of $38.5 million, or 1.0 %, over the third quarter of 2024, and an increase of $97.9 million, or 2.6%, over the fourth quarter of 2023. The increase over both prior periods was primarily driven by higher deposit balances (see below – Deposits). Compared to the third quarter of 2024, the change in earning asset mix was primarily attributable to a $41.4 million increase in short term investments (overnight funds sold), a $6.7 million increase in investment securities, and $6.5 million increase in loans held for sale, partially offset by a $16.1 million decrease in loans HFI. Compared to the fourth quarter of 2023, the change in earning asset mix reflected a $198.4 million increase in short term investments (overnight funds sold) that was partially offset by a $48.0 million decrease in investment securities, a $33.8 million decrease in loans HFI, and a $18.7 million decrease in loans held for sale.

Average loans HFI for the fourth quarter of 2024 decreased $16.1 million, or 0.6%, from the third quarter of 2024 and decreased $33.8 million, or 1.3%, from the fourth quarter of 2023. Compared to the third quarter of 2024, the decline was primarily attributable to decreases in consumer loans (primarily indirect auto) of $18.3 million and commercial mortgage real estate loans of $24.1 million, partially offset by increases in construction real estate loans of $13.1 million, and residential real estate loans of $11.6 million. Compared to the fourth quarter of 2023, the decrease was driven by decreases in consumer loans (primarily indirect auto) of $72.8 million, commercial loans of $30.2 million, and commercial mortgage real estate loans of $25.3 million, partially offset by increases in residential real estate loans of $70.8 million, construction real estate loans of $16.6 million, and home equity loans of $10.2 million.

Loans HFI at December 31, 2024 decreased $31.5 million, or 1.2%, from September 30, 2024 and decreased $82.4 million, or 3.0%, from December 31, 2023. Compared to September 30, 2024, the decrease was driven by decreases in commercial mortgage real estate loans of $40.9 million, consumer loans (primarily indirect auto) of $13.8 million, and commercial loans of $5.4 million, partially offset by increases in home equity loans of $9.1 million, other loans of $13.5 million, and residential real estate loans of $5.0 million. Compared to December 31, 2023, the decrease was primarily attributable to decreases in consumer loans (primarily indirect auto) of $71.5 million, commercial mortgage real estate loans of $46.4 million, and commercial loans of $36.0 million, partially offset by increases in residential real estate loans of $27.2 million, construction real estate loans of $23.9 million, and home equity loans of $9.1 million.

Allowance for Credit Losses

At December 31, 2024, the allowance for credit losses for loans HFI totaled $29.3 million compared to $29.8 million at September 30, 2024 and $29.9 million at December 31, 2023. Activity within the allowance is provided on Page 9. The decreases in the allowance from September 30, 2024 and December 31, 2023 were primarily attributable to lower loan balances and favorable loan migration. Net loan charge-offs were 25 basis points of average loans for the fourth quarter of 2024 versus 19 basis points for the third quarter of 2024. For 2024, net loan charge-offs were 21 basis points of average loans compared to 18 basis points in 2023. At December 31, 2024, the allowance represented 1.10% of loans HFI compared to 1.11% at September 30, 2024, and 1.10% at December 31, 2023.

Credit Quality

Nonperforming assets (nonaccrual loans and other real estate) totaled $6.7 million at December 31, 2024 compared to $7.2 million at September 30, 2024 and $6.2 million at December 31, 2023. At December 31, 2024, nonperforming assets as a percent of total assets equaled 0.15%, compared to 0.17% at September 30, 2024 and 0.15% at December 31, 2023. Nonaccrual loans totaled $6.3 million at December 31, 2024, a $0.3 million decrease from September 30, 2024 and a $0.1 million increase over December 31, 2023. Further, classified loans totaled $19.9 million at December 31, 2024, a $5.6 million decrease from September 30, 2024 and a $2.3 million decrease from December 31, 2023.

Deposits

Average total deposits were $3.600 billion for the fourth quarter of 2024, an increase of $28.4 million, or 0.8%, over the third quarter of 2024 and an increase of $51.9 million, or 1.5%, over the fourth quarter of 2023. Compared to the third quarter of 2024, the increase was primarily attributable to higher NOW account balances which reflected the seasonal inflow of public funds from municipal clients as they receive their tax receipts beginning in late November. The increase over the fourth quarter of 2023 reflected higher NOW, MMA, and certificates of deposit (“CD”) balances that were partially offset by decreases in noninterest bearing and savings balances. During 2024, we realized a re-mix in deposits as rate sensitive clients sought higher yield deposit products. Average core deposit balances (total deposits less public funds) increased $20.3 million over the third quarter of 2024 and $28.4 million over the fourth quarter of 2023.

At December 31, 2024, total deposits were $3.672 billion, an increase of $92.9 million, or 2.6%, over September 30, 2024 and a decrease of $29.8 million, or 0.8%, from December 31, 2023. Compared to the third quarter of 2024, the increase was primarily due to a $110.7 million increase in NOW account balances which reflected the aforementioned seasonal inflow of public funds balances. The decrease from the fourth quarter of 2023 was driven by lower noninterest bearing, NOW, and savings account balances that were partially offset by higher MMA and CD balances which reflected the aforementioned re-mix in balances during 2024. Core deposit balances (total deposits less public funds) decreased $50.3 million from the third quarter of 2024 and increased $21.9 million over the fourth quarter of 2023.

Liquidity

The Bank maintained an average net overnight funds (deposits with banks plus FED funds sold less FED funds purchased) sold position of $298.3 million in the fourth quarter of 2024 compared to $256.9 million in the third quarter of 2024 and $99.8 million in the fourth quarter of 2023. Compared to both prior periods, the increases reflected growth in average core and public fund deposit balances.

At December 31, 2024, we had the ability to generate approximately $1.535 billion (excludes overnight funds position of $321 million) in additional liquidity through various sources including various federal funds purchased lines, Federal Home Loan Bank borrowings, the Federal Reserve Discount Window, and brokered deposits.

We also view our investment portfolio as a liquidity source and have the option to pledge securities in our portfolio as collateral for borrowings or deposits, and/or to sell selected securities. Our portfolio consists of debt issued by the U.S. Treasury, U.S. governmental agencies, municipal governments, and corporate entities. At December 31, 2024, the weighted-average maturity and duration of our portfolio were 2.54 years and 2.19 years, respectively, and the available-for-sale portfolio had a net unrealized after-tax loss of $19.2 million.

Capital

Shareowners’ equity was $495.3 million at December 31, 2024 compared to $476.5 million at September 30, 2024 and $440.6 million at December 31, 2023. For the fourth quarter of 2024, shareowners’ equity was positively impacted by net income attributable to common shareowners of $13.1 million, a net $7.6 million decrease in the accumulated other comprehensive loss, the issuance of stock of $0.9 million, stock compensation accretion of $0.7 million, and a $0.4 million reclassification from temporary equity (concurrent with the agreement to assign the minority membership interest (49%) in Capital City Home Loans, LLC, temporary equity was reclassified to other liabilities and included a $0.4 million net credit to retained earnings to account for the difference between the fair value and the book value of the minority interest). The net favorable change in accumulated other comprehensive loss reflected a $10.1 million decrease in the pension plan loss from the year-end re-measurement of the plan and a $0.7 million increase in the fair value of the interest rate swap related to subordinated debt, that was partially offset by a $3.2 million increase in the investment securities loss. Shareowners’ equity was reduced by common stock dividends of $3.9 million ($0.23 per share).

For the full year 2024, shareowners’ equity was positively impacted by net income attributable to common shareowners of $52.9 million, a net $15.7 million decrease in the accumulated other comprehensive loss, the issuance of stock of $3.1 million, and stock compensation accretion of $1.9 million. The net favorable change in accumulated other comprehensive loss reflected a $10.1 million decrease in the pension plan loss from the year-end re-measurement of the plan and a $5.6 million decrease in the investment securities loss. Shareowners’ equity was reduced by common stock dividends of $14.9 million ($0.88 per share), the repurchase of stock of $2.3 million (82,540 shares), net adjustments totaling $1.4 million related to transactions under our stock compensation plans, and a $0.3 million reclassification from temporary equity.

At December 31, 2024, our total risk-based capital ratio was 18.77% compared to 17.97% at September 30, 2024 and 16.57% at December 31, 2023. Our common equity tier 1 capital ratio was 15.64%, 14.88%, and 13.52%, respectively, on these dates. Our leverage ratio was 11.05%, 10.89%, and 10.30%, respectively, on these dates. At December 31, 2024, all our regulatory capital ratios exceeded the thresholds to be designated as “well-capitalized” under the Basel III capital standards. Further, our tangible common equity ratio was 9.55% at December 31, 2024 compared to 9.28% and 8.26% at September 30, 2024 and December 31, 2023, respectively. If our unrealized held-to-maturity securities losses of $16.0 million (after-tax) were recognized in accumulated other comprehensive loss, our adjusted tangible capital ratio would be 9.17%.

About Capital City Bank Group, Inc.

Capital City Bank Group, Inc. (NASDAQ: CCBG) is one of the largest publicly traded financial holding companies headquartered in Florida and has approximately $4.3 billion in assets. We provide a full range of banking services, including traditional deposit and credit services, mortgage banking, asset management, trust, merchant services, bankcards, securities brokerage services and financial advisory services, including the sale of life insurance, risk management and asset protection services. Our bank subsidiary, Capital City Bank, was founded in 1895 and now has 63 banking offices and 104 ATMs/ITMs in Florida, Georgia and Alabama. For more information about Capital City Bank Group, Inc., visit www.ccbg.com.

FORWARD-LOOKING STATEMENTS

Forward-looking statements in this Press Release are based on current plans and expectations that are subject to uncertainties and risks, which could cause our future results to differ materially. The words “may,” “could,” “should,” “would,” “believe,” “anticipate,” “estimate,” “expect,” “intend,” “plan,” “target,” “vision,” “goal,” and similar expressions are intended to identify forward-looking statements. The following factors, among others, could cause our actual results to differ: our ability to successfully manage credit risk, interest rate risk, liquidity risk, and other risks inherent to our industry; the effects of changes in the level of checking or savings account deposits and the competition for deposits on our funding costs, net interest margin and ability to replace maturing deposits and advances; legislative or regulatory changes; adverse developments in the financial services industry generally; inflation, interest rate, market and monetary fluctuations; uncertainty in the pricing of residential mortgage loans that we sell, as well as competition for the mortgage servicing rights related to these loans; interest rate risk and price risk resulting from retaining mortgage servicing rights and the effects of higher interest rates on our loan origination volumes; changes in monetary and fiscal policies of the U.S. Government; the cost and effects of cybersecurity incidents or other failures, interruptions, or security breaches of our systems or those of our customers or third-party providers; the effects of fraud related to debit card products; the accuracy of our financial statement estimates and assumptions; changes in accounting principles, policies, practices or guidelines; the frequency and magnitude of foreclosure of our loans; the effects of our lack of a diversified loan portfolio; the strength of the local economies in which we operate; our ability to declare and pay dividends; structural changes in the markets for origination, sale and servicing of residential mortgages; our ability to retain key personnel; the effects of natural disasters (including hurricanes), widespread health emergencies (including pandemics), military conflict, terrorism, civil unrest or other geopolitical events; our ability to comply with the extensive laws and regulations to which we are subject; the impact of the restatement of our previously issued consolidated statements of cash flows and any deficiencies in the processes undertaken to effect such restatements; any inability to implement and maintain effective internal control over financial reporting and/or disclosure control or inability to remediate our existing material weaknesses in our internal controls deemed ineffective; the willingness of clients to accept third-party products and services rather than our products and services; technological changes; the outcomes of litigation or regulatory proceedings; negative publicity and the impact on our reputation; changes in consumer spending and saving habits; growth and profitability of our noninterest income; the limited trading activity of our common stock; the concentration of ownership of our common stock; anti-takeover provisions under federal and state law as well as our Articles of Incorporation and our Bylaws; other risks described from time to time in our filings with the Securities and Exchange Commission; and our ability to manage the risks involved in the foregoing. Additional factors can be found in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, as amended, and our other filings with the SEC, which are available at the SEC’s internet site (http://www.sec.gov). Forward-looking statements in this Press Release speak only as of the date of the Press Release, and we assume no obligation to update forward-looking statements or the reasons why actual results could differ, except as may be required by law.

USE OF NON-GAAP FINANCIAL MEASURES
Unaudited

We present a tangible common equity ratio and a tangible book value per diluted share that removes the effect of goodwill and other intangibles resulting from merger and acquisition activity. We believe these measures are useful to investors because it allows investors to more easily compare our capital adequacy to other companies in the industry.

The GAAP to non-GAAP reconciliations are provided below.

(Dollars in Thousands, except per share data)		Dec 31, 2024			Sep 30, 2024			Jun 30, 2024			Mar 31, 2024			Dec 31, 2023
Shareowners’ Equity (GAAP)		$	495,317		$	476,499		$	460,999		$	448,314		$	440,625
Less: Goodwill and Other Intangibles (GAAP)			92,773			92,813			92,853			92,893			92,933
Tangible Shareowners’ Equity (non-GAAP)	A		402,544			383,686			368,146			355,421			347,692
Total Assets (GAAP)			4,307,142			4,225,316			4,225,695			4,259,922			4,304,477
Less: Goodwill and Other Intangibles (GAAP)			92,773			92,813			92,853			92,893			92,933
Tangible Assets (non-GAAP)	B	$	4,214,369		$	4,132,503		$	4,132,842		$	4,167,029		$	4,211,544
Tangible Common Equity Ratio (non-GAAP)	A/B		9.55	%		9.28	%		8.91	%		8.53	%		8.26	%
Actual Diluted Shares Outstanding (GAAP)	C		17,018,122			16,980,686			16,970,228			16,947,204			17,000,758
Tangible Book Value per Diluted Share (non-GAAP)	A/C	$	23.65		$	22.60		$	21.69		$	20.97		$	20.45

CAPITAL CITY BANK GROUP, INC.
EARNINGS HIGHLIGHTS
*Unaudited*

		Three Months Ended						Twelve Months Ended
(Dollars in thousands, except per share data)		Dec 31, 2024		Sep 30, 2024		Dec 31, 2023		Dec 31, 2024		Dec 31, 2023
EARNINGS
Net Income Attributable to Common Shareowners	$	13,090	$	13,118	$	11,720		52,915	$	52,258
Diluted Net Income Per Share	$	0.77	$	0.77	$	0.70		3.12	$	3.07
PERFORMANCE
Return on Average Assets (annualized)		1.22	%	1.24	%	1.12	%	1.25	%	1.22	%
Return on Average Equity (annualized)		10.60		10.87		10.69		11.18		12.40
Net Interest Margin		4.17		4.12		4.07		4.08		4.05
Noninterest Income as % of Operating Revenue		31.34		32.67		30.46		32.34		31.05
Efficiency Ratio		69.74	%	71.81	%	70.82	%	70.30	%	67.99	%
CAPITAL ADEQUACY
Tier 1 Capital		17.58	%	16.77	%	15.37	%	17.58	%	15.37	%
Total Capital		18.77		17.97		16.57		18.77		16.57
Leverage		11.05		10.89		10.30		11.05		10.30
Common Equity Tier 1		15.64		14.88		13.52		15.64		13.52
Tangible Common Equity ⁽¹⁾		9.55		9.28		8.26		9.55		8.26
Equity to Assets		11.50	%	11.28	%	10.24	%	11.50	%	10.24	%
ASSET QUALITY
Allowance as % of Non-Performing Loans		464.14	%	452.64	%	479.70	%	464.14	%	479.70	%
Allowance as a % of Loans HFI		1.10		1.11		1.10		1.10		1.10
Net Charge-Offs as % of Average Loans HFI		0.25		0.19		0.23		0.21		0.18
Nonperforming Assets as % of Loans HFI and OREO		0.25		0.27		0.23		0.25		0.23
Nonperforming Assets as % of Total Assets		0.15	%	0.17	%	0.15	%	0.15	%	0.15	%
STOCK PERFORMANCE
High	$	40.86	$	36.67	$	32.56		40.86	$	36.86
Low		33.00		26.72		26.12		25.45		26.12
Close	$	36.65	$	35.29	$	29.43		36.65	$	29.43
Average Daily Trading Volume		27,484		37,151		33,297		31,390		33,775

⁽¹⁾ Tangible common equity ratio is a non-GAAP financial measure. For additional information, including a reconciliation to GAAP, refer to Page 7.

CAPITAL CITY BANK GROUP, INC.
CONSOLIDATED STATEMENT OF FINANCIAL CONDITION
*Unaudited*

	2024												2023
(Dollars in thousands)	Fourth Quarter				Third Quarter			Second Quarter			First Quarter			Fourth Quarter
ASSETS
Cash and Due From Banks	$	70,543		$	83,431		$	75,304		$	73,642		$	83,118
Funds Sold and Interest Bearing Deposits		321,311			261,779			272,675			231,047			228,949
Total Cash and Cash Equivalents		391,854			345,210			347,979			304,689			312,067

Investment Securities Available for Sale		403,345			336,187			310,941			327,338			337,902
Investment Securities Held to Maturity		567,155			561,480			582,984			603,386			625,022
Other Equity Securities		2,399			6,976			2,537			3,445			3,450
Total Investment Securities		972,899			904,643			896,462			934,169			966,374

Loans Held for Sale		28,672			31,251			24,022			24,705			28,211

Loans Held for Investment (“HFI”):
Commercial, Financial, & Agricultural		189,208			194,625			204,990			218,298			225,190
Real Estate – Construction		219,994			218,899			200,754			202,692			196,091
Real Estate – Commercial		779,095			819,955			823,122			823,690			825,456
Real Estate – Residential		1,028,498			1,023,485			1,012,541			1,012,791			1,001,257
Real Estate – Home Equity		220,064			210,988			211,126			214,617			210,920
Consumer		199,479			213,305			234,212			254,168			270,994
Other Loans		14,006			461			2,286			3,789			2,962
Overdrafts		1,206			1,378			1,192			1,127			1,048
Total Loans Held for Investment		2,651,550			2,683,096			2,690,223			2,731,172			2,733,918
Allowance for Credit Losses		(29,251	)		(29,836	)		(29,219	)		(29,329	)		(29,941	)
Loans Held for Investment, Net		2,622,299			2,653,260			2,661,004			2,701,843			2,703,977

Premises and Equipment, Net		81,952			81,876			81,414			81,452			81,266
Goodwill and Other Intangibles		92,773			92,813			92,853			92,893			92,933
Other Real Estate Owned		367			650			650			1			1
Other Assets		116,326			115,613			121,311			120,170			119,648
Total Other Assets		291,418			290,952			296,228			294,516			293,848
Total Assets	$	4,307,142		$	4,225,316		$	4,225,695		$	4,259,922		$	4,304,477
LIABILITIES
Deposits:
Noninterest Bearing Deposits	$	1,306,254		$	1,330,715		$	1,343,606		$	1,361,939		$	1,377,934
NOW Accounts		1,285,281			1,174,585			1,177,180			1,212,452			1,327,420
Money Market Accounts		404,396			401,272			413,594			398,308			319,319
Savings Accounts		506,766			507,604			514,560			530,782			547,634
Certificates of Deposit		169,280			164,901			159,624			151,320			129,515
Total Deposits		3,671,977			3,579,077			3,608,564			3,654,801			3,701,822

Repurchase Agreements		26,240			29,339			22,463			23,477			26,957
Other Short-Term Borrowings		2,064			7,929			3,307			8,409			8,384
Subordinated Notes Payable		52,887			52,887			52,887			52,887			52,887
Other Long-Term Borrowings		794			794			1,009			265			315
Other Liabilities		57,863			71,974			69,987			65,181			66,080
Total Liabilities		3,811,825			3,742,000			3,758,217			3,805,020			3,856,445

Temporary Equity		–			6,817			6,479			6,588			7,407
SHAREOWNERS’ EQUITY
Common Stock		170			169			169			169			170
Additional Paid-In Capital		37,684			36,070			35,547			34,861			36,326
Retained Earnings		463,949			454,342			445,959			435,364			426,275
Accumulated Other Comprehensive Loss, Net of Tax		(6,486	)		(14,082	)		(20,676	)		(22,080	)		(22,146	)
Total Shareowners’ Equity		495,317			476,499			460,999			448,314			440,625
Total Liabilities, Temporary Equity and Shareowners’ Equity	$	4,307,142		$	4,225,316		$	4,225,695		$	4,259,922		$	4,304,477
OTHER BALANCE SHEET DATA
Earning Assets	$	3,974,431		$	3,880,769		$	3,883,382		$	3,921,093		$	3,957,452
Interest Bearing Liabilities		2,447,708			2,339,311			2,344,624			2,377,900			2,412,431
Book Value Per Diluted Share	$	29.11		$	28.06		$	27.17		$	26.45		$	25.92
Tangible Book Value Per Diluted Share⁽¹⁾		23.65			22.60			21.69			20.97			20.45
Actual Basic Shares Outstanding		16,975			16,944			16,942			16,929			16,950
Actual Diluted Shares Outstanding		17,018			16,981			16,970			16,947			17,001
⁽¹⁾ Tangible book value per diluted share is a non-GAAP financial measure. For additional information, including a reconciliation to GAAP, refer to Page 7.


CAPITAL CITY BANK GROUP, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
*Unaudited*

		2024									2023		Twelve Months Ended December 31,
(Dollars in thousands, except per share data)		Fourth Quarter			Third Quarter		Second Quarter		First Quarter		Fourth Quarter		2024		2023
INTEREST INCOME
Loans, including Fees	$	41,453		$	41,659	$	41,138	$	40,683	$	40,407	$	164,933	$	152,250
Investment Securities		4,694			4,155		4,004		4,244		4,392		17,097		18,692
Federal Funds Sold and Interest Bearing Deposits		3,596			3,514		3,624		1,893		1,385		12,627		10,126
Total Interest Income		49,743			49,328		48,766		46,820		46,184		194,657		181,068
INTEREST EXPENSE
Deposits		7,766			8,223		8,579		7,594		5,872		32,162		17,582
Repurchase Agreements		199			221		217		201		199		838		513
Other Short-Term Borrowings		83			52		68		39		310		242		1,538
Subordinated Notes Payable		581			610		630		628		627		2,449		2,427
Other Long-Term Borrowings		11			11		3		3		5		28		20
Total Interest Expense		8,640			9,117		9,497		8,465		7,013		35,719		22,080
Net Interest Income		41,103			40,211		39,269		38,355		39,171		158,938		158,988
Provision for Credit Losses		701			1,206		1,204		920		2,025		4,031		9,714
Net Interest Income after Provision for Credit Losses		40,402			39,005		38,065		37,435		37,146		154,907		149,274
NONINTEREST INCOME
Deposit Fees		5,207			5,512		5,377		5,250		5,304		21,346		21,325
Bank Card Fees		3,697			3,624		3,766		3,620		3,713		14,707		14,918
Wealth Management Fees		5,222			4,770		4,439		4,682		4,276		19,113		16,337
Mortgage Banking Revenues		3,118			3,966		4,381		2,878		2,327		14,343		10,400
Other		1,516			1,641		1,643		1,667		1,537		6,467		8,630
Total Noninterest Income		18,760			19,513		19,606		18,097		17,157		75,976		71,610
NONINTEREST EXPENSE
Compensation		26,108			25,800		24,406		24,407		23,822		100,721		93,787
Occupancy, Net		6,893			7,098		6,997		6,994		7,098		27,982		27,660
Other		8,781			10,023		9,038		8,770		9,038		36,612		35,576
Total Noninterest Expense		41,782			42,921		40,441		40,171		39,958		165,315		157,023
OPERATING PROFIT		17,380			15,597		17,230		15,361		14,345		65,568		63,861
Income Tax Expense		4,219			2,980		3,189		3,536		2,909		13,924		13,040
Net Income		13,161			12,617		14,041		11,825		11,436		51,644		50,821
Pre-Tax Loss (Income) Attributable to Noncontrolling Interest		(71	)		501		109		732		284		1,271		1,437
NET INCOME ATTRIBUTABLE TO COMMON SHAREOWNERS	$	13,090		$	13,118	$	14,150	$	12,557	$	11,720	$	52,915	$	52,258
PER COMMON SHARE
Basic Net Income	$	0.77		$	0.77	$	0.84	$	0.74	$	0.69	$	3.12	$	3.08
Diluted Net Income		0.77			0.77		0.83		0.74		0.70		3.12		3.07
Cash Dividend	$	0.23		$	0.23	$	0.21	$	0.21	$	0.20	$	0.88	$	0.76
AVERAGE SHARES
Basic		16,946			16,943		16,931		16,951		16,947		16,943		16,987
Diluted		16,990			16,979		16,960		16,969		16,997		16,969		17,023

CAPITAL CITY BANK GROUP, INC.
ALLOWANCE FOR CREDIT LOSSES (“ACL”)
AND CREDIT QUALITY
*Unaudited*

		2024												2023			Twelve Months Ended December 31,
(Dollars in thousands, except per share data)		Fourth Quarter			Third Quarter			Second Quarter			First Quarter			Fourth Quarter			2024			2023
ACL – HELD FOR INVESTMENT LOANS
Balance at Beginning of Period	$	29,836		$	29,219		$	29,329		$	29,941		$	29,083		$	29,941		$	25,068
Transfer from Other Liabilities		–			–			–			(50	)		66			(50	)		66
Provision for Credit Losses		1,085			1,879			1,129			932			2,354			5,025			9,529
Net Charge-Offs (Recoveries)		1,670			1,262			1,239			1,494			1,562			5,665			4,722
Balance at End of Period	$	29,251		$	29,836		$	29,219		$	29,329		$	29,941		$	29,251		$	29,941
As a % of Loans HFI		1.10	%		1.11	%		1.09	%		1.07	%		1.10	%		1.10	%		1.10	%
As a % of Nonperforming Loans		464.14	%		452.64	%		529.79	%		431.46	%		479.70	%		464.14	%		479.70	%
ACL – UNFUNDED COMMITMENTS
Balance at Beginning of Period		2,522		$	3,139		$	3,121		$	3,191		$	3,502		$	3,191		$	2,989
Provision for Credit Losses		(367	)		(617	)		18			(70	)		(311	)		(1,036	)		202
Balance at End of Period⁽¹⁾		2,155			2,522			3,139			3,121			3,191			2,155			3,191
ACL – DEBT SECURITIES
Provision for Credit Losses	$	(17	)	$	(56	)	$	57		$	58		$	(18	)	$	42		$	(17	)
CHARGE-OFFS
Commercial, Financial and Agricultural	$	499		$	331		$	400		$	282		$	217		$	1,512		$	511
Real Estate – Construction		47			–			–			–			–			47			–
Real Estate – Commercial		–			3			–			–			–			3			120
Real Estate – Residential		44			–			–			17			79			61			79
Real Estate – Home Equity		33			23			–			76			–			132			39
Consumer		1,307			1,315			1,061			1,550			1,689			5,233			5,754
Overdrafts		574			611			571			638			602			2,394			2,789
Total Charge-Offs	$	2,504		$	2,283		$	2,032		$	2,563		$	2,587		$	9,382		$	9,292
RECOVERIES
Commercial, Financial and Agricultural	$	103		$	176		$	59		$	41		$	83		$	379		$	277
Real Estate – Construction		3			–			–			–			–			3			2
Real Estate – Commercial		33			5			19			204			16			261			52
Real Estate – Residential		28			88			23			37			34			176			253
Real Estate – Home Equity		17			59			37			24			17			137			226
Consumer		352			405			313			410			433			1,480			1,936
Overdrafts		298			288			342			353			442			1,281			1,824
Total Recoveries	$	834		$	1,021		$	793		$	1,069		$	1,025		$	3,717		$	4,570
NET CHARGE-OFFS (RECOVERIES)	$	1,670		$	1,262		$	1,239		$	1,494		$	1,562		$	5,665		$	4,722
Net Charge-Offs as a % of Average Loans HFI⁽²⁾		0.25	%		0.19	%		0.18	%		0.22	%		0.23	%		0.21	%		0.18	%
CREDIT QUALITY
Nonaccruing Loans	$	6,302		$	6,592		$	5,515		$	6,798		$	6,242
Other Real Estate Owned		367			650			650			1			1
Total Nonperforming Assets (“NPAs”)	$	6,669		$	7,242		$	6,165		$	6,799		$	6,243

Past Due Loans 30-89 Days	$	4,311		$	9,388		$	5,672		$	5,392		$	6,855
Classified Loans		19,896			25,501			25,566			22,305			22,203

Nonperforming Loans as a % of Loans HFI		0.24	%		0.25	%		0.21	%		0.25	%		0.23	%
NPAs as a % of Loans HFI and Other Real Estate		0.25	%		0.27	%		0.23	%		0.25	%		0.23	%
NPAs as a % of Total Assets		0.15	%		0.17	%		0.15	%		0.16	%		0.15	%

⁽¹⁾Recorded in other liabilities
⁽²⁾Annualized

CAPITAL CITY BANK GROUP, INC.
AVERAGE BALANCE AND INTEREST RATES
*Unaudited*

		Fourth Quarter 2024							Third Quarter 2024							Second Quarter 2024							First Quarter 2024							Fourth Quarter 2023							Full Year 2024							Full Year 2023
(Dollars in thousands)		Average Balance			Interest	Average Rate			Average Balance			Interest	Average Rate			Average Balance			Interest	Average Rate			Average Balance			Interest	Average Rate			Average Balance			Interest	Average Rate			Average Balance			Interest	Average Rate			Average Balance			Interest	Average Rate
ASSETS:
Loans Held for Sale	$	31,047		$	976	7.89	%	$	24,570		$	720	7.49	%	$	26,281		$	517	5.26	%	$	27,314			563	5.99	%	$	49,790		$	817	6.50	%	$	27,306		$	2,776	6.72	%	$	55,510		$	3,232	5.82	%
Loans Held for Investment⁽¹⁾		2,677,396			40,521	6.07			2,693,533			40,985	6.09			2,726,748			40,683	6.03			2,728,629			40,196	5.95			2,711,243			39,679	5.81			2,706,461			162,385	6.03			2,656,394			149,366	5.62

Investment Securities
Taxable Investment Securities		914,353			4,688	2.04			907,610			4,148	1.82			918,989			3,998	1.74			952,328			4,239	1.78			962,322			4,389	1.81			923,253			17,073	1.85			1,016,550			18,652	1.83
Tax-Exempt Investment Securities⁽¹⁾		849			9	4.31			846			10	4.33			843			9	4.36			856			9	4.34			862			7	4.32			848			37	4.34			2,199			59	2.68

Total Investment Securities		915,202			4,697	2.04			908,456			4,158	1.82			919,832			4,007	1.74			953,184			4,248	1.78			963,184			4,396	1.82			924,101			17,110	1.85			1,018,749			18,711	1.83

Federal Funds Sold and Interest Bearing Deposits		298,255			3,596	4.80			256,855			3,514	5.44			262,419			3,624	5.56			140,488			1,893	5.42			99,763			1,385	5.51			239,712			12,627	5.27			203,147			10,126	4.98

Total Earning Assets		3,921,900		$	49,790	5.05	%		3,883,414		$	49,377	5.06	%		3,935,280		$	48,831	4.99	%		3,849,615		$	46,900	4.90	%		3,823,980		$	46,277	4.80	%		3,897,580		$	194,898	5.00	%		3,933,800		$	181,435	4.61	%

Cash and Due From Banks		73,992							70,994							74,803							75,763							76,681							73,881							75,786
Allowance for Credit Losses		(30,107	)						(29,905	)						(29,564	)						(30,030	)						(29,998	)						(29,902	)						(28,190	)
Other Assets		293,884							291,359							291,669							295,275							296,114							293,044							297,290

Total Assets	$	4,259,669						$	4,215,862						$	4,272,188						$	4,190,623						$	4,166,777						$	4,234,603						$	4,278,686

LIABILITIES:
Noninterest Bearing Deposits	$	1,323,556						$	1,332,305						$	1,346,546						$	1,344,188						$	1,416,825						$	1,336,601						$	1,507,657
NOW Accounts		1,182,073		$	3,826	1.29	%		1,145,544		$	4,087	1.42	%		1,207,643		$	4,425	1.47	%		1,201,032		$	4,497	1.51	%		1,138,461		$	3,696	1.29	%		1,183,962		$	16,835	1.42	%		1,172,861		$	12,375	1.06	%
Money Market Accounts		422,615			2,526	2.38			418,625			2,694	2.56			407,387			2,752	2.72			353,591			1,985	2.26			318,844			1,421	1.77			400,664			9,957	2.49			299,581			3,670	1.22
Savings Accounts		504,859			179	0.14			512,098			180	0.14			519,374			176	0.14			539,374			188	0.14			557,579			202	0.14			518,869			723	0.14			592,033			598	0.10
Time Deposits		167,321			1,235	2.94			163,462			1,262	3.07			160,078			1,226	3.08			138,328			924	2.69			116,797			553	1.88			157,342			4,647	2.95			97,480			939	0.96
Total Interest Bearing Deposits		2,276,868			7,766	1.36			2,239,729			8,223	1.46			2,294,482			8,579	1.50			2,232,325			7,594	1.37			2,131,681			5,872	1.09			2,260,837			32,162	1.42			2,161,955			17,582	0.81
Total Deposits		3,600,424			7,766	0.86			3,572,034			8,223	0.92			3,641,028			8,579	0.95			3,576,513			7,594	0.85			3,548,506			5,872	0.66			3,597,438			32,162	0.89			3,669,612			17,582	0.48
Repurchase Agreements		28,018			199	2.82			27,126			221	3.24			26,999			217	3.24			25,725			201	3.14			26,831			199	2.94			26,970			838	3.11			19,917			513	2.57
Other Short-Term Borrowings		6,510			83	5.06			2,673			52	7.63			6,592			68	4.16			3,758			39	4.16			16,906			310	7.29			4,882			242	4.94			24,146			1,538	6.37
Subordinated Notes Payable		52,887			581	4.30			52,887			610	4.52			52,887			630	4.71			52,887			628	4.70			52,887			627	4.64			52,887			2,449	4.56			52,887			2,427	4.53
Other Long-Term Borrowings		794			11	5.57			795			11	5.55			258			3	4.31			281			3	4.80			336			5	4.72			534			28	5.31			408			20	4.77
Total Interest Bearing Liabilities		2,365,077		$	8,640	1.45	%		2,323,210		$	9,117	1.56	%		2,381,218		$	9,497	1.60	%		2,314,976		$	8,465	1.47	%		2,228,641		$	7,013	1.25	%		2,346,110		$	35,719	1.52	%		2,259,313		$	22,080	0.98	%

Other Liabilities		73,130							73,767							72,634							68,295							78,772							71,964							81,842

Total Liabilities		3,761,763							3,729,282							3,800,398							3,727,459							3,724,238							3,754,675							3,848,812
Temporary Equity		6,763							6,443							6,493							7,150							7,423							6,712							8,392

SHAREOWNERS’ EQUITY:		491,143							480,137							465,297							456,014							435,116							473,216							421,482

Total Liabilities, Temporary Equity and Shareowners’ Equity	$	4,259,669						$	4,215,862						$	4,272,188						$	4,190,623						$	4,166,777						$	4,234,603						$	4,278,686

Interest Rate Spread				$	41,150	3.59	%				$	40,260	3.49	%				$	39,334	3.38	%				$	38,435	3.43	%				$	39,264	3.55	%				$	159,179	3.47	%				$	159,355	3.63	%

Interest Income and Rate Earned⁽¹⁾					49,790	5.05						49,377	5.06						48,831	4.99						46,900	4.90						46,277	4.80						194,898	5.00						181,435	4.61
Interest Expense and Rate Paid⁽²⁾					8,640	0.88						9,117	0.93						9,497	0.97						8,465	0.88						7,013	0.73						35,719	0.92						22,080	0.56

Net Interest Margin				$	41,150	4.17	%				$	40,260	4.12	%				$	39,334	4.02	%				$	38,435	4.01	%				$	39,264	4.07	%				$	159,179	4.08	%				$	159,355	4.05	%

⁽¹⁾Interest and average rates are calculated on a tax-equivalent basis using a 21% Federal tax rate.
⁽²⁾Rate calculated based on average earning assets.

For Information Contact:
Jep Larkin
Executive Vice President and Chief Financial Officer
850.402. 8450

MIL-OSI: RYVYL Pays Initial $13.0 Million Tranche to Securityholder to Retire All Outstanding Series B Convertible Preferred Stock and Majority of 8% Senior Convertible Note

Source: GlobeNewswire (MIL-OSI)

SAN DIEGO, CA, Jan. 28, 2025 (GLOBE NEWSWIRE) — RYVYL Inc. (NASDAQ: RVYL) (“RYVYL” or the “Company”), a leading innovator of payment transaction solutions leveraging electronic payment technology for diverse international markets, has paid the initial tranche of $13.0 million to a securityholder of the Company on January 27, 2025, which completed the following:

Redeemed of all shares of the Company’s Series B Convertible Preferred Stock (“Preferred Stock”), for which the liquidation value was $53.1 million.
Partially repaid the 8% Senior Convertible Note held by the securityholder (“Note”), reducing the outstanding principal from $18.3 million to $4.0 million, which is due on or before April 30, 2025, and also temporarily suspended (i) the Company’s requirement to pay interest on the remaining principal balance of the Note, (ii) the securityholder’s right to convert the Note and (iii) certain restrictive covenants contained in the Note, all of which would be restored if the Company does not pay the second tranche of $4.0 million by April 30, 2025.

“These transactions eliminate a large portion of the conversion overhang and substantial dilution risk to our common stock from both the Preferred Stock and Note,” said George Oliva, CFO of RYVYL. “We expect the net gain from this balance sheet restructuring to be highly anti-dilutive; thus, benefitting the common stockholders and lowering our overall cost of capital as we invest in our growth in 2025.”

This communication is for informational purposes only and does not constitute an offer to sell, or a solicitation of an offer to buy, any security and does not constitute an offer, solicitation or sale of any security in any jurisdiction in which such offer, solicitation or sale would be unlawful.

About RYVYL

RYVYL Inc. (NASDAQ: RVYL) was born from a passion for empowering a new way to conduct business-to-business, consumer-to-business, and peer-to-peer payment transactions around the globe. By leveraging electronic payment technology for diverse international markets, RYVYL is a leading innovator of payment transaction solutions reinventing the future of financial transactions. Since its founding as GreenBox POS in 2017 in San Diego, RYVYL has developed applications enabling an end-to-end suite of turnkey financial products with enhanced security and data privacy, world-class identity theft protection, and rapid speed to settlement. As a result, the platform can log immense volumes of immutable transactional records at the speed of the internet for first-tier partners, merchants, and consumers around the globe. www.ryvyl.com

Cautionary Note Regarding Forward-Looking Statements

This press release includes information that constitutes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are based on the Company’s current beliefs, assumptions, and expectations regarding future events, which in turn are based on information currently available to the Company. Such forward-looking statements include statements regarding timely payment of the second tranche, the benefit to stockholders from the repayment of the Note and repurchase of the Preferred Stock, and the timing and expectation of revenues from the license described herein and are charactered by future or conditional words such as “may,” “will,” “expect,” “intend,” “anticipate,” “believe,” “estimate” and “continue” or similar words. You should read statements that contain these words carefully because they discuss future expectations and plans, which contain projections of future results of operations or financial condition or state other forward-looking information. By their nature, forward-looking statements address matters that are subject to risks and uncertainties. A variety of factors could cause actual events and results to differ materially from those expressed in or contemplated by the forward-looking statements, including the risk that the licensee understands and complies with various banking laws and regulations that may impact the licensee’s ability to process transactions. For example, federal money laundering statutes and Bank Secrecy Act regulations discourage financial institutions from working with operators of certain industries – particularly industries with heightened cash reporting obligations and restrictions – as a result of which, banks may refuse to process certain payments and/or require onerous reporting obligations by payment processors to avoid compliance risk. These and other risk factors affecting the Company are discussed in detail in the Company’s periodic filings with the SEC. The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether because of the latest information, future events or otherwise, except to the extent required by applicable laws.

IR Contact:
David Barnard, Alliance Advisors Investor Relations, 415-433-3777, ryvylinvestor@allianceadvisors.com

MIL-OSI: Sandy Spring Bancorp Announces Fourth Quarter Results

Source: GlobeNewswire (MIL-OSI)

OLNEY, Md., Jan. 28, 2025 (GLOBE NEWSWIRE) — Sandy Spring Bancorp, Inc. (Nasdaq-SASR), the parent company of Sandy Spring Bank, reported a net loss of $39.5 million ($0.87 per diluted common share) for the quarter ended December 31, 2024, compared to net income of $16.2 million ($0.36 per diluted common share) for the third quarter of 2024 and $26.1 million ($0.58 per diluted common share) for the fourth quarter of 2023. The current quarter’s net loss is a result of a $54.4 million goodwill impairment charge determined during our annual goodwill impairment test based on the terms of the merger agreement with Atlantic Union Bankshares Corporation (“AUB”). The goodwill impairment is a non-cash charge and has no impact on the Company’s regulatory capital ratios, cash flows, core operating performance or liquidity position.

The current quarter’s core earnings were $21.0 million ($0.47 per diluted common share), compared to $17.9 million ($0.40 per diluted common share) for the quarter ended September 30, 2024 and $27.1 million ($0.60 per diluted common share) for the quarter ended December 31, 2023. Core earnings exclude the goodwill impairment charge, merger and acquisition expense, and the after-tax impact of amortization of intangibles, investment securities gains or losses and other non-recurring or extraordinary items. The current quarter’s increase in core earnings as compared to the linked quarter was driven by higher net interest income coupled with higher non-interest income, and lower provision for credit losses, partially offset by higher adjusted non-interest expense. The total provision for credit losses was $4.5 million for the fourth quarter of 2024 compared to $6.3 million for the previous quarter and a credit of $3.4 million for the fourth quarter of 2023.

“We are pleased with our fourth quarter results, most notably our improved net interest margin, growth in core earnings, and reductions in brokered deposits,” said Daniel J. Schrider, Chair, President and CEO of Sandy Spring Bank. “We remain focused on serving our clients and building communities in the Greater Washington region.”

Fourth Quarter Highlights

Total assets at December 31, 2024 decreased by 2% to $14.1 billion compared to $14.4 billion at September 30, 2024. This decline is predominantly driven by a $200.0 million reduction in FHLB advances and a resulting $231.4 million decline in cash and cash equivalents quarter-over-quarter.

Total loans remained level at $11.5 billion as of December 31, 2024 compared to September 30, 2024. During the current quarter, AD&C and commercial business loans and lines increased by $71.7 million and $32.2 million, respectively, while the commercial investor real estate segment declined by $88.9 million. Total residential mortgage and consumer loan portfolios increased by $19.6 million during this period.

Total deposits stayed relatively unchanged at $11.7 billion at December 31, 2024 compared to September 30, 2024. Interest-bearing deposits increased $106.1 million, while noninterest-bearing deposits declined $98.1 million. Growth in interest-bearing deposits was mainly experienced within interest checking accounts, which grew $122.9 million during the current quarter, while decline in noninterest-bearing deposit categories was driven by lower balances in commercial checking accounts. Total deposits, excluding brokered deposits, increased by $32.0 million quarter-over-quarter and represented 94% of total deposits as of December 31, 2024.

The ratio of non-performing loans to total loans was 1.03% at December 31, 2024 compared to 1.09% at September 30, 2024 and 0.81% at December 31, 2023. The current quarter’s decline in non-performing loans was mainly related to pay downs on several non-accrual loans along with a single commercial real estate loan that returned to an accrual status.

Net interest income for the fourth quarter of 2024 grew $4.7 million or 6% compared to the previous quarter and $4.4 million or 5% compared to the fourth quarter of 2023. Compared to the previous quarter, interest income increased by $1.0 million, while interest expense decreased by $3.7 million.

The net interest margin was 2.53% for the fourth quarter of 2024 compared to 2.44% for the third quarter of 2024 and 2.45% for the fourth quarter of 2023. Compared to the linked quarter, the rate paid on interest-bearing liabilities decreased 23 basis points, driven by a 26 basis point decline in the rate on interest-bearing deposits, while the yield on interest-earning assets declined by six basis points. The decline in the rate paid on interest-bearing deposits was attributable to a 50 basis point reduction in the federal funds rate during the current quarter and the associated actions taken by management to re-price the Company’s funding base.

Provision for credit losses directly attributable to the funded loan portfolio was $4.7 million for the current quarter compared to $6.3 million in the previous quarter and a credit of $2.6 million in the prior year quarter. The current quarter’s provision expense is mainly attributable to a slight deterioration in the projected economic variables coupled with higher qualitative adjustments, partially offset by lower probability of recession. In addition, during the current quarter, the provision for unfunded commitments declined by $0.2 million, a result of higher utilization rates on lines of credit.

Non-interest income for the fourth quarter of 2024 increased by 10% or $1.9 million compared to the linked quarter and grew by 31% or $5.1 million compared to the prior year quarter. The quarter-over-quarter increase was mainly due to an increase in income from bank-owned life insurance driven by one-time mortality proceeds received during the current quarter in combination with higher swap fees and higher wealth management income, which was partially offset by lower income from mortgage banking activities.

Non-interest expense for the fourth quarter of 2024 increased by $61.3 million compared to the third quarter of 2024 and $67.1 million compared to the prior year quarter, due to the goodwill impairment charge of $54.4 million incurred during the current quarter. Excluding the goodwill impairment charge, adjusted non-interest expense was $79.8 million during the current quarter compared to $72.9 million in the linked quarter. This quarterly increase in adjusted non-interest expense was primarily due to a combination of merger and acquisition expense associated with the pending merger with AUB along with higher salaries and compensation benefits, partially offset by lower professional fees and services.

We perform an annual goodwill impairment test as of October 1st of each year. During the current year, we utilized the terms incorporated in the merger agreement between the Company and AUB. The implied value of the Company utilized the stock conversion ratio in the merger agreement and used a weighted average approach to consider both AUB’s most recent closing stock price prior to the merger announcement date, as well as the forward sale price for AUB common stock under the forward sale agreement announced simultaneous with the merger agreement. This valuation method resulted in the estimated fair value of the Company being below its book value and required the recording of a goodwill impairment charge of $54.4 million.

Return on average assets (“ROA”) for the quarter ended December 31, 2024 was (1.09)% and return on average tangible common equity (“ROTCE”) was 5.46% compared to 0.46% and 5.88%, respectively, for the third quarter of 2024 and 0.73% and 9.26%, respectively, for the fourth quarter of 2023. On a non-GAAP basis, the current quarter’s core ROA was 0.58% and core ROTCE was 6.80% compared to 0.50% and 5.88%, respectively, for the previous quarter and 0.76% and 9.26%, respectively, for the fourth quarter of 2023.

The GAAP efficiency ratio was 124.61% for the fourth quarter of 2024, compared to 72.12% for the third quarter of 2024 and 68.33% for the fourth quarter of 2023. An elevated GAAP efficiency ratio for the current quarter was the result of higher non-interest expense due to the $54.4 million goodwill impairment charge. The non-GAAP efficiency ratio was 67.16% for the fourth quarter of 2024 compared to 69.06% for the third quarter of 2024 and 66.16% for the prior year quarter.

Balance Sheet and Credit Quality

Total assets were $14.1 billion at December 31, 2024, as compared to $14.4 billion at September 30, 2024. At December 31, 2024, total loans remained stable at $11.5 billion compared to the previous quarter. During this period, the growth in AD&C and commercial business loans and lines of $71.7 million or 6% and $32.2 million or 2%, respectively, was mostly offset by the decline in commercial investor real estate loans of $88.9 million or 2%. Total residential mortgage and consumer loan portfolios increased by $19.6 million or 1%.

Deposits stayed relatively unchanged at $11.7 billion at December 31, 2024 compared to September 30, 2024. During this period, noninterest-bearing deposits decreased $98.1 million or 3%, while interest-bearing deposits increased $106.1 million or 1%. The decline in noninterest-bearing deposit categories was driven by decreases in commercial checking accounts. Growth in interest-bearing deposits was seen predominantly in interest checking accounts, which grew $122.9 million or 8% during the current quarter. Total deposits, excluding brokered deposits, increased by $32.0 million quarter-over-quarter and remained at 94% of total deposits as of December 31, 2024 compared to September 30, 2024, reflecting continued strength and stability of the core deposit base. Total uninsured deposits at December 31, 2024 were approximately 37% of total deposits.

Total borrowings decreased $201.7 million or 23% at December 31, 2024 as compared to the previous quarter, primarily driven by a $200.0 million reduction in FHLB advances, of which $150 million related to scheduled maturities, while $50 million was prepaid generating a $0.5 million gain on debt extinguishment. At December 31, 2024, available unused sources of liquidity, which consist of available FHLB borrowings, fed funds, funds through the Federal Reserve Bank’s discount window, as well as excess cash and unpledged investment securities, totaled $6.3 billion or 147% of uninsured deposits.

The tangible common equity to tangible assets ratio was 8.84% at December 31, 2024, compared to 8.83% at September 30, 2024.

At December 31, 2024, the Company had a total risk-based capital ratio of 15.38%, a common equity tier 1 risk-based capital ratio of 11.36%, a tier 1 risk-based capital ratio of 11.36%, and a tier 1 leverage ratio of 9.39%. These risk-based capital ratios compare to a total risk-based capital ratio of 15.53%, a common equity tier 1 risk-based capital ratio of 11.27%, a tier 1 risk-based capital ratio of 11.27%, and a tier 1 leverage ratio of 9.59% at September 30, 2024. All of these ratios remain well in excess of the mandated minimum regulatory requirements.

Non-performing loans include non-accrual loans and accruing loans 90 days or more past due. At December 31, 2024, non-performing loans totaled $119.4 million, compared to $125.3 million at September 30, 2024 and $91.8 million at December 31, 2023. The ratio of non-performing loans to total loans was 1.03% compared to 1.09% on a linked quarter basis. These levels of non-performing loans compare to 0.81% at December 31, 2023. The current quarter’s decline in non-performing loans was mainly related to pay downs on several non-accrual loans along with a single commercial real estate loan that returned to an accrual status based on the borrower’s historical payment performance. Total net charge-offs for the current quarter amounted to $1.7 million compared to $0.7 million for the third quarter of 2024 and net recoveries of $0.1 million for the fourth quarter of 2023.

At December 31, 2024, the allowance for credit losses was $134.4 million or 1.16% of outstanding loans and 113% of non-performing loans, compared to $131.4 million or 1.14% of outstanding loans and 105% of non-performing loans at the end of the previous quarter and $120.9 million or 1.06% of outstanding loans and 132% of non-performing loans at the end of the fourth quarter of 2023. The increase in the allowance for the current quarter compared to the previous quarter mainly reflects slight deterioration in the projected economic variables coupled with higher qualitative adjustments, partially offset by lower probability of economic recession.

Income Statement Review

Quarterly Results

Net loss was $39.5 million ($0.87 per diluted common share) for the three months ended December 31, 2024 compared to net income of $16.2 million ($0.36 per diluted common share) for the three months ended September 30, 2024 and $26.1 million ($0.58 per diluted common share) for the prior year quarter. The current quarter’s net loss is predominantly related to the $54.4 million goodwill impairment charge. The current quarter’s core earnings were $21.0 million ($0.47 per diluted common share), compared to $17.9 million ($0.40 per diluted common share) for the previous quarter and $27.1 million ($0.60 per diluted common share) for the quarter ended December 31, 2023. The increase in the current quarter’s core earnings compared to the linked quarter was driven primarily by higher net interest income and non-interest income, and lower provision for credit losses, partially offset by higher adjusted non-interest expense.

Net interest income for the fourth quarter of 2024 increased $4.7 million or 6% compared to the previous quarter and $4.4 million or 5% compared to the fourth quarter of 2023. During the current quarter, interest income increased $1.0 million, while interest expense declined $3.7 million. The higher interest rate environment during the current year was primarily responsible for a $5.4 million year-over-year increase in interest income, which outpaced the $1.0 million year-over-year growth in interest expense.

The net interest margin was 2.53% for the fourth quarter of 2024 compared to 2.44% for the third quarter of 2024 and 2.45% for the fourth quarter of 2023. The increase in the net interest margin during the current quarter was a result of a 23 basis point decrease in the rate paid on interest-bearing liabilities, driven by a 26 basis point decline in the rate paid on interest-bearing deposits, while the yield earned on interest-earning assets declined by six basis points. As compared to the prior year quarter, the yield on interest-earning assets increased eight basis points, while the rate paid on interest-bearing liabilities declined nine basis points, resulting in net interest margin increase of eight basis points.

The total provision for credit losses was $4.5 million for the fourth quarter of 2024 compared to $6.3 million for the previous quarter and a credit of $3.4 million for the fourth quarter of 2023. The provision for credit losses directly attributable to the funded loan portfolio was $4.7 million for the current quarter compared to $6.3 million for the third quarter of 2024 and a credit of $2.6 million for the fourth quarter of 2023. The current quarter’s provision is mainly a reflection of a slight deterioration in the projected economic variables along with higher qualitative adjustments, partially offset by lower probability of economic recession. In addition, during the current quarter, the reserve for unfunded commitments declined to $1.3 million from $1.5 million in the previous quarter due to higher utilization rates on lines of credit.

Non-interest income for the fourth quarter of 2024 increased by 10% or $1.9 million compared to the linked quarter and grew by 31% or $5.1 million compared to the prior year quarter. The current quarter’s increase in non-interest income as compared to the previous quarter was mainly driven by the $1.9 million increase in income from bank owned life insurance, generated by one-time mortality proceeds, $0.4 million of swap fee income, and $0.2 million increase in wealth management income, due to the overall favorable market performance, partially offset by $0.4 million decrease in income from mortgage banking activities, due to lower sales volumes.

Non-interest expense for the fourth quarter of 2024 increased $61.3 million or 84% compared to the third quarter of 2024 and $67.1 million or 100% compared to the fourth quarter of 2023. The increase over the comparative quarters was primarily due to the goodwill impairment charge of $54.4 million in the fourth quarter of 2024. Excluding the goodwill impairment charge, adjusted non-interest expense increased $6.9 million or 9% compared to the linked quarter. This quarter-over-quarter increase is predominantly attributable to $4.2 million in merger and acquisition expenses incurred during the current quarter, a $3.3 million increase in salaries and benefits, due to an increase in employee incentive compensation, and a $0.7 million increase in marketing expense. These increases were partially offset by the $1.8 million reduction in professional fees and services.

For the fourth quarter of 2024, the GAAP efficiency ratio was 124.61% compared to 72.12% for the third quarter of 2024 and 68.33% for the fourth quarter of 2023. The non-GAAP efficiency ratio was 67.16% for the current quarter as compared to 69.06% for the third quarter of 2024 and 66.16% for the fourth quarter of 2023.

ROA for the quarter ended December 31, 2024 was (1.09)% and ROTCE was 5.46% compared to 0.46% and 5.88%, respectively, for the third quarter of 2024 and 0.73% and 9.26%, respectively, for the fourth quarter of 2023. On a non-GAAP basis, the current quarter’s core ROA was 0.58% and core ROTCE was 6.80% compared to 0.50% and 5.88% for the third quarter of 2024 and 0.76% and 9.26%, respectively, for the fourth quarter of 2023.

Explanation of Non-GAAP Financial Measures

This news release contains financial information and performance measures determined by methods other than in accordance with generally accepted accounting principles in the United States (“GAAP”). The Company’s management believes that the supplemental non-GAAP information provides a better comparison of period-to-period operating performance. Additionally, the Company believes this information is utilized by regulators and market analysts to evaluate a company’s financial condition and, therefore, such information is useful to investors. Non-GAAP measures used in this release consist of the following:

Tangible common equity and related measures are non-GAAP measures that exclude the impact of goodwill and other intangible assets.
The non-GAAP efficiency ratio excludes goodwill impairment loss, merger and acquisition expense, amortization of intangible assets, investment securities gains/(losses), pension settlement expense, severance expense, contingent payment expense, and includes tax-equivalent income.
Core earnings and the related measures of core earnings per diluted common share, core return on average assets and core return on average tangible common equity reflect net income exclusive of goodwill impairment loss, merger and acquisition expense, and after-tax impact of amortization of intangible assets, investment securities gains/(losses) and other non-recurring or extraordinary items.
Pre-tax pre-provision net income excludes income tax expense and the provision (credit) for credit losses.

These disclosures should not be viewed as a substitute for financial results in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Please refer to the non-GAAP Reconciliation tables included with this release for a reconciliation of these non-GAAP measures to the most directly comparable GAAP measure.

About Sandy Spring Bancorp, Inc.

Sandy Spring Bancorp, Inc., headquartered in Olney, Maryland, is the holding company for Sandy Spring Bank, a premier community bank in the Greater Washington, D.C. region. With over 50 locations, the bank offers a broad range of commercial and retail banking, mortgage, private banking, and trust services throughout Maryland, Virginia, and Washington, D.C. Through its subsidiaries, Rembert Pendleton Jackson and West Financial Services, Inc., Sandy Spring Bank also offers a comprehensive menu of wealth management services.

Source: Sandy Spring Bancorp, Inc.
Code: SASR-E

For additional information or questions, please contact:
	Daniel J. Schrider, Chair, President & Chief Executive Officer, or
	Charles S. Cullum, E.V.P. & Chief Financial Officer
	Sandy Spring Bancorp
	17801 Georgia Avenue
	Olney, Maryland 20832
	1-800-399-5919
	Email:	DSchrider@sandyspringbank.com
		CCullum@sandyspringbank.com

	Website:	www.sandyspringbank.com
	Media Contact:
	Jennifer E. Schell, Division Executive, Marketing & Corporate Communications
	301-774-6400 x8331
	jschell@sandyspringbank.com

Forward-Looking Statements

Sandy Spring Bancorp’s forward-looking statements are subject to significant risks and uncertainties that may cause actual results to differ materially from those in such statements. These risks and uncertainties include, but are not limited to, the risks identified in our quarterly and annual reports and the following: changes in general business and economic conditions nationally or in the markets that we serve; changes in consumer and business confidence, investor sentiment, or consumer spending or savings behavior; changes in the level of inflation; changes in the demand for loans, deposits and other financial services that we provide; the possibility that future credit losses may be higher than currently expected; the impact of the interest rate environment on our business, financial condition and results of operations; the impact of compliance with changes in laws, regulations and regulatory interpretations, including changes in income taxes; changes in credit ratings assigned to us or our subsidiaries; competitive pressures among financial services companies; the ability to attract, develop and retain qualified employees; our ability to maintain the security of our data processing and information technology systems; the impact of changes in accounting policies, including the introduction of new accounting standards; the impact of judicial or regulatory proceedings; the impact of fiscal and governmental policies of the United States federal government; the impact of health emergencies, epidemics or pandemics; the effects of climate change; and the impact of natural disasters, extreme weather events, military conflict, terrorism or other geopolitical events; the possibility that the Company’s pending merger with AUB does not close when expected or at all because required regulatory or other approvals or conditions to closing are not received or satisfied on a timely basis or at all (and the risk that such approvals may result in the imposition of conditions that could adversely affect the combined company or the expected benefits of the merger); the risk that the benefits from the merger may not be fully realized or may take longer to realize than expected; and the risk of disruption to the Company’s business as a result of the pendency of the merger;. Sandy Spring Bancorp provides greater detail regarding some of these factors in its Form 10-K for the year ended December 31, 2023 and its Form 10-Q for the quarter ended September 30, 2024, including in the Risk Factors section of those reports, and in its other SEC reports. Sandy Spring Bancorp’s forward-looking statements may also be subject to other risks and uncertainties, including those that it may discuss elsewhere in this news release or in its filings with the SEC, accessible on the SEC’s Web site at www.sec.gov.

Sandy Spring Bancorp, Inc. and Subsidiaries
FINANCIAL HIGHLIGHTS – UNAUDITED

	Three Months Ended December 31,						% Change		Year Ended December 31,						% Change
(Dollars in thousands, except per share data)		2024			2023		% Change			2024			2023		% Change
Results of operations:
Net interest income	$	86,086		$	81,696		5	%	$	327,126		$	354,550		(8	)%
Provision/ (credit) for credit losses		4,468			(3,445	)	N/M			14,192			(17,561	)	N/M
Non-interest income		21,646			16,560		31			79,315			67,078		18
Non-interest expense		134,241			67,142		100			343,288			275,054		25
Income/ (loss) before income tax expense		(30,977	)		34,559		N/M			48,961			164,135		(70	)
Net income/ (loss)		(39,453	)		26,100		N/M			19,935			122,844		(84	)

Net income/ (loss) attributable to common shareholders	$	(39,457	)	$	26,066		N/M		$	19,902		$	122,621		(84	)
Pre-tax pre-provision net income/ (loss) ⁽¹⁾	$	(26,509	)	$	31,114		N/M		$	63,153		$	146,574		(57	)

Return on average assets		(1.09	)%		0.73	%				0.14	%		0.87	%
Return on average common equity		(9.70	)%		6.70	%				1.25	%		8.04	%
Return on average tangible common equity ⁽¹⁾		5.46	%		9.26	%				6.73	%		11.06	%
Net interest margin		2.53	%		2.45	%				2.46	%		2.67	%
Efficiency ratio – GAAP basis ⁽²⁾		124.61	%		68.33	%				84.46	%		65.24	%
Efficiency ratio – Non-GAAP basis ⁽²⁾		67.16	%		66.16	%				67.07	%		60.99	%

Per share data:
Basic net income/ (loss) per common share	$	(0.87	)	$	0.58		N/M		$	0.44		$	2.74		(84	)%
Diluted net income/ (loss) per common share	$	(0.87	)	$	0.58		N/M		$	0.44		$	2.73		(84	)
Weighted average diluted common shares		45,133,834			45,009,574		—			45,227,487			44,947,263		1
Dividends declared per share	$	0.34		$	0.34		—		$	1.36		$	1.36		—
Book value per common share	$	34.51		$	35.36		(2	)	$	34.51		$	35.36		(2	)
Tangible book value per common share ⁽¹⁾	$	26.99		$	26.64		1		$	26.99		$	26.64		1
Outstanding common shares		45,140,417			44,913,561		1			45,140,417			44,913,561		1

Financial condition at period-end:
Investment securities	$	1,418,244		$	1,414,453		—	%	$	1,418,244		$	1,414,453		—	%
Loans		11,537,966			11,366,989		2			11,537,966			11,366,989		2
Assets		14,127,480			14,028,172		1			14,127,480			14,028,172		1
Deposits		11,745,665			10,996,538		7			11,745,665			10,996,538		7
Stockholders’ equity		1,558,011			1,588,142		(2	)		1,558,011			1,588,142		(2	)

Capital ratios:
Tier 1 leverage ⁽³⁾		9.39	%		9.51	%				9.39	%		9.51	%
Common equity tier 1 capital to risk-weighted assets ⁽³⁾		11.36	%		10.90	%				11.36	%		10.90	%
Tier 1 capital to risk-weighted assets ⁽³⁾		11.36	%		10.90	%				11.36	%		10.90	%
Total regulatory capital to risk-weighted assets ⁽³⁾		15.38	%		14.92	%				15.38	%		14.92	%
Tangible common equity to tangible assets ⁽⁴⁾		8.84	%		8.77	%				8.84	%		8.77	%
Average equity to average assets		11.26	%		10.97	%				11.31	%		10.87	%

Credit quality ratios:
Allowance for credit losses to loans		1.16	%		1.06	%				1.16	%		1.06	%
Non-performing loans to total loans		1.03	%		0.81	%				1.03	%		0.81	%
Non-performing assets to total assets		0.87	%		0.65	%				0.87	%		0.65	%
Allowance for credit losses to non-performing loans		112.59	%		131.59	%				112.59	%		131.59	%
Annualized net charge-offs/ (recoveries) to average loans ⁽⁵⁾		0.06	%		—	%				0.03	%		0.01	%

N/M – not meaningful

(1)	Represents a non-GAAP measure.
(2)	The efficiency ratio – GAAP basis is non-interest expense divided by net interest income plus non-interest income from the Condensed Consolidated Statements of Income. The traditional efficiency ratio – Non-GAAP basis excludes goodwill impairment loss, merger and acquisition expense, intangible asset amortization, pension settlement expense, severance expense and contingent payment expense from non-interest expense; and investment securities gains/ (losses) from non-interest income; and adds the tax-equivalent adjustment to net interest income. See the Reconciliation Table included with these Financial Highlights.
(3)	Estimated ratio at December 31, 2024.
(4)	The tangible common equity to tangible assets ratio is a non-GAAP ratio that divides assets excluding goodwill and other intangible assets into stockholders’ equity after deducting goodwill and other intangible assets. See the Reconciliation Table included with these Financial Highlights.
(5)	Calculation utilizes average loans, excluding residential mortgage loans held-for-sale.

Sandy Spring Bancorp, Inc. and Subsidiaries
RECONCILIATION TABLE – UNAUDITED (CONTINUED)
OPERATING EARNINGS – METRICS

	Three Months Ended December 31,						Year Ended December 31,
(Dollars in thousands)		2024			2023			2024			2023
Core earnings (non-GAAP):
Net income/ (loss) (GAAP)	$	(39,453	)	$	26,100		$	19,935		$	122,844
Plus/ (less) non-GAAP adjustments:
Merger, acquisition and disposal expense⁽²⁾		4,164			—			4,164			—
Amortization of intangible assets (net of tax)⁽¹⁾		1,937			1,047			6,801			3,898
Goodwill impairment loss⁽²⁾		54,391			—			54,391			—
Severance expense (net of tax)⁽¹⁾		—			—			—			1,445
Pension settlement expense (net of tax)⁽¹⁾		—			—			—			6,088
Investment securities gains/ losses		—			—			—			—
Contingent payment expense (net of tax)⁽¹⁾		—			—			—			27
Core earnings (Non-GAAP)	$	21,039		$	27,147		$	85,291		$	134,302

Core earnings per diluted common share (non-GAAP):
Weighted average common shares outstanding – diluted (GAAP)		45,133,834			45,009,574			45,227,487			44,947,263

Earnings/ (loss) per diluted common share (GAAP)	$	(0.87	)	$	0.58		$	0.44		$	2.73
Core earnings per diluted common share (non-GAAP)	$	0.47		$	0.60		$	1.89		$	2.99

Core return on average assets (non-GAAP):
Average assets (GAAP)	$	14,362,321		$	14,090,423		$	14,129,795		$	14,055,645

Return on average assets (GAAP)		(1.09	)%		0.73	%		0.14	%		0.87	%
Core return on average assets (non-GAAP)		0.58	%		0.76	%		0.60	%		0.96	%

Return/ Core return on average tangible common equity (non-GAAP):
Net Income/ (loss) (GAAP)	$	(39,453	)	$	26,100		$	19,935		$	122,844
Plus: Amortization of intangible assets (net of tax)⁽¹⁾		1,937			1,047			6,801			3,898
Plus: Goodwill impairment loss⁽²⁾		54,391			—			54,391			—
Net income adjusted (non-GAAP)	$	16,875		$	27,147		$	81,127		$	126,742

Average total stockholders’ equity (GAAP)	$	1,617,633		$	1,546,312		$	1,597,456		$	1,528,242
Average goodwill		(356,341	)		(363,436	)		(361,653	)		(363,436	)
Average other intangible assets, net		(30,885	)		(20,162	)		(30,178	)		(18,596	)
Average tangible common equity (non-GAAP)	$	1,230,407		$	1,162,714		$	1,205,625		$	1,146,210

Return on average tangible common equity (non-GAAP)		5.46	%		9.26	%		6.73	%		11.06	%
Core return on average tangible common equity (non-GAAP)		6.80	%		9.26	%		7.07	%		11.72	%

(1)	Tax adjustments have been determined using the combined marginal federal and state rate of 25.48% and 25.37% for 2024 and 2023, respectively.
(2)	Adjustment is not tax-effected as it represents a tax nondeductible item.

Sandy Spring Bancorp, Inc. and Subsidiaries
RECONCILIATION TABLE – UNAUDITED

	Three Months Ended December 31,						Year Ended December 31,
(Dollars in thousands)		2024			2023			2024			2023
Pre-tax pre-provision net income:
Net income/ (loss) (GAAP)	$	(39,453	)	$	26,100		$	19,935		$	122,844
Plus/ (less) non-GAAP adjustments:
Income tax expense		8,476			8,459			29,026			41,291
Provision/ (credit) for credit losses		4,468			(3,445	)		14,192			(17,561	)
Pre-tax pre-provision net income/ (loss) (non-GAAP)	$	(26,509	)	$	31,114		$	63,153		$	146,574

Efficiency ratio (GAAP):
Non-interest expense	$	134,241		$	67,142		$	343,288		$	275,054

Net interest income plus non-interest income	$	107,732		$	98,256		$	406,441		$	421,628

Efficiency ratio (GAAP)		124.61	%		68.33	%		84.46	%		65.24	%

Efficiency ratio (Non-GAAP):
Non-interest expense	$	134,241		$	67,142		$	343,288		$	275,054
Less non-GAAP adjustments:
Amortization of intangible assets		2,599			1,403			9,126			5,223
Merger, acquisition and disposal expense		4,164			—			4,164			—
Goodwill impairment loss		54,391			—			54,391			—
Severance expense		—			—			—			1,939
Pension settlement expense		—			—			—			8,157
Contingent payment expense		—			—			—			36
Non-interest expense – as adjusted	$	73,087		$	65,739		$	275,607		$	259,699

Net interest income plus non-interest income	$	107,732		$	98,256		$	406,441		$	421,628
Plus non-GAAP adjustment:
Tax-equivalent income		1,100			1,113			4,459			4,157
Less/ (plus) non-GAAP adjustment:
Investment securities gains/ (losses)		—			—			—			—
Net interest income plus non-interest income – as adjusted	$	108,832		$	99,369		$	410,900		$	425,785

Efficiency ratio (Non-GAAP)		67.16	%		66.16	%		67.07	%		60.99	%

Tangible common equity ratio:
Total stockholders’ equity	$	1,558,011		$	1,588,142		$	1,558,011		$	1,588,142
Goodwill		(309,045	)		(363,436	)		(309,045	)		(363,436	)
Other intangible assets, net		(30,748	)		(28,301	)		(30,748	)		(28,301	)
Tangible common equity	$	1,218,218		$	1,196,405		$	1,218,218		$	1,196,405

Total assets	$	14,127,480		$	14,028,172		$	14,127,480		$	14,028,172
Goodwill		(309,045	)		(363,436	)		(309,045	)		(363,436	)
Other intangible assets, net		(30,748	)		(28,301	)		(30,748	)		(28,301	)
Tangible assets	$	13,787,687		$	13,636,435		$	13,787,687		$	13,636,435

Tangible common equity ratio		8.84	%		8.77	%		8.84	%		8.77	%

Outstanding common shares		45,140,417			44,913,561			45,140,417			44,913,561
Tangible book value per common share	$	26.99		$	26.64		$	26.99		$	26.64

Sandy Spring Bancorp, Inc. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF CONDITION – UNAUDITED

(Dollars in thousands)	December 31, 2024			December 31, 2023
Assets
Cash and due from banks	$	80,698		$	82,257
Federal funds sold		—			245
Interest-bearing deposits with banks		438,265			463,396
Cash and cash equivalents		518,963			545,898
Residential mortgage loans held for sale (at fair value)		22,757			10,836
SBA loans held for sale		715			—
Investments held-to-maturity (fair values of $177,854 and $200,411 at December 31, 2024 and December 31, 2023, respectively)		215,747			236,165
Investments available-for-sale (at fair value)		1,140,783			1,102,681
Other investments, at cost		61,714			75,607
Total loans		11,537,966			11,366,989
Less: allowance for credit losses – loans		(134,401	)		(120,865	)
Net loans		11,403,565			11,246,124
Premises and equipment, net		55,998			59,490
Other real estate owned		3,265			—
Accrued interest receivable		45,627			46,583
Goodwill		309,045			363,436
Other intangible assets, net		30,748			28,301
Other assets		318,553			313,051
Total assets	$	14,127,480		$	14,028,172

Liabilities
Noninterest-bearing deposits	$	2,804,930		$	2,914,161
Interest-bearing deposits		8,940,735			8,082,377
Total deposits		11,745,665			10,996,538
Securities sold under retail repurchase agreements		68,911			75,032
Federal Reserve Bank borrowings		—			300,000
Advances from FHLB		250,000			550,000
Subordinated debt		371,400			370,803
Total borrowings		690,311			1,295,835
Accrued interest payable and other liabilities		133,493			147,657
Total liabilities		12,569,469			12,440,030

Stockholders’ equity
Common stock — par value $1.00; shares authorized 100,000,000; shares issued and outstanding 45,140,417 and 44,913,561 at December 31, 2024 and December 31, 2023, respectively.		45,140			44,914
Additional paid in capital		748,905			742,243
Retained earnings		856,613			898,316
Accumulated other comprehensive loss		(92,647	)		(97,331	)
Total stockholders’ equity		1,558,011			1,588,142
Total liabilities and stockholders’ equity	$	14,127,480		$	14,028,172

Sandy Spring Bancorp, Inc. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF INCOME – UNAUDITED

	Three Months Ended December 31,						Year Ended December 31,
(Dollars in thousands, except per share data)		2024			2023			2024		2023
Interest income:
Interest and fees on loans	$	153,262		$	148,655		$	609,571	$	579,960
Interest on mortgage loans held for sale		249			199			1,050		896
Interest on SBA loans held for sale		21			—			23		—
Interest on deposits with banks		7,997			8,456			25,398		22,435
Interest and dividend income on investment securities:
Taxable		7,821			6,454			29,140		26,992
Tax-advantaged		1,697			1,848			7,082		7,224
Interest on federal funds sold		—			4			8		17
Total interest income		171,047			165,616			672,272		637,524
Interest expense:
Interest on deposits		76,111			69,813			303,173		225,028
Interest on retail repurchase agreements and federal funds purchased		369			4,075			5,259		14,452
Interest on advances from FHLB		3,865			6,086			20,259		27,709
Interest on subordinated debt		4,616			3,946			16,455		15,785
Total interest expense		84,961			83,920			345,146		282,974
Net interest income		86,086			81,696			327,126		354,550
Provision/ (credit) for credit losses		4,468			(3,445	)		14,192		(17,561	)
Net interest income after provision/ (credit) for credit losses		81,618			85,141			312,934		372,111
Non-interest income:
Service charges on deposit accounts		2,998			2,749			11,763		10,447
Mortgage banking activities		1,091			792			5,615		5,536
Wealth management income		10,920			9,219			42,071		36,633
Income from bank owned life insurance		3,213			1,207			7,496		4,210
Bank card fees		457			454			1,750		1,769
Other income		2,967			2,139			10,620		8,483
Total non-interest income		21,646			16,560			79,315		67,078
Non-interest expense:
Salaries and employee benefits		44,309			35,482			159,858		160,192
Occupancy expense of premises		4,727			4,558			19,005		18,778
Equipment expenses		4,252			3,987			15,924		15,675
Marketing		2,013			1,242			5,363		5,103
Outside data services		3,228			3,000			12,642		11,186
FDIC insurance		2,761			2,615			11,396		9,461
Amortization of intangible assets		2,599			1,403			9,126		5,223
Merger, acquisition and disposal expense		4,164			—			4,164		—
Professional fees and services		4,805			5,628			21,208		17,982
Goodwill impairment loss		54,391			—			54,391		—
Other expenses		6,992			9,227			30,211		31,454
Total non-interest expense		134,241			67,142			343,288		275,054
Income/ (loss) before income tax expense		(30,977	)		34,559			48,961		164,135
Income tax expense		8,476			8,459			29,026		41,291
Net income/ (loss)	$	(39,453	)	$	26,100		$	19,935	$	122,844

Net income per share amounts:
Basic net income/ (loss) per common share	$	(0.87	)	$	0.58		$	0.44	$	2.74
Diluted net income/ (loss) per common share	$	(0.87	)	$	0.58		$	0.44	$	2.73
Dividends declared per share	$	0.34		$	0.34		$	1.36	$	1.36

Sandy Spring Bancorp, Inc. and Subsidiaries
HISTORICAL TRENDS – QUARTERLY FINANCIAL DATA – UNAUDITED

		2024												2023
(Dollars in thousands, except per share data)	Q4			Q3			Q2			Q1			Q4			Q3			Q2			Q1
Profitability for the quarter:
Tax-equivalent interest income	$	172,147		$	171,219		$	166,252		$	167,113		$	166,729		$	163,479		$	159,156		$	152,317
Interest expense		84,961			88,686			84,828			86,671			83,920			77,330			67,679			54,045
Tax-equivalent net interest income		87,186			82,533			81,424			80,442			82,809			86,149			91,477			98,272
Tax-equivalent adjustment		1,100			1,121			1,139			1,099			1,113			1,068			1,006			970
Provision/ (credit) for credit losses		4,468			6,316			1,020			2,388			(3,445	)		2,365			5,055			(21,536	)
Non-interest income		21,646			19,715			19,587			18,367			16,560			17,391			17,176			15,951
Non-interest expense		134,241			72,937			68,104			68,006			67,142			72,471			69,136			66,305
Income/ (loss) before income tax expense		(30,977	)		21,874			30,748			27,316			34,559			27,636			33,456			68,484
Income tax expense		8,476			5,665			7,941			6,944			8,459			6,890			8,711			17,231
Net income/ (loss)	$	(39,453	)	$	16,209		$	22,807		$	20,372		$	26,100		$	20,746		$	24,745		$	51,253
GAAP financial performance:
Return on average assets	(1.09)%				0.46	%		0.66	%		0.58	%		0.73	%		0.58	%		0.70	%		1.49	%
Return on average common equity	(9.70)%				4.01	%		5.81	%		5.17	%		6.70	%		5.35	%		6.46	%		13.93	%
Return on average tangible common equity		5.46	%		5.88	%		8.27	%		7.39	%		9.26	%		7.42	%		8.93	%		19.10	%
Net interest margin		2.53	%		2.44	%		2.46	%		2.41	%		2.45	%		2.55	%		2.73	%		2.99	%
Efficiency ratio – GAAP basis		124.61	%		72.12	%		68.19	%		69.60	%		68.33	%		70.72	%		64.22	%		58.55	%
Non-GAAP financial performance:
Pre-tax pre-provision net income/ (loss)	$	(26,509	)	$	28,190		$	31,768		$	29,704		$	31,114		$	30,001		$	38,511		$	46,948
Core after-tax earnings	$	21,039		$	17,936		$	24,400		$	21,916		$	27,147		$	27,766		$	27,136		$	52,253
Core return on average assets		0.58	%		0.50	%		0.70	%		0.63	%		0.76	%		0.78	%		0.77	%		1.52	%
Core return on average common equity		5.17	%		4.44	%		6.21	%		5.56	%		6.97	%		7.16	%		7.09	%		14.20	%
Core return on average tangible common equity		6.80	%		5.88	%		8.27	%		7.39	%		9.26	%		9.51	%		9.43	%		19.11	%
Core earnings per diluted common share	$	0.47		$	0.40		$	0.54		$	0.49		$	0.60		$	0.62		$	0.60		$	1.16
Efficiency ratio – Non-GAAP basis		67.16	%		69.06	%		65.31	%		66.73	%		66.16	%		60.91	%		60.68	%		56.87	%
Per share data:
Net income/ (loss) attributable to common shareholders	$	(39,457	)	$	16,205		$	22,800		$	20,346		$	26,066		$	20,719		$	24,712		$	51,084
Basic net income/ (loss) per common share	$	(0.87	)	$	0.36		$	0.51		$	0.45		$	0.58		$	0.46		$	0.55		$	1.14
Diluted net income/ (loss) per common share	$	(0.87	)	$	0.36		$	0.51		$	0.45		$	0.58		$	0.46		$	0.55		$	1.14
Weighted average diluted common shares		45,133,834			45,242,920			45,145,214			45,086,471			45,009,574			44,960,455			44,888,759			44,872,582
Dividends declared per share	$	0.34		$	0.34		$	0.34		$	0.34		$	0.34		$	0.34		$	0.34		$	0.34
Non-interest income:
Service charges on deposit accounts		2,998			3,009			2,939			2,817			2,749			2,704			2,606			2,388
Mortgage banking activities		1,091			1,529			1,621			1,374			792			1,682			1,817			1,245
Wealth management income		10,920			10,738			10,455			9,958			9,219			9,391			9,031			8,992
Income from bank owned life insurance		3,213			1,307			1,816			1,160			1,207			845			1,251			907
Bank card fees		457			435			445			413			454			450			447			418
Other income		2,967			2,697			2,311			2,645			2,139			2,319			2,024			2,001
Total non-interest income	$	21,646		$	19,715		$	19,587		$	18,367		$	16,560		$	17,391		$	17,176		$	15,951
Non-interest expense:
Salaries and employee benefits	$	44,309		$	41,030		$	37,821		$	36,698		$	35,482		$	44,853		$	40,931		$	38,926
Occupancy expense of premises		4,727			4,657			4,805			4,816			4,558			4,609			4,764			4,847
Equipment expenses		4,252			3,841			3,868			3,963			3,987			3,811			3,760			4,117
Marketing		2,013			1,320			1,288			742			1,242			729			1,589			1,543
Outside data services		3,228			3,025			3,286			3,103			3,000			2,819			2,853			2,514
FDIC insurance		2,761			2,773			2,951			2,911			2,615			2,333			2,375			2,138
Amortization of intangible assets		2,599			2,323			2,135			2,069			1,403			1,245			1,269			1,306
Merger, acquisition and disposal expense		4,164			—			—			—			—			—			—			—
Professional fees and services		4,805			6,577			4,946			4,880			5,628			4,509			4,161			3,684
Goodwill impairment loss		54,391			—			—			—			—			—			—			—
Other expenses		6,992			7,391			7,004			8,824			9,227			7,563			7,434			7,230
Total non-interest expense	$	134,241		$	72,937		$	68,104		$	68,006		$	67,142		$	72,471		$	69,136		$	66,305

Sandy Spring Bancorp, Inc. and Subsidiaries
HISTORICAL TRENDS – QUARTERLY FINANCIAL DATA – UNAUDITED

		2024												2023
(Dollars in thousands, except per share data)	Q4			Q3			Q2			Q1			Q4			Q3			Q2			Q1
Balance sheets at quarter end:
Commercial investor real estate loans	$	4,779,593		$	4,868,467		$	4,933,329		$	4,997,879		$	5,104,425		$	5,137,694		$	5,131,210		$	5,167,456
Commercial owner-occupied real estate loans		1,748,772			1,737,327			1,747,708			1,741,113			1,755,235			1,760,384			1,770,135			1,769,928
Commercial AD&C loans		1,327,292			1,255,609			1,184,296			1,090,259			988,967			938,673			1,045,742			1,046,665
Commercial business loans		1,653,135			1,620,926			1,601,510			1,509,592			1,504,880			1,454,709			1,423,614			1,437,478
Residential mortgage loans		1,537,589			1,529,786			1,521,890			1,511,624			1,474,521			1,432,051			1,385,743			1,328,524
Residential construction loans		49,028			53,639			78,027			97,685			121,419			160,345			190,690			223,456
Consumer loans		442,557			426,167			417,161			416,132			417,542			416,436			422,505			421,734
Total loans		11,537,966			11,491,921			11,483,921			11,364,284			11,366,989			11,300,292			11,369,639			11,395,241
Allowance for credit losses – loans		(134,401	)		(131,428	)		(125,863	)		(123,096	)		(120,865	)		(123,360	)		(120,287	)		(117,613	)
Residential mortgage loans held for sale		22,757			21,489			18,961			16,627			10,836			19,235			21,476			16,262
SBA loans held for sale		715			425			—			—			—			—			—			—
Investment securities		1,418,244			1,440,488			1,401,511			1,405,490			1,414,453			1,392,078			1,463,554			1,528,336
Total assets		14,127,480			14,383,073			14,008,343			13,888,133			14,028,172			14,135,085			13,994,545			14,129,007
Noninterest-bearing demand deposits		2,804,930			2,903,063			2,931,405			2,817,928			2,914,161			3,013,905			3,079,896			3,228,678
Total deposits		11,745,665			11,737,694			11,340,228			11,227,200			10,996,538			11,151,012			10,958,922			11,075,991
Customer repurchase agreements		68,911			70,767			75,038			71,529			75,032			66,581			74,510			47,627
Total stockholders’ equity		1,558,011			1,628,837			1,599,004			1,589,364			1,588,142			1,537,914			1,539,032			1,536,865
Quarterly average balance sheets:
Commercial investor real estate loans	$	4,825,594		$	4,874,003		$	4,964,406		$	5,057,334		$	5,125,028		$	5,125,459		$	5,146,632		$	5,136,204
Commercial owner-occupied real estate loans		1,739,686			1,741,663			1,734,106			1,746,042			1,755,048			1,769,717			1,773,039			1,769,680
Commercial AD&C loans		1,300,966			1,253,035			1,133,506			1,030,763			960,646			995,682			1,057,205			1,082,791
Commercial business loans		1,606,641			1,579,001			1,551,798			1,508,336			1,433,035			1,442,518			1,441,489			1,444,588
Residential mortgage loans		1,535,924			1,526,445			1,518,748			1,491,277			1,451,614			1,406,929			1,353,809			1,307,761
Residential construction loans		47,788			64,684			86,638			110,456			142,325			174,204			211,590			223,313
Consumer loans		433,185			421,003			417,206			417,539			419,299			421,189			423,306			424,122
Total loans		11,489,784			11,459,834			11,406,408			11,361,747			11,286,995			11,335,698			11,407,070			11,388,459
Residential mortgage loans held for sale		13,768			19,889			14,497			8,142			10,132			13,714			17,480			8,324
SBA loans held for sale		591			65			—			—			—			—			—
Investment securities		1,542,401			1,531,378			1,538,624			1,536,127			1,544,173			1,589,342			1,639,324			1,679,593
Interest-earning assets		13,713,618			13,474,697			13,292,995			13,411,810			13,462,583			13,444,117			13,423,589			13,316,165
Total assets		14,362,321			14,136,037			13,956,261			14,061,935			14,090,423			14,086,342			14,094,653			13,949,276
Noninterest-bearing demand deposits		2,813,545			2,783,906			2,790,620			2,730,295			2,958,254			3,041,101			3,137,971			3,480,433
Total deposits		11,807,983			11,483,524			11,245,476			11,086,145			11,089,587			11,076,724			10,928,038			11,049,991
Customer repurchase agreements		65,253			63,436			62,161			72,836			66,622			67,298			58,382			60,626
Total interest-bearing liabilities		9,792,134			9,600,905			9,441,015			9,583,074			9,418,666			9,332,617			9,257,652			8,806,720
Total stockholders’ equity		1,617,633			1,607,377			1,579,582			1,584,902			1,546,312			1,538,553			1,535,465			1,491,929
Financial measures:
Average equity to average assets		11.26	%		11.37	%		11.32	%		11.27	%		10.97	%		10.92	%		10.89	%		10.70	%
Average investment securities to average earning assets		11.25	%		11.36	%		11.57	%		11.45	%		11.47	%		11.82	%		12.21	%		12.61	%
Average loans to average earning assets		83.78	%		85.05	%		85.81	%		84.71	%		83.84	%		84.32	%		84.98	%		85.52	%
Loans to assets		81.67	%		79.90	%		81.98	%		81.83	%		81.03	%		79.94	%		81.24	%		80.65	%
Loans to deposits		98.23	%		97.91	%		101.27	%		101.22	%		103.37	%		101.34	%		103.75	%		102.88	%
Assets under management	$	6,577,150		$	6,567,752		$	6,215,697		$	6,165,509		$	5,999,520		$	5,536,499		$	5,742,888		$	5,477,560
Capital measures:
Tier 1 leverage⁽¹⁾		9.39	%		9.59	%		9.70	%		9.56	%		9.51	%		9.50	%		9.42	%		9.44	%
Common equity tier 1 capital to risk-weighted assets⁽¹⁾		11.36	%		11.27	%		11.28	%		10.96	%		10.90	%		10.83	%		10.65	%		10.53	%
Tier 1 capital to risk-weighted assets⁽¹⁾		11.36	%		11.27	%		11.28	%		10.96	%		10.90	%		10.83	%		10.65	%		10.53	%
Total regulatory capital to risk-weighted assets⁽¹⁾		15.38	%		15.53	%		15.49	%		15.05	%		14.92	%		14.85	%		14.60	%		14.43	%
Book value per common share	$	34.51		$	36.10		$	35.45		$	35.37		$	35.36		$	34.26		$	34.31		$	34.37
Outstanding common shares		45,140,417			45,125,078			45,109,671			44,940,147			44,913,561			44,895,158			44,862,369			44,712,497

(1)	Estimated ratio at December 31, 2024.

Sandy Spring Bancorp, Inc. and Subsidiaries
LOAN PORTFOLIO QUALITY DETAIL – UNAUDITED

		2024								2023
(Dollars in thousands)	December 31,		September 30,		June 30,		March 31,		December 31,		September 30,		June 30,		March 31,
Non-performing assets:
Loans 90 days past due:
Commercial real estate:
Commercial investor real estate	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	215
Commercial owner-occupied real estate		—		—		—		—		—		—		—		—
Commercial AD&C		—		—		—		—		—		—		—		—
Commercial business		—		—		—		20		20		415		29		3,002
Residential real estate:
Residential mortgage		232		399		338		340		342		—		692		352
Residential construction		—		—		—		—		—		—		—		—
Consumer		—		—		—		—		—		—		—		—
Total loans 90 days past due		232		399		338		360		362		415		721		3,569
Non-accrual loans:
Commercial real estate:
Commercial investor real estate		58,071		57,578		55,498		55,579		58,658		20,108		20,381		15,451
Commercial owner-occupied real estate		7,008		9,639		9,403		4,394		4,640		4,744		4,846		4,949
Commercial AD&C		31,314		31,816		2,127		556		1,259		1,422		569		—
Commercial business		7,590		9,044		8,455		7,164		10,051		9,671		9,393		9,443
Residential real estate:
Residential mortgage		10,939		11,996		12,228		11,835		12,332		10,766		10,153		8,935
Residential construction		521		539		539		542		443		449		—		—
Consumer		3,697		4,258		4,400		4,011		4,102		4,187		3,396		4,900
Total non-accrual loans		119,140		124,870		92,650		84,081		91,485		51,347		48,738		43,678
Total non-performing loans		119,372		125,269		92,988		84,441		91,847		51,762		49,459		47,247
Other real estate owned (OREO)		3,265		3,265		2,700		2,700		—		261		611		645
Total non-performing assets	$	122,637	$	128,534	$	95,688	$	87,141	$	91,847	$	52,023	$	50,070	$	47,892

	For the Quarter Ended,
(Dollars in thousands)	December 31, 2024			September 30, 2024			June 30, 2024			March 31, 2024			December 31, 2023			z	September 30, 2023			June 30, 2023			March 31, 2023
Analysis of non-accrual loan activity:
Balance at beginning of period	$	124,870		$	92,650		$	84,081		$	91,485		$	51,347			$	48,738		$	43,678		$	34,782
Non-accrual balances transferred to OREO		—			(565	)		—			(2,700	)		—				—			—			—
Non-accrual balances charged-off		(1,698	)		(787	)		—			(1,550	)		—				(183	)		(2,049	)		(126	)
Net payments or draws		(5,065	)		(3,095	)		(1,427	)		(4,017	)		(7,619	)			(1,545	)		(1,654	)		(10,212	)
Loans placed on non-accrual		2,847			36,667			10,038			1,490			47,920				4,967			9,276			19,714
Non-accrual loans brought current		(1,814	)		—			(42	)		(627	)		(163	)			(630	)		(513	)		(480	)
Balance at end of period	$	119,140		$	124,870		$	92,650		$	84,081		$	91,485			$	51,347		$	48,738		$	43,678

Analysis of allowance for credit losses – loans:
Balance at beginning of period	$	131,428		$	125,863		$	123,096		$	120,865		$	123,360			$	120,287		$	117,613		$	136,242
Provision/ (credit) for credit losses – loans		4,653			6,310			2,961			3,331			(2,574	)			3,171			4,454			(18,945	)
Less loans charged-off, net of recoveries:
Commercial real estate:
Commercial investor real estate		(3	)		397			(3	)		(2	)		(3	)			(3	)		(14	)		(5	)
Commercial owner-occupied real estate		(30	)		(27	)		(27	)		(27	)		(27	)			(25	)		(27	)		(26	)
Commercial AD&C		(23	)		111			(23	)		(283	)		—				—			—			—
Commercial business		1,656			250			(28	)		1,550			(105	)			15			363			(127	)
Residential real estate:
Residential mortgage		(7	)		(35	)		39			(6	)		(6	)			(4	)		35			21
Residential construction		—			—			—			—			—				—			—			—
Consumer		87			49			236			(132	)		62				115			1,423			(179	)
Net charge-offs/ (recoveries)		1,680			745			194			1,100			(79	)			98			1,780			(316	)
Balance at the end of period	$	134,401		$	131,428		$	125,863		$	123,096		$	120,865			$	123,360		$	120,287		$	117,613

Asset quality ratios:
Non-performing loans to total loans		1.03	%		1.09	%		0.81	%		0.74	%		0.81	%			0.46	%		0.44	%		0.41	%
Non-performing assets to total assets		0.87	%		0.89	%		0.68	%		0.63	%		0.65	%			0.37	%		0.36	%		0.34	%
Allowance for credit losses to total loans		1.16	%		1.14	%		1.10	%		1.08	%		1.06	%			1.09	%		1.06	%		1.03	%
Allowance for credit losses to non-performing loans		112.59	%		104.92	%		135.35	%		145.78	%		131.59	%			238.32	%		243.21	%		248.93	%
Annualized net charge-offs/ (recoveries) to average loans		0.06	%		0.03	%		0.01	%		0.04	%		—	%			—	%		0.06	%		(0.01	)%

Sandy Spring Bancorp, Inc. and Subsidiaries
CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES – UNAUDITED

	Three Months Ended December 31,
		2024							2023
(Dollars in thousands and tax-equivalent)	Average Balances			Interest ⁽¹⁾		Annualized Average Yield/Rate		Average Balances			Interest ⁽¹⁾		Annualized Average Yield/Rate
Assets
Commercial investor real estate loans	$	4,825,594		$	57,898	4.77	%	$	5,125,028		$	60,909	4.72	%
Commercial owner-occupied real estate loans		1,739,686			21,497	4.92			1,755,048			21,011	4.75
Commercial AD&C loans		1,300,966			24,303	7.43			960,646			20,510	8.47
Commercial business loans		1,606,641			26,374	6.53			1,433,035			23,822	6.60
Total commercial loans		9,472,887			130,072	5.46			9,273,757			126,252	5.40
Residential mortgage loans		1,535,924			14,676	3.82			1,451,614			12,984	3.58
Residential construction loans		47,788			672	5.59			142,325			1,515	4.22
Consumer loans		433,185			8,496	7.80			419,299			8,543	8.08
Total residential and consumer loans		2,016,897			23,844	4.72			2,013,238			23,042	4.56
Total loans ⁽²⁾		11,489,784			153,916	5.33			11,286,995			149,294	5.25
Residential mortgage loans held for sale		13,768			249	7.24			10,132			199	7.86
SBA loans held for sale		591			21	14.50			—			—	—
Taxable securities		1,214,327			7,821	2.58			1,193,408			6,454	2.16
Tax-advantaged securities		328,074			2,143	2.61			350,765			2,322	2.64
Total investment securities ⁽³⁾		1,542,401			9,964	2.58			1,544,173			8,776	2.27
Interest-bearing deposits with banks		667,074			7,997	4.77			621,007			8,456	5.40
Federal funds sold		—			—	—			276			4	5.43
Total interest-earning assets		13,713,618			172,147	5.00			13,462,583			166,729	4.92

Less: allowance for credit losses – loans		(131,565	)						(121,851	)
Cash and due from banks		77,280							89,143
Premises and equipment, net		56,925							69,162
Other assets		646,063							591,386
Total assets	$	14,362,321						$	14,090,423

Liabilities and Stockholders’ Equity
Interest-bearing demand deposits	$	1,519,835		$	6,510	1.70	%	$	1,474,748		$	5,612	1.51	%
Regular savings deposits		1,763,353			13,768	3.11			1,153,610			9,715	3.34
Money market savings deposits		3,116,359			26,657	3.40			2,697,930			24,456	3.60
Time deposits		2,594,891			29,176	4.47			2,805,045			30,030	4.25
Total interest-bearing deposits		8,994,438			76,111	3.37			8,131,333			69,813	3.41
Repurchase agreements		65,253			327	2.00			66,622			354	2.11
Federal funds purchased and Federal Reserve Bank borrowings		3,525			42	4.69			300,000			3,721	4.92
Advances from FHLB		357,609			3,865	4.30			550,000			6,086	4.39
Subordinated debt		371,309			4,616	4.97			370,711			3,946	4.26
Total borrowings		797,696			8,850	4.41			1,287,333			14,107	4.35
Total interest-bearing liabilities		9,792,134			84,961	3.45			9,418,666			83,920	3.54

Noninterest-bearing demand deposits		2,813,545							2,958,254
Other liabilities		139,009							167,191
Stockholders’ equity		1,617,633							1,546,312
Total liabilities and stockholders’ equity	$	14,362,321						$	14,090,423

Tax-equivalent net interest income and spread				$	87,186	1.55	%				$	82,809	1.38	%
Less: tax-equivalent adjustment					1,100							1,113
Net interest income				$	86,086						$	81,696

Interest income/earning assets						5.00	%						4.92	%
Interest expense/earning assets						2.47							2.47
Net interest margin						2.53	%						2.45	%

(1)	Tax-equivalent income has been adjusted using the combined marginal federal and state rate of 25.48% and 25.37% for 2024 and 2023, respectively. The annualized taxable-equivalent adjustments utilized in the above table to compute yields aggregated to $1.1 million and $1.1 million in 2024 and 2023, respectively.
(2)	Non-accrual loans are included in the average balances.
(3)	Available-for-sale investments are presented at amortized cost.

Sandy Spring Bancorp, Inc. and Subsidiaries
CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES – UNAUDITED

	Year Ended December 31,
		2024							2023
(Dollars in thousands and tax-equivalent)	Average Balances			Interest ⁽¹⁾		Annualized Average Yield/Rate		Average Balances			Interest ⁽¹⁾		Annualized Average Yield/Rate
Assets
Commercial investor real estate loans	$	4,929,894		$	234,402	4.75	%	$	5,133,279		$	237,976	4.64	%
Commercial owner-occupied real estate loans		1,740,376			84,587	4.86			1,766,839			82,049	4.64
Commercial AD&C loans		1,180,100			93,082	7.89			1,023,669			81,515	7.96
Commercial business loans		1,561,616			105,400	6.75			1,440,382			92,080	6.39
Total commercial loans		9,411,986			517,471	5.50			9,364,169			493,620	5.27
Residential mortgage loans		1,518,170			56,644	3.73			1,380,496			48,909	3.54
Residential construction loans		77,276			3,880	5.02			187,599			6,817	3.63
Consumer loans		422,260			34,189	8.10			421,963			32,946	7.81
Total residential and consumer loans		2,017,706			94,713	4.69			1,990,058			88,672	4.46
Total loans ⁽²⁾		11,429,692			612,184	5.36			11,354,227			582,292	5.13
Residential mortgage loans held for sale		14,089			1,050	7.45			12,421			896	7.21
SBA loans held for sale		165			23	14.17			—			—	—
Taxable securities		1,200,218			29,140	2.43			1,254,739			26,992	2.15
Tax-advantaged securities		336,913			8,928	2.65			357,933			9,049	2.53
Total investment securities ⁽³⁾		1,537,131			38,068	2.48			1,612,672			36,041	2.23
Interest-bearing deposits with banks		492,649			25,398	5.16			432,392			22,435	5.19
Federal funds sold		216			8	3.79			393			17	4.26
Total interest-earning assets		13,473,942			676,731	5.02			13,412,105			641,681	4.78

Less: allowance for credit losses – loans		(125,131	)						(124,624	)
Cash and due from banks		81,761							93,494
Premises and equipment, net		58,571							69,886
Other assets		640,652							604,784
Total assets	$	14,129,795						$	14,055,645

Liabilities and Stockholders’ Equity
Interest-bearing demand deposits	$	1,480,668		$	25,368	1.71	%	$	1,429,219		$	16,077	1.12	%
Regular savings deposits		1,643,305			56,365	3.43			784,575			17,546	2.24
Money market savings deposits		2,914,712			105,847	3.63			2,974,580			93,432	3.14
Time deposits		2,588,713			115,593	4.47			2,695,232			97,973	3.64
Total interest-bearing deposits		8,627,398			303,173	3.51			7,883,606			225,028	2.85
Repurchase agreements		65,913			1,370	2.08			63,259			915	1.45
Federal funds purchased and Federal Reserve Bank borrowings		75,227			3,889	5.17			273,508			13,537	4.95
Advances from FHLB		465,164			20,259	4.36			615,082			27,709	4.50
Subordinated debt		371,085			16,455	4.43			370,487			15,785	4.26
Total borrowings		977,389			41,973	4.29			1,322,336			57,946	4.38
Total interest-bearing liabilities		9,604,787			345,146	3.59			9,205,942			282,974	3.07

Noninterest-bearing demand deposits		2,779,696							3,152,699
Other liabilities		147,856							168,762
Stockholders’ equity		1,597,456							1,528,242
Total liabilities and stockholders’ equity	$	14,129,795						$	14,055,645

Tax-equivalent net interest income and spread				$	331,585	1.43	%				$	358,707	1.71	%
Less: tax-equivalent adjustment					4,459							4,157
Net interest income				$	327,126						$	354,550

Interest income/earning assets						5.02	%						4.78	%
Interest expense/earning assets						2.56							2.11
Net interest margin						2.46	%						2.67	%

(1)	Tax-equivalent income has been adjusted using the combined marginal federal and state rate of 25.48% and 25.37% for 2024 and 2023, respectively. The annualized taxable-equivalent adjustments utilized in the above table to compute yields aggregated to $4.5 million and $4.2 million in 2024 and 2023, respectively.
(2)	Non-accrual loans are included in the average balances.
(3)	Available-for-sale investments are presented at amortized cost.

MIL-OSI: Provident Financial Holdings Reports Second Quarter of Fiscal Year 2025 Results

Source: GlobeNewswire (MIL-OSI)

Net Income of $872,000 in the December 2024 Quarter, Down 54% from the Sequential Quarter and 59% from the Comparable Quarter Last Year

Net Interest Margin of 2.91% in the December 2024 Quarter, Up Seven Basis Points from the Sequential Quarter and 13 Basis Points from the Comparable Quarter Last Year

Loans Held for Investment of $1.05 Billion at December 31, 2024, Unchanged from June 30, 2024

Total Deposits of $867.5 Million at December 31, 2024, Down 2% from June 30, 2024

Non-Performing Assets to Total Assets Ratio of 0.20% at December 31, 2024, Unchanged from June 30, 2024

Non-Interest Expenses Remain Well Controlled

RIVERSIDE, Calif., Jan. 28, 2025 (GLOBE NEWSWIRE) — Provident Financial Holdings, Inc. (“Company”), NASDAQ GS: PROV, the holding company for Provident Savings Bank, F.S.B. (“Bank”), today announced earnings for the second quarter of the fiscal year ending June 30, 2025.

The Company reported net income of $872,000, or $0.13 per diluted share (on 6.79 million average diluted shares outstanding), for the quarter ended December 31, 2024, down 59 percent from net income of $2.14 million, or $0.31 per diluted share (on 6.98 million average diluted shares outstanding), in the comparable period a year ago. The decrease in earnings was due primarily to a $586,000 provision for credit losses, in contrast to a $720,000 recovery of credit losses in the comparable period a year ago, and a $450,000 increase in non-interest expenses (primarily attributable to higher salaries and employee benefits and other operating expenses).

“I am pleased with the progress we have made in our fundamental operating results. Net interest income increased by approximately two percent from the prior sequential quarter and was largely the result of an expanding net interest margin. Growth in the loans held for investment portfolio, which increased from the September 30, 2024 balance, also contributed to this improvement. Credit quality remains strong; however, the increase in mortgage interest rates has resulted in a longer estimated average life of our loan portfolio and a corresponding provision for credit losses. Additionally, we remain active in our stock repurchase plan with our Board of Directors recently approving a new plan, demonstrating our commitment to sound capital management practices,” stated Donavon P. Ternes, President and Chief Executive Officer of the Company. “As I described last quarter, our business model performs better in a flat or upward-sloping yield curve environment. Now that the Federal Open Market Committee has implemented looser monetary policy and the inverted yield curve has reversed course, we are transitioning back to less restrictive operating strategies,” concluded Ternes.

Return on average assets was 0.28 percent for the second quarter of fiscal 2025, compared to 0.61 percent in the first quarter of fiscal 2025 and 0.66 percent for the second quarter of fiscal 2024. Return on average stockholders’ equity for the second quarter of fiscal 2025 was 2.66 percent, compared to 5.78 percent for the first quarter of fiscal 2025 and 6.56 percent for the second quarter of fiscal 2024.

On a sequential quarter basis, the $872,000 net income for the second quarter of fiscal 2025 reflects a 54 percent decrease from $1.90 million in the first quarter of fiscal 2025. The decrease was primarily attributable to a $586,000 provision for credit losses, in contrast to a $697,000 recovery of credit losses, and a $271,000 increase in non-interest expense (primarily due to an increase in salaries and employee benefits), partly offset by a $143,000 increase in net interest income (primarily due to a higher net interest margin). The increase in salaries and employee benefits expense was primarily attributable to higher employee compensation. Diluted earnings per share for the second quarter of fiscal 2025 were $0.13 per share, down 54 percent from $0.28 per share in the first quarter of fiscal 2025.

For the six months ended December 31, 2024, net income decreased $1.13 million, or 29 percent, to $2.77 million from $3.90 million in the comparable period in fiscal 2024. Diluted earnings per share for the six months ended December 31, 2024 decreased 27 percent to $0.41 per share (on 6.83 million average diluted shares outstanding) from $0.56 per share (on 7.00 million average diluted shares outstanding) for the comparable six-month period last year. The decrease in earnings was primarily attributable to a $1.12 million increase in non-interest expense (primarily due to an increase in salaries and employee benefits and other operating expenses) and a $538,000 decrease in net interest income, partly offset by a $118,000 increase in non-interest income.

In the second quarter of fiscal 2025, net interest income decreased slightly to $8.76 million from $8.77 million for the same quarter last year. The slight decrease in net interest income was due to a lower average balance of interest-earning assets, partly offset by a higher net interest margin. The average balance of interest-earning assets decreased five percent to $1.20 billion in the second quarter of fiscal 2025 from $1.26 billion in the same quarter last year, primarily due to decreases in the average balance of loans receivable, investment securities and interest-earning deposits. The net interest margin for the second quarter of fiscal 2025 increased 13 basis points to 2.91 percent from 2.78 percent in the same quarter last year. The increase in net interest margin was due to increased yields on interest-earning assets outpacing increased funding costs. The average yield on interest-earning assets increased 33 basis points to 4.66 percent in the second quarter of fiscal 2025 from 4.33 percent in the same quarter last year. In contrast, our average funding costs increased by 23 basis points to 1.92 percent in the second quarter of fiscal 2025 from 1.69 percent in the same quarter last year.

Interest income on loans receivable increased $541,000, or four percent, to $13.05 million in the second quarter of fiscal 2025 from $12.51 million in the same quarter of fiscal 2024. The increase was due to a higher average loan yield, partly offset by a lower average loan balance. The average yield on loans receivable increased 33 basis points to 4.99 percent in the second quarter of fiscal 2025 from 4.66 percent in the same quarter last year. Adjustable-rate loans of approximately $100.7 million repriced upward in the second quarter of fiscal 2025 by approximately 15 basis points from a weighted average rate of 7.83 percent to 7.98 percent. The average balance of loans receivable decreased $27.8 million, or three percent, to $1.05 billion in the second quarter of fiscal 2025 from $1.07 billion in the same quarter last year. Total loans originated for investment in the second quarter of fiscal 2025 were $36.4 million, up 80 percent from $20.2 million in the same quarter last year, while loan principal payments received in the second quarter of fiscal 2025 were $34.3 million, up 93 percent from $17.8 million in the same quarter last year.

Interest income from investment securities decreased $53,000, or 10 percent, to $471,000 in the second quarter of fiscal 2025 from $524,000 for the same quarter of fiscal 2024. This decrease was attributable to a lower average balance, partly offset by a higher average yield. The average balance of investment securities decreased $23.4 million, or 16 percent, to $123.8 million in the second quarter of fiscal 2025 from $147.2 million in the same quarter last year. The decrease in the average balance was due to scheduled principal payments and prepayments of investment securities. The average yield on investment securities increased 10 basis points to 1.52 percent in the second quarter of fiscal 2025 from 1.42 percent for the same quarter last year. The increase in the average yield was primarily attributable to a lower premium amortization during the current quarter in comparison to the same quarter last year ($97,000 vs. $137,000) due to lower total principal repayments ($5.3 million vs. $5.9 million) and, to a lesser extent, the upward repricing of adjustable-rate mortgage-backed securities.

In the second quarter of fiscal 2025, the Bank received $213,000 in cash dividends from the Federal Home Loan Bank (“FHLB”) – San Francisco stock and other equity investments, up eight percent from $197,000 in the same quarter last year, resulting in an average yield of 8.38 percent in the second quarter of fiscal 2025 compared to 8.29 percent in the same quarter last year. The average balance of FHLB – San Francisco stock and other equity investments in the second quarter of fiscal 2025 was $10.2 million, up from $9.5 million in the same quarter of fiscal 2024.

Interest income from interest-earning deposits, primarily cash deposited at the Federal Reserve Bank (“FRB”) of San Francisco, was $287,000 in the second quarter of fiscal 2025, down $148,000 or 34 percent from $435,000 in the same quarter of fiscal 2024. The decrease was due to a lower average balance and, to a lesser extent, a lower average yield. The average balance of the Company’s interest-earning deposits decreased $7.8 million, or 25 percent, to $23.7 million in the second quarter of fiscal 2025 from $31.5 million in the same quarter last year. The average yield earned on interest-earning deposits in the second quarter of fiscal 2025 was 4.74 percent, down 67 basis points from 5.41 percent in the same quarter last year. The decrease in the average yield was due to a lower average interest rate on the FRB’s reserve balances resulting from decreases in the targeted federal funds rate during the comparable periods.

Interest expense on deposits for the second quarter of fiscal 2025 was $2.67 million, an increase of $401,000 or 18 percent from $2.27 million for the same period last year. The increase was attributable to higher rates paid on deposits, partly offset by a lower average balance. The average cost of deposits was 1.23 percent in the second quarter of fiscal 2025, up 24 basis points from 0.99 percent in the same quarter last year. The increase in the average cost of deposits was primarily attributable to an increase in higher cost time deposits, particularly brokered certificates of deposit. The average balance of deposits decreased $51.5 million, or six percent, to $863.1 million in the second quarter of fiscal 2025 from $914.6 million in the same quarter last year.

Transaction account balances, or “core deposits,” decreased $21.6 million, or four percent, to $592.9 million at December 31, 2024 from $614.5 million at June 30, 2024, while time deposits increased slightly to $274.6 million at December 31, 2024 from $273.9 million at June 30, 2024. As of December 31, 2024, brokered certificates of deposit totaled $143.8 million, up $12.0 million or nine percent from $131.8 million at June 30, 2024. The weighted average cost of brokered certificates of deposit was 4.56 percent and 5.18 percent (including broker fees) at December 31, 2024 and June 30, 2024, respectively.

Interest expense on borrowings, consisting of FHLB advances, for the second quarter of fiscal 2025 decreased $30,000, or one percent, to $2.59 million from $2.62 million for the same period last year. The decrease in interest expense on borrowings was primarily the result of a lower average balance, partly offset by a higher average cost. The average balance of borrowings decreased $3.8 million, or two percent, to $226.7 million in the second quarter of fiscal 2025 from $230.5 million in the same quarter last year. The average cost of borrowings increased two basis points to 4.53 percent in the second quarter of fiscal 2025 from 4.51 percent in the same quarter last year.

At December 31, 2024, the Bank had approximately $246.2 million of remaining borrowing capacity at the FHLB. Additionally, the Bank has an unused secured borrowing facility of approximately $198.5 million with the FRB of San Francisco and an unused unsecured federal funds borrowing facility of $50.0 million with its correspondent bank. The total available borrowing capacity across all sources totaled approximately $494.7 million at December 31, 2024.

The Bank continues to work with both the FHLB and FRB of San Francisco to ensure that its borrowing capacity is continuously reviewed and updated in order to be accessed seamlessly should the need arise.

During the second quarter of fiscal 2025, the Company recorded a provision for credit losses of $586,000 (which included a $41,000 recovery of unfunded commitment reserves), in contrast to a $720,000 recovery of credit losses recorded during the same period last year and a $697,000 recovery of credit losses recorded in the first quarter of fiscal 2025 (sequential quarter). The provision for credit losses recorded in the second quarter of fiscal 2025 was primarily attributable to a longer estimated life of the loan portfolio resulting from lower loan prepayment estimates (attributable to higher interest rates) and a slight increase in the outstanding balance of loans held for investment at December 31, 2024 from September 30, 2024.

Non-performing assets, comprised solely of non-accrual loans with underlying collateral located in California, decreased $66,000 or three percent to $2.5 million, which represented 0.20 percent of total assets at December 31, 2024, compared to $2.6 million, which represented 0.20 percent of total assets at June 30, 2024. At both December 31, 2024 and June 30, 2024, non-performing loans were comprised of 10 single-family loans. At both December 31, 2024 and June 30, 2024, there was no real estate owned and no loans past due by 90 days or more that were accruing interest. For the quarters ended December 31, 2024 and 2023, there were no loan charge-offs.

The recent wildfires in Los Angeles, California did not have a material impact on the Company’s operations or the Bank’s customers. The Bank’s branches and facilities remained operational throughout the wildfire events, and there were no significant disruptions to customer services or business activities observed. Additionally, the Bank has not identified any significant credit exposure or financial impact attributable to the wildfires at this time.

Classified assets were $5.8 million at December 31, 2024, consisting of $631,000 of loans in the special mention category and $5.1 million of loans in the substandard category. Classified assets at June 30, 2024 were $5.8 million, consisting of $1.1 million of loans in the special mention category and $4.7 million of loans in the substandard category.

The allowance for credit losses on loans held for investment was $7.0 million, or 0.66 percent of gross loans held for investment, at December 31, 2024, down from $7.1 million, or 0.67 percent of gross loans held for investment, at June 30, 2024. The decrease in the allowance for credit losses was due primarily to a shorter estimated life of the loan portfolio, partly offset by a slightly higher balance of loans held for investment. Management believes that, based on currently available information, the allowance for credit losses is sufficient to absorb expected losses inherent in loans held for investment at December 31, 2024.

Non-interest income decreased by $30,000, or three percent, to $845,000 in the second quarter of fiscal 2025 from $875,000 in the same period last year, due primarily to decreases in loan servicing and other fess, deposit fees and card and processing fees, partly offset by an increase in other fees. On a sequential quarter basis, non-interest income decreased $54,000, or six percent, primarily due to decreases in loan servicing and other fess, deposit fees and card and processing fees, partly offset by an increase in other fees.

Non-interest expense increased $450,000, or six percent, to $7.79 million in the second quarter of fiscal 2025 from $7.34 million for the same quarter last year, primarily due to higher salaries and employee benefits expenses and other operating expenses. The higher salaries and employee benefits expenses was primarily due to higher compensation expenses, retirement plan benefit expenses and executive search agency costs, partly offset by a lower accrual adjustment for the supplemental executive retirement plans expense. On a sequential quarter basis, non-interest expense increased $271,000, or four percent as compared to $7.52 million in the first quarter of fiscal 2025, due primarily to higher salaries and employee benefits expenses. The higher salaries and employee benefits expenses was primarily due to higher compensation expenses, a higher accrual adjustment for the supplemental executive retirement plans expense and executive search agency costs.

The Company’s efficiency ratio, defined as non-interest expense divided by the sum of net interest income and non-interest income, in the second quarter of fiscal 2025 was 81.15 percent, an increase from 76.11 percent in the same quarter last year and 79.06 percent in the first quarter of fiscal 2025 (sequential quarter). The increase in the efficiency ratio during the current quarter in comparison to the comparable quarter last year was due to higher non-interest expense and, to a lesser extent, a lower net interest income and non-interest income.

The Company’s provision for income taxes was $352,000 for the second quarter of fiscal 2025, down 60 percent from $884,000 in the same quarter last year and down 55 percent from $789,000 for the first quarter of fiscal 2025 (sequential quarter). The decrease during the current quarter compared to both the sequential quarter and same quarter last year was due to a decrease in pre-tax income. The effective tax rate in the second quarter of fiscal 2025 was 28.8 percent as compared to 29.2 percent in the same quarter last year and 29.3 percent for the first quarter of fiscal 2025 (sequential quarter).

The Company repurchased 63,556 shares of its common stock pursuant to its current stock repurchase program at an average cost of $16.04 per share during the quarter ended December 31, 2024. As of December 31, 2024, a total of 31,919 shares remained available for future purchase under the Company’s current repurchase program, which expires on September 26, 2025.

The Bank currently operates 13 retail/business banking offices in Riverside County and San Bernardino County (Inland Empire).

The Company will host a conference call for institutional investors and bank analysts on Tuesday, January 28, 2025 at 9:00 a.m. (Pacific) to discuss its financial results. The conference call can be accessed by dialing 1-800-715-9871 and referencing Conference ID number 7361828. An audio replay of the conference call will be available through Tuesday, February 4, 2025 by dialing 1-800-770-2030 and referencing Conference ID number 7361828.

For more financial information about the Company please visit the website at www.myprovident.com and click on the “Investor Relations” section.

Safe-Harbor Statement

This press release contains statements that the Company believes are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements relate to the Company’s financial condition, liquidity, results of operations, plans, objectives, future performance or business. You should not place undue reliance on these statements as they are subject to various risks and uncertainties. When considering these forward-looking statements, you should keep in mind these risks and uncertainties, as well as any cautionary statements the Company may make. Moreover, you should treat these statements as speaking only as of the date they are made and based only on information then actually known to the Company.

There are a number of important factors that could cause future results to differ materially from historical performance and these forward-looking statements. Factors which could cause actual results to differ materially from the results anticipated or implied by our forward-looking statements include, but are not limited to: adverse economic conditions in our local market areas or other markets where we have lending relationships; effects of employment levels, labor shortages, inflation, a recession or slowed economic growth; changes in the interest rate environment, including the increases and decreases in the Board of Governors of the Federal Reserve Board (the “Federal Reserve”) benchmark rate and the duration of such levels, which could adversely affect our revenues and expenses, the value of assets and obligations, and the availability and cost of capital and liquidity; the impact of inflation and the Federal Reserve monetary policy; the effects of any Federal government shutdown; credit risks of lending activities, including loan delinquencies, write-offs, changes in our ACL, and provision for credit losses; increased competitive pressures, including repricing and competitors’ pricing initiatives, and their impact on our market position, loan, and deposit products; quality and composition of our securities portfolio and the impact of adverse changes in the securities markets; fluctuations in deposits; secondary market conditions for loans and our ability to sell loans in the secondary market; liquidity issues, including our ability to borrow funds or raise additional capital, if necessary; expectations regarding key growth initiatives and strategic priorities; the impact of bank failures or adverse developments at other banks and related negative press about the banking industry in general on investor and depositor sentiment; results of examinations of us by regulatory authorities, which may the possibility that any such regulatory authority may, among other things, institute a formal or informal enforcement action against us or our bank subsidiary which could require us to increase our ACL, write-down assets, change our regulatory capital position or affect our ability to borrow funds or maintain or increase deposits or impose additional requirements or restrictions on us, any of which could adversely affect our liquidity and earnings; legislative and regulatory changes, including changes in banking, securities and tax law, in regulatory policies and principles, or the interpretation of regulatory capital or other rules; use of estimates in determining the fair value of assets, which may prove incorrect; disruptions or security breaches, or other adverse events, failures or interruptions in or attacks on our information technology systems or on our third-party vendors; the potential imposition of new tariffs or changes to existing trade policies that could affect economic activity or specific industry sectors; staffing fluctuations in response to product demand or corporate implementation strategies; our ability to pay dividends on our common stock; environmental, social and governance goals; effects of climate change, severe weather events, natural disasters, pandemics, epidemics and other public health crises, acts of war or terrorism, civil unrest and other external events; and other factors described in the Company’s latest Annual Report on Form 10-K and Quarterly Reports on Form 10-Q and other reports filed with and furnished to the Securities and Exchange Commission (“SEC”), which are available on our website at www.myprovident.com and on the SEC’s website at www.sec.gov.

We do not undertake and specifically disclaim any obligation to revise any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements whether as a result of new information, future events or otherwise. These risks could cause our actual results for fiscal 2025 and beyond to differ materially from those expressed in any forward-looking statements by, or on behalf of us and could negatively affect our operating and stock price performance.


Contacts:	Donavon P. Ternes	TamHao B. Nguyen
	President and	Senior Vice President and
	Chief Executive Officer	Chief Financial Officer


PROVIDENT FINANCIAL HOLDINGS, INC. Condensed Consolidated Statements of Financial Condition (Unaudited –In Thousands, Except Share and Per Share Information)

	December 31,			September 30,			June 30,			March 31,			December 31,
		2024		2024			2024			2024			2023
Assets
Cash and cash equivalents	$	45,539		$	48,193		$	51,376		$	51,731		$	46,878
Investment securities – held to maturity, at cost with no allowance for credit losses		118,888			124,268			130,051			135,971			141,692
Investment securities – available for sale, at fair value		1,750			1,809			1,849			1,935			1,996
Loans held for investment, net of allowance for credit losses of $6,956, $6,329, $7,065, $7,108 and $7,000, respectively; includes $1,016, $1,082, $1,047, $1,054 and $1,092 of loans held at fair value, respectively		1,053,603			1,048,633			1,052,979			1,065,761			1,075,765
Accrued interest receivable		4,167			4,287			4,287			4,249			4,076
FHLB – San Francisco stock and other equity investments, includes $650, $565, $540, $0 and $0 of other equity investments at fair value, respectively		10,218			10,133			10,108			9,505			9,505
Premises and equipment, net		9,474			9,615			9,313			9,637			9,598
Prepaid expenses and other assets		11,327			10,442			12,237			11,258			11,583
Total assets	$	1,254,966		$	1,257,380		$	1,272,200		$	1,290,047		$	1,301,093

Liabilities and Stockholders’ Equity
Liabilities:
Noninterest-bearing deposits	$	85,399		$	86,458		$	95,627		$	91,708		$	94,030
Interest-bearing deposits		782,116			777,406			792,721			816,414			817,950
Total deposits		867,515			863,864			888,348			908,122			911,980

Borrowings		245,500			249,500			238,500			235,000			242,500
Accounts payable, accrued interest and other liabilities		13,321			14,410			15,411			17,419			16,952
Total liabilities		1,126,336			1,127,774			1,142,259			1,160,541			1,171,432

Stockholders’ equity:
Preferred stock, $.01 par value (2,000,000 shares authorized; none issued and outstanding)		—			—			—			—			—
Common stock, $.01 par value; (40,000,000 shares authorized; 18,229,615, 18,229,615, 18,229,615, 18,229,615 and 18,229,615 shares issued respectively; 6,705,691, 6,769,247, 6,847,821, 6,896,297 and 6,946,348 shares outstanding, respectively)		183			183			183			183			183
Additional paid-in capital		98,747			98,711			98,532			99,591			99,565
Retained earnings		210,779			210,853			209,914			208,923			208,396
Treasury stock at cost (11,523,924, 11,460,368, 11,381,794, 11,333,318, and 11,283,267 shares, respectively)		(181,094	)		(180,155	)		(178,685	)		(179,183	)		(178,476	)
Accumulated other comprehensive income (loss), net of tax		15			14			(3	)		(8	)		(7	)
Total stockholders’ equity		128,630			129,606			129,941			129,506			129,661
Total liabilities and stockholders’ equity	$	1,254,966		$	1,257,380		$	1,272,200		$	1,290,047		$	1,301,093


PROVIDENT FINANCIAL HOLDINGS, INC. Condensed Consolidated Statements of Operations (Unaudited – In Thousands, Except Per Share Information)

	For the Quarter Ended					Six Months Ended
	December 31,					December 31,
	2024		2023			2024			2023
Interest income:
Loans receivable, net	$	13,050	$	12,509		$	26,073		$	24,685
Investment securities		471		524			953			1,048
FHLB – San Francisco stock and other equity investments		213		197			423			376
Interest-earning deposits		287		435			647			898
Total interest income		14,021		13,665			28,096			27,007

Interest expense:
Checking and money market deposits		51		72			104			129
Savings deposits		117		73			229			111
Time deposits		2,506		2,128			5,165			3,918
Borrowings		2,588		2,618			5,223			4,936
Total interest expense		5,262		4,891			10,721			9,094

Net interest income		8,759		8,774			17,375			17,913
Provision for (recovery of) credit losses		586		(720	)		(111	)		(175	)
Net interest income, after provision for (recovery of) credit losses		8,173		9,494			17,486			18,088

Non-interest income:
Loan servicing and other fees		60		124			164			103
Deposit account fees		282		299			580			587
Card and processing fees		300		333			620			686
Other		203		119			380			250
Total non-interest income		845		875			1,744			1,626

Non-interest expense:
Salaries and employee benefits		4,826		4,569			9,459			8,683
Premises and occupancy		917		903			1,868			1,806
Equipment		379		346			722			633
Professional		412		410			838			882
Sales and marketing		187		181			360			349
Deposit insurance premiums and regulatory assessments		190		209			373			406
Other		883		726			1,697			1,441
Total non-interest expense		7,794		7,344			15,317			14,200
Income before income taxes		1,224		3,025			3,913			5,514
Provision for income taxes		352		884			1,141			1,611
Net income	$	872	$	2,141		$	2,772		$	3,903

Basic earnings per share	$	0.13	$	0.31		$	0.41		$	0.56
Diluted earnings per share	$	0.13	$	0.31		$	0.41		$	0.56
Cash dividends per share	$	0.14	$	0.14		$	0.28		$	0.28


PROVIDENT FINANCIAL HOLDINGS, INC. Condensed Consolidated Statements of Operations – Sequential Quarters (Unaudited – In Thousands, Except Per Share Information)

	For the Quarter Ended
	December 31,		September 30,			June 30,			March 31,		December 31,
	2024		2024			2024			2024		2023
Interest income:
Loans receivable, net	$	13,050	$	13,023		$	12,826		$	12,683	$	12,509
Investment securities		471		482			504			517		524
FHLB – San Francisco stock and other equity investments		213		210			207			210		197
Interest-earning deposits		287		360			379			397		435
Total interest income		14,021		14,075			13,916			13,807		13,665

Interest expense:
Checking and money market deposits		51		53			71			90		72
Savings deposits		117		112			105			97		73
Time deposits		2,506		2,659			2,657			2,488		2,128
Borrowings		2,588		2,635			2,632			2,573		2,618
Total interest expense		5,262		5,459			5,465			5,248		4,891

Net interest income		8,759		8,616			8,451			8,559		8,774
Provision for (recovery of) credit losses		586		(697	)		(12	)		124		(720	)
Net interest income, after provision for (recovery of) credit losses		8,173		9,313			8,463			8,435		9,494

Non-interest income:
Loan servicing and other fees		60		104			142			92		124
Deposit account fees		282		298			278			289		299
Card and processing fees		300		320			381			317		333
Other		203		177			666			150		119
Total non-interest income		845		899			1,467			848		875

Non-interest expense:
Salaries and employee benefits		4,826		4,633			4,419			4,540		4,569
Premises and occupancy		917		951			945			835		903
Equipment		379		343			347			329		346
Professional		412		426			327			321		410
Sales and marketing		187		173			193			167		181
Deposit insurance premiums and regulatory assessments		190		183			184			190		209
Other		883		814			757			786		726
Total non-interest expense		7,794		7,523			7,172			7,168		7,344
Income before income taxes		1,224		2,689			2,758			2,115		3,025
Provision for income taxes		352		789			805			620		884
Net income	$	872	$	1,900		$	1,953		$	1,495	$	2,141

Basic earnings per share	$	0.13	$	0.28		$	0.28		$	0.22	$	0.31
Diluted earnings per share	$	0.13	$	0.28		$	0.28		$	0.22	$	0.31
Cash dividends per share	$	0.14	$	0.14		$	0.14		$	0.14	$	0.14


PROVIDENT FINANCIAL HOLDINGS, INC. Financial Highlights (Unaudited – Dollars in Thousands, Except Share and Per Share Information)

	As of and For the
	Quarter Ended						Six Months Ended
	December 31,						December 31,
	2024			2023			2024			2023
SELECTED FINANCIAL RATIOS:
Return on average assets		0.28	%		0.66	%		0.45	%		0.60	%
Return on average stockholders’ equity		2.66	%		6.56	%		4.22	%		5.98	%
Stockholders’ equity to total assets		10.25	%		9.97	%		10.25	%		9.97	%
Net interest spread		2.74	%		2.64	%		2.70	%		2.70	%
Net interest margin		2.91	%		2.78	%		2.87	%		2.83	%
Efficiency ratio		81.15	%		76.11	%		80.11	%		72.68	%
Average interest-earning assets to average interest-bearing liabilities		110.52	%		110.27	%		110.43	%		110.22	%

SELECTED FINANCIAL DATA:
Basic earnings per share	$	0.13		$	0.31		$	0.41		$	0.56
Diluted earnings per share	$	0.13		$	0.31		$	0.41		$	0.56
Book value per share	$	19.18		$	18.67		$	19.18		$	18.67
Shares used for basic EPS computation		6,744,653			6,968,460			6,788,889			6,992,565
Shares used for diluted EPS computation		6,792,759			6,980,856			6,827,921			7,004,042
Total shares issued and outstanding		6,705,691			6,946,348			6,705,691			6,946,348

LOANS ORIGINATED FOR INVESTMENT:
Mortgage loans:
Single-family	$	29,583		$	8,660		$	52,032		$	21,112
Multi-family		6,495			6,608			11,685			11,721
Commercial real estate		365			4,936			1,625			5,875
Commercial business loans		—			—			50			—
Total loans originated for investment	$	36,443		$	20,204		$	65,392		$	38,708


PROVIDENT FINANCIAL HOLDINGS, INC. Financial Highlights (Unaudited – Dollars in Thousands, Except Share and Per Share Information)

	As of and For the
	Quarter			Quarter			Quarter			Quarter			Quarter
	Ended			Ended			Ended			Ended			Ended
	12/31/24			09/30/24			06/30/24			03/31/24			12/31/23
SELECTED FINANCIAL RATIOS:
Return on average assets		0.28	%		0.61	%		0.62	%		0.47	%		0.66	%
Return on average stockholders’ equity		2.66	%		5.78	%		5.96	%		4.57	%		6.56	%
Stockholders’ equity to total assets		10.25	%		10.31	%		10.21	%		10.04	%		9.97	%
Net interest spread		2.74	%		2.66	%		2.54	%		2.55	%		2.64	%
Net interest margin		2.91	%		2.84	%		2.74	%		2.74	%		2.78	%
Efficiency ratio		81.15	%		79.06	%		72.31	%		76.20	%		76.11	%
Average interest-earning assets to average interest-bearing liabilities		110.52	%		110.34	%		110.40	%		110.28	%		110.27	%

SELECTED FINANCIAL DATA:
Basic earnings per share	$	0.13		$	0.28		$	0.28		$	0.22		$	0.31
Diluted earnings per share	$	0.13		$	0.28		$	0.28		$	0.22		$	0.31
Book value per share	$	19.18		$	19.15		$	18.98		$	18.78		$	18.67
Average shares used for basic EPS		6,744,653			6,833,125			6,867,521			6,919,397			6,968,460
Average shares used for diluted EPS		6,792,759			6,863,083			6,893,813			6,935,053			6,980,856
Total shares issued and outstanding		6,705,691			6,769,247			6,847,821			6,896,297			6,946,348

LOANS ORIGINATED FOR INVESTMENT:
Mortgage loans:
Single-family	$	29,583		$	22,449		$	10,862		$	8,946		$	8,660
Multi-family		6,495			5,190			4,526			5,865			6,608
Commercial real estate		365			1,260			1,710			2,172			4,936
Construction		—			—			1,480			—			—
Commercial business loans		—			50			—			1,250			—
Total loans originated for investment	$	36,443		$	28,949		$	18,578		$	18,233		$	20,204


PROVIDENT FINANCIAL HOLDINGS, INC. Financial Highlights (Unaudited – Dollars in Thousands)

	As of			As of			As of			As of			As of
	12/31/24			09/30/24			06/30/24			03/31/24			12/31/23
ASSET QUALITY RATIOS AND DELINQUENT LOANS:
Recourse reserve for loans sold	$	23		$	23		$	26		$	31		$	31
Allowance for credit losses on loans held for investment	$	6,956		$	6,329		$	7,065		$	7,108		$	7,000
Non-performing loans to loans held for investment, net		0.24	%		0.20	%		0.25	%		0.21	%		0.16	%
Non-performing assets to total assets		0.20	%		0.17	%		0.20	%		0.17	%		0.13	%
Allowance for credit losses on loans to gross loans held for investment		0.66	%		0.61	%		0.67	%		0.67	%		0.65	%
Net loan charge-offs (recoveries) to average loans receivable (annualized)		—	%		—	%		—	%		—	%		—	%
Non-performing loans	$	2,530		$	2,106		$	2,596		$	2,246		$	1,750
Loans 30 to 89 days delinquent	$	3		$	2		$	1		$	388		$	340


	Quarter		Quarter			Quarter			Quarter		Quarter
	Ended		Ended			Ended			Ended		Ended
	12/31/24		09/30/24			06/30/24			03/31/24		12/31/23
(Recovery) recourse provision for loans sold	$	—	$	(3	)	$	(5	)	$	—	$	(2	)
Provision for (recovery of) credit losses	$	586	$	(697	)	$	(12	)	$	124	$	(720	)
Net loan charge-offs (recoveries)	$	—	$	—		$	—		$	—	$	—


	As of		As of		As of		As of		As of
	12/31/2024		09/30/2024		06/30/2024		03/31/2024		12/31/2023
REGULATORY CAPITAL RATIOS (BANK):
Tier 1 leverage ratio	9.81	%	9.63	%	10.02	%	9.70	%	9.48	%
Common equity tier 1 capital ratio	18.60	%	18.36	%	19.29	%	18.77	%	18.20	%
Tier 1 risk-based capital ratio	18.60	%	18.36	%	19.29	%	18.77	%	18.20	%
Total risk-based capital ratio	19.67	%	19.35	%	20.38	%	19.85	%	19.24	%


	As of December 31,
	2024				2023
	Balance		Rate⁽¹⁾		Balance		Rate⁽¹⁾
INVESTMENT SECURITIES:
Held to maturity (at cost):
U.S. SBA securities	$	385	5.35	%	$	630	5.85	%
U.S. government sponsored enterprise MBS		114,817	1.59			137,205	1.50
U.S. government sponsored enterprise CMO		3,686	2.14			3,857	2.17
Total investment securities held to maturity	$	118,888	1.62	%	$	141,692	1.54	%

Available for sale (at fair value):
U.S. government agency MBS	$	1,152	4.46	%	$	1,314	3.47	%
U.S. government sponsored enterprise MBS		518	6.90			584	5.61
Private issue CMO		80	6.09			98	4.67
Total investment securities available for sale	$	1,750	5.26	%	$	1,996	4.16	%
Total investment securities	$	120,638	1.67	%	$	143,688	1.57	%

⁽¹⁾Weighted-average yield earned on all instruments included in the balance of the respective line item.


PROVIDENT FINANCIAL HOLDINGS, INC. Financial Highlights (Unaudited – Dollars in Thousands)

	As of December 31,
	2024					2023
	Balance			Rate⁽¹⁾		Balance			Rate⁽¹⁾
LOANS HELD FOR INVESTMENT:
Mortgage loans:
Single-family (1 to 4 units)	$	533,140		4.60	%	$	521,944		4.32	%
Multi-family (5 or more units)		433,724		5.48			458,502		5.00
Commercial real estate		77,984		6.72			88,640		6.20
Construction		1,480		11.00			2,534		8.88
Other		90		5.25			102		5.25
Commercial business loans		4,371		9.67			1,616		10.50
Consumer loans		59		17.75			68		18.50
Total loans held for investment		1,050,848		5.15	%		1,073,406		4.79	%

Advance payments of escrows		321					106
Deferred loan costs, net		9,390					9,253
Allowance for credit losses on loans		(6,956	)				(7,000	)
Total loans held for investment, net	$	1,053,603				$	1,075,765
Purchased loans serviced by others included above	$	1,749		5.72	%	$	10,239		5.59	%

⁽¹⁾Weighted-average yield earned on all instruments included in the balance of the respective line item.


	As of December 31,
	2024				2023
	Balance		Rate⁽¹⁾		Balance		Rate⁽¹⁾
DEPOSITS:
Checking accounts – noninterest-bearing	$	85,399	—	%	$	94,030	—	%
Checking accounts – interest-bearing		251,024	0.04			275,396	0.04
Savings accounts		232,917	0.20			256,578	0.14
Money market accounts		23,527	0.29			31,637	0.82
Time deposits		274,648	3.61			254,339	3.76
Total deposits⁽²⁾⁽³⁾	$	867,515	1.22	%	$	911,980	1.13	%

Brokered CDs included in time deposits above	$	143,775	4.56	%	$	122,700	5.26	%

BORROWINGS:
Overnight	$	15,000	4.66	%	$	—	—	%
Three months or less		40,000	3.98			67,500	4.35
Over three to six months		22,500	4.17			32,500	5.00
Over six months to one year		59,000	5.05			40,000	5.21
Over one year to two years		94,000	4.46			67,500	4.14
Over two years to three years		—	—			20,000	4.72
Over three years to four years		15,000	4.41			—	—
Over four years to five years		—	—			15,000	4.41
Over five years		—	—			—	—
Total borrowings⁽⁴⁾	$	245,500	4.51	%	$	242,500	4.55	%

     ⁽¹⁾Weighted-average rate paid on all instruments included in the balance of the respective line item.
     ⁽²⁾Includes uninsured deposits of approximately $134.7 million and $140.3 million at December 31, 2024 and 2023, respectively.
     ⁽³⁾The average balance of deposit accounts was approximately $35 thousand and $34 thousand at December 31, 2024 and 2023, respectively.
     ⁽⁴⁾The Bank had approximately $246.2 million and $266.5 million of remaining borrowing capacity at the FHLB – San Francisco, approximately $198.5 million and $183.0 million of borrowing capacity at the FRB of San Francisco and $50.0 million and $50.0 million of borrowing capacity with its correspondent bank at December 31, 2024 and 2023, respectively.


PROVIDENT FINANCIAL HOLDINGS, INC. Financial Highlights (Unaudited – Dollars in Thousands)

	For the Quarter Ended					For the Quarter Ended
	December 31, 2024					December 31, 2023
	Balance		Rate⁽¹⁾			Balance		Rate⁽¹⁾
SELECTED AVERAGE BALANCE SHEETS:

Loans receivable, net	$	1,046,797		4.99	%	$	1,074,592	4.66	%
Investment securities		123,826		1.52			147,166	1.42
FHLB – San Francisco stock and other equity investments		10,172		8.38			9,505	8.29
Interest-earning deposits		23,700		4.74			31,473	5.41
Total interest-earning assets	$	1,204,495		4.66	%	$	1,262,736	4.33	%
Total assets	$	1,234,768				$	1,293,471

Deposits⁽²⁾	$	863,106		1.23	%	$	914,629	0.99	%
Borrowings		226,707		4.53			230,546	4.51
Total interest-bearing liabilities⁽²⁾	$	1,089,813		1.92	%	$	1,145,175	1.69	%
Total stockholders’ equity	$	131,135				$	130,614

⁽¹⁾Weighted-average yield earned or rate paid on all instruments included in the balance of the respective line item.
⁽²⁾Includes the average balance of noninterest-bearing checking accounts of $86.2 million and $99.4 million during the quarters ended December 31, 2024 and 2023, respectively; and the average balance of uninsured deposits (adjusted lower by collateralized deposits) of $130.2 million and $139.3 million in the quarters ended December 31, 2024 and 2023, respectively.


	Six Months Ended					Six Months Ended
	December 31, 2024					December 31, 2023
	Balance		Rate⁽¹⁾			Balance		Rate⁽¹⁾
SELECTED AVERAGE BALANCE SHEETS:

Loans receivable, net	$	1,047,964		4.98	%	$	1,073,600	4.60	%
Investment securities		126,698		1.50			150,439	1.39
FHLB – San Francisco stock and other equity investments		10,146		8.34			9,505	7.91
Interest-earning deposits		25,015		5.06			32,758	5.36
Total interest-earning assets	$	1,209,823		4.64	%	$	1,266,302	4.27	%
Total assets	$	1,239,950				$	1,296,811

Deposits⁽²⁾	$	871,844		1.25	%	$	927,406	0.89	%
Borrowings		223,723		4.63			221,501	4.42
Total interest-bearing liabilities⁽²⁾	$	1,095,567		1.94	%	$	1,148,907	1.57	%
Total stockholders’ equity	$	131,317				$	130,578

⁽¹⁾Weighted-average yield earned or rate paid on all instruments included in the balance of the respective line item.
⁽²⁾Includes the average balance of noninterest-bearing checking accounts of $88.4 million and $102.8 million during the six months ended December 31, 2024 and 2023, respectively; and the average balance of uninsured deposits (adjusted lower by collateralized deposits) of $125.7 million and $139.1 million in the six months ended December 31, 2024 and 2023, respectively.

ASSET QUALITY:


	As of		As of		As of		As of		As of
	12/31/24		09/30/24		06/30/24		03/31/24		12/31/23
Loans on non-accrual status
Mortgage loans:
Single-family	$	2,530	$	2,106	$	2,596	$	2,246	$	1,750
Total		2,530		2,106		2,596		2,246		1,750

Accruing loans past due 90 days or more:		—		—		—		—		—
Total		—		—		—		—		—

Total non-performing loans ⁽¹⁾		2,530		2,106		2,596		2,246		1,750

Real estate owned, net		—		—		—		—		—
Total non-performing assets	$	2,530	$	2,106	$	2,596	$	2,246	$	1,750

⁽¹⁾The non-performing loan balances are net of individually evaluated or collectively evaluated allowances, specifically attached to the individual loans.

Data for financing and financial investment of NFCs (Table 2)

MIL-OSI Economics: Euro area economic and financial developments by institutional sector: third quarter of 2024

Source: European Central Bank

28 January 2025

Euro area net saving increased to €820 billion in four quarters up to third quarter of 2024, compared with €804 billion one quarter earlier
Household debt-to-income ratio decreased to 82.5% in third quarter of 2024 from 86.2% one year earlier
NFCs’ debt-to-GDP ratio (consolidated measure) decreased to 67.4% in third quarter of 2024 from 69.1% one year earlier

Total euro area economy

Euro area net saving increased to €820 billion (6.8% of euro area net disposable income) in the four quarters up to the third quarter of 2024 compared with €804 billion in the four quarters up to the previous quarter. Euro area net non-financial investment was broadly unchanged at €440 billion (3.7% of net disposable income), due to broadly unchanged net investment in all sectors (see Chart 1 and Table 1 in the Annex).

Euro area net lending to the rest of the world increased to €418 billion (from €405 billion previously) reflecting the increased net saving and broadly unchanged net non-financial investment. Household net lending increased to €581 billion (4.8% of net disposable income) from €561 billion. Net lending of NFCs decreased to €192 billion (1.6% of net disposable income) from €231 billion while that of financial corporations was broadly unchanged at €132 billion (1.1% of net disposable income). General government net borrowing decreased, contributing less negatively (-4.0% of net disposable income, after -4.3% previously) to euro area net lending.

Chart 1

Euro area saving, investment and net lending to the rest of the world

(EUR billions, four-quarter sums)

Sources: ECB and Eurostat.
* Net saving minus net capital transfers to the rest of the world (equals change in net worth due to transactions).

Data for euro area saving, investment and net lending to the rest of the world (Chart 1)

Households

Household financial investment increased at a broadly unchanged annual rate of 2.4% in the third quarter of 2024. Among its components, investment in currency and deposits (2.6%, after 2.3%) and investment in shares and other equity (1.3%, after 0.8%) grew at higher rates – the latter due to investment fund shares – while investment in debt securities increased at a lower rate (15.4%, after 28.4%).

Households continued to purchase, in net terms, mainly debt securities issued by general government and MFIs. Households were overall net sellers of listed shares, selling predominantly listed shares of non-financial corporations, while buying listed shares issued by the rest of the world (i.e. shares issued by non-euro area residents). Households increased their purchases of euro area investment fund shares, including those issued by MFIs (money market funds) and by non-money market investment funds, and continued to purchase investment fund shares issued by the rest of the world (see Table 1 below and Table 2.2. in the Annex).

The household debt-to-income ratio^[1] decreased to 82.5% in the third quarter of 2024 from 86.2% in the third quarter of 2023. The household debt-to-GDP ratio declined to 51.8% in the third quarter of 2024 from 53.5% in the third quarter of 2023 (see Chart 2).

Table 1

Financial investment and financing of households, main items

(annual growth rates)

	Financial transactions
	2023 Q3	2023 Q4	2024 Q1	2024 Q2	2024 Q3
Financial investment*	1.8	1.9	2.0	2.3	2.4
Currency and deposits	0.3	0.7	1.6	2.3	2.6
Debt securities	58.7	55.9	39.4	28.4	15.4
Shares and other equity**	1.1	0.3	0.4	0.8	1.3
Life insurance	-0.7	-0.7	-0.2	0.0	0.8
Pension schemes	2.3	2.1	2.2	2.2	2.3
Financing***	1.5	0.8	1.0	1.3	1.3
Loans	1.0	0.5	0.5	0.5	0.9

Source: ECB.
* Items not shown include: loans granted, prepayments of insurance premiums and reserves for outstanding claims and other accounts receivable.
** Includes investment fund shares.
*** Items not shown include: financial derivatives’ net liabilities, pension schemes and other accounts payable.

Data for financial investment and financing of households (Table 1)

Chart 2

Debt ratios of households and NFCs

(percentages of GDP)

Sources: ECB and Eurostat.
* Outstanding amount of loans, debt securities, trade credits and pension scheme liabilities.
** Outstanding amount of loans and debt securities, excluding debt positions between NFCs
*** Outstanding amount of loan liabilities.

Data for debt ratios of households and NFCs (Chart 2)

Non-financial corporations

Financing of NFCs increased at an unchanged annual rate of 1.0% in the third quarter of 2024. Issuance of debt securities grew at a lower rate (2.4% after 2.9%) and financing via trade credits increased at a higher rate (2.4% after 1.8%) while financing via shares and other equity (0.7%) and loans (1.3%) increased at unchanged rates. Loans granted by MFIs to NFCs increased at a broadly unchanged rate (1.2%), and loans granted by other NFCs grew at a lower rate (2.6% after 3.1%). Loans granted by other financial institutions declined at a less negative rate (‑0.2% after -0.6%), as did loans granted by the rest of the world (-1.1% after -2.1) (see Table 2 below and Table 3.2 in the Annex).

NFCs’ debt-to-GDP ratio (consolidated measure) decreased to 67.4% in the third quarter of 2024, from 69.1% in the third quarter of 2023; the non-consolidated, wider debt measure decreased to 138.4% from 141.3% (see Chart 2).

Table 2

Financing and financial investment of NFCs, main items

(annual growth rates)

	Financial transactions
	2023 Q3	2023 Q4	2024 Q1	2024 Q2	2024 Q3
Financing*	1.2	0.8	0.8	1.0	1.0
Debt securities	1.5	1.3	1.9	2.9	2.4
Loans	1.8	1.6	1.4	1.3	1.3
Shares and other equity	0.4	0.3	0.4	0.7	0.7
Trade credits and advances	2.1	1.1	0.9	1.8	2.4
Financial investment**	2.3	1.7	1.8	2.0	2.0
Currency and deposits	-1.2	-1.2	0.5	2.8	1.8
Debt securities	24.9	20.2	8.5	5.8	1.9
Loans	4.7	4.5	3.9	3.9	3.4
Shares and other equity	1.2	1.0	1.4	1.4	1.6

Source: ECB.
* Items not shown include: pension schemes, other accounts payable, financial derivatives’ net liabilities and deposits.
** Items not shown include: other accounts receivable and prepayments of insurance premiums and reserves for outstanding claims.

For queries, please use the statistical information request form.

Notes

These data come from a second release of quarterly euro area sector accounts for the third quarter of 2024 by the ECB and Eurostat, the statistical office of the European Union. This release incorporates revisions and completed data for all sectors compared with the first release on “Euro area households and non-financial corporations” of 13 January 2025. Moreover, it incorporates revisions to the data since the first quarter of 1999, reflecting, amongst others, the impact of the benchmark revision 2024 implemented in the EU. For further information see the related Eurostat webpage.
The euro area and national financial accounts data of NFCs and households are available in an interactive dashboard.
The debt-to-GDP (or debt-to-income) ratios are calculated as the outstanding amount of debt in the reference quarter divided by the sum of GDP (or income) in the four quarters up to the reference quarter. The ratio of non-financial transactions (e.g. savings) as a percentage of income or GDP is calculated as the sum of the four quarters up to the reference quarter for both numerator and denominator.
The annual growth rate of non-financial transactions and of outstanding assets and liabilities (stocks) is calculated as the percentage change between the value for a given quarter and that value recorded four quarters earlier. The annual growth rates used for financial transactions refer to the total value of transactions during the year in relation to the outstanding stock a year before.
Hyperlinks in the main body of the statistical release lead to data that may change with subsequent releases as a result of revisions. Figures shown in annex tables are a snapshot of the data as at the time of the current release.
The ECB publishes experimental Distributional Wealth Accounts (DWA) for the household sector. The release of results for the third quarter of 2024 is planned for 28 February 2025 (tentative date).

MIL-OSI Economics: January 2025 euro area bank lending survey

Source: European Central Bank

28 January 2025

Credit standards tightened for firms in the fourth quarter of 2024, driven by higher perceived risks and lower risk tolerance
Credit standards remained unchanged for loans to households for house purchase but continued to tighten for consumer credit
Housing loan demand continued to rebound strongly, while demand for firm loans remained weak

According to the January 2025 bank lending survey (BLS), euro area banks reported a renewed net tightening of credit standards – banks’ internal guidelines or loan approval criteria – for loans or credit lines to enterprises in the fourth quarter of 2024 (net percentage of banks of 7%; Chart 1). Banks also reported broadly unchanged credit standards for loans to households for house purchase (net percentage of 1%), whereas credit standards for consumer credit and other lending to households tightened further (net percentage of 6%). For firms, the net tightening followed the unchanged credit standards seen in the third quarter and was higher than banks had expected in the previous survey round. It was driven by higher perceived risks related to the economic outlook, the industry-and-firm-specific situation and banks’ lower risk tolerance. For loans to households for house purchase, the stability of credit standards, after three quarters of easing, was in contrast to the strong net easing that banks had expected in the previous quarter. Credit standards tightened further for consumer credit, mainly owing to higher perceived risks. For the first quarter of 2025, banks expect a further net tightening of credit standards for loans to firms and consumer credit, and a small net tightening for loans to households for house purchase.

Banks’ overall terms and conditions – the actual terms and conditions agreed in loan contracts – remained broadly unchanged for loans to firms and consumer credit, but eased strongly for housing loans. For loans to firms, the contribution to easing from lower lending rates and narrower margins on average loans was broadly offset by stricter collateral requirements and other terms and conditions, such as loan covenants, to compensate for the higher perceived risks. For housing loans, lower lending rates and margins on average loans were the main drivers of the net easing. For consumer credit, lending rates had an easing impact, offset by widening loan margins.

In the fourth quarter of 2024, demand from firms for loans or the drawing of credit lines increased slightly (Chart 2), while remaining weak overall. Loan demand from firms was supported mainly by declining interest rates, with fixed investment having a still-muted impact after its small positive contribution in the previous quarter. Net demand for housing loans continued to increase strongly, driven mainly by declining interest rates, substantiating still further the signs of a rebound from the strong declines seen in housing loan demand over previous years. Demand for consumer credit and other lending to households increased slightly, supported by declining interest rates, whereas spending on durable goods and consumer confidence, among other factors, dampened demand for consumer credit. In the first quarter of 2025, banks expect loan demand to remain broadly unchanged for firms and to increase further for households, especially for housing loans.

Euro area banks’ access to funding worsened somewhat for retail funding, money markets and debt securities in the fourth quarter of 2024. In the first quarter of 2025, banks expect access to funding to remain broadly unchanged across all market segments.

In response to the new regulatory or supervisory requirements in 2024, euro area banks reported a net increase in their required capital as well as increases in their liquid and risk-weighted assets. Banks also reported a net tightening impact on credit standards stemming from the requirements, especially for loans to firms, with further net tightening expected in 2025.

Euro area banks reported that non-performing loan ratios and other indicators of credit quality had a net tightening impact on their credit standards for loans to firms and consumer credit in the second half of 2024, the largest since the height of the pandemic and the period of balance sheet clean-up in 2014-17. By contrast, for housing loans credit quality had a neutral impact on bank lending conditions. Banks expect these developments to continue in the first half of 2025.

Banks’ credit standards tightened further in all main economic sectors in the second half of 2024, especially in commercial real estate (CRE), wholesale and retail trade, construction and energy-intensive manufacturing. Banks also reported a net decrease in loan demand in CRE, construction and energy-intensive manufacturing. For the first half of 2025, banks expect a further net tightening of credit standards in most economic sectors, except for services. They expect muted loan demand in all sectors but residential real estate, for which they expect a moderate increase.

Banks reported that the changes in excess liquidity held with the Eurosystem had a neutral impact on bank lending conditions in the second half of 2024. They expect similar effects in the first half of 2025.

The quarterly BLS was developed by the Eurosystem to improve its understanding of bank lending behaviour in the euro area. The results reported in the January 2025 survey relate to changes observed in the fourth quarter of 2024 and changes expected in the first quarter of 2025, unless otherwise indicated. The January 2025 survey round was conducted between 10 December 2024 and 7 January 2025. A total of 155 banks were surveyed in this round, with a response rate of 99%.

Chart 1

Changes in credit standards for loans or credit lines to enterprises, and contributing factors

(net percentages of banks reporting a tightening of credit standards, and contributing factors)

Source: ECB (BLS).

Notes: Net percentages are defined as the difference between the sum of the percentages of banks responding “tightened considerably” and “tightened somewhat” and the sum of the percentages of banks responding “eased somewhat” and “eased considerably”. The net percentages for “Other factors” refer to an average of the further factors which were mentioned by banks as having contributed to changes in credit standards.

Chart 2

Changes in demand for loans or credit lines to enterprises, and contributing factors

(net percentages of banks reporting an increase in demand, and contributing factors)

Source: ECB (BLS).

Notes: Net percentages for the questions on demand for loans are defined as the difference between the sum of the percentages of banks responding “increased considerably” and “increased somewhat” and the sum of the percentages of banks responding “decreased somewhat” and “decreased considerably”. The net percentages for “Other factors” refer to an average of the further factors which were mentioned by banks as having contributed to changes in loan demand.

For media queries, please contact William Lelieveldt, tel.: +49 69 1344 7316.

Notes

A report on this survey round is available on the ECB’s website, along with a copy of the questionnaire, a glossary of BLS terms and a BLS user guide with information on the BLS series keys.
The euro area and national data series are available on the ECB’s website via the ECB Data Portal. National results, as published by the respective national central banks, can be obtained via the ECB’s website.
For more detailed information on the BLS, see Köhler-Ulbrich, P., Dimou, M., Ferrante, L. and Parle, C., “Happy anniversary, BLS – 20 years of the euro area bank lending survey”, Economic Bulletin, Issue 7, ECB, 2023; and Huennekes, F. and Köhler-Ulbrich, P., “What information does the euro area bank lending survey provide on future loan developments?”, Economic Bulletin, Issue 8, ECB, 2022.

MIL-OSI Asia-Pac: English rendering of PM’s speech at NCC Rally at the Cariappa Parade Ground in Delhi

Source: Government of India

Posted On: 27 JAN 2025 8:08PM by PIB Delhi

My colleagues in the Union Cabinet, Shri Rajnath Singh Ji, Sanjay Seth Ji, CDS- General Anil Chauhan Ji, Chiefs of the three Armed Forces, Defence Secretary Shri, DG NCC, other guests and my dear friends from NCC! Best wishes to all of you on the occasion of NCC Day. Today, around 150 cadets from 18 friendly countries are also present here among us. I welcome all these cadets. I also congratulate the colleagues of Mera Yuva Bharat, MY Bharat, associated with the country.

Friends,

Being selected for the Republic Day parade is an achievement in itself. This year’s parade was also special because our republic has completed 75 years. Friends, these memories will stay with you for life. In the future, you will definitely remember that when the Republic completed 75 years, we took part in the parade. My heartiest congratulations to those friends who have received the Best Cadet Award. I recently got the opportunity to flag off many NCC missions here. Such efforts of NCC connect India’s heritage with youth aspirations. I wish all the best to the cadets involved in these missions.

Friends,

NCC was established during the period when the country got independence. In a way, the journey of your organization started even before the Constitution of the country. In the 75 years of the Republic, the Constitution of India always gave democratic inspiration to the country and explained the importance of civic duties. Similarly, NCC also always inspired the youth of India to build the nation and explained the importance of discipline to them. I am satisfied that in the past years, the government has done a lot of work to increase both the scope and responsibility of NCC. NCC has been expanded in our border areas, the districts adjoining the sea border.

Today, NCC has reached more than 170 border talukas and nearly 100 coastal talukas of the country. I would also like to congratulate the three armies. You took the responsibility of specially training the young NCC cadets of these districts. Today thousands of youth living on the border have benefited from this. We are also seeing the result of reform in NCC in the number of cadets. In 2014, the number of NCC cadets was approximately 14 lakh. Today this number has reached 20 lakh. It is a matter of pride that there are more than 8 lakh girl cadets, our daughters. Today our NCC cadets are playing an important role in disaster management. NCC cadets are also flying their flag in the world of sports. I am proud that NCC is the world’s largest uniformed youth organisation.

Friends,

You are going to determine the development of India and the world in the 21st century. The youth of India are not only a force for India, but also a force for global good. Today the world is accepting this. Recently a report has been published in the newspapers. What has been told in it is very important. In the last decade, the youth of India have created 1.5 lakh start-ups and more than 100 unicorns. Today more than 200 big companies of the world are led by people of Indian origin. These companies are contributing millions of crores of rupees to the global GDP, helping to change the lives of crores of people. Indian scientists, Indian researchers, teachers of India are also accelerating the progress of the world. That is, be it any sector, it is difficult to imagine the future of the world without the youth power of India, without the talent of India. And that is why I call all of you a force for global good.

Friends,

Be it a person or a country, its strength increases when it overcomes unnecessary obstacles. I am satisfied that in the last 10 years, we have worked to remove all the obstacles that the youth of India faced, whatever they were. This has increased the strength of the youth of India, the strength of the country. In 2014, you would have been 10 or 12 or 14 years old, just ask your family what the situation was earlier, for example, attestation of documents. Earlier, whether it was admission, examination, recruitment, filling any form, one had to get the documents attested by a gazetted officer, and there used to be a lot of running around in this. Our government removed this difficulty of the youth, and trusted you, now you can verify your documents by self-attesting. Earlier, the youth used to face a lot of difficulties in applying for scholarships, getting scholarships. There used to be a lot of manipulation in the scholarship money, the money did not go to the children’s accounts. Now the single window system has eliminated all the old problems. Earlier there was another big problem regarding the selection of subjects. If you took a subject while studying after the board, then it was difficult to change it. Now the new National Education Policy gives you the flexibility to change subjects as per your wish.

Friends,

There was a time 10 years ago when young people could not get bank loans easily. Banks used to say that if you want a loan, first give some guarantee. In 2014, when the people of the country gave me the opportunity to serve as the Prime Minister, I said, I will take the guarantee for the youth of my country. We started the Mudra Yojana which gives loans without bank guarantee. Earlier, loans up to Rs 10 lakh were available without guarantee. Now in the third term of the government, we have increased it to 20 lakhs. In 10 years, we have given more than 40 lakh crore rupees under Mudra loan. Lakhs of youth like you have started their business by taking help from this loan.

Friends,

Another important issue related to the future of the youth is the electoral system of the country. Just two days ago, we celebrated National Voters’ Day. Many of you have become first-time voters. The purpose of Voters’ Day is that the maximum number of voters should participate and use their right. Today, the world’s biggest elections are held in India, but another aspect of this is that elections keep happening in India every few months. After independence, it used to happen for a long time when Lok Sabha and Assembly elections used to be held simultaneously. But then this pattern broke, the country has suffered a lot due to this. In every election, the voting list is updated, a lot of work is done, and you must have seen that our teachers are often put on duty in this, due to which studies are affected, preparations for exams are affected. Due to frequent elections, there are also difficulties in governance. Therefore, a very important debate is going on in the country these days. Everyone is giving their views on this subject and this deliberation is very necessary in democracy, everyone should express their views, this is necessary, and what is debate – One Nation One Election. Lok Sabha and Assembly elections should be held together, and every 5 years when the time is fixed, it should be held. So, there will be relief from the new works that get stopped in between.

Today, I especially request the youth of India, I request the NCC cadets, I request the volunteers of MY Bharat, I request the NSS comrades, wherever we are, we should conduct this debate, take the debate forward, lead the debate, we should participate in this debate in large numbers. This is a subject directly related to your future. Even in a country like America, the date of formation of a new government is fixed, there elections are held every four years. In your own college or school also, the student council elections are completed in one go. Just think, if elections keep happening every month, will it be possible to study in a university or college? Therefore, you should lead the debate on One Nation-One Election; there should be a nationwide discussion so that the country can decide to move in the right direction.

Friends,

Today, the world of the 21st century is changing very fast. Today, the demand of time is that we also have to move forward at a very fast pace. All of you, the youth of the country, have a big role in this. In every sector, in every field, whether it is the field of art, research, innovation, you have to create new energy with your innovative ideas, creativity. Another such important field is politics. The youth of our country should come in the field of politics as much as possible, come with new suggestions, come with new energy, come with innovative ideas. This is the need of the country today. That is why I have said from the Red Fort that one lakh youth should come into politics. What is the power of youth, we have also seen this during the Vikas Bharat: Young India Dialogue. Lakhs of youth from across the country have given their invaluable suggestions, expressed their views for the creation of a developed India.

Friends,

During the freedom struggle, people of every profession in the country had set their only goal – the freedom of the country, and the youth participated in it with great enthusiasm, made sacrifices, and spent their youth in jails. Similarly, in this Amrit Kaal, we have to keep only one goal – developed India. The criterion of every decision of ours, the criterion of every work, should be a Developed India. And for this, we have to always remember our Panch Pranas. Pancha Prana means – we have to make a developed India, we have to get freedom from every thought of slavery, we have to be proud of our heritage, we have to work for the unity of India, and we have to perform our duties honestly. These Panch Pranas are the ones who give direction to every Indian, they are the inspiration of every Indian. The wonderful cultural performances that you have given now also reflect this. The feeling of one India – the best India is a great strength of the country. The Maha Kumbh that is going on in Prayag these days, there too this reflection of the unity of the country is visible. Therefore, this Maha Kumbh is a Maha Kumbh of unity. This unity is necessary for the progress of the country.

Friends,

You also have to always keep your duties in mind. A grand and divine developed India will be built on the foundation of duties.

Friends,

Today when I have come amongst you, I am seeing your zeal and enthusiasm, I had written some lines at one time, those lines are coming to my mind today, I had written at one time-

असंख्य भुजाओं की शक्ति है, हर तरफ देश की भक्ति है

तुम उठो तिरंगा लहरा दो, भारत के भाग्य को फहरा दो

कुछ ऐसा नहीं जो कर ना सको, कुछ ऐसा नहीं जो पा ना सको

तुम उठ जाओ, तुम जुट जाओ

सामर्थ्य को अपने पहचानो, कर्तव्य को अपने सब जानो !

Friends,

Once again, I wish you all the best for your bright future and many thanks to you all. Say it with me-

Bhaarat maata kee jai.

Vande Mataram. Vande Mataram.

Vande Mataram

DISCLAIMER: This is the approximate translation of PM’s speech. Original speech was delivered

MIL OSI Asia Pacific News –

MIL-OSI Economics: Asian Development Blog: A Steppe Forward: How to Revive Mongolia’s Grasslands and Fight Climate Change

Source: Asia Development Bank

Mongolia’s rangelands occupy 70% of the country’s territory and are vital for climate mitigation through carbon storage. Research highlights the importance of sustainable grazing practices and collective herder management to restore degraded rangelands and maintain their ecological functions.

Spanning more than 110 million hectares across 70% of Mongolia’s land territory, and renowned as one of the last remaining natural steppe ecosystems, Mongolian rangelands have a crucial role to play in the country’s climate mitigation efforts.

If well managed, rangelands can serve as more stable carbon stores than forests, as they are more resilient to environmental stresses such as drought and fire.

Effective management practices can boost soil carbon stocks by increasing organic matter input or reducing carbon losses. Through photosynthesis, plants absorb CO2 from the atmosphere. As grasses grow, their dry and dead leaves and stems fall to the ground and decompose.

Roots, which often have more biomass below ground than above, also grow, and some die and decompose each year. Soil microorganisms aid in decomposing organic matter, and carbon from these sources is incorporated into soil carbon stocks.

Current carbon estimates for rangelands often focus on the topsoil, but a substantial amount of grassland soil carbon is found in deeper subsoil layers.

When rangelands degrade, soil carbon is released into the atmosphere. Therefore, scientists advise that climate mitigation efforts should focus on protecting this irreplaceable soil carbon as its restoration is difficult once lost.

In rangeland management science, this is known as a tipping point where changes in vegetation and soil become impossible to reverse.

Are Mongolian rangelands close to a tipping point? In the past thirty years, the livestock population in Mongolia has tripled, surpassing the rangelands’ carrying capacity by three times. This has resulted in degradation of 65% of rangelands.

However, due to traditional rotational grazing practices, most of the degraded rangelands have retained their ability to recover. Research findings confirm that 85% of degraded rangelands maintain their natural regeneration capacity if the level of degradation has not passed the threshold of no recovery.

Managed carefully in accordance with the seasonal carrying capacity, rangelands can recover and maintain their carbon sequestration and storage capacity for the benefit of the people, the country, and the world’s climate.

Mongolia’s first rangeland health report in May 2015 found 65% of rangelands were degraded, but 94% could still recover. By 2018, a second report showed the degraded rangelands had decreased to 57%. According to the third report released in 2022, the percentage of heavily degraded rangelands has declined from 10.2% to 6.6%.

Researchers attributed this positive trend to a high capacity for recovery of Mongolian rangelands, reduced grazing pressure, and herders’ commitment to improving rotational grazing practices.

This suggests the key to maintaining rangeland recovery capacity is resting rangelands during critical vegetation growth periods and adjusting livestock numbers based on seasonal productivity.

Mongolia’s agencies monitor rangelands at thousands of sites nationwide. Collaborating with international researchers, Mongolian scientists have developed tools like Ecological Site Descriptions and State and Transition Models to assess rangeland health. They’ve identified 22 ecological groups based on vegetation, soil, productivity, landscape, and climate, which guide site-specific grazing and stocking plans.

In cooperation with herder households, the Mongolian National Federation of Pasture User Groups has carried out several pilot projects testing the length of time different rangelands take to reach new recovery classes. Even rangelands that reached a heavy level of degradation are still able to recover if there is more than 10 years of frugal management.

The agriculture sector produces 53% of all greenhouse gas emissions, with land use and land management accounting for 34%, according to the latest Biannual Transparency Report. As the dominant ecosystem in Mongolia, rangelands have a huge role to play in the nation’s emission reduction targets.

Research trials conducted to rehabilitate heavily degraded rangelands with a range of modern technologies revealed that this is both difficult and costly. The best method is to revitalize traditional rotational grazing and resting practices. This has to be regulated through the collective control of herder households and supported by a legal framework.

These findings have led to the formation of pasture user groups among herder households that share customary access to the same seasonal rangelands. Group members define the boundaries of their seasonal rotational grazing areas and regulate their use.

These plans form the basis for establishing rangeland use agreements between the groups and local government, which are the means to enforce and monitor rotational grazing and rangeland-resting plans.

When rangelands show signs of degradation, herder households move to the next rangeland to let it regenerate. These are known among herders as the “4 Golden Rules”, followed to manage their grazing areas sustainably: do not exceed the carrying capacity of rangelands; do not deplete the regeneration capacity of plants; give plants time to recover; and practice pre-planned and regulated rotational grazing.

This nature-based solution offers ample opportunities to restore rangelands. Managed carefully in accordance with the seasonal carrying capacity, rangelands can recover and maintain their carbon sequestration and storage capacity for the benefit of the people, the country, and the world’s climate.

Across the globe, the rangeland ecosystem services are often undervalued, and much larger efforts are required to create awareness. Not only is it a source of livestock feed but also crucial in climate mitigation and adaptation efforts and provision of generic ecosystem services such as absorbing excess rainfall and releasing water gradually during dry periods, stabilizing soil quality to prevent erosion and desertification.

By integrating these actions into nationally determined contributions, national adaptation plans, and long-term emission strategies, we can strengthen community and ecosystem resilience and build a future ready to face a changing climate.

MIL-OSI Economics: Bridging the Climate Finance Gap: Unpacking the Global Disparities and Imperatives for Developing Countries

Source: Asia Development Bank

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MIL-OSI Banking: BoBC Auction Results – 28 January 2025

Source: Bank of Botswana

The Monetary Policy Rate (MoPR) was unchanged at 1.9 percent of the previous week, for a paper maturing on 5 February 2025. The summarised results of the auction held on 28 January 2025, are attached below:

BOBC Results 28 January 2025.pdf

MIL OSI Global Banks –

MIL-OSI Europe: A current flowing to the future

Source: European Investment Bank

Just 25 kilometres northwest of Mostar, another man is on a mission to save his local river. Boro Đolo grew up along the banks of the Lištica River. “Here, people learn to swim before they learn to walk,” he says.

A soft-spoken grandfather, Đolo spends his free time working with a local organisation to restore the area’s native fish population. Professionally, Đolo has devoted 35 years to the water sector, working for the city of Široki Brijeg. There he leads a project aimed at improving wastewater services to protect the Lištica. The city has already built and rehabilitated 25 kilometres of sewer lines and four kilometres of storm drains and is currently constructing a treatment plant to serve its 15 000 residents.

Flowing from a nearby spring, the Lištica River, carves through local landscapes before joining the Neretva near Mostar. “That’s why it’s crucial to keep the Lištica clean. We all live downstream,” Đolo says. “If someone upstream pollutes a river, that pollution affects everyone living downstream.”

The projects in Mostar and Široki Brijeg are part of a larger effort, financed by the European Investment Bank, to improve water and sanitation across the Federation of Bosnia and Herzegovina. The €60 million invested in these initiatives is part of the Bank’s broader €240 million commitments to water infrastructure and flood protection in the country.

“The project covers 19 municipalities and has significantly improved the quality of life for residents,” says Sukavata Bejdić, project lead at the Federal Ministry of Agriculture, Water Management and Forestry. Speaking in her crowded office, surrounded by stacks of paperwork, Bejdić maintains an optimistic attitude and an infectious smile. “Over the last 15 years, this project has brought clean drinking water and a better sewerage system to more than 500 000 people.”

Bejdić knows she’s making a difference. “It’s been a long process and a lot of hard work,” Bejdić says, “but I talk to people on the ground every day, and I’m happy I can do something for them.”

MIL-OSI Europe: Written question – Funding the construction of a new Greek research vessel – E-000199/2025

Source: European Parliament

Question for written answer E-000199/2025
to the Commission
Rule 144
Yannis Maniatis (S&D)

Greece, a country with enormous maritime wealth and importance for European maritime policy, is being confronted with the need to renew its basic infrastructure, such as research vessels. Oceanographic vessels are a key tool for studying climate change, implementing the European maritime policy strategy and fulfilling obligations under European directives.

Greece’s two existing research vessels (‘AEGAEO’ and ‘PHILIA’) were built in 1985. The oceanographic vessel ‘AEGAEO’, which has been in service for 40 years and supported European programmes worth hundreds of millions of euro, will soon be decommissioned. Despite the fact that 75 % funding was secured from the European Investment Bank (EIB) in 2018 for the construction of a new modern research vessel, the national contribution (25 % of the total budget) has still not been made available, causing delays that are jeopardising the continuation of Greek maritime research.

Can the Commission say whether additional European instruments or programmes could be used to help complete the construction of the new Greek research vessel, in order to ensure the continuation of maritime research and the fulfilment of Greece’s European obligations?

Submitted: 17.1.2025

Last updated: 28 January 2025

MIL-OSI Europe: Netherlands: Rabobank and EIB scale up support for environmentally conscious small businesses

Source: European Investment Bank

The European Investment Bank (EIB) and Rabobank are scaling up their support for environmentally conscious businesses. Through this new instrument, €300 million will be made available to small and medium-sized enterprises (SMEs) working at the forefront of sustainable development. Over the last nine years, in cooperation with the EIB, Rabobank has provided over €1.8 billion in sustainable financing to over 1 000 SMEs.

Data for euro area saving, investment and net lending to the rest of the world (Chart 1)

MIL-OSI Europe: Euro area economic and financial developments by institutional sector: third quarter of 2024

Source: European Central Bank

28 January 2025

Euro area net saving increased to €820 billion in four quarters up to third quarter of 2024, compared with €804 billion one quarter earlier
Household debt-to-income ratio decreased to 82.5% in third quarter of 2024 from 86.2% one year earlier
NFCs’ debt-to-GDP ratio (consolidated measure) decreased to 67.4% in third quarter of 2024 from 69.1% one year earlier

Total euro area economy

Euro area net saving increased to €820 billion (6.8% of euro area net disposable income) in the four quarters up to the third quarter of 2024 compared with €804 billion in the four quarters up to the previous quarter. Euro area net non-financial investment was broadly unchanged at €440 billion (3.7% of net disposable income), due to broadly unchanged net investment in all sectors (see Chart 1 and Table 1 in the Annex).

Euro area net lending to the rest of the world increased to €418 billion (from €405 billion previously) reflecting the increased net saving and broadly unchanged net non-financial investment. Household net lending increased to €581 billion (4.8% of net disposable income) from €561 billion. Net lending of NFCs decreased to €192 billion (1.6% of net disposable income) from €231 billion while that of financial corporations was broadly unchanged at €132 billion (1.1% of net disposable income). General government net borrowing decreased, contributing less negatively (-4.0% of net disposable income, after -4.3% previously) to euro area net lending.

Chart 1

Euro area saving, investment and net lending to the rest of the world

(EUR billions, four-quarter sums)

Sources: ECB and Eurostat.
* Net saving minus net capital transfers to the rest of the world (equals change in net worth due to transactions).

Households

Household financial investment increased at a broadly unchanged annual rate of 2.4% in the third quarter of 2024. Among its components, investment in currency and deposits (2.6%, after 2.3%) and investment in shares and other equity (1.3%, after 0.8%) grew at higher rates – the latter due to investment fund shares – while investment in debt securities increased at a lower rate (15.4%, after 28.4%).

Households continued to purchase, in net terms, mainly debt securities issued by general government and MFIs. Households were overall net sellers of listed shares, selling predominantly listed shares of non-financial corporations, while buying listed shares issued by the rest of the world (i.e. shares issued by non-euro area residents). Households increased their purchases of euro area investment fund shares, including those issued by MFIs (money market funds) and by non-money market investment funds, and continued to purchase investment fund shares issued by the rest of the world (see Table 1 below and Table 2.2. in the Annex).

The household debt-to-income ratio^[1] decreased to 82.5% in the third quarter of 2024 from 86.2% in the third quarter of 2023. The household debt-to-GDP ratio declined to 51.8% in the third quarter of 2024 from 53.5% in the third quarter of 2023 (see Chart 2).

Table 1

Financial investment and financing of households, main items

(annual growth rates)

	Financial transactions
	2023 Q3	2023 Q4	2024 Q1	2024 Q2	2024 Q3
Financial investment*	1.8	1.9	2.0	2.3	2.4
Currency and deposits	0.3	0.7	1.6	2.3	2.6
Debt securities	58.7	55.9	39.4	28.4	15.4
Shares and other equity**	1.1	0.3	0.4	0.8	1.3
Life insurance	-0.7	-0.7	-0.2	0.0	0.8
Pension schemes	2.3	2.1	2.2	2.2	2.3
Financing***	1.5	0.8	1.0	1.3	1.3
Loans	1.0	0.5	0.5	0.5	0.9

Source: ECB.
* Items not shown include: loans granted, prepayments of insurance premiums and reserves for outstanding claims and other accounts receivable.
** Includes investment fund shares.
*** Items not shown include: financial derivatives’ net liabilities, pension schemes and other accounts payable.

Data for financial investment and financing of households (Table 1)

Chart 2

Debt ratios of households and NFCs

(percentages of GDP)

Sources: ECB and Eurostat.
* Outstanding amount of loans, debt securities, trade credits and pension scheme liabilities.
** Outstanding amount of loans and debt securities, excluding debt positions between NFCs
*** Outstanding amount of loan liabilities.

Data for debt ratios of households and NFCs (Chart 2)

Non-financial corporations

Financing of NFCs increased at an unchanged annual rate of 1.0% in the third quarter of 2024. Issuance of debt securities grew at a lower rate (2.4% after 2.9%) and financing via trade credits increased at a higher rate (2.4% after 1.8%) while financing via shares and other equity (0.7%) and loans (1.3%) increased at unchanged rates. Loans granted by MFIs to NFCs increased at a broadly unchanged rate (1.2%), and loans granted by other NFCs grew at a lower rate (2.6% after 3.1%). Loans granted by other financial institutions declined at a less negative rate (‑0.2% after -0.6%), as did loans granted by the rest of the world (-1.1% after -2.1) (see Table 2 below and Table 3.2 in the Annex).

NFCs’ debt-to-GDP ratio (consolidated measure) decreased to 67.4% in the third quarter of 2024, from 69.1% in the third quarter of 2023; the non-consolidated, wider debt measure decreased to 138.4% from 141.3% (see Chart 2).

Table 2

Financing and financial investment of NFCs, main items

(annual growth rates)

	Financial transactions
	2023 Q3	2023 Q4	2024 Q1	2024 Q2	2024 Q3
Financing*	1.2	0.8	0.8	1.0	1.0
Debt securities	1.5	1.3	1.9	2.9	2.4
Loans	1.8	1.6	1.4	1.3	1.3
Shares and other equity	0.4	0.3	0.4	0.7	0.7
Trade credits and advances	2.1	1.1	0.9	1.8	2.4
Financial investment**	2.3	1.7	1.8	2.0	2.0
Currency and deposits	-1.2	-1.2	0.5	2.8	1.8
Debt securities	24.9	20.2	8.5	5.8	1.9
Loans	4.7	4.5	3.9	3.9	3.4
Shares and other equity	1.2	1.0	1.4	1.4	1.6

Source: ECB.
* Items not shown include: pension schemes, other accounts payable, financial derivatives’ net liabilities and deposits.
** Items not shown include: other accounts receivable and prepayments of insurance premiums and reserves for outstanding claims.

Data for financing and financial investment of NFCs (Table 2)

For queries, please use the statistical information request form.

Notes

These data come from a second release of quarterly euro area sector accounts for the third quarter of 2024 by the ECB and Eurostat, the statistical office of the European Union. This release incorporates revisions and completed data for all sectors compared with the first release on “Euro area households and non-financial corporations” of 13 January 2025. Moreover, it incorporates revisions to the data since the first quarter of 1999, reflecting, amongst others, the impact of the benchmark revision 2024 implemented in the EU. For further information see the related Eurostat webpage.
The euro area and national financial accounts data of NFCs and households are available in an interactive dashboard.
The debt-to-GDP (or debt-to-income) ratios are calculated as the outstanding amount of debt in the reference quarter divided by the sum of GDP (or income) in the four quarters up to the reference quarter. The ratio of non-financial transactions (e.g. savings) as a percentage of income or GDP is calculated as the sum of the four quarters up to the reference quarter for both numerator and denominator.
The annual growth rate of non-financial transactions and of outstanding assets and liabilities (stocks) is calculated as the percentage change between the value for a given quarter and that value recorded four quarters earlier. The annual growth rates used for financial transactions refer to the total value of transactions during the year in relation to the outstanding stock a year before.
Hyperlinks in the main body of the statistical release lead to data that may change with subsequent releases as a result of revisions. Figures shown in annex tables are a snapshot of the data as at the time of the current release.
The ECB publishes experimental Distributional Wealth Accounts (DWA) for the household sector. The release of results for the third quarter of 2024 is planned for 28 February 2025 (tentative date).

MIL-OSI United Kingdom: Expert advisory group appointed by independent water commission

Source: United Kingdom – Government Statements

The independent water commission announces members of the new advisory group

Expert advisory group appointed by independent water commission

Senior advisory group supporting Sir Jon Cunliffe on major water reset

Leading voices from areas including the environment, public health and investment have been announced today (28 January) as the new advisory group to the independent water commission, chaired by Sir Jon Cunliffe.

Sir Chris Whitty (Chief Medical Officer), Richard Benwell (CEO, Wildlife & Countryside Link), Professor Isabelle Durance (Professor of Integrated Water Sciences at Cardiff University) and Peter Harrison (former CEO, Schroders) are among the nine members advising the commission in its major review of the water system.

A Call for Evidence will be published in February 2024 to bring in views from all interested parties on possible areas of reform.

The members are:

Richard Benwell (environment expert), Chief Executive of Wildlife and Countryside Link, a coalition of environmental charities. Previously policy adviser to the Defra Secretary of State and worked in policy and advocacy roles for the Wildfowl and Wetlands Trust and RSPB.
Chris Whitty (public health expert), Chief Medical Officer for England and Chief Medical Adviser to the UK Government.
Professor Isabelle Durance (environmental science and Welsh water system expert), Founder and Director of the Water Research Institute at Cardiff University, and Professor of Integrated Water Sciences
Peter Harrison (investment expert), Former Group CEO at Schroders plc. Member of the Capital Markets Industry Taskforce (CMIT), Chair of the charity Business in the Community, and chair-designate of Morgan Sindall plc.
Dame Yve Buckland (consumers advocate), Founding Chair of the Consumer Council for Water (2005 –2015). Chair of University Hospitals Birmingham NHS Foundation Trust since 2023.   
Jonathan Haskel (economics expert) Professor of Economics at Imperial College Business School. Previously board member at the UK Statistics Authority and a member of the Monetary Policy Committee at the Bank of England.
Philip Graham (infrastructure), Executive Director of Good Growth at Greater London Authority. Previously Chief Executive of the National Infrastructure Commission.
Jon Loveday (project delivery and commercial expert), Director of Infrastructure, Enterprise and Growth at the Infrastructure and Projects Authority (IPA). Shareholder Non-Executive Director of Crossrail International and Sizewell C. Former Executive Director within the water, telecoms and energy sectors.
Stephen Peacock (planning and place-making expert), CEO of West of England Mayoral Combined Authority. Former CEO and Executive Director of growth and regeneration at Bristol City Council

The independent water commission was announced by the UK and Welsh governments in October 2024 to help deliver a reset of the water sector, chaired by Former Deputy Governor of the Bank of England, Sir Jon Cunliffe.

The upcoming Call for Evidence will look at the management of the overall water system, regulatory reform, and the role of water companies, owners and investors.

A set of recommendations will be delivered later this year to the Defra Secretary of State Steve Reed and Huw Irranca Davies, Wales’ Deputy First Minister with responsibility for Climate Change and Rural Affairs.

Sir Jon Cunliffe, Chair of the independent water commission, said:

Since taking up this role I have seen the many complex challenges faced by the water sector in England and Wales. All sides know that change is clearly needed.

The calibre of expertise we have bought together in this group reflects the significance of the task ahead.

I know their insight and experience will be invaluable in recommending meaningful and long-term reforms to rebuild the trust that has been lost and deliver a thriving and sustainable water sector for the future. I look forward to our work together in the coming months.

As set out in the Terms of Reference, the Commission is operating independently of the UK and Welsh Ministers. The Chair and advisory group are supported by a Defra Secretariat.

Full biographies of all advisory group members are listed below.  

Name	Details
Richard Benwell (environment)	Richard Benwell is CEO of Wildlife & Countryside Link, a coalition of environmental charities. He is a Board member of UK Youth for Nature and the Broadway Initiative, and Chair of Oxfordshire’s Local Nature Partnership. Previously, he was Policy Adviser to the Secretary of State at DEFRA, and has worked in policy and advocacy roles for WWT and RSPB.
Sir Chris Whitty (public health)	Professor Sir Chris Whitty FRS is Chief Medical Officer for England (CMO) and head of the public health profession. He is an epidemiologist and NHS infectious disease consultant physician. Chris has worked with the Royal Academy of Engineering and others on solutions for the safe management of sewage.
Dame Yve Buckland (consumers)	Yve Buckland was the founding Chair of the Consumer Council for Water, holding the role between 2005 and 2015.  She has also held a number of roles in public health, including Chair of the NHS Institute for Innovation and Improvement at Warwick University (2005 – 2010), Pro-Chancellor of Aston University (2019 – 2023), and in 2022 Dame Yve was appointed Chair of University Hospitals Birmingham NHS Foundation Trust.
Jonathan Haskel (economics)	Jonathan Haskel is Professor of Economics at Imperial College Business School, Imperial College London, where he has been since 2008.  He has previously taught at Queen Mary, University of London; Dartmouth College, USA and New York University, USA.  His research interests are productivity and growth.   In addition to his academic activities, he has been an External Member of the Reporting Panel of the Competition and Markets Authority (2001-2009); a non-Executive Director of the UK Statistics Authority (2016-2022) and an External Member of the Bank of England Monetary Policy Committee (2018-2024).
Philip Graham  (infrastructure)	Philip Graham was the founding Chief Executive of the National Infrastructure Commission from 2015-20, during which time he led its establishment as an independent arms-length body and delivered the UK’s first ever cross-cutting National Infrastructure Assessment. He is currently Executive Director for Good Growth at the Greater London Authority, where he leads the Mayor’s policies and programmes in relation to London’s environment, economy, infrastructure, and spatial development. He worked across areas in the Department for Transport, including leading the Airports Commission’s review of aviation capacity for Sir Howard Davies.
Jon Loveday (project management and delivery)	Jon Loveday is the Director of Infrastructure, Enterprise and Growth at the Infrastructure and Projects Authority (IPA), the government’s centre of expertise for infrastructure and major projects. He leads the expert delivery team advising on the set up of delivery bodies, commercial models and project delivery across the £800bn Government’s Major Projects Portfolio. Jon has held Executive roles for regulated utility companies and major construction and infrastructure contractors and has extensive experience of delivering major utility projects throughout the UK.
Peter Harrison (investors)	Peter Harrison was formally Group Chief Executive of Schroders plc, with over 35 years’ experience in the asset management industry. He is currently a member of the Capital Markets Industry Taskforce (CMIT), chair of the charity Business in the Community, and chair-designate of Morgan Sindall plc.
Professor Isabelle Durance (science and Welsh water system)	Isabelle Durance is Professor of Integrated Water Science and Director of the Water Research Institute at Cardiff University, recognised for its interdisciplinarity and extensive stakeholder reach that includes water companies, government and regulators. With multi-million-pound support, her personal research in the UK and overseas examines interactions between landscape change, biodiversity and ecosystem services.  Outside her academic role, she is involved extensively in various advisory capacities to government bodies, research councils, charities, industry and regulators – especially in the water sector.
Stephen Peacock (planning and place-making)	Stephen Peacock is Chief Executive of the West of England Mayoral Combined Authority, responsible for £1 billion of investment to drive sustainable and inclusive growth across the most productive and fast-growing UK city region outside London. He has a commercial background in international energy and technology along with a track record of public sector leadership.  A former partner with a major professional services firm, Stephen was Chief Executive of Bristol City Council where his achievements include the creation of the award-winning City Leap public-private partnership.

Published 28 January 2025

MIL OSI United Kingdom –

MIL-OSI Banking: Press Conference “Risks in BaFin’s Focus”, 28 January 2025

Source: Bundesanstalt für Finanzdienstleistungsaufsicht – In English

Check against delivery.

A warm welcome from me too!

The environment facing the German financial sector in 2025 will be challenging.

At the moment, there is no single key risk. The situation is multifaceted and complex. Companies are having to deal with a diverse range of risks. Risks that are sometimes closely interconnected. Many of these risks can have immediate impacts, while some will only materialise in the long term. This situation is described in the fourth edition of our “Risks in BaFin’s Focus”, which we are publishing today. The picture is also very dynamic. While some risks remain consistently high – for example the strained situation on the commercial real estate markets – the risk situation in market-driven areas can change rapidly. Since going to press, we have seen a kind of party mood develop in certain parts of the financial markets. And as we all know: the bigger the party, the bigger the hangover.

Over the next few minutes, I would like to discuss three topics. These three topics are very different, but they all make one thing clear: some of the challenges we are facing today are the result of new risk drivers. In other words, they are the result of developments that cannot be precisely gauged – in part because we lack relevant historical experience. This makes risk management more difficult. For the supervised entities, but also for us. The trend arrows for the risks I will address today are pointing in the wrong direction, symbolising a growing risk.

The first topic I would like to address today is sustainability. Or, to be more precise: the physical risks of climate change. Still fresh in all our minds are the images of the devastating fires around Los Angeles. A tragic disaster with thousands of destroyed buildings, tens of thousands of people evacuated and more than two dozen fatalities. It is estimated that the potential property damage and economic losses could be as high as 150 billion US dollars. This will of course have an impact on the financial sector, especially on insurers’ loss amounts. Rating agencies estimate that in Europe, too, more than 30 percent of reinsurers annual loss budget for natural disasters could already be used up – and that within the first few days of the year.

For disasters of this kind to occur, many factors have to come together. While regional weather patterns undoubtedly play a role, experts tell us that climate change is increasingly creating the conditions for these kinds of catastrophic fires. Conditions such as long periods of drought.

Companies in the financial sector must therefore continue to address the physical risks of climate change – and they need to address these risks more intensively. That is to say, the specific effects of global warming, such as extreme weather events like droughts and flooding. Of course, the transition risks posed by the journey to a sustainable, low-carbon economy will also remain relevant.

But I would say that in comparison, regulation and supervision have not paid sufficient attention to physical risks up to now. At BaFin, we will be putting a particular focus on these risks in 2025 – climate change is forging ahead. According to Copernicus, the EU’s Earth observation programme, the global average temperature in 2024 was more than 1.5 degrees above pre-industrial levels for the first time. Physical risks, which will have an impact on banks’ loan portfolios or insurers’ loss amounts, are continuing to rise. Think of the Spanish region of Valencia, where severe flooding last autumn caused extensive damage. According to estimates, the ratios of non-performing loans in Spanish banks’ portfolios will rise in the coming quarters.

We are therefore taking a close look at how physical risks are addressed at the companies we supervise – such as banks and insurers that are particularly at risk due to extreme weather, supply chain dependency or concentrated credit and market risks. We have found that the companies have generally made progress in managing their sustainability risks, but there is still room for improvement.

For example, when it comes to integrating and processing data on physical climate risks. This is important for banks and insurers to be able to assess individual natural hazards. And that means they need to draw on several sources of information. We have found that many companies lack important data. In the case of banks, this is often customer-related location data – combined with an allocation of the physical risks to an exact address, such as possible flooding due to heavy rain. Insurers have gaps in their data, for example, in terms of public flood protection measures or the building regulations of the respective cities and municipalities. It is our impression that banks, in particular, are still in the early stages in this regard. They are currently focusing on building up their data basis.

This is very important work. Supervised companies need to manage the increasing physical risks of climate change. Take regional banks, for example. If an extreme weather event were to occur in their home region, many of their customers could be affected at the same time. Not to mention numerous employees. This geographical concentration can be problematic. It can also particularly affect insurers and banks with specialised business models, for example in agriculture and forestry. The situation is made even more difficult by the sometimes very close links between banks and insurers through risk transfers. Just think of real estate loans and the protection of properties against natural disasters. These risks in particular are becoming increasingly difficult to assess: how likely are they to occur? How severe could potential damage be? And: will the property even be insurable for a reasonable price in future? In several areas of some US states, such as Florida or California, this is no longer a possibility . Climate change is one reason for this. Such insurance gaps not only raise political and social questions, but also questions about the financial viability and recoverability of real estate loans.

It is important to realise that historical data is only of limited value – the risk situation is changing rapidly. Depending on the scenario one takes , one neighbouring country might be almost completely under water by the end of the century. It also seems plausible to me that climate change could become a driver of another highly charged geopolitical issue: migration.

For BaFin, one thing is certain: supervised companies must continue to address in detail the physical risks of climate change and, especially, integrate these risks into all areas of their risk management. We should not wait for the next disaster. A forward-looking approach will not only protect the solvency of insurers and banks, but also be able to drive prevention measures forward. If risks are properly priced, it is more likely that they will be mitigated. The more trouble we have getting climate change under control, the more we will have to accept that physical risks are increasing and that prevention and risk avoidance are becoming more and more essential.

The second topic I would like to address today is the risk arising from the profound technological change taking place in the financial industry. Here, too, historical experience is not particularly helpful. New technologies – such as generative artificial intelligence or, in future, quantum computing – are driving the transformation of the industry forward. These technologies have tremendous potential. For companies. And for customers. But they also entail very significant risks.

At the top of the list are potential cyber incidents or major IT failures. Large banks, insurers and clearing houses play an extremely important role and have highly sensitive and therefore valuable data. This makes them particularly susceptible to cyber incidents. Data presented by the International Monetary Fund (IMF) also confirms this. According to the IMF report, almost a fifth of all global cyber incidents over the past 20 years affected companies in the financial sector. The damage amounts to almost 12 billion US dollars.

The threat of cyber incidents is globally very high. And it is continuing to rise. This is also due to the tense geopolitical situation. Many companies in the financial sector and their key service providers form part of the critical infrastructure. They are thus an attractive target for state-initiated attacks. But the threat is also rising due to the many new technological possibilities.

For example, through generative AI. More and more companies in the financial sector are using generative AI or testing its use. And of course, criminals are also using such technologies – to develop new attack methods or malicious code, for example. High quality phishing messages can be created quickly using AI, which makes it much more difficult to identify fraudulent messages.

Many companies are aware of all these risks and have invested in their IT security. That’s good news. But we cannot become complacent. It is important to us that companies continuously monitor current developments and threats. That they adapt their security measures. And that they prepare for crisis situations. They are currently well positioned to do so: the financial institutions reported strong earnings in 2024. They should use these earnings to invest further in their IT security. This is what we expect of them. It is also what their customers expect of them.

It goes without saying that our work as a supervisory authority is increasingly being defined by the risks arising from technological change. Just to give one example: in the first three quarters of 2024, we received 258 reports of IT incidents in payment services. This is a significant increase compared to previous years. In two out of three incidents, the cause was not at a supervised financial institution, but at one of its service providers.

We are also continuing to identify numerous serious IT shortcomings in our IT inspections at supervised companies.

This is why the topics of IT security, cybersecurity and outsourcing remain high on our agenda. This year, we are planning more than 30 IT inspections, including follow-up inspections and inspections focusing on IT security.

We will also be more closely monitoring multi-client service providers that offer services to a significant extent in the European financial market, service providers that this market also relies on. In addition, we are preparing to participate in joint examination teams led by the European Supervisory Authorities; these teams monitor critical IT service providers. Among others, the focus here will be on cloud hyperscalers.

We need strong and effective supervision in the IT sector. At the same time, we need to keep an eye on emerging technologies. Technologies that are not yet available today, but which we know could have a very significant impact on the future of the financial sector. One such technology is quantum computing.

Some people might argue that there aren’t yet any mass-produced quantum computers. Maybe so. There are still a few technological hurdles to overcome. But research and development are making rapid progress. You may remember that a few weeks ago, in December, Google presented a new quantum chip. In less than five minutes, this chip performed a calculation that would take one of today’s fastest supercomputers 10 quadrillion years. That is a one with 25 zeros. An unimaginable number that far exceeds the age of the universe.

We don’t yet know when powerful quantum computers will be widely available. But there is much to suggest that we will see a breakthrough happen.

Companies in the financial sector need to get ready for this development. They need to get ready today.

Why do I emphasise this so strongly? Because quantum computers will be able to overcome conventional encryption technologies. Current cryptography methods such as RSA¹ , which form the basis of IT security in the financial sector today, will no longer be an obstacle for quantum computers. This will pose a massive threat to data security in the financial industry. The cryptography currently used for the largest cryptoassets is probably not quantum-resistant either. Now, please be aware that this is not only some future scenario we are talking about. This risk is already relevant today. Data can already be stolen and stored today, to be decrypted later.

Companies must not underestimate the risks that this poses. They must take protective measures – now. Especially for security-relevant data designed to have long-term validity. This is the only way they can protect this data in the long term.

This may remind some of you, at least the older ones among us, of the millennium bug. That was a major issue at the end of the 90s. And the situation is similar today. Only this time we don’t have a target date we can work towards.

So what exactly needs to be done? Companies must identify the data that could be jeopardised by quantum computing. And then develop a protection plan that takes existing technical possibilities and standards for post-quantum cryptography into account. A protection plan must of course be flexible by design. To ensure that IT risk management can react to future developments. And to ensure that it is in a position to implement future safety recommendations and standards.

The fact that quantum computing is jeopardising data security is nothing new. The BSI pointed this out a good five years ago. The German government has also addressed the topic in its cybersecurity strategy. So today, I would like to emphasise once again: the time to act is now. When the first powerful quantum computers are for sale, it will be too late.

Ladies and gentlemen,

In addition to the physical risks associated with climate change and the risks arising from technological changes in the financial sector, we also need to talk about the current economic situation – and the risks that this situation is giving rise to.

As you all know, the German economy is stagnating. Last year, GDP fell by 0.2%. For 2025, the German Council of Economic Experts (Sachverständigenrat) is expecting slight economic growth of 0.4%. This shows that the economic situation remains difficult.

Geopolitical risks are currently a key factor clouding the growth prospects of the German economy. This is because the German financial system is highly susceptible to geopolitical shocks. And the risk of such shocks is currently high. For example in the area of trade policy. We are seeing a global trend towards more protectionism. In particular, an intensification of the trade dispute between the US and China would have considerable consequences for the global economy, but especially for Europe. US import tariffs on German and European goods would also have direct impacts on the German economy.

The number of corporate insolvencies in Germany rose significantly in 2024 – by 16.8% compared to the previous year. As a consequence, the risk that companies will partially or completely default on their loans also rose. The ratio of non-performing loans at German banks rose sharply in the third quarter of 2023 and has continued to increase since then. The aggregate NPL ratio increased from 1.38% to 1.76% in the third quarter of 2024 compared with the same period in 2023. We have seen this trend in both large and less significant institutions. And we expect the proportion of problematic loans to continue rising – in part due to the weak economy. In all probability, the impact of higher value adjustments will also become evident in institutions’ earnings in the foreseeable future. Banks’ loan books are a reflection of the health of the economy.

Loan loss provisions at German banks likewise continued to rise, but have remained at a low level. In the third quarter of 2024, the loan loss provision ratio, i.e. the ratio of cumulative loan loss provisions to the loan portfolio, was 1.41%.

The increased credit default risks are not only relevant for banks. Insurers also have to deal with these risks. After all, insurers also grant loans to companies. And they invest in private debt funds.

BaFin will be taking a particularly close look at the risks arising from corporate loan defaults in 2025 – at banks and at insurance companies. In particular, we will be keeping a close eye on institutions that are heavily involved in sectors that could be significantly affected by an economic downturn or by geopolitical tensions. We will also be monitoring the investment behaviour of insurers, with a particular focus on the risk management of alternative investments such as private debt.

Macroprudential measures also remain important for the resilience of the German financial sector. These measures include instruments such as the countercyclical capital buffer, which currently stands at 0.75% of domestic risk exposure. In December 2024, the Financial Stability Committee assessed this level and once again deemed it appropriate.

Ladies and gentlemen,

As you can see, the financial sector is operating in a very challenging environment. This is in part because, for many risk drivers, we cannot draw on past experience. Physical climate risks, quantum computing, deglobalisation, geopolitical upheavals – the proverbial look in the rear-view mirror doesn’t help much when it comes to such developments. This makes it all the more important for companies in the financial sector to manage their risks wisely and to think in terms of scenarios. They must ask themselves: What can the risk situation mean for us? Where are we vulnerable? And how can we prepare for this? And, of course, they need to be highly resilient to potential shocks. More than anything else, this means keeping well-stocked capital and liquidity buffers. That is what we expect of them – and we will be paying particularly close attention to this over the course of the year.

Now I look forward to your questions!

MIL OSI Global Banks –