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Category: Banking

  • MIL-OSI: Magma to build out liquid staking on Monad and restaking with Ether.fi following $3.9M seed fundraise

    Source: GlobeNewswire (MIL-OSI)

    MIAMI, Oct. 30, 2024 (GLOBE NEWSWIRE) —  Following a $3.9M seed round with participation from Bloccelerate, Animoca Ventures, CMS Holdings, Maelstrom and others, Magma is building MEV-powered liquid staking on Monad. Additionally, Magma will partner with Ether.fi to build the first Restaking integration on Monad. In the last few months, Magma has solidified partnerships with a network of best-in-class validators, including Staked (as part of Kraken), P2P, A41, Validation Cloud, Everstake, Chorus One, Finoa Consensus Services, Bware Labs alongside core DeFi primitives, including Ether.fi, Wormhole, Pyth, Switchboard, LFJ (Previously Trader Joe), Curvance, and others. The Magma Team was founded by David Mass and Meir Bank, who were previously at Citibank and AngelDAO.

    Additional Investors in the round included Veil VC, Builder Capital, Infinity Ventures, RockTree Capital, Wise3 Ventures, Stake Capital, Relayer Capital, and others. Angel investors who contributed to the fundraise included Meltem Demirors, Kartik Talwar, Mike Silagadze, Alan Curtis, and Ben Lakoff.

    With this investment, the company plans to further develop its liquid staking platform and MEV (Maximal Extractable Value) architecture. MEV is the additional value that can be extracted during block production beyond the standard block reward and gas fees. This is achieved by manipulating the inclusion, exclusion, or ordering of transactions within a blockchain.

    David Mass, Co-founder and CEO, said, “We have been actively building in the space for a few years and committed to building in the Monad ecosystem in the Summer of 2023. We wanted to build a brand and a community inspired by the overarching success similar to Monad’s parabolic growth. We have a fun brand, but most importantly, we are focusing on building a best-of-breed product for our category type, which will be vetted by some of the best auditors in the space.”

    Looking ahead to Q4

    “We have been working diligently on pipelining strategic partnerships throughout the Monad ecosystem. The next few months will be exciting as we look forward to launching on testnet and eventually mainnet with a unique community points program,” Mass explains.

    About Magma

    Magma is a decentralized Liquid Staking Protocol built on the Monad Network, an Ethereum-compatible Layer 1 blockchain. Users of Magma will be able to stake their Monad tokens in exchange for gMONAD, a liquid staking token (LST) which allows users to retain their liquidity to utilize throughout the Monad ecosystem and earn staking rewards. Magma is also building MEV infrastructure for Monad to maximize the performance of the Monad Network. Magma users will be able to utilize their LST to earn restaking rewards with Ether.Fi.

    X | Website | Discord

    Contact:
    David Mass
    Contact@magmastaking.xyz
    david@hydrogenlabs.xyz

    Disclaimer: This content is provided by Magma. The statements, views and opinions expressed in this column are solely those of the content provider. The information provided in this press release is not a solicitation for investment, nor is it intended as investment advice, financial advice, or trading advice. It is strongly recommended you practice due diligence, including consultation with a professional financial advisor, before investing in or trading cryptocurrency and securities. Please conduct your own research and invest at your own risk.

    A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/bb86bad8-6cd4-4ba3-9d3c-2c9bf889c6c5

    The MIL Network –

    January 25, 2025
  • MIL-OSI Economics: Identity theft: BaFin warns consumers against offers on website friheden.de

    Source: Bundesanstalt für Finanzdienstleistungsaufsicht – In English

    The Federal Financial Supervisory Authority BaFin warns consumers against offers on website friheden.de. According to information available to BaFin, financial and investment services are being provided on this website without the required authorisation. According to the current state of knowledge, the services are not actually offered by Friheden Invest Holding ApS. It is suspected that this is a case of identity theft by unknown perpetrators.

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

    Theinformation provided by BaFin is based on section 37 (4) of the German Banking Act (Kreditwesengesetz – KWG).

    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 Economics –

    January 25, 2025
  • MIL-OSI Economics: Fiscal Affairs Department’s 60th Anniversary Conference: “60 Years of FAD: The Fiscal Affair Continues”

    Source: International Monetary Fund

    The Fiscal Affairs Department (FAD) of the IMF will celebrate 60 years since it was formed in 1964 with a one-day conference, “60 Years of FAD: The Fiscal Affair Continues,“ on November 4, 2024, in Washington D.C., USA.

    Even as prospects for a global soft landing have improved, fiscal policy continues to struggle with legacies of high debt and deficits, while facing new challenges. Risks to public finances are acute, reflecting the pressures of aging societies, industrial policies, geopolitical tensions, the needs of a greener and more equitable society and now, the threat to labor from AI technologies. Lower medium-term growth prospects have worsened debt dynamics and compounded the risks to fiscal sustainability. Fiscal policy challenges are especially acute in low-income countries, where financing is scarce and limits the ability of governments to support economic and human development.

    In this context, the conference will bring together fiscal policy experts, senior policy makers, and former and current IMF staff. They will look back at the contributions of FAD to the global fiscal policy discourse and its service to the membership. They will discuss the likely evolution of sovereign debt market and the role that public policy can play in making AI beneficial for workers and growth. And they will look ahead to the challenges that will emerge for fiscal policy in the future, and the choices fiscal policymakers will face, especially in low-income and fragile countries. The conference will also be an occasion to celebrate the evolution and impact of FAD’s capacity development (CD) from serving a small section of the membership to covering nearly every corner of the world.

    Agenda

    8:30 A.M. Coffee and refreshments
    9:00 A.M. Opening remarks. Gita Gopinath, First Deputy Managing Director of the IMF, introduced by Vítor Gaspar, Director, Fiscal Affairs Department, IMF.
    9:15 – 10:30 A.M. Sovereign Debt
    Moderator: Ceyla Pazarbasioglu, Director, Strategy, Policy and Review Department, IMF
    Panelists:

    S. Ali Abbas  (Deputy Director, Fiscal Affairs Department, IMF)

    S. Ali Abbas is a deputy director in the IMF’s Fiscal Affairs Department where he supervises the sovereign debt and governance workstreams, and oversees the department’s review of Fund programs in emerging and developing economies, with a focus on Sub-Saharan Africa. He was previously IMF mission chief for the United Kingdom and Jordan, and deputy chief of the Debt Policy Division in the IMF’s Strategy Policy and Review Department. He has been closely involved in several complex Fund programs, and has led reforms to the IMF’s exceptional access lending and debt sustainability frameworks. In 2019, he co-edited Sovereign Debt: A Guide for Economists and Practitioners (OUP), with Alex Pienkowski and Kenneth Rogoff, adding to his earlier published work on post-GFC fiscal policy, the euro area sovereign debt crisis, international tax competition, state contingent debt instruments, fiscal policy and the current account, and government securities markets. Ali is a Rhodes scholar from Pakistan and holds a doctorate in economics from Oxford. He also served as an Overseas Development Institute fellow to the Tanzanian Treasury during 2000–02.

    Carlo Cottarelli (Former Director Fiscal Affairs Department, IMF)

    Carlo Cottarelli, a citizen of Italy, after receiving degrees in economics from the University of Siena and the London School of Economics, worked at the Bank of Italy, ENI and the IMF. He was FAD Director in 2008-13, Commissioner for Public Spending in Italy in 2013-14, IMF Executive Director in 2014-17. He taught at Bocconi University and he is currently Director of the Observatory on the Italian Public Accounts of the Catholic University of Milan, where he also teaches a course of Fiscal Macroeconomics In 2021 he was awarded the honor of First Class Knight Grand Cross of the Order of Merit of the Italian Republic.

    Christoph Trebesch (Professor, Kiel University)

    Christoph Trebesch is a professor at the Kiel Institute for the World Economy and the University of Kiel. His research focuses on international finance and macroeconomics as well as political economy and geopolitics. His research has been published in leading economic journals such as the American Economic Review, the Quarterly Journal of Economics, and the Journal of Political Economy, and is regularly cited in international media, including the New York Times, the Financial Times, and the Wall Street Journal. He directs the CEPR Policy Network on “International Lending and Sovereign Debt” and co-directs the CEPR Network on “Geoeconomics”, for which he organizes an annual high-level conference on geopolitics and economics. He is also the creator of the widely referenced “Ukraine Support Tracker” on military and financial aid flows to Ukraine. In 2023, he was awarded an ERC Consolidator Grant, one of the most prestigious research recognitions in Europe.

    10:30 – 11:00 AM The Surge in FAD’s Capacity Development Delivery (A/V) Moderators:

    Katherine Baer (Deputy Director, Fiscal Affairs Department, IMF)

    Katherine Baer is a Deputy Director in the IMF’s Fiscal Affairs Department (FAD). She oversees FAD’s work in the areas of taxation and public financial management, supervises Capacity Development (CD) delivery in all fiscal areas to countries in the Middle East, North Africa and Centra Asia, oversees FAD’s strategy to strengthen fiscal policies and institutions in the Fragile and Conflict-Affected States, and manages the department’s work on fiscal issues from a gender perspective. Her career at the IMF has focused on strengthening fiscal policies and institutions in member countries across all regions and income levels, and in countries experiencing economic crises. She has been an economist in the U.S. Treasury and an assistant commissioner in the Mexican Tax Administration. She also worked at the World Bank on public finance reforms in Latin America and the Caribbean at the height of the region’s debt crisis in the 1980s. Ms. Baer has many publications relating to public finance and holds a Ph.D. from Cornell University.

    Juan Toro (Deputy Director, Fiscal Affairs Department, IMF)

    Juan Toro is Deputy Director of the IMF’s Fiscal Affairs Department (FAD), in charge of: managing FAD budget, relationship with development partners, overseeing governance and operations of FAD’s capacity development (CD), coordinating FAD’s CD to Europe, and coordinating FAD TA on sustainable development goals. He previously was Assistant Director in charge of the IMF’s revenue administration CD to Europe, Asia, Middle East, and Central Asia.

    He has led and participated in IMF TA missions in taxation in more than 40 countries and has authored and contributed to several analytical papers in taxation. Before joining the IMF in 2007, he was the Commissioner of the Chilean Tax Administration (Servicio de Impuestos Internos, SII) from 2002 to 2006.

    11.00 – 11:30 A.M. Coffee break
    11:30 A.M. – 12:45 P.M. FAD in the Global Discourse
    Moderator: Ruud De Mooij , Deputy Director, Fiscal Affairs Department, IMF
    Panelists:

    Zainab Ahmed (Alternate Executive Director, World Bank)

    Alternate Executive Director from Nigeria from July 2023 to October 2024. A Nigerian national representing – Angola, Nigeria, and South Africa (EDS25). Prior to joining the WBG, Ms. Ahmed has served a:- Minister of Finance, Budget and National Planning (2018- 2023); Minister of State, Ministry of Budget and National Planning (2015 – 2018); Chair of the board of Trustees of the African Union Peace Fund (2019 – 2023). Member of the International Board, Extractive Industries Transparency Initiative (EITI) (2016 – 2019); Executive Secretary and National Coordinator, Nigeria Extractive Industries Transparency Initiative (NEITI) (2010 – 2015); and Managing Director, Kaduna Investment Company Ltd (2009 – 2010).

    Abdulelah Alrasheedy (Deputy Minister of Macro-Fiscal Policies, Ministry of Finance, Saudi Arabia)

    Dr. Abdulelah AlRasheedy is the Deputy Minister for Macro-Fiscal Policies at Ministry of Finance (MOF). Before being named Deputy Minister in March 2024, Dr. AlRasheedy was Assistant Deputy Minister for Macroeconomic Policies Analysis and Acting as General Supervisor of Policy and Consultation Assistant Deputyship.
    Prior to joining Ministry of Finance, Dr. Abdulelah spent 12 years with Saudi Central Bank (SAMA) most recently as Manager of Economic Modeling Division and was SAMA Representative at The International Financial Architecture Working Group.
    Dr. Abdulelah earned a Ph.D.  in economics and statistics from University of Missouri, where he was a Research Scholar at the Global Institute for Sustainable Prosperity.
    In addition to being a Deputy Minister, he is a board member of King Abdullah City for Atomic and Renewable Energy. Also a Ministry of Finance Representative for Financial Sustainability Board. 

    Adam Posen (President, Peterson Institute of International Economics)
    Mark Sobel (U.S. Chairman, OMFIF)

    Mark Sobel is currently US Chair at OMFIF.  He served  nearly four decades at the US Treasury, including as Deputy Assistant Secretary for International and Monetary Affairs from 2000-2015, a position in which he led the Department’s work in preparing G7 and G20 Finance Minister and Central Bank Governor meetings, formulating US positions in the IMF, and coordinating the work of Treasury and regulatory agencies in the Financial Stability Board.  He was also chief US financial negotiator in the G20 from 2008-2015, including for the 2009 London Economic Summit.  From 2015 through early 2018, he was US representative at the IMF. 

    12:45 – 1:00 P.M. FAD Montage (A/V)
    A look back at FAD through the decades.
    1:00 – 2:15 P.M. Lunch (by invitation)
    2:15 – 3:30 P.M. Public Policy for AI
    Moderator: Era Dabla-Norris, Deputy Director, Fiscal Affairs Department, IMF
    Panelists:

    Simon Johnson (Professor, MIT Sloan School of Management & 2024  Nobel Prize Winner in Economics )

    Simon Johnson is the Ronald A. Kurtz (1954) Professor of Entrepreneurship the MIT Sloan School of Management, where he is head of the Global Economics and Management group. At MIT, he is also co-director of the Shaping the Future of Work Initiative and a Research Affiliate at Blueprint Labs. In 2007-08, Johnson was chief economist and director of the Research Department at the International Monetary Fund. He currently co-chairs the CFA Institute Systemic Risk Council with Erkki Liikanen. In February 2021, Johnson joined the board of directors of Fannie Mae, where he is vice chair of the audit committee and a member of the risk and capital committee. Johnson’s most recent book, with Daron Acemoglu, Power and Progress: Our 1000-Year Struggle Over Technology and Prosperity, explores the history and economics of major technological transformations up to and including the latest developments in Artificial Intelligence.
    2024 Nobel prize laureate in economic sciences “for studies of how institutions are formed and affect prosperity”

    Branko Milanovic (Professor, City University of New York)

    Research professor at the Graduate Center, City University of New York and senior scholar at The Stone Center on Socio-economic Inequality; Visiting Professor at the Institute for International Inequalities at LSE; was lead economist in World Bank Research Department for almost 20 years and senior associate at the Carnegie Endowment for International Peace in Washington. Milanovic’s main area of work is income inequality, in individual countries and globally, as well as historically among pre-industrial societies. His most recent books are Global inequality: a new approach for the age of globalization which deals with economic and political issues of globalization, and Capitalism, Alone that contrasts inequality and class formation in societies of liberal and political capitalism. In October 2023, he published Visions of Inequality that looks at how income distribution was studied by the most famous economists over the past 200 years. Milanovic was awarded (jointly with Mariana Mazzucato) the 2018 Leontieff Prize.

    Christine Qiang (Global Director, Digital Transformation Global Department, World Bank)

    3.30 – 4:00 P.M. Coffee break
    4:00 – 5:15 P.M. The Future of Fiscal Policy
    Moderator: Vítor Gaspar Director, Fiscal Affairs Department, IMF
    Panelists:

    Jason Furman (Professor, Kennedy School of Government, Harvard University)

    Jason Furman is the Aetna Professor of the Practice of Economic Policy jointly at Harvard Kennedy School (HKS) and the Department of Economics at Harvard University. Furman engages in public policy through research, writing and teaching in a wide range of areas including U.S. and international macroeconomics, fiscal policy, labor markets and competition policy. Previously Furman served eight years as a top economic adviser to President Obama, including serving as the 28th Chairman of the Council of Economic Advisers from August 2013 to January 2017, acting as both President Obama’s chief economist and a member of the cabinet. In addition to articles in scholarly journals and periodicals, Furman is a regular contributor to the Wall Street Journal and Project Syndicate and the editor of two books on economic policy. Furman holds a Ph.D. in economics from Harvard University.

    Ilan Goldfajn (President, Inter-American Development Bank)

    He was elected president of the IDB in November 2022, after serving as director of the Western Hemisphere Department at the International Monetary Fund. Previously, he was governor of the Banco Central do Brasil (2016-2019), where he led several modernization reforms, including promoting financial inclusion through Brazil’s fast digital payment system. He has also held several academic positions and high-ranking roles in Brazil’s financial sector.  In 2017, he was elected Central Banker of the Year by The Banker magazine.  Mr. Goldfajn holds a doctorate in economics from MIT, and master’s degree in economics from the Pontificia Universidade and has taught economics at universities in Brazil and the U.S. He is fluent in four languages.

    Mick Keen (Professor, Tokyo University)

    Michael Keen was formerly Deputy Director of the Fiscal Affairs Department at the International Monetary Fund. He is now Ushioda Fellow at the University of Tokyo. Michael was President of the International Institute of Public Finance from 2003 to 2006, awarded the CESifo Musgrave Prize in 2010, and in 2018 received from the National Tax Association of the United States its most prestigious award, the Daniel M. Holland Medal for distinguished lifetime contributions to the study and practice of public finance. His most recent book, Rebellion, Rascals and Revenues (with Joel Slemrod), aims to use history and humor to convey basic tax principles to a wider audience.

    5:15 P.M. Closing remarks
    Vítor Gaspar (Director, Fiscal Affairs Department )
    6:00 P.M. Adjourn

    Conference Organizing Committee: Katherine Baer (Deputy Director, FAD), Mitali Das (Advisor, FAD), and Andrew Okello (Deputy Division Chief, FAD).

    Conference Coordinators: Agnese de Leo (Administrative Coordinator), Harsha Padaruth (Administrative Coordinator), Luciana Marcelino (Administrative Coordinator) Martha Gaytan Frettlohr (Administrative Coordinator), Sahara De la Torre (Administrative Coordinator), and Sheetal Prasad (Senior Administrative Coordinator) – all FAD.

    The conference (which is in-person only) is open to all Fund employees and invited external guests (registration is required of external guests who will all receive a link to the registration form). Please note that the deadline for registration for this conference is October 25th, 2024. Registered external guests will be required to present photo identification on entering the IMF at 1900 Pennsylvania Avenue, N.W., Washington D.C. For questions regarding the conference, please email FAD_60th_anniversary@imf.org

    MIL OSI Economics –

    January 25, 2025
  • MIL-OSI Africa: Africa Investment Forum welcomes Arab Bank for Economic Development in Africa (BADEA) as new partner ahead of the December Market Days in Rabat

    Source: Africa Press Organisation – English (2) – Report:

    WASHINGTON D.C., United States of America, October 30, 2024/APO Group/ —

    The Arab Bank for Economic Development in Africa (BADEA) has joined the Africa Investment Forum (www.AfricaInvestmentForum.com) as a founding partner, marking a new phase in the Forum’s expansion and influence as a catalyst for mega investments into the continent.

    The official announcement came during a breakfast meeting of heads of the Africa Investment Forum Founding Partner institutions, convened by the African Development Bank in Washington, DC on the sidelines of the International Monetary Fund and World Bank’s annual meetings. During the meeting, the partners examined and adopted a new strategic framework to govern the forum. The meeting took place on Friday 25 October.

    In welcoming BADEA as a new partner, African Development Bank President Akinwumi Adesina said: “Since 2018, BADEA has been a steadfast supporter of the Africa Investment Forum, consistently contributing to the growth and success of this platform.”

    The Arab Bank for Economic Development in Africa is a multilateral development financial institution owned by 18 Arab countries. Its operations cover the entire Sub-Saharan African region.

    BADEA group president Dr. Sidi Ould Tah said the main shareholders of his bank had been working on a new mechanism to support investment flows to Africa. The group has sovereign funds under management with assets in the trillions of dollars, of which they had pledged to channel a part for Africa’s infrastructure needs.

    “The role of BADEA is to catalyse resources for Africa. BADEA will work with all the member countries of AIF to make this pledge a reality,” Tah said.                                 

    The addition of BADEA brings the AIF’s founding partners to nine:  the African Development Bank, Afreximbank, Africa Finance Corporation, Africa50, Development Bank of Southern Africa, European Investment Bank, Islamic Development Bank, and Trade and Development Bank.

    Heads and representatives of each of the partners who attended the meeting included included Trade and Development Bank President and CEO Admassu Tadesse, Africa Finance Corporation’s CEO  Samaila Zubairu, Africa50  President Alain Ebobissé, European Investment Bank Vice President Ambroise Fayolle,  Hani Salem Sonbol  Chief Executive Officer of the International Islamic Trade Finance Corporation representing Islamic Development Bank President Dr. Muhammad Sulaiman Al Jasser, and Afreximbank’s Director for Export Development Oluranti Doherty, who represented its president.

    Adesina also commended the founding partners for their energy, drive and momentum which he described as a testament to their confidence in the Forum.

    The AIF’s Market Days events, held annually, have drawn sovereign and non-sovereign investors from around the world, enabling a shift in risk perception and fostering confidence in Africa’s investment landscape.

    The platform has actively supported women-led businesses under its Women as Investment Champions pillar with examples such as Mobihealth International Ltd (Healthcare, Nigeria) which was supported to access grant and loan funding for feasibility studies and pan-African expansion.

    From the African Development Bank, Senior Vice President Marie Laure Akin-Olugbade, several vice presidents and directors and the Senior Director of Syndications, the Africa Investment Forum and Client Solutions, Max Magor Ndiaye, and the Special Representative of President Adesina, Yacine Fall also attended the meeting.

    The 2024 Market Days will take place from 4-6 December 2024 in Rabat, Morocco, under the theme: “Leveraging Innovative Partnerships for Scale.”

    MIL OSI Africa –

    January 25, 2025
  • MIL-OSI: WhiteBIT Surpasses 5 Million Users, Strengthening Its Leadership in Europe’s Crypto Market

    Source: GlobeNewswire (MIL-OSI)

    VILNIUS, Lithuania, Oct. 30, 2024 (GLOBE NEWSWIRE) — As WhiteBIT approaches its 6th anniversary in November, the exchange continues to reinforce its role as a prominent player in Europe’s cryptocurrency sector, driven by a focus on user experience, security, and strategic partnerships. 

    WhiteBIT, one of Europe’s largest centralized crypto exchanges, is proud to announce it has reached a major milestone, exceeding 5 million users. In the past year, WhiteBIT added over 1 million new users, more than doubling its user base since 2022. The platform’s trading volume exceeded $1 trillion across spot and futures markets, and its B2B services now support over 1,000 business clients. This growth reflects the increasing trust in WhiteBIT as a secure platform for digital asset trading among investors. 

    “Our mission from the start has been to make cryptocurrency accessible, secure, and trusted across Europe and beyond. Hitting 5 million users is more than just a number—it’s a validation of our efforts. We keep focusing on continuous innovation and fostering trust in the digital economy,” comments Volodymyr Nosov, CEO of WhiteBIT.

    Growth Fueled by Strategic Partnerships

    Partnerships have been a cornerstone of WhiteBIT’s growth strategy. Collaborations with major football clubs and organizations, such as FC Barcelona, FC Trabzonspor, and the Ukrainian national football team, as well as FACEIT in e-sports have bolstered its brand presence. Moreover, WhiteBIT has established an alliance with Georgia’s Hash Bank.

    For its institutional clients, WhiteBIT has partnered with Fireblocks, a leader in digital asset management, which strengthens its services for businesses looking to expand in the crypto space.

    Expanding Ecosystem and Technological Advancements

    WhiteBIT has also made strategic advancements in blockchain technology, unveiling its rebranded blockchain, Whitechain, which has already processed 50 million transactions and facilitated 25,000 NFTs. Additionally, WhitePool, the exchange’s Bitcoin mining pool, has ranked among the top 15 mining pools worldwide and is now one of the largest mining pool backed by a centralized exchange.

    Global Expansion and Commitment to Security

    WhiteBIT has been rapidly expanding its presence beyond Europe, establishing offices in Australia, Georgia, the UK, and Turkey. With a team of over 1,100 professionals globally, WhiteBIT is steadily growing its international footprint while staying rooted in its Ukrainian origins.

    In its growth, security remains a top priority for WhiteBIT. According to cer.live, the exchange consistently ranks among the top five most secure platforms. Its robust security protocols, including WAF firewalls, strict AML policies, and mandatory KYC procedures, recently earned WhiteBIT the Hacken Security Award 2024 at TOKEN2049 in Singapore.

    WhiteBIT continues to lead in blockchain innovation, fostering technological progress and championing the global cryptocurrency community. As the exchange grows, WhiteBIT empowers users and businesses to embrace digital assets while bridging the gap between traditional finance and the evolving world of cryptocurrency.

    About WhiteBIT

    WhiteBIT, established in 2018, is one of the largest centralized crypto exchanges in Europe. It offers over 600+ trading pairs, 300+ digital assets, and supports 9 national currencies. WhiteBIT is an official partner of the Ukrainian national football team, FC Barcelona, FC Trabzonspor, and FACEIT. The exchange is dedicated to advancing blockchain technology and ensuring compliance with regulatory standards in all jurisdictions where it operates.

    Users can visit:

    Twitter | FaceBook | Instagram | YouTube | LinkedIn | Telegram | Discord | Medium

    Contact

    WhiteBit

    pr@whitebit.com

    The MIL Network –

    January 25, 2025
  • MIL-OSI: ATPC Cyber Forum to Focus on Next Generation Cybersecurity and Artificial Intelligence Issues

    Source: GlobeNewswire (MIL-OSI)

    ATLANTA, Oct. 30, 2024 (GLOBE NEWSWIRE) — White House National Cyber Director, CEOs, Key Financial Services Companies, Congressional and Executive Branch Experts will discuss industry priorities for 2025 and beyond  

    The American Transaction Processors Coalition (ATPC) Cyber Council will convene “The Tie that Binds: A 21st Century Cybersecurity Dialogue,” on October 31, 2024, at the Bank of America Financial Center Tower’s Convention Hall in Atlanta. This event will feature leading cyber experts from the financial services sector, Federal agencies, the White House, and Congress to focus on pressing cybersecurity issues and ways the financial services sector is addressing these issues. It will include discussions on evolving technologies that will influence the path forward, the role of AI, supply chain security needs, and more. 

    “Cybersecurity is the backbone of the payment processing industry,” said H. West Richards, ATPC executive director. “The work of the ATPC Cyber Council is a testament to our commitment to safeguarding our financial ecosystem and fostering a collaborative approach to tackling the cybersecurity challenges of tomorrow.” 

    Key Speakers and Highlights: 

    • The Honorable Harry Coker, Jr., White House National Cyber Director, will deliver the luncheon keynote. 
    • The Honorable Rich McCormick (R-GA-06) will deliver a keynote address. 
    • Moira Bergin, Subcommittee on Cybersecurity Staff Director, House Committee on Homeland Security, will discuss legislative priorities and global cybersecurity risks. 
    • The Honorable Andre Dickens, Mayor of Atlanta, will provide a video address. 
    • Barry McCarthy, CEO of Deluxe and Chair of the ATPC Board of Directors, will also deliver a keynote. 
    • Bridgette Walsh, Executive Director of the Financial Services Sector Coordinating Council, and Josh Magri, Founder & CEO of Cyber Risk Institute, will participate in a fireside discussion on private sector best practices. 
    • A panel on AI in financial services will feature Clarissa Banks (Deluxe), David Excell (Featurespace), David King (Mastercard), and Donna Teevens (ACI Worldwide), moderated by Rick Van Luvender. 
    • A panel on cyber education will include Dr. Tony Coulson (CSUSB), Dr. Albena Asenova-Belal (Gwinnett Technical College), Dr. Humayun Zafar (Kennesaw State University), and Dr. Michael Nowatkowski (Augusta University). 
    • H. West Richards, ATPC Executive Director, will open the event with a welcome address. 
    • Rick Van Luvender, ATPC Cyber Council Chair & SVP, Head of Cybersecurity Client Trust & International Cybersecurity Service at Fiserv, will deliver the opening remarks. 
    • Norma Krayem, ATPC Cyber Council Director & Vice President, Chair of the Cybersecurity, Privacy & Digital Innovation Practice Group at Van Scoyoc Associates, will provide insights on future cybersecurity trends.

    The forum will conclude with a fireside chat focused on “A Look to the Future: 2025: Top Cybersecurity and Critical Technology Priorities for the ATPC Cyber Council,” featuring Rick Van Luvender from Fiserv and Norma Krayem, the ATPC Cyber Council director, focusing on future cybersecurity and critical technology priorities. 

    Conference details are available at https://atpcoalition.com/atpc-cyber-forum/.  

    ATPC is a leading voice for America’s payments processors, consisting of the world’s largest, global payment processors, banks, credit card companies and financial services companies. ATPC member companies are uniquely positioned to ensure global payments move seamlessly across the world, while empowering broader and more diverse participation within the financial services system. In the race for a better tomorrow, technology solutions can advance faster than companies can keep up with cybersecurity risks. As a result, the ATPC is one of the few coalitions that created a standalone Cybersecurity Council to prioritize these key cybersecurity issues across its member companies. The ATPC Cyber Council is a unique group made up of only CISOs, CSOs, CIOs and CTOs who are on the front lines every day dealing with the operational impacts of cybersecurity. These U.S. based companies serve hundreds of millions of customer businesses across the globe daily and process hundreds of billions of transactions per year.  

    About the ATPC 

    The ATPC is a leading voice for America’s payments processors, driving awareness of the industry and its value to consumers, businesses, and the economy with legislators and regulators at federal, state, and international levels. The ATPC is rooted in Georgia’s Transaction Alley where electronic payments and the fintech industry began. Yet, our members enable payments in states across the nation and in every corner of the globe. The ATPC has a rich history of economic development, thought leadership, and engagement on legislative and regulatory topics like cybersecurity, privacy, financial inclusion, fraud, as well as emerging themes like open banking, AI, and stable coins. 

    About the ATPC Cyber Council 

    The American Transaction Processors Coalition (ATPC) established a dedicated Cyber Council to galvanize the efforts of the ATPC member companies in addressing cybersecurity risks. The Cyber Council’s mission is to identify best practices and areas of shared risk to help ATPC members address the evolving cyber threat across America’s payments processing system to strengthen industry’s ability to identify, protect, detect, respond to and recover from cyberattacks. 

    Contact

    Alison Watson

    Golin

    awatson@golin.com

    The MIL Network –

    January 25, 2025
  • MIL-OSI USA: New Affordable Homes in Sunset Park

    Source: US State of New York

    Governor Kathy Hochul today celebrated the completion of Sunset Ridge, an 84-unit, affordable housing development for seniors and older adults in Sunset Park, Brooklyn. The energy-efficient development, which also houses a new education space, will preserve historic decorative elements from a church that used to be on the site and is the first affordable older adult housing built in Sunset Park in over 15 years.

    “Sunset Ridge is the embodiment of a multi-generational and community-centered development — one that incorporates the neighborhood’s history with the need for growth and sustainability,” Governor Hochul said. “By investing in new mixed-use projects, we are unlocking a future that is more affordable and more livable, opening up new opportunities for communities to thrive.”

    The entire $65 million development is reserved for persons aged 62 and older earning up to 50 percent of the Area Median Income. All units are supported by project-based vouchers, ensuring tenants pay no more than 30 percent of their income on rent. Reflecting a strong commitment to address housing insecurity among the city’s most vulnerable, 26 apartments are set aside for formerly homeless seniors who will receive social services including emergency assistance, recreational activities, case management, wellness support and benefits assistance.

    The ground floor and first floor of the new building includes a community facility space for five pre-kindergarten classrooms that will be constructed by the New York City Schools Construction Authority starting in 2025, enhancing access to early childhood education for local families.

    New York State Homes and Community Renewal Commissioner RuthAnne Visnauskas said, “Sunset Ridge is giving 84 senior households affordable and modern homes where they can age in place, while also prioritizing the needs of families with a new education space. This $65 million investment will help residents decrease their carbon footprint and provide support for tenants who need it most. We are grateful to Governor Hochul for her vision, as well as to Commissioner Carrion and all our partners for bringing this project to fruition.”

    The project included the demolition of the Zion Lutheran Church and the construction of a new nine-story building, as well as the complete rehabilitation of two pre-existing townhouses which were combined into one building. Decorative elements of the original church were preserved and reused within the new building.

    Both buildings feature energy-efficiency measures including all-electric heating and cooking. Additionally, a 19.8kW solar array was installed on the roof, underscoring the project’s commitment to sustainability.

    In the past five years, New York State Homes and Community Renewal has created or preserved nearly 7,700 affordable homes in Brooklyn. Sunset Ridge continues this effort and complements Governor Hochul’s $25 billion five-year Housing Plan which is on track to create or preserve 100,000 affordable homes statewide.

    Fifth Avenue Committee, a nonprofit comprehensive community development corporation, is the project sponsor, developer and manager. Bay Ridge Center provides on-site social services to the formerly homeless tenants. Metropolitan New York Synod is the owner of the Community Facility on the ground floor and first floor.

    Sunset Ridge is supported by HCR’s Federal Low-Income Housing Tax Credit program that generated approximately $18.3 million in equity and its State Low-Income Housing Tax Credit program that generated approximately $3.4 million in equity. All of the units benefit from a project-based Section 8 rental assistance vouchers. The New York State Energy Research and Development Authority provided more than $100,000 in funding with $31,700 in tax incentives through NY-Sun, along with $73,600 in combined incentives through the Low-Rise New Construction and the Multifamily New Construction programs. The New York City Department of Housing Preservation and Development provided $11.7 million through its Senior Affordable Rental Apartments program and $1.3 million in accrued interest. The project also received a $6 million discretionary capital grant from the Brooklyn Borough President in Fiscal Year 2017 and Fiscal Year 2020 administered by HPD.

    The project was guaranteed by Fifth Avenue Committee and Moodna Creek, LLC. Chase Community Development Banking provided a $28 million construction loan. Tax credit syndicator Hudson Housing Capital and the Tax Oriented Investments unit of J.P. Morgan invested $23 million in tax credit equity to support the development. Freddie Mac through Greystone provided $15 million in permanent loan financing.

    NYSERDA President and CEO Doreen M. Harris said, “Sunset Ridge shows how sustainable new construction practices and retrofitting existing structures can uplift historically underserved communities by providing affordable, healthy and comfortable housing and community spaces. This all-electric, multi-use development powered by rooftop solar will ensure New Yorkers living in Sunset Park benefit from clean energy while advancing Governor Hochul’s commitment to tackling the housing shortage.

    Senate Majority Leader Charles Schumer said, “Everyone deserves a safe and affordable place to call home. I’m proud that the federal Low-Income Housing Tax Credit and project-based Section 8 rental assistance vouchers that I worked hard to protect and expand has delivered millions to help build senior housing in Sunset Park, which will provide more seniors with an affordable, supportive and energy-efficient place to live. I applaud Governor Hochul’s efforts to create and preserve affordable homes across the state, and I will continue working to deliver the federal resources needed for more affordable homes in Brooklyn.”

    New York City Schools Construction Authority President and CEO Nina Kubota said, “The SCA is excited to partner with the Fifth Avenue Committee, HCR, HPD, and Metropolitan New York Synod to leverage this high-quality opportunity to provide access to early childhood education for Sunset Park and Bay Ridge parents. We will begin work on this 13,314 square foot pre-kindergarten facility in early 2025 that will bring 90 new seats and an exterior play yard to this community. Thinking outside of the box by maximizing space in multi-use sites is part of the strategy we have been deploying to expand early childhood education throughout the City. Access to pre-k improves cognitive and social development, reduces achievement gaps, and supports working parents, providing them with affordable, reliable childcare. Today is a day to celebrate this truly unique partnership.”

    Representative Dan Goldman said, “As housing costs in New York City rise to unprecedented levels, our seniors have been left behind. The Fifth Avenue Committee’s new affordable housing complex in Sunset Park is a crucial step toward providing our older New Yorkers with the homes they deserve, and I applaud the city, state, and Fifth Avenue Committee for ensuring that this vital project is completed. I look forward to continuing to work alongside FAC to ensure every New Yorker can access high-quality, stable, and affordable housing.”

    State Senator Andrew Gounardes said, “If we want Brooklyn to be a place where everyone can succeed, we need to create resources for everyone from young children to seniors. The Sunset Ridge development is exactly the kind of resource our communities need: affordable housing for seniors along with universal pre-k classrooms so families can more easily access childcare and education. Thank you to Fifth Avenue Committee for taking the opportunity to support working families and a thriving future for all Brooklynites.”

    Assemblymember Marcela Mitaynes said, “Fifth Avenue Committee and its partners have brought much-needed affordable senior housing to Sunset Park. Sunset Ridge is an example of how the intentional construction of housing can address the gaps that exist in New York State communities. AD51 needs more affordable units in environmentally friendly and community-oriented buildings under strong tenant protections.”

    Brooklyn Borough President Antonio Reynoso said, “As we work to address housing insecurity in Brooklyn, it is critical that we consider the particular vulnerabilities faced by older adults in our community. Sunset Ridge confronts this disparity directly, and by combining affordable senior housing with universal pre-k, the project creates an intergenerational community resource and gathering place. I applaud NYS Homes and Community Renewal and NYC Department of Housing Preservation and Development as well as the Fifth Avenue Committee for investing in the well-being of both the oldest and youngest members of the Sunset Park community, and I look forward to seeing residents and students thrive in their new space.”

    New York City Councilmember Alexa Aviles said, “I applaud the Fifth Avenue Committee for bringing to fruition Sunset Ridge Apartments, a development that will deliver truly affordable housing for our older adults. Housing insecurity is the number one issue in my office with frequent visits from so many older adults who are facing displacement as a result of gentrification and unscrupulous landlords. Today however, we celebrate a move towards solutions, and am proud to have played a role in bringing this much needed housing to our community. I thank Fifth Avenue Committee under the leadership of Michelle de la Uz for their work in providing affordable housing to our district seniors.”

    Fifth Avenue Committee Executive Director Michelle de la Uz said, “FAC is thrilled to be cutting the ribbon at Sunset Ridge, the first new affordable housing for seniors in the community in over 15 years and FAC’s 2nd new affordable housing project in Sunset Park to be completed in 2 years. Access to quality, affordable housing is crucial to our health and well-being, especially as we age. The project is especially gratifying because it will also have 90-Universal Pre-K seats in the future, representing an important intergenerational resource for the local community. We broke ground on the project just before the pandemic hit, so we never celebrated its start, making today’s ribbon cutting with our project partners and tenants all the more meaningful. On behalf of our tenants and the local community, thank you to the Metropolitan New York Synod, NYS HCR and NYC HPD and everyone who helped make this critical project possible.”

    Bay Ridge Center Executive Director Todd Fliedner said, “At Bay Ridge Center, we are dedicated to enhancing the lives of adults 60 and older in our vibrant community, through a variety of enriching programs and essential services, we strive to support our members in living active fulfilling lives.”

    Chase Community Development Banking Head of East Region Dave Walsh said, “We are proud to support the redevelopment of Sunset Ridge, a project delivering essential affordable senior housing in Brooklyn. Providing housing with essential services not only fosters a sense of belonging but is vital to ensure our most vulnerable senior residents have the resources they need to flourish.”

    Hudson Housing Capital Managing Director Sam Ganeshan said, “Hudson Housing Capital is proud to partner with Fifth Avenue Committee to finance high-quality, affordable housing for seniors at Sunset Ridge. This property will provide some of the City’s most vulnerable residents with a safe place to live independently and age in-place. We thank and commend all those involved in making this day possible, including our investor J.P. Morgan, and look forward to seeing this impactful housing development thrive for many years to come.”

    Governor Hochul’s Housing Agenda

    Governor Hochul is committed to addressing New York’s housing crisis and making the State more affordable and more livable for all New Yorkers. As part of the FY25 Enacted Budget, the Governor secured a landmark agreement to increase New York’s housing supply through new tax incentives for Upstate communities, new incentives and relief from certain state-imposed restrictions to create more housing in New York City, a $500 million capital fund to build up to 15,000 new homes on state-owned property, an additional $600 million in funding to support a variety of housing developments statewide and new protections for renters and homeowners. In addition, as part of the FY23 Enacted Budget, the Governor announced a five-year, $25 billion Housing Plan to create or preserve 100,000 affordable homes statewide, including 10,000 with support services for vulnerable populations, plus the electrification of an additional 50,000 homes. More than 45,000 homes have been created or preserved to date.

    The FY25 Enacted Budget also strengthened the Pro-Housing Community Program which the Governor launched in 2023. Pro Housing Certification is now a requirement for localities to access up to $650 million in discretionary funding. To date, more than 160 communities have been certified, including the City of New York.

    MIL OSI USA News –

    January 25, 2025
  • MIL-OSI: Security Federal Corporation Announces Third Quarter Income

    Source: GlobeNewswire (MIL-OSI)

    AIKEN, S.C., Oct. 30, 2024 (GLOBE NEWSWIRE) — Security Federal Corporation (the “Company”) (OTCBB: SFDL), the holding company for Security Federal Bank (the “Bank”), today announced earnings and financial results for the three and nine months ended September 30, 2024.

    The Company reported net income available to common shareholders of $2.0 million, or $0.62 per share, for the quarter ended September 30, 2024, compared to $2.1 million, or $0.65 per share, for the third quarter of 2023. Year-to-date net income available to common shareholders was $5.9 million, or $1.83 per common share, for the nine months ended September 30, 2024, compared to $6.6 million, or $2.02 per common share, during the nine months ended September 30, 2023. Both the quarterly and year-to-date decreases in net income available to common shareholders were primarily due to increases in the provision for credit losses and non-interest expense, as well as the payment of preferred stock dividends during 2024, which were partially offset by increases in net interest income and non-interest income.

    Third Quarter Comparative Financial Highlights

    • Net interest income increased $964,000, or 10.2%, to $10.4 million during the quarter ended September 30, 2024, compared to $9.4 million during the third quarter of 2023.
    • Total interest income increased $2.7 million, or 16.1%, to $19.5 million while total interest expense increased $1.7 million, or 23.7%, to $9.1 million during the quarter ended September 30, 2024 compared to the same quarter the prior year. The increase in interest income and interest expense was the result of higher market interest rates and increased average interest-earning assets and interest-bearing liabilities.
    • Non-interest income increased $457,000, or 21.1%, to $2.6 million during the quarter ended September 30, 2024 compared to the same quarter in the prior year primarily due to $263,000 and $74,000 increases in trust income and gain on sale of loans, respectively.
    • Non-interest expense increased $389,000, or 4.4%, to $9.3 million during the quarter ended September 30, 2024 compared to the same quarter in the prior year primarily due to an increase in salaries and employee benefits expense.
         
        Quarter Ended
    (Dollars in Thousands, except for Earnings per Share)   9/30/2024   9/30/2023
    Total interest income   $ 19,531   $ 16,822
    Total interest expense     9,121     7,376
    Net interest income     10,410     9,446
    Provision for credit losses     580     –
    Net interest income after provision for credit losses     9,830     9,446
    Non-interest income     2,625     2,168
    Non-interest expense     9,313     8,924
    Income before income taxes     3,142     2,690
    Provision for income taxes     732     568
    Net income     2,410     2,122
    Preferred stock dividends     415     –
    Net income available to common shareholders   $ 1,995   $ 2,122
    Earnings per common share (basic)   $ 0.62   $ 0.65
                 
                 

    Year to Date (Nine Months) Comparative Financial Highlights

    • Net interest income increased $1.8 million, or 6.1%, to $30.6 million during the nine months ended September 30, 2024 compared to the same period in the prior year.
    • Total interest income increased $10.5 million, or 22.5%, to $57.1 million while total interest expense increased $8.7 million, or 49.0%, to $26.5 million during the nine months ended September 30, 2024 compared to the same period in the prior year.
    • Non-interest income increased $780,000, or 11.8%, to $7.4 million during the nine months ended September 30, 2024 compared to the same period in the prior year primarily due to a $480,000 increase in trust income.
    • Non-interest expense increased $1.8 million, or 6.5%, to $28.6 million for the nine months ended September 30, 2024 compared to the same period in 2023.
         
        Nine Months Ended
    (Dollars in Thousands, except for Earnings per Share)   9/30/2024   9/30/2023
    Total interest income   $ 57,071   $ 46,593
    Total interest expense     26,497     17,780
    Net interest income     30,574     28,813
    Provision for credit losses     1,090     221
    Net interest income after provision for credit losses     29,484     28,592
    Non-interest income     7,400     6,620
    Non-interest expense     28,617     26,863
    Income before income taxes     8,267     8,349
    Provision for income taxes     1,878     1,775
    Net income     6,389     6,574
    Preferred stock dividends     512     –
    Net income available to common shareholders   $ 5,877   $ 6,574
    Earnings per common share (basic)   $ 1.83   $ 2.02
                 
                 

    Credit Quality

    • The Bank recorded a $1.2 million provision for credit losses on loans and a $110,000 reversal of provision for credit losses on unfunded commitments, resulting in a total provision for credit losses of $1.1 million for the first nine months of 2024, compared to $376,000 in provision for credit losses on loans and a $155,000 reversal of provision for credit losses on unfunded commitments, resulting in a total provision for credit losses of $221,000 for the first nine months of 2023.
    • Non-performing assets were $6.8 million at both September 30, 2024 and December 31, 2023, compared to $6.3 million at September 30, 2023.
    • The allowance for credit losses to gross loans was 1.95%, 1.98% and 2.03% at September 30, 2024, December 31, 2023, and September 30, 2023, respectively.
           
    At Period End (dollars in thousands): 9/30/2024 12/31/2023 9/30/2023
    Non-performing assets $ 6,770   $ 6,825   $ 6,339  
    Non-performing assets to total assets   0.43 %   0.44 %   0.43 %
    Allowance for credit losses $ 13,604   $ 12,569   $ 12,348  
    Allowance for credit losses to gross loans   1.95 %   1.98 %   2.03 %
                       
                       

    Balance Sheet Highlights and Capital Management

    • Total assets were $1.6 billion at September 30, 2024, a year-over-year increase of $99.0 million, or 6.7%.
    • Total loans receivable, net were $686.7 million at September 30, 2024, an increase of $64.2 million during the first nine months of 2024 and a year-over-year increase of $88.7 million.
    • Investment securities decreased $28.7 million during the first nine months of 2024 to $672.1 million at September 30, 2024, as maturities and principal paydowns of investment securities exceeded purchases during the nine-month period.
    • Deposits were $1.3 billion at September 30, 2024, an increase of $62.3 million, or 5.2% during the nine months ended September 30, 2024, and a year-over-year increase of $71.3 million, or 6.0%.
    • Borrowings decreased $49.1 million, or 28.9%, during the nine months ended September 30, 2024 to $121.0 million due to the repayment of borrowings with the Federal Reserve Bank Term Funding Program.
           
    Dollars in thousands (except per share amounts) 9/30/2024 12/31/2023 9/30/2023
    Total assets $ 1,576,326   $ 1,549,671   $ 1,477,330  
    Cash and cash equivalents   132,376     128,284     84,224  
    Total loans receivable, net   686,708     622,529     598,029  
    Investment securities   672,054     700,712     705,558  
    Deposits   1,257,313     1,194,997     1,186,053  
    Borrowings   120,978     170,035     119,898  
    Total shareholders’ equity   185,081     172,362     158,996  
    Common shareholders’ equity   102,132     89,413     76,047  
    Common equity book value per share $ 31.97   $ 27.69   $ 23.46  
    Total risk-based capital to risk weighted assets (1)   19.21 %   19.49 %   19.33 %
    CET1 capital to risk weighted assets (1)   17.96 %   18.24 %   18.08 %
    Tier 1 leverage capital ratio (1)   10.27 %   9.83 %   10.11 %
    (1) – Ratio is calculated using Bank only information and not consolidated information      
           
           

    Security Federal Bank has 19 full-service branches located in Aiken, Ballentine, Clearwater, Columbia, Graniteville, Langley, Lexington, North Augusta, Ridge Spring, Wagener and West Columbia, South Carolina and Augusta and Evans, Georgia. A full range of financial services, including trust and investments, are provided by the Bank and insurance services are provided by the Bank’s wholly owned subsidiary, Security Federal Insurance, Inc.

    Forward-looking statements:

    Certain matters discussed in this press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements relate to, among other things, expectations of the business environment in which the Company operates, projections of future performance, perceived opportunities in the market, potential future credit experience, and statements regarding the Company’s mission and vision. These forward-looking statements are based upon current management expectations and may, therefore, involve risks and uncertainties. The Company’s actual results, performance, or achievements may differ materially from those suggested, expressed, or implied by forward-looking statements as a result of a wide variety or range of factors including, but not limited to: potential adverse impacts to economic conditions in our local market area or other aspects of the Company’s business, operations or financial markets, including, without limitation, as a result of employment levels, labor shortages and the effects of inflation, a potential recession or slowed economic growth; economic conditions in the Company’s primary market area; demand for residential, commercial business and commercial real estate, consumer, and other types of loans; success of new products; competitive conditions between banks and non-bank financial service providers; changes in management’s business strategies, including expectations regarding key growth initiatives and strategic priorities; legislative or regulatory changes that adversely affect the Company’s business, including the interpretation of regulatory capital or other rules; the ability to attract and retain deposits; the availability of resources to address changes in laws, rules, or regulations or to respond to regulatory actions; adverse changes in the securities markets; changes in accounting policies and practices, as may be adopted by the financial institution regulatory agencies or the Financial Accounting Standards Board, including additional guidance and interpretation on accounting issues and details of the implementation of new accounting methods; technology factors affecting operations, including disruptions, security breaches, or other adverse events, failures or interruptions in, or attacks on, our information technology systems or on the third-party vendors who perform critical processing functions for us; pricing of products and services; environmental, social and governance goals and targets; the effects of climate change, severe weather events, natural disasters, pandemics, epidemics and other public health crises, acts of war or terrorism, and other external events on our business; and other risks detailed in the Company’s reports filed with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the fiscal year ended December 31, 2023. These factors should be considered in evaluating forward-looking statements, and undue reliance should not be placed on such statements. The Company does not undertake any responsibility to update or revise any forward-looking statement.

    The MIL Network –

    January 25, 2025
  • MIL-OSI NGOs: Israel’s decision to ban UNRWA will significantly worsen humanitarian catastrophe News Oct 30, 2024

    Source: Doctors Without Borders –

    NEW YORK/JERUSALEM, October 30, 2024 — The Israeli Knesset’s ban on UNRWA operations represents a devastating blow to Palestinians, further jeopardizing their survival in Gaza and greatly impacting communities in the West Bank, said Doctors Without Borders/Médecins Sans Frontières. 

    UNRWA is the largest health provider in Gaza, with over half of Gazans relying on it for essential health care services, including for the treatment of chronic diseases, displacement-related conditions, maternal and child heath, and vaccinations. Each day, UNRWA’s health teams provide over 15,000 consultations in the Gaza Strip. The ban of its activities threatens to create a vast gap in services within an already largely destroyed health system in Gaza—directly and indirectly endangering the lives of Palestinians.

    “UNRWA is a lifeline for Palestinians,” said Christopher Lockyear, MSF’s secretary general. “If implemented, the ban on UNRWA’s activities would have catastrophic implications on the dire humanitarian situation of Palestinians living in Gaza, as well as in the West Bank—now and for generations to come. We strongly condemn this decision, which is the culmination of a long-running campaign against the organization.”

    If implemented, the ban on UNRWA’s activities would have catastrophic implications on the dire humanitarian situation of Palestinians living in Gaza, as well as in the West Bank—now and for generations to come.

    Christopher Lockyear, MSF secretary general

    The newly voted legislation will make it almost impossible for UNRWA to work in Gaza or the West Bank. Coordination with Israeli authorities will be impeded and entrance permits to either of the occupied territories will be denied, essentially blocking delivery of UNRWA aid into and within Gaza. UNRWA handles almost all the distribution of UN aid coming into the Strip. This vote adds to the endless physical and bureaucratic impediments imposed by Israel to limit the amount of aid reaching Gaza, and contradicts Israel’s claims that it is facilitating humanitarian assistance into the Strip.

    More than 90 percent of the population of Gaza has been displaced by the war, and many are living in makeshift camps in extremely poor conditions.
    Palestine 2024 © Nour Daher

    Earlier this month, the US sent a letter to Israel demanding they take steps to improve the humanitarian situation within 30 days, and not adopt this legislation. As the leading provider of military and financial support to Israel, the US has an obligation to assess if the conduct of the war is consistent with international and US laws designed to protect civilians and to apply the appropriate legal procedures.

    The Israeli parliament’s passage of legislation banning UNRWA is shocking in its cruelty … In the face of this blatant criminalization of humanitarian aid, the US government yet again offers only weak warnings while maintaining its support for a war without rules.

    Avril Benoît, chief executive officer of MSF USA

    “After a full year of death, destruction, and deprivation in Gaza, Israel is moving to make it impossible for the largest humanitarian actor to deliver assistance and services amid the most severe humanitarian crisis Palestinians have ever endured,” said Avril Benoît, chief executive officer of MSF USA. “The Israeli parliament’s passage of legislation banning UNRWA is shocking in its cruelty. This ban would suffocate the humanitarian response in Gaza and cut off people’s access to basic services in the West Bank. In the face of this blatant criminalization of humanitarian aid, the US government yet again offers only weak warnings while maintaining its support for a war without rules and for the continued collective punishment of civilians.”

    The impact of UNRWA’s ban will extend beyond Gaza. Critical services, including refugee camp management, health services, education, and social programs across the West Bank are also at risk of destabilization under this legislation. These bills set a grave precedent for other conflict situations where governments may wish to eliminate an inconvenient United Nations presence. 

    Israeli bill to designate UNRWA a terrorist organization is an attack on humanitarian aid

    Read more

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    MIL OSI NGO –

    January 25, 2025
  • MIL-OSI: Alpine Banks of Colorado announces financial results for third quarter 2024

    Source: GlobeNewswire (MIL-OSI)

    GLENWOOD SPRINGS, Colo., Oct. 30, 2024 (GLOBE NEWSWIRE) — Alpine Banks of Colorado (OTCQX: ALPIB) (“Alpine” or the “Company”), the holding company for Alpine Bank (the “Bank”), today announced results (unaudited) for the quarter ended September 30, 2024. The Company reported net income of $13.6 million, or $127.16 per basic Class A common share and $0.85 per basic Class B common share, for third quarter 2024.

    Highlights in third quarter 2024 include:

    • Basic earnings per Class A common share increased 16.8%, or $18.28, during third quarter 2024.
    • Basic earnings per Class A common share decreased 16.8%, or $18.30, compared to third quarter 2023.
    • Basic earnings per Class B common share increased 16.8%, or $0.12, during third quarter 2024.
    • Basic earnings per Class B common share decreased 16.8%, or $0.12, compared to third quarter 2023.
    • Net interest margin for third quarter 2024 was 2.98%, compared to 2.87% in second quarter 2024, and 2.87% in third quarter 2023.

    “Third quarter 2024 results show a continuation of our improving financial performance,” said Glen Jammaron, Alpine Banks of Colorado President and Vice Chairman. “Alpine successfully grew customer deposit balances, paid down brokered CDs and decreased the cost of our funding during the third quarter. Both our net interest margin and return on assets saw improvements over the first and second quarters of 2024.”

    Net Income
    Net income for third quarter 2024 and second quarter 2024 was $13.6 million and $11.7 million, respectively. Interest income increased $1.9 million in third quarter 2024 compared to second quarter 2024, primarily due to increases in yields on the loan portfolio and increased balances in due from banks. These increases were slightly offset by decreased yields and volumes in the securities portfolio and decreased rates on due from banks, along with decreased volume in the loan portfolio. Interest expense increased $0.3 million in third quarter 2024 compared to second quarter 2024, primarily due to increased balances in deposit accounts. This increase was partially offset by decreases in costs on, and volume of, the Company’s trust preferred securities. Noninterest income increased $1.3 million in third quarter 2024 compared to second quarter 2024, primarily due to increases in service charges on deposit accounts, and other income. Noninterest expense decreased $0.8 million in third quarter 2024 compared to second quarter 2024, due to decreases in other expenses and salary and employee benefit expenses slightly offset by increases in occupancy expenses and furniture and fixture expenses. A provision for loan losses of $1.2 million was recorded in third quarter 2024 compared to a $0.2 million provision recorded in second quarter 2024.

    Net income for the nine months ended September 30, 2024, and September 30, 2023, was $35.9 million and $46.0 million, respectively. Interest income increased $18.5 million in the first nine months of 2024 compared to the first nine months of 2023, primarily due to increases in volume in the loan portfolio and balances due from banks, along with increases in yields on the loan portfolio, the securities portfolio, and balances due from banks. These increases were slightly offset by a decrease in volume in the securities portfolio. Interest expense increased $31.8 million in the first nine months of 2024 compared to the first nine months of 2023, primarily due to increases in costs on the Company’s trust preferred securities, other borrowings, and cost of deposits, along with increases in volume in deposit balances. These increases were partially offset by a decrease in the volume of other borrowings. Noninterest income increased $3.3 million in the first nine months of 2024 compared to the first nine months of 2023, primarily due to increases in earnings on bank-owned life insurance, service charges on deposit accounts and other income. Noninterest expense increased $3.0 million in the first nine months of 2024 compared to the first nine months of 2023, due to increases in salary and employee benefit expenses and occupancy expenses. These increases were partially offset by decreases in furniture and fixture expenses and other expenses. Provision for loan losses decreased $0.3 million in the first nine months of 2024 due to loan portfolio declines and a small volume of loan charge-offs, compared to the nine months ended September 30, 2023.

    Net interest margin increased from 2.87% in second quarter 2024 to 2.98% in third quarter 2024. Net interest margin for the nine months ended September 30, 2024, and September 30, 2023, was 2.89% and 3.17%, respectively.

    Assets
    Total assets increased $107.0 million, or 1.7%, to $6.58 billion as of September 30, 2024, compared to June 30, 2024, primarily due to increased cash and due from banks and investment securities balances, partially offset by decreased loans receivable. Total assets increased $110.6 million, or 1.7%, from September 30, 2023, to September 30, 2024. The Alpine Bank Wealth Management* division had assets under management of $1.34 billion on September 30, 2024, compared to $1.09 billion on September 30, 2023, an increase of 23.3%.

    Loans
    Loans outstanding as of September 30, 2024, totaled $4.0 billion. The loan portfolio decreased $36.3 million, or 0.9%, during third quarter 2024 compared to June 30, 2024. This decrease was driven by a $22.9 million decrease in real estate construction loans and a $33.7 million decrease in residential real estate loans, partially offset by a $13.7 million increase in commercial and industrial loans, a $5.0 million increase in commercial real estate loans, a $1.6 million increase in consumer loans, and a $0.1 million increase in other loans.

    Loans outstanding as of September 30, 2024, reflected a decrease of $5.0 million, or 0.1%, compared to loans outstanding of $4.0 billion on September 30, 2023. This decrease was driven by a $102.8 million decrease in real estate construction loans, partially offset by a $54.9 million increase in commercial real estate loans, a $20.8 million increase in residential real estate loans, a $20.0 million increase in commercial and industrial loans, a $1.8 million increase in consumer loans and a $0.3 million increase in other loans.

    Deposits
    Total deposits increased $74.1 million, or 1.3%, to $5.9 billion during third quarter 2024 compared to June 30, 2024, primarily due to a $110.1 million increase in demand deposits and a $49.5 million increase in money market accounts. This increase was partially offset by a $36.4 million decrease in certificate of deposit accounts, a $3.8 million decrease in savings accounts, and a $45.4 million decrease in interest-bearing checking accounts. Brokered certificates of deposit totaled $330.7 million on September 30, 2024, compared to $390.5 million on June 30, 2024. Noninterest-bearing demand accounts comprised 30.7% of all deposits on September 30, 2024, compared to 29.3% on June 30, 2024.

    Total deposits of $5.9 billion on September 30, 2024, reflected an increase of $38.5 million, or 0.7%, compared to total deposits of $5.8 billion on September 30, 2023. This increase was due to a $248.2 million increase in money market accounts, partially offset by a $41.6 million decrease in certificate of deposit accounts, a $111.6 million decrease in interest-bearing checking accounts, a $27.0 million decrease in demand deposits and a $29.5 million decrease in savings accounts. Brokered certificates of deposit totaled $330.7 million on September 30, 2024, compared to $563.7 million on September 30, 2023. Noninterest-bearing demand accounts comprised 30.7% of all deposits on September 30, 2024, compared to 31.4% on September 30, 2023.

    Capital
    The Bank continues to be designated as a “well capitalized” institution as its capital ratios exceed the minimum requirements for this designation. As of September 30, 2024, the Bank’s Tier 1 Leverage Ratio was 9.62%, Tier 1 Risk-Based Capital Ratio was 14.15%, and Total Risk-Based Capital Ratio was 15.30%. On a consolidated basis, the Company’s Tier 1 Leverage Ratio was 9.23%, Tier 1 Risk-Based Capital Ratio was 13.59%, and Total Risk-Based Capital Ratio was 15.85% as of September 30, 2024.

    Book value per share on September 30, 2024, was $4,787.58 per Class A common share and $31.92 per Class B common share, an increase of $294.62 per Class A common share and $1.96 per Class B common share from June 30, 2024.

    Each Class A common share is entitled to one vote per share. Except as otherwise provided by the Colorado Business Corporation Act, each Class B common share has no voting rights.

    Dividends
    Each Class B common share has dividend and distribution rights equal to one-one hundred and fiftieth (1/150th) of such rights of one Class A common share. Therefore, each one Class A common share is equivalent to 150 Class B common shares for purposes of the payment of dividends.

    During third quarter 2024, the Company paid cash dividends of $30.00 per Class A common share and $0.20 per Class B common share. On October 10, 2024, the Company declared cash dividends of $30.00 per Class A common share and $0.20 per Class B common share payable on October 28, 2024, to shareholders of record on October 21, 2024.

    About Alpine Banks of Colorado
    Alpine Banks of Colorado, through its wholly owned subsidiary Alpine Bank, is a $6.6 billion, independent, employee-owned organization founded in 1973 with headquarters in Glenwood Springs, Colorado. Alpine Bank employs 890 people and serves 170,000 customers with personal, business, wealth management*, mortgage, and electronic banking services across Colorado’s Western Slope, mountains and Front Range. Alpine Bank has a five-star rating – meaning it has earned a superior performance classification – from BauerFinancial, an independent organization that analyzes and rates the performance of financial institutions in the United States. Shares of the Class B non-voting common stock of Alpine Banks of Colorado trade under the symbol “ALPIB” on the OTCQX® Best Market. Learn more at www.alpinebank.com.

    *Alpine Bank Wealth Management services are not FDIC insured, may lose value, and are not guaranteed by the Bank.                                                   

    Contacts: Glen Jammaron Eric A. Gardey
      President and Vice Chairman Chief Financial Officer
      Alpine Banks of Colorado Alpine Banks of Colorado
      2200 Grand Avenue 2200 Grand Avenue
      Glenwood Springs, CO 81601 Glenwood Springs, CO 81601
      (970) 384-3266 (970) 384-3257


    A note about forward-looking statements
    This press release contains “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as “anticipates,” “intends,” “plans,” “seeks,” “reflects,” “believes,” “can,” “would,” “should,” “will,” “estimates,” “continues,” “expects” and similar references to future periods. Examples of forward-looking statements include, but are not limited to, statements we make regarding our evaluation of macro-environment risks, Federal Reserve rate management, and trends reflecting things such as regulatory capital standards and adequacy. Forward-looking statements are based on our current expectations and assumptions regarding our business, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Our actual results may differ materially from those contemplated by the forward-looking statements. We caution you therefore against relying on any of these forward- looking statements. They are neither statements of historical fact nor guarantees or assurances of future performance. Important factors that could cause actual results to differ materially from those in the forward-looking statement include, but are not limited to:

    • The ability to attract new deposits and loans;
    • Demand for financial services in our market areas;
    • Competitive market-pricing factors;
    • Changes in assumptions underlying the establishment of allowances for loan losses and other estimates;
    • Effects of future economic, business and market conditions, including higher inflation;
    • Adverse effects of public health events, such as the COVID-19 pandemic, including governmental and societal responses;
    • Deterioration in economic conditions that could result in increased loan losses;
    • Actions by competitors and other market participants that could have an adverse impact on expected performance;
    • Risks associated with concentrations in real estate-related loans;
    • Risks inherent in making loans, such as repayment risks and fluctuating collateral values;
    • Market interest rate volatility, including changes to the federal funds rate;
    • Stability of funding sources and continued availability of borrowings;
    • Geopolitical events, including acts of war, international hostilities and terrorist activities;
    • Assumptions and estimates used in applying critical accounting policies and modeling, including under the CECL model, which may prove unreliable, inaccurate, or not predictive of actual results;
    • Actions of government regulators, including potential future changes in the target range for the federal funds rate by the Board of Governors of the Federal Reserve;
    • Sale of investment securities in a loss position before their value recovers, including as a result of asset liability management strategies or in response to liquidity needs;
    • Any increases in FDIC assessments;
    • Risks associated with potential cybersecurity incidents, data breaches or failures of key information technology systems;
    • The ability to maintain adequate liquidity and regulatory capital, and comply with evolving federal and state banking regulations;
    • Changes in legal or regulatory requirements or the results of regulatory examinations that could restrict growth;
    • The ability to recruit and retain key management and staff;
    • The ability to raise capital or incur debt on reasonable terms; and
    • Effectiveness of legislation and regulatory efforts to help the U.S. and global financial markets.

    There are many factors that could cause actual results to differ materially from those contemplated by forward-looking statements. Any forward-looking statement made by us in this press release or in any subsequent written or oral statements attributable to the Company are expressly qualified in their entirety by the cautionary statements above. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.

    Key Financial Measures
    The attached tables highlight the Company’s key financial measures for the periods indicated (unaudited).

    Key Financial Measures 09.30.2024

    Consolidated Statements of Comprehensive Income 09.30.2024

    Consolidated Statements of Financial Condition 09.30.2024

    Consolidated Statements of Income 09.30.3024

    The MIL Network –

    January 25, 2025
  • MIL-OSI Russia: Financial news: List of changes made to the Main directions of the unified state monetary policy for 2025 and the period 2026 and 2027

    Translation. Region: Russian Federation –

    Source: Central Bank of Russia (2) –

    Please note: This information is raw content directly from the source of the information. It is exactly what the source states and does not reflect the position of MIL-OSI or its clients.

    Category24-7, Central Bank of Russia, MIL-AXIS, Russian Banks, Russians Savings, Russian Finance, Russians Language, Russian economy, Russian banks

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    MIL OSI Russia News –

    January 25, 2025
  • MIL-OSI Europe: EIB Group showcases progress of European Tech Champions Initiative boosting European scale-ups at event in Madrid

    Source: European Investment Bank

    • Since its launch in 2023, the European Tech Champions Initiative has closed fund deals worth €2 billion and mobilising five times this amount, totalling €10 billion in public and private sector resources.
    • Investments have been made in 16 technology scale-ups, two of which are Spanish.
    • In Spain, the European Tech Champions Initiative has invested in a mega fund specialising in deep tech and climate, and an investment in a second mega fund is expected by 2025.
    • As an ETCI participant country, Spain has announced an additional contribution of €300 million to the initiative by the Ministry of Digital Transformation that is soon to be approved by the Spanish cabinet.

    The EIB Group outlined the progress of the European Tech Champions Initiative (ETCI) – the fund of funds promoted by the European Union and participating EU Member States to foster the growth of cutting-edge technology startups with high growth potential (scale-ups) – today in Madrid. This initiative is led by the European Investment Fund (EIF), the EIB Group’s specialist provider of investment capital to benefit small and medium-sized enterprises (SMEs) and mid-caps.

    The presentation took place during the Tech Champions Made in Europe day, which brought together representatives of the Spanish investment and technological innovation ecosystem and was attended by EIB Group President Nadia Calviño, Spanish Minister of Economy, Trade and Business Carlos Cuerpo, EIF Chief Executive Marjut Falkstedt and Instituto de Crédito Oficial (ICO) Chairman Manuel Illueca Muñoz.

    Opening the day, President Calviño had the opportunity to detail the ongoing work to bolster the European capital market, including the expansion of the ETCI and opening it up to private investors. New financial instruments are also being developed to facilitate investor exits via acquisition or listing of the technology startups on European markets.

    “Thanks to EIB Group support, Spain now has a top-tier European investment mega fund. We are already working on the second phase of this initiative, in which Spain is expected to retain its key role,” said EIB Group President Nadia Calviño.

    The event was closed by Spanish Minister of Economy, Trade and Business Carlos Cuerpo, who said: “Spain has already provided €400 million to the ETCI, and today we are announcing an additional contribution of €300 million from the Ministry of Digital Transformation that is soon to be approved by the Spanish cabinet.”

    Since its launch in 2023, the ETCI has been fostering a positive environment in the European venture capital fund market and in the technology ecosystem. It has already closed fund deals worth €2 billion and mobilising five times this amount, totalling €10 billion in public and private sector resources for investment in growth-stage technology companies. ETCI-backed funds have so far invested in 16 European companies, two of which are Spanish.

    In Spain, the ETCI has already made an initial investment in the Kembara Fund I FCR mega fund, a deep tech and climate-focused venture capital fund operating across Europe and managed by Alma Mundi Ventures SGEIC (Mundi Ventures). An investment in a second mega fund is expected by 2025. ETCI-backed funds have in turn invested in two Spanish high-tech companies in their advanced growth phase: Inke, which specialises in respiratory disease treatments, and Factorial, which develops and sells human resources software.

    EIF Chief Executive Marjut Falkstedt said: “We are very happy with the ETCI’s progress to date, and are working on expanding it to increase its impact on the European venture capital and technological innovation ecosystems even further. We are exploring initiatives including structures where the private sector can play a greater role in this fund of funds, which is vital for ensuring European technological autonomy.”

    During his speech, ICO Chairman Manuel Illueca Muñoz said: “The ETCI is helping to strengthen the EU innovation ecosystem. ICO Group aims to support Spanish startups and scale-ups throughout their lifecycle, until they reach sufficient maturity for the ETCI to turn them into European champions.”

    Background information

    The European Investment Bank Group (EIB Group), consisting of the European Investment Bank (EIB) and the European Investment Fund (EIF), reported total financing signatures in Spain of €11.4 billion in 2023, approximately €6.8 billion of which went to climate action and environmental sustainability projects. Overall, the EIB Group signed €88 billion in new financing in 2023.

    The European Tech Champions Initiative (ETCI) is an EU programme managed by the EIF and backed by the European Commission and participating EU Member States. It helps to cover the financing needs of European technology scale-ups, preventing them from relocating and strengthening Europe’s strategic autonomy and competitiveness. Sectors benefiting from the initiative include cybersecurity, artificial intelligence, quantum computing, deep tech, green technologies, biotechnology and digital technologies. The ETCI is also making a major contribution to the European financial markets and is an example of how the EIB Group can act as a pioneering instrument for the capital markets union.

    Discurso completo de la presidenta Nadia Calviño durante la apertura de la jornada

    MIL OSI Europe News –

    January 25, 2025
  • MIL-OSI: Hawthorn Bancshares Announces Cash Dividend

    Source: GlobeNewswire (MIL-OSI)

    JEFFERSON CITY, Mo., Oct. 30, 2024 (GLOBE NEWSWIRE) — Hawthorn Bancshares, Inc. (NASDAQ: HWBK) announced today that its Board of Directors approved a quarterly cash dividend of $0.19 per common share, payable January 1, 2025 to shareholders of record at the close of business on December 15, 2024.

    About Hawthorn Bancshares, Inc.

    Hawthorn Bancshares, Inc., a financial-bank holding company headquartered in Jefferson City, Missouri, is the parent company of Hawthorn Bank, which has served families and businesses for more than 150 years. Hawthorn Bank has multiple locations, including in the greater Kansas City metropolitan area, Jefferson City, Columbia, Springfield, and Clinton.

    Contact:

    Hawthorn Bancshares, Inc.
    Brent M. Giles
    Chief Executive Officer
    TEL: 573.761.6100
    www.HawthornBancshares.com

    Statements made in this press release that suggest the Company’s or management’s intentions, hopes, beliefs, expectations, or predictions of the future include “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. It is important to note that actual results could differ materially from those projected in such forward-looking statements. Additional information concerning factors that could cause actual results to differ materially from those projected in such forward-looking statements is contained from time to time in the Company’s quarterly and annual reports filed with the Securities and Exchange Commission. These forward-looking statements are made as of the date of this communication, and the Company disclaims any obligation to update any forward-looking statement or to publicly announce the results of any revisions to any of the forward-looking statements included herein, except as required by law.

    The MIL Network –

    January 25, 2025
  • MIL-OSI: Hawthorn Bancshares Reports Third Quarter 2024 Results

    Source: GlobeNewswire (MIL-OSI)

    JEFFERSON CITY, Mo., Oct. 30, 2024 (GLOBE NEWSWIRE) — Hawthorn Bancshares, Inc. (NASDAQ: HWBK), (the “Company”), the bank holding company for Hawthorn Bank, reported third quarter 2024 net income of $4.6 million, or earnings per diluted share (“EPS”) of $0.66.

    Third Quarter 2024 Results

    • Net income improved $2.0 million, or 77%, from the third quarter 2023 (the “prior year quarter”)
    • EPS of $0.66, an improvement of $0.30 per share, or 83%, from the prior year quarter
    • Net interest margin, fully taxable equivalent (“FTE”) improved in the third quarter 2024 to 3.36% compared to 3.33% for second quarter 2024 (the “prior quarter”)
    • Return on average assets and equity of 1.00% and 12.87%, respectively
    • Loans decreased $31.8 million, or 2.1%, and deposits decreased $46.7 million, or 3.0%, compared to the prior quarter
    • Investments increased $17.9 million, or 9.3%, compared to the prior quarter
    • Credit quality remained strong with non-performing loans to total loans of 0.28%
    • Remained well capitalized with total risk-based capital of 14.91%
    • Book Value per share increased $4.09 to $20.91, or 24%, compared to the prior year quarter

    Brent Giles, Chief Executive Officer of Hawthorn Bancshares, Inc. commented, “We are pleased with the progress we’ve made on our strategic objectives, and the corresponding financial results. Our focus on core lines of business has resulted in reduced overhead expenses and expansion of our fee income.”

    Financial Summary

    (unaudited)
    $000, except per share data

      September 30,   June 30,   September 30,
      2024   2024   2023
    Balance sheet information:          
    Total assets $ 1,809,769     $ 1,847,810     $ 1,879,005  
    Loans held for investment   1,466,751       1,498,504       1,556,969  
    Investment securities   209,019       191,159       240,521  
    Deposits   1,503,504       1,550,250       1,580,365  
    Total stockholders’ equity $ 146,474     $ 138,241     $ 118,404  
               
    Key ratios and per share data:          
    Book value per share $ 20.91     $ 19.71     $ 16.82  
    Market price per share $ 25.03     $ 19.80     $ 16.25  
    Diluted earnings per share (QTR) $ 0.66     $ 0.66     $ 0.36  
    Net interest margin (FTE) (QTR)   3.36%       3.33%       3.35%  
    Efficiency ratio (QTR)   66.23%       66.24%       79.79%  

    Financial Results for the Quarter and Nine Months Ended September 30, 2024

    Earnings

    Net income for the third quarter 2024 was $4.6 million, a decrease of $0.1 million, or 1.2%, from the prior quarter, and an increase of $2.0 million, or 77.4%, from the prior year quarter. EPS remained consistent with the prior quarter at $0.66 compared to $0.36 for the prior year quarter.

    Net income for the nine months ended September 30, 2024 was $13.7 million, or $1.95 per diluted share, an increase of $5.3 million compared to $8.4 million, or $1.19 per diluted share, for the nine months ended September 30, 2023.

    Net Interest Income and Net Interest Margin

    Net interest income for the third quarter 2024 was $14.3 million, an increase of $0.2 million from the prior quarter, and a decrease of $0.82 million from the prior year quarter. Net interest income for the nine months ended September 30, 2024 was $43.2 million, a decrease of $0.1 million compared to $43.3 million for the nine months ended September 30, 2023.

    Interest income decreased $0.1 million in the current quarter compared to the prior year quarter, driven primarily by lower average interest earning assets, while interest expense increased $0.8 million compared to the prior year quarter. Net interest margin, on an FTE basis, was 3.36% for the current quarter, compared to 3.33% for the prior quarter, and 3.35% for the prior year quarter.

    The yield earned on average loans held for investment was consistent at 5.83%, on an FTE basis, for both the third quarter 2024 and the prior quarter, compared to 5.67% for the prior year quarter.

    The average cost of deposits was 2.74% for the third quarter 2024, compared to 2.69% for the prior quarter and 2.32% for the prior year quarter. Non-interest bearing demand deposits as a percent of total deposits was 26.0% as of September 30, 2024, compared to 25.9% and 26.9% at June 30, 2024 and September 30, 2023, respectively.

    Non-interest Income

    Total non-interest income for the third quarter 2024 was $3.8 million, a decrease of $0.2 million, or 5.3%, from the prior quarter, and an increase of $3.2 million, or 524.3%, from the prior year quarter. For the nine months ended September 30, 2024, non-interest income was $10.8 million, an increase of $5.4 million as compared to $5.4 million for the nine months ended September 30, 2023.

    The decrease in the current quarter compared to the prior quarter was primarily due to the Company completing the sale of its mortgage servicing rights and recognizing a gain on sale on foreclosed property in the prior quarter.

    The increase in the current quarter compared to the prior year quarter was primarily due to an increase in earnings on bank owned life insurance and a decrease in other real estate owned valuation write-downs, partially offset by a decrease in the gains on sale of mortgage loans in the current quarter.

    Non-interest Expense

    Total non-interest expense for the third quarter 2024 was $12.0 million, a decrease of $0.04 million, or 0.3%, from the prior quarter, and a decrease of $0.6 million, or 4.6%, from the prior year quarter. For the nine months ended September 30, 2024, non-interest expense was $36.6 million, a decrease of $1.2 million as compared to $37.8 million for the nine months ended September 30, 2023.

    The third quarter 2024 efficiency ratio was 66.23% compared to 66.24% and 79.79% for the prior quarter and prior year quarter, respectively. The slight decrease in the current quarter compared to the prior quarter was primarily due to higher net interest margin and lower non-interest expenses in the current quarter.

    Loans

    Loans held for investment decreased $31.8 million, or 2.1%, to $1.5 billion as of September 30, 2024 as compared to June 30, 2024 and decreased $90.2 million, or 5.8%, from September 30, 2023.

    Investments

    Investments increased $17.9 million, or 9.3%, to $209.0 million as of September 30, 2024 compared to June 30, 2024 and decreased $31.5 million, or 13.1%, from September 30, 2023.

    Asset Quality

    Non-performing assets to total loans was 0.58% at September 30, 2024, compared to 0.54% and 0.48% at June 30, 2024 and September 30, 2023, respectively. Non-performing assets totaled $8.5 million at September 30, 2024, compared to $8.1 million and $7.4 million at June 30, 2024 and September 30, 2023, respectively. The increase in non-performing assets in the current quarter compared to the prior quarter is primarily due to a $2.0 million commercial loan relationship moving to non-accrual status and a $1.1 million commercial real estate loan that went to foreclosure during the current quarter.

    In the third quarter 2024, the Company had net loan charge-offs of $0.6 million, or 0.04% of average loans, compared to net loan charge-offs of $2.0 million, or 0.13% of average loans, and $0.1 million, or 0.00% of average loans, in the prior quarter and prior year quarter, respectively. The charge-offs in the current quarter primarily related to one commercial real estate loan and one commercial loan relationship that were adequately reserved for in the prior quarter.

    The Company’s provision for credit losses and unfunded commitments was consistent at $0.5 million for both the third quarter 2024 and the prior quarter, and was $0.1 million for the prior year quarter.

    The allowance for credit losses at September 30, 2024 was $21.9 million, or 1.50% of outstanding loans, and 539.52% of non-performing loans. At June 30, 2024, the allowance for credit losses was $22.0 million, or 1.47% of outstanding loans, and 495.38% of non-performing loans. At September 30, 2023, the allowance for credit losses was $22.5 million, or 1.44% of outstanding loans, and 583.88% of non-performing loans. The allowance for credit losses represents management’s best estimate of expected losses inherent in the loan portfolio and is commensurate with risks in the loan portfolio as of September 30, 2024 as determined by management.

    Deposits

    Total deposits at September 30, 2024 were $1.5 billion, a decrease of $46.7 million, or 3.0%, from June 30, 2024, and a decrease of $76.9 million, or 4.9%, from September 30, 2023. The decrease in deposits at September 30, 2024 as compared to September 30, 2023 was primarily a result of a decrease in demand deposits and brokered deposits.

    Capital

    The Company maintains its “well capitalized” regulatory capital position. At September 30, 2024, capital ratios were as follows: total risk-based capital to risk-weighted assets 14.91%; tier 1 capital to risk-weighted assets 13.66%; tier 1 leverage 11.33%; and common equity to assets 8.09%.

    Pursuant to the Company’s 2019 Repurchase Plan, management is given discretion to determine the number and pricing of the shares to be purchased under the plan, as well as the timing of any such purchases. The Company repurchased 56,692 common shares under the repurchase plan during the first nine months of 2024 at an average cost of $19.51 per share totaling $1.1 million. As of September 30, 2024, $3.9 million remains available for share repurchases pursuant to the plan.

    During the fourth quarter of 2024, the Company’s Board of Directors approved a quarterly cash dividend of $0.19 per common share payable January 1, 2025 to shareholders of record at the close of business on December 15, 2024.

    [Tables follow]

    FINANCIAL SUMMARY
    (unaudited)
    $000, except per share data

      Three Months Ended
      September 30,   June 30,   September 30,
    Statement of income information: 2024   2024   2023
    Total interest income $ 23,819   $ 23,556     $ 23,888
    Total interest expense   9,492     9,384       8,741
    Net interest income   14,327     14,172       15,147
    Provision for credit losses on loans and unfunded commitments   500     457       110
    Non-interest income   3,783     3,995       606
    Investment securities gains (losses), net   8     (15)       3
    Non-interest expense   11,994     12,034       12,569
    Pre-tax income   5,624     5,661       3,077
    Income taxes   1,050     1,033       498
    Net income $ 4,574   $ 4,628     $ 2,579
    Earnings per share:          
    Basic: $ 0.66   $ 0.66     $ 0.36
    Diluted: $ 0.66   $ 0.66     $ 0.36
               
          Nine Months Ended
          September 30,
    Statement of income information:      2024      2023
    Total interest income     $ 71,427     $ 66,748
    Total interest expense       28,181       23,451
    Net interest income       43,246       43,297
    Provision for credit losses on loans and unfunded commitments       726       790
    Non-interest income       10,798       5,384
    Investment securities (losses) gains, net       (7)       18
    Non-interest expense       36,603       37,772
    Pre-tax income       16,708       10,137
    Income taxes       3,049       1,738
    Net income     $ 13,659     $ 8,399
    Earnings per share:          
    Basic:     $ 1.95     $ 1.19
    Diluted:     $ 1.95     $ 1.19

    FINANCIAL SUMMARY (continued)

    (unaudited)

    $000

      September 30,   June 30,   September 30,
      2024   2024   2023
    Key financial ratios:          
    Return on average assets (QTR)   1.00%       1.02%       0.54%  
    Return on average common equity (QTR)   12.87%       13.75%       8.05%  
    Net interest margin (FTE) (QTR)   3.36%       3.33%       3.35%  
    Efficiency ratio (QTR)   66.23%       66.24%       79.79%  
               
    Asset Quality Ratios:          
    Allowance for credit losses to total loans   1.50%       1.47%       1.44%  
    Non-performing loans to total loans (a)   0.28%       0.30%       0.25%  
    Non-performing assets to loans   0.58%       0.54%       0.48%  
    Non-performing assets to assets   0.47%       0.44%       0.39%  
    Performing TDRs to loans $ 636     $ 1,977     $ 74  
    Net Charge-offs to Average Loans (QTR)   0.04%       0.13%       0.00%  
    Allowance for credit losses on loans to          
    non-performing loans (a)   539.52%       495.38%       583.88%  
               
    Capital Ratios:          
    Average stockholders’ equity to average total assets (QTR)   7.80%       7.40%       6.73%  
    Period-end stockholders’ equity to period-end assets   8.09%       7.48%       6.30%  
    Total risk-based capital ratio   14.91%       14.30%       14.20%  
    Tier 1 risk-based capital ratio   13.66%       12.94%       12.54%  
    Common equity Tier 1 capital   10.53%       10.02%       10.09%  
    Tier 1 leverage ratio   11.33%       10.94%       10.43%  

    (a) Non-performing loans include loans 90-days past due and accruing and non-accrual loans.

    About Hawthorn Bancshares

    Hawthorn Bancshares, Inc., a financial-bank holding company headquartered in Jefferson City, Missouri, is the parent company of Hawthorn Bank, which has served families and businesses for more than 150 years. Hawthorn Bank has multiple locations, including in the greater Kansas City metropolitan area, Jefferson City, Columbia, Springfield, and Clinton.

    Contact:
    Hawthorn Bancshares, Inc.
    Brent M. Giles
    Chief Executive Officer
    TEL: 573.761.6100
    www.HawthornBancshares.com

    The financial results in this press release reflect preliminary, unaudited results, which are not final until the Company’s Quarterly Report on Form 10-Q is filed. Statements made in this press release that suggest the Company’s or management’s intentions, hopes, beliefs, expectations, or predictions of the future include “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. It is important to note that actual results could differ materially from those projected in such forward-looking statements. Additional information concerning factors that could cause actual results to differ materially from those projected in such forward-looking statements is contained from time to time in the Company’s quarterly and annual reports filed with the Securities and Exchange Commission. These forward-looking statements are made as of the date of this communication, and the Company disclaims any obligation to update any forward-looking statement or to publicly announce the results of any revisions to any of the forward-looking statements included herein, except as required by law.

    The MIL Network –

    January 25, 2025
  • MIL-OSI NGOs: Hurricane Unpreparedness in the Caribbean, Disaster by Imperial Design

    Source: Council on Hemispheric Affairs –

    St. Lucia during and post Hurricane Beryl

    by Tamanisha J. John

    Toronto, Ontario

    Whenever a hurricane hits in the Caribbean, people rush to point out that it is an indicator of “disaster capitalism” and/or that “disaster capitalism” will surely come. While I agree that non-governmental organizations (NGO) and other organizations profit from disasters in the Caribbean region, and have a long history of doing so, I am less inclined to believe that “disaster capitalism” exists there unless one takes an ahistorical view. Disaster capitalism in the Caribbean can only exist in those states whose revolutions have been defeated and/or undermined, but overall, there has been no massive structural changes in these states. The region is already, and historically has been, ultra-accommodating to capitalism. Disaster capitalism refers to “the use of the shock of disastrous situations to dismantle state participation in the economy and to implant structural changes in the form of laissez-faire capitalism” (Schwartz, 2015, p. 311). To claim that disaster capitalism will come to the Caribbean region would thus indicate a marked period of state participation in the Caribbean that provided for the peoples living there.

    Instead, all states’ independence was marked by US interventions given the ideological and economic struggle of the Cold War and the neoliberal turn, which attacked state input and intervention in the market. Caribbean states’ independence was marked by debt and lack of access to capital. It occurred alongside financial institutions’ proliferation of structural adjustment policies whose implementation was necessitated for states in the region to acquire access to loaned capital (John, 2023). Though struggles for nationalizations did occur – in industries like mining, banking, insurance, and others – harsh retaliations from the US and Canada made them unsustainable (John, 2023, p. 134) – with no real reductions in foreign ownership “despite the changes in legal forms of ownership” (Thomas, 1984, p. 168-9). Thus, large foreign ownership of resource extractive industries and financial institutions remained a feature of Caribbean societies when they became independent – just as it also marked the colonial landscape in these spaces. The foreign players that controlled corporations, land, and industries in these countries did change somewhat, but this was also typical with imperial rivalries (Caribbean states themselves having been subject to multiple phases of European colonization throughout their histories).

    It was Walter Rodney, who in his 1972 text How Europe Underdeveloped Africa, put forward a critique of the thesis that capitalism had to develop prior to ushering in socialism – which was Marx’s estimation – given that this thesis went against the trajectory of capitalist development in both the Caribbean and in Africa, where the capitalist logics of extraction with disregard for these societies left them in almost permanent states of underdevelopment, that only physical and ideological anti-imperialism could rectify. One of the consequences of this underdevelopment, I argue, is the lack of hurricane preparedness. The logic of “getting people back to work” and “security” in these colonized spaces have always trumped wellbeing for the people and environment – precisely because the people in them have always been categorized as disposable, while the natural resources have been reduced to instruments for the generation of profit. This ideology was true under European empires, and now true under US hegemony in the region – where foreign imposing actors continue to have more say on preparedness, wealth distribution, land ownership, security, economic development, and entrepreneurship (innovation).

    In a Region Prone to Hurricanes, Unpreparedness is an Ideological Policy Choice

    “Hurricanes are not random phenomena. Atmospheric conditions and physics limit their movement” (Schwartz, 2015, p. xvi). In the Caribbean, the Yucatán Peninsula, the Gulf of Mexico, and the South-Eastern United States, we have come to expect a lack of preparedness whenever hurricanes strike. Though Hurricane Beryl’s strength and early formation in June was unprecedented for the Caribbean’s hurricane season, what is precedent is the lack of regional preparedness for hurricanes in a region prone to have them – no matter when these hurricanes form. Forming around June 25th it was clear that Beryl would break the record for earliest formed Category 5 hurricane by the time that it made way into the Caribbean. This was due to the unusually warm temperatures registered in both the Atlantic Ocean and the Caribbean Sea as early as March, various heatwave advisories and warnings were placed on the region acknowledging that the summer 2024 would be “hotter than usual” (Loop News 2024). When news of Beryl’s formation first spread, people expected the worst given unusually hot increases in temperatures (+4°c) for the region so early in the year.

    Making landfall as a Category 4 hurricane in one of the smaller islands of Grenada, Carriacou, on July 1st Beryl would destroy 95% of the infrastructure there before strengthening to a Category 5 hurricane. It would bring even worse devastation to a smaller island of St. Vincent and the Grenadines, Mayreu, where reports proclaim that island to have nearly been “erased from the map” (AP News 2024). In its Caribbean path, Beryl brought devastation as a Category 5 and 4 storm to Grenada, St. Vincent and the Grenadines, Dominica, Tobago and northern Venezuela, Barbados, and the southern portion of Jamaica. In its North American path, Beryl brought devastation as a Category 2 and 1 storm to Mexico’s Yucatan Peninsula, before making landfall in Texas and Louisiana. Thereafter the storm was experienced elsewhere in the form of a tropical cyclone and massive downpours of rain. Beryl eventually tapered off in Canada on July 11th where it left heavy rain that caused massive flooding (due to Canada’s neglected flood systems). Beryl’s death toll currently stands at 33, with the storm causing 6 deaths “in Venezuela, 1 in Grenada, 2 in Carriacou, 6 in St. Vincent and the Grenadines, 4 in Jamaica […] at least 11 in the Greater Houston area, 1 in Louisiana, and 2 in Vermont.” (TT Weather Center 2024)”

    Now that the storm has passed, people in impacted areas must contend with the loss of life, destruction of physical infrastructure – including homes and businesses, the lack of food and other basic products, as well as the lack of power and electricity. While contending with loss, victims of this severe weather will start to question the inability of their governments – rich or poor – to adequately address the post hurricane scenarios that they find themselves in repeatedly. This discontent with unpreparedness is now prevalent even before the hurricane season itself has ended.

    A Note on Cuba’s Hurricane Preparedness, The Importance of Ideology

    One of the most infuriating elements of hurricanes in this region is the “disaster” narratives that come after them, which falsely assert the “naturalness” of unpreparedness given the chaos of the disaster itself – when unpreparedness is, in fact, an ideological policy choice. Poorer states in this region are shackled by an unwillingness of the state to drastically deviate from “larger institutional constraints from which the logic of colonial administration derived its central purpose” and are inherited (Pérez Jr., 2001, p. 133-4).  On the other hand, richer states are shackled by their individualist ideologies which offer “vigorous critiques of government expenditure” which leave preparedness up to “market-driven, neoliberal economic policies,” that turn state and local responsibilities over “to charitable institutions, to churches, or to the victims themselves and their communities” (Schwartz, 2015, p. 300).

    When looking at states in the Western Hemisphere which frequently experience hurricanes, Cuba stands out as a state which tends to fare better in the post hurricane environment given that state’s policies of shared responsibility towards its people. This even as Cuba has been subjected to a draining embargo and sanctions which places a burden on economic growth there. Yet still, Washington maintains that Cuba’s successful hurricane response and disaster mitigation strategies amount to “the exchange of liberty for effectiveness” (Schwartz, 2015, p. 293-4). Though couched in this language of ‘liberty,’ mitigating the loss of life ensures one’s longtime enjoyment of liberty – as opposed to dying for ‘liberty’s’ sake during a hurricane (or other disasters like the COVID-19 pandemic). For example, Cuba’s hurricane preparedness in relation to the US stands out. Cuba’s disaster response compares a bit more favorably to the Federal Emergency Management Agency (FEMA). FEMA “oversaw 15 times more deaths from hurricanes than Cuba from 2005 — the year that Katrina struck New Orleans — to 2015” (Wolfe, 2021).

    This is because Cuba’s disaster preparedness is proactive, prioritizing human life and well-being given the ideological foundations of its revolution that transformed political, social, economic, and environmental relations in the country. US disaster preparedness on the other hand prioritizes profit at the expense of people – it is reactionary and reactive, often blaming victims of hurricane disasters for the lack of state preparedness.

    The Caribbean Hurricane as Natural Phenomena, the Disaster as Colonial Inheritance

    Hurricanes are not experienced equally amongst states in the Western Hemisphere. People living on Caribbean islands tend to experience the worst effects of hurricanes when they do strike, and it is also people on these same islands which tend to have less resources to recover from the impacts of a hurricane. Though Cuba’s hurricane preparedness is commendable, infrastructure and livelihoods there are still devastated by hurricanes. Many of the Caribbean islands are geographically located “in the Atlantic Hurricane Alley, [and] the region is sensitive to large-scale fluctuation of ocean patterns that are disrupted by warming seas” (Zodgekar, et. al 2023, p. 321). Additionally, populations and infrastructure on these islands tend to be concentrated on the coast – a colonial holdover – given that European “settlements were established directly in the path of oncoming hurricanes (Pérez Jr., 2001, p. 8). Initially due to lack of knowledge, this trend remained unchanged amongst Europeans given the need to export what was being extracted from these islands using the ports developed on the coasts.

    Historically, environmental disasters (hurricanes, earthquakes, and droughts) throughout the 1600s-1900s would consolidate land amongst the wealthiest European settlers on different islands and would foil settler attempts to diversify agriculture on islands. This was because wealthy settlers could more easily recover and rebuild what was lost in the aftermath of a hurricane, due to their ability to access credit from Europe and resort to using their own fortunes (wealth and networks). On the other hand, smaller settlers unable to rebuild and recover from hurricane losses had a harder time accessing credit – and creditors within Europe viewed loaning to smaller settlers as a financial burden. If these smaller settlers were already in debt, the passing of a hurricane meant that they would either have to work off debt by giving all that they had to a creditor in Europe, or one on the island, by entering into a credit arrangement with a wealthier plantation owner (Mulcahy, 2006, p. 86-8). These losses were quite frequent, as it is known that these phenomena made it so that some European creditors in Europe would amass plantation wealth, even if they themselves had never visited a Caribbean island or formally engaged in plantation life (Mulcahy, 2006, p. 87-8).

    These dynamics, in part, explain the predominance of the cultivation of sugar (and rice in what would become the South-Eastern United States) within the region, and even then, “plantership […] necessitated deep pockets (or strong credit) to survive its constant and rapid fluctuations” (Mulcahy, 2006, p. 66). “Without access to credit, smaller farmers were forced to sell their lands to wealthier and more secure planters, who thereby expanded their landholdings and production capabilities” (Mulcahy, 2006, p. 86). This consolidation of larger and wealthier plantations also made other concerns arise, namely the depopulation of settlers from the islands, as debtors opted to leave in the aftermath of storms, and later the transfers of estates to owners outside of the colonies (Mulcahy, 2006, p. 86-7). In essence, settlers’ decision to flee in the wake of, or after, a hurricane shaped population dynamics and demographics in colonies. They also shaped the lack of hurricane preparedness in colonies. Wealthier planters on the islands, and Europeans in Europe, who could suffer from hurricane losses (hurricanes themselves not being guaranteed every season), rebuild afterwards, and recover previous losses given the profit from plantation trade goods – had less incentives to plan ahead if they were not as risk of losing everything they had amassed in their life after a hurricane.

    In smaller island states’, where plantation systems were heavily disrupted or stunted in growth due to geography of the land (especially in the Lesser Antilles), even fewer attempts were made to develop any infrastructure which could protect against storms (Mulcahy, 2006). To be clear, this does not mean that these landscapes were spared from destruction which made the impacts of hurricanes worse: deforestation, overgrazing, and over-cultivation of Caribbean islands during centuries of European colonialism that included dispossession of indigenous groups and the enslavement of Africans, also impacted how hurricanes came to be experienced. While planter consolidation, rebuilding, and profits have so far been underscored here – the elephant in the room is that all of this occurred alongside the massive death toll of enslaved Africans who suffered the most both during and after the passage of a hurricane. Outside of the high death tolls for enslaved Africans on the islands, once a hurricane passed, the ultimate goal in the colonies became the reestablishment of ‘law-and-order’ given fears of slave revolt in the wake of destruction (Mulcahy, 2006; Schwartz, 2015). Although slave-revolts post hurricane remained a consistent fear of settlers, slave revolts did not occur after a hurricane due to its disproportionate toll on enslaved populations who were “often the most debilitated by the shortage of food and the diseases that followed the hurricane” (Schwartz, 2015, p. 49).

    Caribbean Indigenous Peoples Blamed European Imperial Settlement for Increased Hurricane Devastation

    From historical accounts, we know that the Spaniards were the first Europeans to experience a hurricane within the Western Hemisphere during Columbus’s second voyage in 1494/5 (Pérez Jr., 2001; Mulcahy, 2006; Schwartz, 2015). The hurricane experience was unlike anything that Europeans had observed in Europe, and it was from this experience that they sought out intel from the indigenous peoples in the Caribbean. For Caribbean indigenous peoples, “the great storms were part of the annual cycle of life. They respected their power and often deified it, but they also sought practical ways to adjust their lives to the storms. Examples were many: The Calusas of southwest Florida planted rows of trees to serve as windbreaks to protect their villages from hurricanes. On the islands of the Greater Antilles—Cuba, Jamaica, Hispaniola, and Puerto Rico—the Taino people preferred root crops like yucca, malanga, and yautia because of their resistance to windstorm damage. The Maya of Yucatan generally avoided building their cities on the coast because they understood that such locations were vulnerable to the winds and to ocean surges that accompanied the storms” (Schwartz, 2015, p. 5). Further, Indigenous representations of hurricanes were overall accurate and are similar to modern meteorological mapping of these storms. Europeans also learned from Caribbean Indigenous groups that you could “track” when a hurricane would strike. These developments meant that Indigenous Caribbean knowledge of the hurricane was not only limited to the occurrence of storm, but also meant that Indigenous Caribbean societies factored in preparedness for hurricanes within their worldviews.

    Given Caribbean Indigenous knowledge of hurricanes, it is these same people who also recognized that the changes to the landscape by European colonialism contributed to the increased devastation caused by hurricanes between the 1600s-1900s. As such, English colonists who would also come to experience the hurricanes report that “several elderly Caribs stated that hurricanes had become more frequent in recent years, which they viewed as a punishment for their interactions with Europeans” and the main “alteration that our people attribute the more frequent happenings of Hurricanes” (Mulcahy, 2006, p. 35). What these settler accounts reveal about Indigenous Caribbean peoples is what Schwartz notes in his 2015 book, Sea of Storms: A History of Hurricanes in the Greater Caribbean from Columbus to Katrina, that although “hurricanes were a natural phenomenon; what made them disasters was the patterns of settlement, economic activity, and other human action” (p. 74). Nonetheless, colonial ecological and environmental destruction in the Caribbean – which increased the felt impact of hurricanes – remained worthwhile for Europeans given the high profits to be made from export crops, which kept people there to rebuild after hurricanes. Mulcahy in his 2006 book, Hurricanes and Society in the British Greater Caribbean, 1624 – 1783, writes “European settlers and colonists were engaged in a never-ending struggle against nature in their quest for wealth” (p. 93)

    Additionally, the European empire’s responses to hurricanes also influenced decisions to stay. Because colonial societies in the Caribbean were stratified along racial and other social hierarchies – hurricanes presented opportunities for large scale consolidation of plantation property on islands which privileged wealthy plantation owners. Additionally, smaller merchants and plantations which could not recover post hurricane were sometimes forced to transfer ownership to merchants in Europe – who never had to visit these properties while amassing wealth from them thereafter (Mulcahy 2006, p. 88). Disaster relief to the colonies thus came to be historically designed as a way for further economic integration, and “assistance to the colonies in times of disaster would bring wealth and affluence to the empire” (Mulcahy 2006, p. 162). Disaster assistance – while increasing inequalities between all peoples in the colonies – did overall benefit imperial capitalism and patriotism within the empire, amongst loyal subjects, especially amongst elite classes, who received the majority of aid based on their losses.

    Banking on Hurricanes and Absolving Empire of Responsibility: Debates in Europe

    While debates in Europe raged regarding enriching the already wealthy within the colonies with disaster relief – these debates did not change the post-hurricane reality of which those most needing of aid (Indigenous groups, enslaved Africans, indentured workers, small merchants, and small planters) were the least likely to receive it, which was true across all of the different European colonies (Pérez Jr., 2001; Mulcahy, 2006; Schwartz, 2015). “Vulnerability to the hurricane itself was a function of the material determinants” around which colonial social hierarchies were arranged (Pérez Jr., 2001, p. 111). In Europe, debates focused primarily on creditors, so it was argued that the wealthy were more primed to repay creditors when/if they received disaster relief after a hurricane. On the other hand, the proliferation of print news meant that individuals and organizations (e.g., the Church) could send aid to the colonies after disaster struck. Previously, when disaster struck it would take months for news to reach those in Europe, even as the disruptions in trade were more readily felt. Moreover, it was hard for the public in Europe to understand the scale of destruction caused by hurricanes in the Americas, given that this kind of natural disaster did not occur in Europe.

    With the establishment of print media, the destruction caused by hurricanes and the damages that they did to plantation systems – which would require a lot of assistance to recover – was made much more readily available to people who could empathize and assist in recovery efforts. Within the British empire, some newspapers even published who would send what amount and type of post disaster relief to the colonies, which undoubtedly contributed to the charitable giving of some wealthy individuals (Mulcahy 2006; Schwartz 2015). Given that the voyage from Europe to the various colonies was long, there was illegal trading between different colonies to provide relief to one another faster – including with the United States, even after the American Revolution.

    It is this colonial history which still shapes the lack of hurricane preparedness in a region prone to have them. Thus, most scholars on hurricanes in the region continue to highlight the colonial and slave legacies which have shaped regional unpreparedness to hurricanes. Though the United States is a wealthier country today with the capabilities to develop hurricane preparedness – even if only within its own borders – it is elite US security interests and ideological leanings which have prevented it from doing so. Additionally, historians like Schwartz (2015) make a compelling argument that “the United States, by its military and political expansion into the Caribbean after 1898, its foreign policy objectives in the Cold War, and through its advocacy of certain forms of capitalism joined with its ability to impose its preferences on international institutions, has also influenced the way in which the whole region has faced hurricanes and other disasters” (Schwartz, 2015, p. xviii-xix). This implies that the United States – like the European empire’s past – also has a stake, or interest, in regional hurricane unpreparedness for both political, economic, and security objectives.

    US Imperial Extensions in the Caribbean, Impact on Hurricane Preparedness

    From this overview of the history of hurricanes in the Caribbean, the Yucatán Peninsula, the Gulf of Mexico, and the South-Eastern United States a few things become clear: hurricane preparedness has never been a concern for colonial capitalist development. Hurricane disasters came to be recognized as extremely ruinous to those occupying the lowest rungs of colonial societies, aid was given to the wealthy people who were understood as being able to put aid to better usage, and disaster situations consolidated preferred modes of accumulation in otherwise “chaotic” and uncivilized landscapes. Thus, outside of patriotic tales and misremembering of the storm events, historically “hopes of communal solidarity” in the wake and aftermath of hurricanes “were either naïve or disingenuous [… with] social divisions ha[ving] always shaped the responses to hurricanes (Schwartz, 2015, p. 68-9). Given strict colonial hierarchies, the maintenance of order – to dissuade slave revolts and looting – were always preeminent concerns of empires and those with wealth and power. This is important to plainly state, given that little has changed in today’s experience with hurricanes in the region.

    Today’s granting of conditioned relief and temporary debt removals still serve to subordinate Caribbean states to the Western capitalist system and the US security apparatus. Those areas hardest hit by storms and less likely to receive aid, continue to be occupied by the poor populations that are largely non-white/Euro peoples. Settlements on islands continue to be concentrated on coasts, where the tourist industry quickly rebuilds its infrastructure post-hurricane and are the first to receive aid. This at once dispels the myths that recovery is impossible, as it happens in the large coastal areas owned and controlled by foreign hotel chains and entities which quickly beckon tourists back to their “lovely beaches” less than a day after a hurricane. Preparedness for hurricanes in the Caribbean islands are “subordinated to political, military, or what today would be called ‘security’ concerns” (Schwartz, 2015, p. 276). I would include economic and ideological concerns as well. These latter concerns are maintained by the wealthiest states in the hemisphere – the United States and Canada.

    Hurricane Flora in the 1960s claimed the lives of over 5,000 Haitians under the Duvalier dictatorship – which failed to even warn Haitians about the arrival of the hurricane so that disorder against Duvalier would not take over the country. The lack of preparedness was accepted by both the United States and Canadian governments given their fear of communism in the Caribbean region. Thus “unlike Haiti’s U.S.-backed right-wing president, François Duvalier, Castro’s Communist government ordered residents living in the hurricane’s projected path to evacuate their homes, and if they were unable, to stay and prepare appropriately for the storm.” This preparation and the establishment of Cuba’s defense system in 1966 accounted for significantly less deaths (1,157) in Cuba (Wolfe, 2021). Today, unpreparedness remains a feature in most Caribbean countries that put corporate interests and the interests of the US (and its allies) security objectives above the prioritization of human life and livelihoods in the Caribbean.

    As further illustration of this point, even though the 2004 Hurricane Jeanne hit Cuba a lot harder than Haiti – killing 3,000 Haitians – no Cuban lives were lost due to the hurricane (Wolfe, 2021). The historical and present-day case of Haiti is both informative and a cause for worry as we expect future hurricane seasons to be quite bad. Not only is Haiti a fully privatized economy (Wilentz, 2008); but it is also one that has been under the tutelage of the CORE group – a group composed primarily of foreign ambassadors from the US, France, Canada, Spain, Brazil, Germany, and a few representatives from the European Union (EU), the United Nations (UN), and the Organization of American States (OAS) – for over two decades. The CORE group’s tutelage of Haiti has been exceptionally negative, as these states and their ambassadors secure their own corporate and labor interests in the country at the expense of that state’s democracy and national sovereignty (Edmonds, 2024). Thus, disaster preparedness in Haiti has never been an agenda item – and has only gotten worse as those governing the country continue to benefit from political, economic, and environmental disasters there. Present day armed intervention and occupation in Haiti, further makes it unlikely that Haiti will be able to weather the next hurricane season.

    Hurricane Unpreparedness, A Note on Canada

    It is important to remind here that although much is said about US imperialism and security concerns trumping human rights and pro-people development in the region – Canada is not exempt from this critique. For instance, although Canada touts that its military base (OSH-LAC) in the Caribbean is a “support hub” – that also seeks to assist states experiencing disasters, of which hurricanes are included – in 2017 when Category 5 Hurricane’s Irma and Maria wreaked havoc on Dominica, OSH-LAC warships monitored the situation but provided no on the ground help to Caribbean peoples there (John, 2024, p. 12-3). The Canadian government also enacted restrictive migration policies towards those fleeing from the hurricane and its damages. This practice would be repeated by Canada again in 2019 during the aftermath of Hurricane Dorian in The Bahamas (John, 2024, p. 12-3). Given that I am currently living in Canada, it is important to point out that Canada is a state that frequently touts progressive rhetoric on climate change, resiliency, and disaster preparedness in the Caribbean region. However, Canada’s actions continue to render the Caribbean region unprepared alongside the actions of the US.

    In the 2023 Canada-CARICOM summit hosted by Canada, Caribbean prime ministers sought to place climate issues and climate infrastructure at the top of the agenda – however, Canada was mainly concerned with getting support for an armed intervention in Haiti (Thurton, 2023). Haiti remains the most unprepared country in the Caribbean when disasters hit, which made Canada’s insistence on armed intervention and occupation even more tone deaf. Haiti’s unpreparedness is directly tied to US, Canada, France, and CORE group members tutelage and rejection of Haitian democracy ever since that country’s integration into the Western capitalist system via US occupation. These examples illuminate the fact that the wealthier states in the Western Hemisphere, namely the US and Canada, actively disregard the lives of those impacted by hurricanes and other natural disasters to their south – while first and foremost safeguarding their own economic, ideological, and security priorities. In my analysis of ‘south,’ the Caribbean, the Yucatán Peninsula, the Gulf of Mexico, and the South-Eastern United States are included.

    Conclusion

    Ideologically, the promotion of capitalism, colonialism, and imperialism in the Caribbean (of which the South-Eastern United States, the Gulf of Mexico and Yucatán Peninsula is included) continues to pose an obstacle to disaster preparedness in a region prone to hurricanes.  More importantly, the promotion of these harmful ideologies often comes at the expense of human life. Nothing makes this clearer than the fact that it is the revolutionary state – which is also the most heavily economically sanctioned state in the region – Cuba, that continues to be the most prepared state in times of disaster. This stands in stark contrast to other Caribbean states and to wealthier states, like the US, which mandate regional unpreparedness. Today, while we await (but hope that it is not so) a bad hurricane season, the Caribbean region is more militarized than it has been since the end of the 20th century and beginning of the 21st century. Militarization is directly due to US security objectives that aim to keep China’s investments (thus competition) out of the region. This policy is backed by Canada, which seeks to advance its own corporate interests in the region.

    The US and Canada continue to militarize the Caribbean region, exacerbating climate change and neglecting the urgency of developing resiliency infrastructure. In fact, militarization in the Caribbean region today (and in Africa and Asia) occurs alongside the tightening of both the US and Canadian borders given hostile narratives towards immigrants and immigration within them. This even with the region’s long history (as has been pointed out) of people fleeing the region both during and after a hurricane. All of which indicates that while these states are undoubtedly deepening the climate crisis with their global “security” endeavors, they view the people harmed and negatively impacted by their actions as disposable.

    Postscript

    Three months after the writing of this document, 5 hurricanes – Debby, Ernesto, Francine, Helene, and Milton – have impacted peoples and infrastructure in the south. The 2024 Atlantic Hurricane season thus far (October 11th, 2024) has taken almost 400 lives – with the actual figure being uncertain, given that the damage from Milton is still being assessed. Each storm is estimated to have cost between $80 – $250 billion (USD) in damages across the region. While governments talk about costs and recovery efforts to get economies “back on track” and provide people with temporary and conditional aid – which is the post disaster norm – we are presented with an uncomfortable, yet undeniable fact: states in the region, whether by colonial inheritance or commitment to capitalism, are banking on unpreparedness continuing well into the future. We must be proactive in defeating this dangerous ideology that places people’s lives, livelihoods and the physical environment at stake; while perpetuating, in its aftermath, conditions that make it so.

    References

    Clark, John I, and Léon Tabah, eds. 1995. Population and Environment Population – Environment – Development Interactions. Paris, France: Comité International de Coopération dans les Recherches Nationales en Démographie (CICRED). http://www.cicred.org/Eng/Publications/pdf/c-a1.pdf.

    Direct Relief. 2024. “Direct Relief Responds as Hurricane Beryl Impacts the Caribbean. The Region, Watchful and Ready, Will Weather the Storm Today.” Direct Relief. https://www.directrelief.org/2024/07/direct-relief-responds-as-hurricane-beryl-impacts-the-caribbean-the-region-watchful-and-ready-will-weather-the-storm-today/.

    Edmonds, Kevin. 2024. “CARICOM, Regional Arm of the Core Group, Sells Out Haiti Again.” Black Agenda Report. https://www.blackagendareport.com/caricom-regional-arm-core-group-sells-out-haiti-again.

    Forecast Centre. 2024. “Atlantic Canada Next in Line for a Soaking, Flood Risk from Beryl Remnants.” The Weather Network.https://www.theweathernetwork.com/en/news/weather/forecasts/atlantic-canada-next-in-line-for-a-soaking-flood-risk-from-beryl-remnants.

    IFRC. 2024. “Humanitarian Needs Ramp up in the Aftermath of ‘unprecedented’ Hurricane Beryl, Signaling New Reality for Caribbean.” The International Federation of Red Cross and Red Crescent Societies (IFRC). https://www.ifrc.org/press-release/humanitarian-needs-ramp-aftermath-unprecedented-hurricane-beryl-signaling-new-reality.

    Jobson, Ryan C. 2024. “Hurricane Beryl at the Gates: The Grenadines and Caribbean Autonomy.” Medium. https://medium.com/clash-voices-for-a-caribbean-federation-from-below/hurricane-beryl-at-the-gates-the-grenadines-and-caribbean-autonomy-86834fb43bcd.

    John, Tamanisha J. 2023. “Canadian Imperialism in Caribbean Structural Adjustment, 1980-2000.” In Class Power and Capitalism, Brill Publishers, 136–79.

    John, Tamanisha J. 2024. “Capitalism, Global Militarism, and Canada’s Investment in the Caribbean.” Class, Race and Corporate Power 12(1): 25.

    Loop News. 2024. “Caribbean 2024 Heat Season Could Climb to Near-Record Heat.” Caribbean Loop News. https://caribbean.loopnews.com/content/caribbean-2024-heat-season-could-climb-near-record-heat.

    McGrath, Gareth. 2024. “Hurricane Beryl Was the Earliest Category 5 Storm. What Could That Mean for NC?” Star News Online. https://www.starnewsonline.com/story/news/local/2024/07/11/what-hurricane-beryl-the-earliest-category-5-storm-could-mean-for-nc/74288495007/.

    Mulcahy, Matthew. 2006. Hurricanes and Society in the British Greater Caribbean, 1624 – 1783. Baltimore, Maryland: The Johns Hopkins University Press.

    NACLA. 2024. “This Week: Hurricane Beryl Slams the Caribbean, a Victory for Midwives in Mexico, Venezuelan Elections, and More.” https://nacla.salsalabs.org/july_12_24?wvpId=37c1b636-52b7-44b5-af75-9a38617519d5.

    NASA. 2024. “Carriacou After Beryl.” NASA Earth Observatory. https://earthobservatory.nasa.gov/images/153039/carriacou-after-beryl.

    Pérez Jr., Louis A. 2001. Winds of Change: Hurricanes & The Transformation of Nineteenth-Century Cuba. Chapel Hill & London: The University of North Carolina Press.

    Rodney, Walter. 2018. How Europe Underdeveloped Africa. Verso Books.

    Schwartz, Stuart B. 2015. Sea of Storms: A History of Hurricanes in the Greater Caribbean from Columbus to Katrina. Princeton University Press.

    Thomas, Clive Y. 1984. Plantations, Peasants and State: A Study of the Mode of Sugar Production in Guyana. Los Angeles: UCLA Center for Afro-American Studies.

    Thurton, David. 2023. “Caribbean Looks to Trudeau to Put Quest for Climate Change Funding on the World’s Agenda.” CBC News. https://www.cbc.ca/news/politics/caricom-trudeau-caribbean-1.6999106.

    TT Weather Center. 2024. “Hurricane Beryl Death Toll Now At 33.” Trinidad and Tobago Weather Center. https://ttweathercenter.com/2024/07/11/hurricane-beryl-death-toll-now-at-33/.

    VOA News. 2024. “Remnants of Beryl Flood Northeast US.” VOA News. https://www.voanews.com/a/remnants-of-beryl-flood-northeast-us/7694063.html#.

    Wagner, Bryce, and Cristiana Mesquita. 2024. “In St. Vincent and the Grenadines, Beryl Nearly Erased the Smallest Inhabited Island from the Map.” AP News. https://apnews.com/article/hurricane-beryl-mayreau-island-caribbean-bb64fc9b61da76685704b8f42f97736c?eType=EmailBlastContent&eId=fffcba4b-3154-47e9-b4ce-e0349f4225db.

    Wilentz, Amy. 2008. “Hurricanes and Haiti.” Los Angeles Times. https://www.latimes.com/la-oe-wilentz13-2008sep13-story.html.

    Wolfe, Mikael. 2021. “When It Comes to Hurricanes, the U.S. Can Learn a Lot from Cuba: Cuba Devised a System That Minimizes Death and Destruction from Hurricanes.” The Washington Post. https://www.washingtonpost.com/outlook/2021/09/01/when-it-comes-hurricanes-us-can-learn-lot-cuba/.

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    Photo Credit: InOldNews, by Delia Louis
    Description: Depicts St. Lucia during and post Hurricane Beryl
    License info: Creative Commons taken from Flickr.

    About the author: Tamanisha J. John is an Assistant Professor at York University in the Department of Politics

    MIL OSI NGO –

    January 25, 2025
  • MIL-OSI Canada: Opening Statement before the Senate Standing Committee on Banking, Commerce and the Economy

    Source: Bank of Canada

    Good afternoon. I’m pleased to be here with Senior Deputy Governor Carolyn Rogers to discuss our recent policy announcement and the Bank of Canada’s Monetary Policy Report.

    Last week, we lowered the policy interest rate by 50 basis points. It was our fourth consecutive decrease since June and brings our policy rate to 3.75%.

    We took a bigger step because inflation is now back to the 2% target, and we want to keep it close to the target.

    In the past few months, inflation has come down significantly. Headline inflation was 1.6% in September, and both our measures of core inflation were under 2½%. Price pressures are no longer broad-based. Our surveys also find that business and consumer expectations of inflation have shifted down and are nearing normal. All this suggests we are back to low inflation. This is good news for Canadians.

    Now our focus is to maintain low, stable inflation. We need to stick the landing.

    That means the upward and downward forces on inflation need to balance out. Economic activity picked up this year, but it is still soft. This softness has helped take the remaining steam out of inflation. With inflation now back at 2%, we want to see growth strengthen. Last week’s interest rate decision should contribute to a pickup in demand.

    Looking ahead, we expect the economy to gradually strengthen in 2025 and 2026, supported by lower interest rates. Population growth will be slower, but we anticipate consumer spending per capita will be picking up. We also expect growth in residential investment to rise as strong demand for housing lifts sales and spending on renovations. We expect business investment to strengthen as demand picks up, and exports should remain strong, supported by robust demand from the United States.

    Our forecast has inflation staying around the target over the projection horizon. The upward pressure from shelter and other services is expected to gradually diminish. With stronger demand, the downward pressure on inflation should also dissipate, keeping the upward and downward forces roughly balanced.

    There are risks around our inflation outlook. The biggest downside risk to inflation is that it could take longer than anticipated for household spending and business investment to pick up. On the upside, lower interest rates could fuel a stronger rebound in housing activity, or wage growth could remain high relative to productivity. We are also facing elevated geopolitical uncertainty and the risk of new shocks. Overall, we view the risks around our inflation forecast as reasonably balanced.

    If the economy evolves broadly in line with our forecast, we anticipate cutting our policy rate further to support demand and keep inflation on target. The timing and pace of further interest rate cuts will depend on incoming information and our assessment of its implications for the inflation outlook. We will take our monetary policy decisions one at a time.

    Let me conclude.

    High inflation and interest rates have been a heavy burden for Canadians. Now we are coming out the other side—monetary policy has worked to get inflation down. With inflation back to target and interest rates continuing to come down, families, businesses and communities should feel some relief.

    The Bank is committed to maintaining price stability for Canadians by keeping inflation close to the 2% target.

    With that summary, the Senior Deputy Governor and I would be pleased to take your questions.

    MIL OSI Canada News –

    January 25, 2025
  • MIL-OSI: Pathfinder Bancorp, Inc. Announces Third Quarter 2024 Results

    Source: GlobeNewswire (MIL-OSI)

    Results reflect branch-acquisition-related expenses, as well as provision expense resulting from a comprehensive loan portfolio review that significantly reduced nonperformers, as Pathfinder positions the Bank for organic growth in its Central New York markets

    OSWEGO, N.Y., Oct. 30, 2024 (GLOBE NEWSWIRE) — Pathfinder Bancorp, Inc. (“Pathfinder” or the “Company”) (NASDAQ: PBHC) announced its financial results for the third quarter ended September 30, 2024.

    The holding company for Pathfinder Bank (“the Bank”) reported a third quarter 2024 net loss attributable to common shareholders of $4.6 million or $0.75 per share, compared to net income available to common shareholders of $2.0 million or $0.32 per share in the second quarter of 2024 and $2.2 million or $0.35 per share in the third quarter of 2023.

    Third Quarter 2024 Highlights and Key Developments

    • The net loss reflected $9.0 million in provision expense that primarily resulted from a comprehensive loan portfolio review that the Bank elected to undertake as part of its commitment to continuously improve its credit risk management approach. Following its conclusion, the Company recorded net charge offs of $8.7 million in the quarter and reduced nonperforming loans by 34.0% to $16.2 million at period end, or 1.8% of total loans. The allowance for credit losses on September 30, 2024 represented 1.87% and 106.8% of total and nonperforming loans, respectively.
    • Net interest income increased for the third consecutive quarter to $11.7 million, including the benefit of a catch-up interest payment of $887,000. Net interest income increased $2.3 million from $9.5 million in the linked quarter ended June 30, 2024 and $1.7 million from $10.1 million in the third quarter of 2023. Net interest margin (“NIM”) expanded for the third consecutive quarter to 3.34%, including the benefit of 25 basis points from the catch-up interest payment. NIM increased 56 basis points from the linked quarter and 27 basis points from the year-ago period.
    • Non-interest income was $1.7 million, including a net death benefit of $175,000 on bank owned life insurance (“BOLI”), compared to $1.2 million in each of the linked and year-ago quarters.
    • Non-interest expense was $10.3 million, including $1.6 million in transaction-related expenses for the previously announced July 2024 closing of the East Syracuse branch acquisition, in addition to third quarter 2024 operating costs of approximately $462,000 associated with Pathfinder’s newest location. Non-interest expense was $7.9 million in the linked quarter and $7.7 million in the year-ago period.
    • Pre-tax, pre-provision net income was $3.4 million, including the effect of transaction-related expenses, compared to $2.8 million in the linked quarter and $3.6 million in the year-ago period. Pre-tax, pre-provision net income, which is not a financial metric under generally accepted accounting principles (“GAAP”), is a measure that the Company believes is helpful to understanding profitability without giving effect to income taxes and provision for credit losses.
    • Total deposits were $1.20 billion at period end, compared to $1.10 billion on June 30, 2024 and $1.13 billion on September 30, 2023. The Bank’s loan-to-deposit ratio was 77.1% on September 30, 2024.
    • Total loans were $921.7 million at period end, compared to $888.3 million on June 30, 2024 and $896.1 million on September 30, 2023.

    “Pathfinder is well positioned for organic growth opportunities in our attractive Central New York markets, having closed the third quarter with significantly reduced levels of nonperformers, healthy reserves, strong capital ratios, and abundant liquidity,” said President and Chief Executive Officer James A. Dowd. “Having completed a thorough, top-to-bottom review of the loan portfolio at the end of September, we believe it is sufficiently collateralized and reserved. Going forward, we intend to take a more exacting loss-mitigation approach, and Pathfinder’s ongoing underwriting and credit risk management processes can be expected to reflect the combined expertise of our entire management team and professional staff, including our recently appointed Chief Credit Officer Joseph Serbun and Chief Financial Officer Justin Bigham.”

    Dowd added, “Our financial performance also reflects the positive impact of Pathfinder Bank’s in-market core deposit franchise and immediate contributions from our recent East Syracuse branch acquisition, including higher loan and deposit balances, lower funding costs, revenue growth, and NIM expansion.  Looking ahead, as we end 2024 and begin the new year, we intend to tightly manage operating expenses and expect continued benefits from our core deposit franchise as a source of low-cost, relationship-based funding for commercial and retail loan growth in our local markets.”

    East Syracuse Branch Acquisition
    As previously announced, Pathfinder Bank completed the purchase of its East Syracuse branch on July 19, 2024, assuming $186.0 million in associated deposits and acquiring $30.6 million in assets including $29.9 million in loans. Acquired assets include a core deposit intangible (“CDI”) valued at $6.3 million, and the valuation of acquired loans resulted in an estimated discount of $1.8 million.

    The addition of the East Syracuse branch significantly increased the Bank’s customer base, which expanded the number of Pathfinder’s relationships by approximately 25% and grew non-brokered deposits by 21.5%.

    At acquisition, the average cost of deposits assumed with the branch acquisition was 1.99% (excluding the CDI) and as of September 30, 2024, the Bank retained approximately 97% of deposit balances. The Company utilized a portion of the low-cost liquidity provided by the transaction to pay down $74.4 million in borrowings and $106.0 million in high-cost brokered deposits during the third quarter of 2024.

    Insurance Business Divestiture
    On October 15, 2024, Pathfinder announced that it sold its interest in the FitzGibbons Agency, LLC, which contributed $28,000 to the Company’s net income and 24 basis points to its consolidated efficiency ratio in the third quarter of 2024, to Marshall & Sterling Enterprises, Inc. Reflecting an active insurance brokerage market and the FitzGibbons Agency’s success since initiating its partnership with the Bank 13 years ago, Pathfinder will receive approximately $2.0 million from the sale, which closed on October 1, 2024, and the Company expects to recognize a portion of that amount as a net gain in the fourth quarter of 2024.

    Net Interest Income and Net Interest Margin
    Third quarter 2024 net interest income was $11.7 million, an increase of 23.8% from the second quarter of 2024. An increase in interest and dividend income of $2.2 million was primarily attributed to average yield increases of 67 basis points on loans including 39 basis points from an $887,000 catch-up interest payment associated with purchased loan pool positions, 97 basis points on fed funds sold and interest-earning deposits, and 45 basis points on all earning assets. The corresponding increase in loan interest income and federal funds sold and interest-earning deposits was $1.9 million and $371,000, respectively. A decrease in interest expense of $75,000 was attributed to reductions in brokered deposits and short-term borrowings expense associated with paydowns of brokered deposits and borrowings utilizing a portion of the low-cost liquidity provided by the Bank’s East Syracuse branch acquisition.

    Net interest margin was 3.34% in the third quarter of 2024 compared to 2.78% in the second quarter of 2024. The increase of 56 basis points was driven by improvements in earning asset yields and funding costs, as well as 25 basis points attributed to the catch-up interest payment received in the third quarter of 2024.

    Third quarter 2024 net interest income was $11.7 million, an increase of 16.6% from the third quarter of 2023. An increase in interest and dividend income of $3.5 million was primarily attributed to average yield increases of 74 basis points on loans including 39 basis points from the catch-up interest payment, 67 basis points on taxable investment securities, 227 basis points on fed funds sold and interest-earning deposits, and 65 basis points on all earning assets. The corresponding increase in loan interest income, taxable investment securities, and federal funds sold and interest-earning deposits was $2.0 million, $1.2 million, and $426,000, respectively. Increased interest and dividend income was partially offset by an increase in interest expense of $1.9 million.  This increase in interest expense was predominantly the result of higher interest rates and balances associated with borrowing and higher average rates paid on interest-bearing deposits, compared to the third quarter of 2023.

    Net interest margin was 3.34% in the third quarter of 2024 compared to 3.07% in the third quarter of 2023. The increase of 27 basis points was driven by improvements in earning asset yields and lower average borrowings, partially offset by higher funding costs, as well as 25 basis points attributed to the catch-up interest payment received in the third quarter of 2024.

    Noninterest Income
    Noninterest income totaled $1.7 million in the third quarter of 2024, an increase of $496,000 or 41.0% from the second quarter of 2024 and an increase of $514,000 or 43.1% from the third quarter of 2023.

    Compared to the linked quarter, noninterest income growth included increases of $194,000 in earnings and gain on BOLI including the net death benefit of $175,000, $109,000 in debit card interchange fees, and $62,000 in service charges on deposit accounts, as well as a $33,000 decrease in loan servicing fees. Noninterest income growth from the linked quarter also reflected an increase of $204,000 in net realized losses on sales and redemptions of investment securities, as well as increases of $201,000 in net realized gains on sales of marketable equity securities and $50,000 in gains on sales of loans and foreclosed real estate.

    Compared to the year-ago quarter, noninterest income growth for the third quarter of 2024 included increases of $278,000 in interchange fees, $196,000 in earnings and gain on BOLI including the net death benefit of $175,000 on BOLI, and $49,000 in service charges on deposit accounts, as well as a $20,000 decrease in loan servicing fees. Noninterest income growth from the year-ago quarter also reflected a $178,000 increase in net realized losses on sales and redemptions of investment securities, as well as increases of $101,000 in net realized gains on sales of marketable equity securities and $49,000 in gains on sales of loans and foreclosed real estate.

    Prior to the October 1, 2024 sale of the Company’s insurance agency asset, it contributed $367,000 to noninterest income in the third quarter of 2024, compared to $260,000 and $310,000 in the linked and year-ago quarters, respectively.
      
    Noninterest Expense
    Noninterest expense totaled $10.3 million in the third quarter of 2024, increasing $2.4 million and $2.6 million from the linked and year-ago quarters, respectively. The increase was primarily due to $1.6 million in transaction-related expenses for the East Syracuse branch acquisition, in addition to third quarter 2024 operating costs of approximately $462,000 associated with operating Pathfinder Bank’s newest location.

    Professional and other services expense was $1.8 million in the third quarter, increasing $1.1 million and $1.3 million from the linked and year-ago quarters, respectively. The increase was primarily attributed to branch acquisition-related expenses.

    Salaries and benefits were $5.0 million in the third quarter of 2024, increasing $560,000 and $805,000 from the linked and year-ago quarters, respectively. The increase was primarily due to $141,000 transaction-related bonuses to employees, $115,000 reduced salary cost deferrals (“ASC 310-20”) associated with reduced lending volumes, and $80,000 of ongoing personnel-related costs associated with operating the branch acquired early in the third quarter of 2024. The remaining increase was primarily driven by higher salaries and benefits costs associated with merit increases and wage inflation.

    Building and occupancy was $1.1 million in the third quarter of 2024, increasing $220,000 and $266,000 from the linked and year-ago quarters, respectively. These increases were due to ongoing facilities-related costs of approximately $322,000 associated with operating the branch acquired early in the third quarter of 2024, partially offset by seasonal reductions in building and occupancy expense categories when compared to the second quarter of 2024.

    Prior to the October 1, 2024 sale of the Company’s insurance agency asset, it incurred $308,000 of noninterest expense in the third quarter of 2024, compared to $232,000 and $273,000 in the linked and year-ago quarters, respectively.

    For the third quarter of 2024, annualized noninterest expense represented 2.75% of average assets, including 8 basis points from insurance agency expense and 43 basis points from acquisition-related expenses.  The efficiency ratio was 75.28%, including 24 basis points and 1,186 basis points attributed to the insurance business and acquisition-related expenses, respectively.  The efficiency ratio, which is not a financial metric under GAAP, is a measure that the Company believes is helpful to understanding its level of non-interest expense as a percentage of total revenue. For the linked and year-ago quarters, annualized noninterest expense represented 2.19% and 2.20% of average assets, respectively. The efficiency ratio was 74.08% and 67.93% in the linked and year-ago periods.

    Statement of Financial Condition
    As of September 30, 2024, the Company’s statement of financial condition reflects total assets of $1.48 billion, compared to $1.45 billion and $1.40 billion recorded on June 30, 2024 and September 30, 2023, respectively.

    The increase in assets during the third quarter of 2024 was primarily due to higher total loan balances, including $29.9 million in primarily consumer, residential, and home equity loans acquired with the East Syracuse branch transaction in the third quarter of 2024.

    Loans totaled $921.7 million on September 30, 2024, increasing 3.8% during the third quarter and 2.9% from one year prior. Consumer and residential loans totaled $388.7 million, increasing 7.6% during the third quarter and 4.8% from one year prior. Commercial loans totaled $534.5 million, increasing 1.4% during the third quarter and 1.7% from one year prior.

    With respect to liabilities, deposits totaled $1.20 billion on September 30, 2024, increasing 8.6% during the third quarter and 6.1% from one year prior. The increase in deposits during the third quarter of 2024 reflects $186.0 million assumed with the East Syracuse branch acquisition, offset by a reduction of $106.0 million in brokered deposits utilizing lower-cost liquidity provided by the transaction, as well as seasonal fluctuations in municipal deposits. The Company also utilized liquidity provided by the transaction to reduce short-term borrowings, which totaled $60.3 million on September 30, 2024 as compared to $127.6 million on June 30, 2024 and $56.7 million on September 30, 2023.

    Shareholders equity totaled $120.3 million on September 30, 2024, down $3.1 million or 2.5% in the third quarter and $6.5 million or 5.7% from one year prior. The decrease reflects lower retained earnings attributed primarily to the elevated third quarter 2024 provision expense’s impact on net income in the period, which more than offset a significant reduction in accumulated other comprehensive loss (“AOCL”). AOCL improved to $6.7 million on September 30, 2024, declining $2.1 million or 23.6% during the third quarter and $6.6 million or 49.7% from one year prior, reflecting a favorable change in the interest rate environment.

    Asset Quality
    The Company’s asset quality metrics reflect the comprehensive loan portfolio review completed at the end of the third quarter of 2024.

    Nonperforming loans were reduced by 34.0% in the third quarter of 2024 to $16.2 million or 1.75% of total loans on September 30, 2024. Nonperforming loans were $24.5 million or 2.76% of total loans on June 30, 2024 and $16.2 million or 1.80% of total loans on September 30, 2023.

    Gross loan charge offs totaled $8.8 million in the third quarter of 2024, following completion of the portfolio review. Gross loan charge offs included $4.9 million for 13 nonperforming commercial loans, as well as $2.5 million for nonperforming positions primarily associated with secured solar purchased loan pools acquired in 2021.

    Net charge offs (“NCOs”) after recoveries were $8.7 million or an annualized 1.29% of average loans in the third quarter of 2024, compared to $66,000 or 0.02% in the linked quarter and $3.8 million or 0.61% in the prior year period.

    The $9.0 million provision for credit losses expense in the third quarter of 2024 primarily resulted from a replenishment of the allowance for credit losses (“ACL”) for commercial loan reserves and an adjustment to the lifetime loss estimate for solar purchased loan pool positions, which followed completion of the Company’s loan portfolio review. The Company believes it is sufficiently collateralized and reserved, with its ACL of $17.3 million on September 30, 2024 increasing by $382,000 from June 30, 2024 and $1.5 million from September 30, 2023. As a percentage of total loans, ACL represented 1.87% on September 30, 2024, 1.90% on June 30, 2024, and 1.76% on September 30, 2023.

    Liquidity
    The Company has diligently ensured a strong liquidity profile as of September 30, 2024 to meet its ongoing financial obligations. The Bank’s liquidity management, as evaluated by its cash reserves and operational cash flows from loan repayments and investment securities, remains robust and is effectively managed by the institution’s leadership.

    The Bank’s analysis indicates that expected cash inflows from loans and investment securities are more than sufficient to meet all projected financial obligations.  Total deposits increased to $1.20 billion on September 30, 2024 from $1.10 billion on June 30, 2024 and $1.13 billion on September 30, 2023. Core deposits increased to 77.45% of total deposits on September 30, 2024, from 67.98% on June 30, 2024 and 69.83% on September 30, 2023. This further underscores the success of the Bank’s strategic initiatives to enhance its core deposit franchise, including targeted marketing campaigns and customer engagement programs aimed at deepening banking relationships and enhancing deposit stability.

    At the end of the current quarter, Pathfinder Bancorp had an available additional funding capacity of $105.2 million with the Federal Home Loan Bank of New York, which complements its liquidity reserves. Moreover, the Bank maintains additional unused credit lines totaling $27.3 million, which provide a buffer for additional funding needs. These facilities, including access to the Federal Reserve’s Discount Window, are part of a comprehensive liquidity strategy that ensures flexibility and readiness to respond to any funding requirements.

    Cash Dividend Declared
    On September 30, 2024, Pathfinder’s Board of Directors declared a cash dividend of $0.10 per share for holders of both voting common and non-voting common stock.

    In addition, this dividend also extends to the notional shares of the Company’s warrants. Shareholders registered by October 18, 2024 will be eligible for the dividend, which is scheduled for disbursement on November 8, 2024. This distribution aligns with Pathfinder Bancorp’s philosophy of consistent and reliable delivery of shareholder value.

    Evaluating the Company’s market performance, the closing stock price as of September 30, 2024 stood at $15.83 per share. This positions the dividend yield at an attractive 2.53%.

    About Pathfinder Bancorp, Inc.
    Pathfinder Bancorp, Inc. (NASDAQ: PBHC) is the commercial bank holding company for Pathfinder Bank, which serves Central New York customers throughout Oswego, Syracuse and their neighboring communities. Strategically located branches averaging approximately $100 million in deposits per location, as well as diversified consumer, mortgage and commercial loan portfolios, reflect the state-chartered Bank’s commitment to in-market relationships and local customer service. The Company also offers investment services to individuals and businesses. At September 30, 2024, the Oswego-headquartered Company had assets of $1.48 billion, loans of $921.7 million, and deposits of $1.20 billion. More information is available at pathfinderbank.com and ir.pathfinderbank.com.

    Forward-Looking Statements
    Certain statements contained herein are “forward looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements are generally identified by use of the words “believe,” “expect,” “intend,” “anticipate,” “estimate,” “project” or similar expressions, or future or conditional verbs, such as “will,” “would,” “should,” “could,” or “may.” These forward-looking statements are based on current beliefs and expectations of the Company’s and the Bank’s management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond the Company’s and the Bank’s control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. Actual results may differ materially from those set forth in the forward-looking statements as a result of numerous factors. Factors that could cause such differences to exist include, but are not limited to: risks related to the real estate and economic environment, particularly in the market areas in which the Company and the Bank operate; fiscal and monetary policies of the U.S. Government; inflation; changes in government regulations affecting financial institutions, including regulatory compliance costs and capital requirements; fluctuations in the adequacy of the allowance for credit losses; decreases in deposit levels necessitating increased borrowing to fund loans and investments; operational risks including, but not limited to, cybersecurity, fraud and natural disasters; the risk that the Company may not be successful in the implementation of its business strategy; changes in prevailing interest rates; credit risk management; asset-liability management; and other risks described in the Company’s filings with the Securities and Exchange Commission, which are available at the SEC’s website, www.sec.gov.

    This release contains non-GAAP financial measures. For purposes of Regulation G, a non-GAAP financial measure is a numerical measure of a registrant’s historical or future financial performance, financial position, or cash flows that excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable measure calculated and presented in accordance with GAAP in the statement of income, balance sheet, or statement of cash flows (or equivalent statements) of the registrant; or includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the most directly comparable measure so calculated and presented. In this regard, GAAP refers to generally accepted accounting principles in the United States. Pursuant to the requirements of Regulation G, the Company has provided reconciliations within the release of the non-GAAP financial measures to the most directly comparable GAAP financial.

    PATHFINDER BANCORP, INC.                              
    Selected Financial Information (Unaudited)                              
    (Amounts in thousands, except per share amounts)                              
                                   
        2024     2023  
    SELECTED BALANCE SHEET DATA:   September 30,     June 30,     March 31,     December 31,     September 30,  
    ASSETS:                              
    Cash and due from banks   $ 18,923     $ 12,022     $ 13,565     $ 12,338     $ 12,822  
    Interest-earning deposits     16,401       19,797       15,658       36,394       11,652  
    Total cash and cash equivalents     35,324       31,819       29,223       48,732       24,474  
    Available-for-sale securities, at fair value     271,977       274,977       279,012       258,716       206,848  
    Held-to-maturity securities, at amortized cost     161,385       166,271       172,648       179,286       185,589  
    Marketable equity securities, at fair value     3,872       3,793       3,342       3,206       3,013  
    Federal Home Loan Bank stock, at cost     5,401       8,702       7,031       8,748       5,824  
    Loans     921,660       888,263       891,531       897,207       896,123  
    Less: Allowance for credit losses     17,274       16,892       16,655       15,975       15,767  
    Loans receivable, net     904,386       871,371       874,876       881,232       880,356  
    Premises and equipment, net     18,989       18,878       18,332       18,441       18,491  
    Assets held-for-sale     –       3,042       3,042       3,042       3,042  
    Operating lease right-of-use assets     1,425       1,459       1,493       1,526       1,559  
    Finance lease right-of-use assets     16,873       4,004       4,038       4,073       4,108  
    Accrued interest receivable     6,806       7,076       7,170       7,286       6,594  
    Foreclosed real estate     –       60       82       151       189  
    Intangible assets, net     6,217       76       80       85       88  
    Goodwill     5,752       4,536       4,536       4,536       4,536  
    Bank owned life insurance     24,560       24,967       24,799       24,641       24,479  
    Other assets     20,159       25,180       23,968       22,097       31,459  
    Total assets   $ 1,483,126     $ 1,446,211     $ 1,453,672     $ 1,465,798     $ 1,400,649  
                                   
    LIABILITIES AND SHAREHOLDERS’ EQUITY:                              
    Deposits:                              
    Interest-bearing deposits   $ 986,103     $ 932,132     $ 969,692     $ 949,898     $ 953,143  
    Noninterest-bearing deposits     210,110       169,145       176,421       170,169       174,710  
    Total deposits     1,196,213       1,101,277       1,146,113       1,120,067       1,127,853  
    Short-term borrowings     60,315       127,577       91,577       125,680       56,698  
    Long-term borrowings     39,769       45,869       45,869       49,919       53,915  
    Subordinated debt     30,057       30,008       29,961       29,914       29,867  
    Accrued interest payable     236       2,092       1,963       2,245       1,731  
    Operating lease liabilities     1,621       1,652       1,682       1,711       1,739  
    Finance lease liabilities     16,829       4,359       4,370       4,381       4,391  
    Other liabilities     16,986       9,203       9,505       11,625       10,013  
    Total liabilities     1,362,026       1,322,037       1,331,040       1,345,542       1,286,207  
    Shareholders’ equity:                              
    Voting common stock shares issued and outstanding     4,719,788       4,719,788       4,719,788       4,719,288       4,713,353  
    Voting common stock     47       47       47       47       47  
    Non-Voting common stock     14       14       14       14       14  
    Additional paid in capital     53,231       53,182       53,151       53,114       52,963  
    Retained earnings     73,670       78,936       77,558       76,060       74,282  
    Accumulated other comprehensive loss     (6,716 )     (8,786 )     (8,862 )     (9,605 )     (13,356 )
    Unearned ESOP shares     –       (45 )     (90 )     (135 )     (180 )
    Total Pathfinder Bancorp, Inc. shareholders’ equity     120,246       123,348       121,818       119,495       113,770  
    Noncontrolling interest     854       826       814       761       672  
    Total equity     121,100       124,174       122,632       120,256       114,442  
    Total liabilities and shareholders’ equity   $ 1,483,126     $ 1,446,211     $ 1,453,672     $ 1,465,798     $ 1,400,649  

    The above information is preliminary and based on the Company’s data available at the time of presentation.

        Nine Months Ended
    September 30,
        2024     2023  
    SELECTED INCOME STATEMENT DATA:   2024     2023     Q3     Q2     Q1     Q4     Q3  
    Interest and dividend income:                                          
    Loans, including fees   $ 39,182     $ 34,919     $ 14,425     $ 12,489     $ 12,268     $ 12,429     $ 12,470  
    Debt securities:                                          
    Taxable     17,007       12,408       5,664       5,736       5,607       5,092       4,488  
    Tax-exempt     1,475       1,441       469       498       508       506       507  
    Dividends     456       341       149       178       129       232       140  
    Federal funds sold and interest-earning deposits     711       226       492       121       98       69       66  
    Total interest and dividend income     58,831       49,335       21,199       19,022       18,610       18,328       17,671  
    Interest expense:                                          
    Interest on deposits     22,670       15,885       7,633       7,626       7,411       7,380       6,223  
    Interest on short-term borrowings     3,476       1,624       1,136       1,226       1,114       1,064       674  
    Interest on long-term borrowings     597       619       202       201       194       231       222  
    Interest on subordinated debt     1,476       1,447       496       489       491       494       492  
    Total interest expense     28,219       19,575       9,467       9,542       9,210       9,169       7,611  
    Net interest income     30,612       29,760       11,732       9,480       9,400       9,159       10,060  
    Provision for (benefit from) credit losses:                                          
    Loans     10,118       2,675       9,104       304       710       316       798  
    Held-to-maturity securities     (90 )     (24 )     (31 )     (74 )     15       (74 )     5  
    Unfunded commitments     (43 )     14       (104 )     60       1       23       30  
    Total provision for credit losses     9,985       2,665       8,969       290       726       265       833  
    Net interest income after provision for credit losses     20,627       27,095       2,763       9,190       8,674       8,894       9,227  
    Noninterest income:                                          
    Service charges on deposit accounts     1,031       913       392       330       309       336       343  
    Earnings and gain on bank owned life insurance     685       466       361       167       157       164       165  
    Loan servicing fees     279       238       79       112       88       69       99  
    Net realized (losses) gains on sales and redemptions of investment securities     (320 )     60       (188 )     16       (148 )     2       (13 )
    Net realized gains (losses) on sales of marketable equity securities     31       (208 )     62       (139 )     108       (47 )     (39 )
    Gains on sales of loans and foreclosed real estate     148       183       90       40       18       (2 )     41  
    Loss on sale of premises and equipment     (36 )     –       (36 )     –       –       –       –  
    Debit card interchange fees     610       455       300       191       119       161       22  
    Insurance agency revenue     1,024       1,001       367       260       397       303       310  
    Other charges, commissions & fees     1,203       764       280       234       689       332       265  
    Total noninterest income     4,655       3,872       1,707       1,211       1,737       1,318       1,193  
    Noninterest expense:                                          
    Salaries and employee benefits     13,687       12,243       4,959       4,399       4,329       3,677       4,154  
    Building and occupancy     2,864       2,699       1,134       914       816       864       868  
    Data processing     1,750       1,519       672       550       528       499       483  
    Professional and other services     3,078       1,531       1,820       696       562       488       492  
    Advertising     386       516       165       116       105       155       144  
    FDIC assessments     685       663       228       228       229       222       222  
    Audits and exams     416       476       123       123       170       259       159  
    Insurance agency expense     825       817       308       232       285       216       273  
    Community service activities     111       151       20       39       52       49       55  
    Foreclosed real estate expenses     82       76       27       30       25       35       44  
    Other expenses     1,989       1,660       803       581       605       580       759  
    Total noninterest expense     25,873       22,351       10,259       7,908       7,706       7,044       7,653  
    (Loss) income before provision for income taxes     (591 )     8,616       (5,789 )     2,493       2,705       3,168       2,767  
    (Benefit) provision for income taxes     (160 )     1,772       (1,173 )     481       532       590       573  
    Net (loss) income attributable to noncontrolling interest and Pathfinder Bancorp, Inc.     (431 )     6,844       (4,616 )     2,012       2,173       2,578       2,194  
    Net income attributable to noncontrolling interest     93       87       28       12       53       42       18  
    Net (loss) income attributable to Pathfinder Bancorp Inc.   $ (524 )   $ 6,757     $ (4,644 )   $ 2,000     $ 2,120     $ 2,536     $ 2,176  
    Voting Earnings per common share – basic and diluted   $ (0.09 )   $ 1.10     $ (0.75 )   $ 0.32     $ 0.34     $ 0.41     $ 0.35  
    Series A Non-Voting Earnings per common share- basic and diluted   $ (0.09 )   $ 1.10     $ (0.75 )   $ 0.32     $ 0.34     $ 0.41     $ 0.35  
    Dividends per common share (Voting and Series A Non-Voting)   $ 0.30     $ 0.27     $ 0.10     $ 0.10     $ 0.10     $ 0.09     $ 0.09  

    The above information is preliminary and based on the Company’s data available at the time of presentation.

        Nine Months
    Ended September
    30,
        2024     2023  
    FINANCIAL HIGHLIGHTS:   2024     2023     Q3     Q2     Q1     Q4     Q3  
    Selected Ratios:                                          
    Return on average assets     -0.05 %     0.65 %     -1.25 %     0.56 %     0.59 %     0.72 %     0.63 %
    Return on average common equity     -0.57 %     7.88 %     -14.79 %     6.49 %     7.01 %     8.72 %     7.50 %
    Return on average equity     -0.57 %     7.88 %     -14.79 %     6.49 %     7.01 %     8.72 %     7.50 %
    Return on average tangible common equity (1)     -0.59 %     8.23 %     -15.28 %     6.78 %     7.32 %     9.01 %     7.75 %
    Net interest margin     2.97 %     3.02 %     3.34 %     2.78 %     2.75 %     2.74 %     3.07 %
    Loans/deposits     77.05 %     79.45 %     77.05 %     80.66 %     77.79 %     80.10 %     79.45 %
    Core deposits/deposits (2)     77.45 %     69.83 %     77.45 %     67.98 %     69.17 %     69.83 %     69.83 %
    Annualized non-interest expense/average assets     2.39 %     2.16 %     2.75 %     2.19 %     2.16 %     2.01 %     2.20 %
    Efficiency ratio (1)     72.70 %     66.58 %     75.28 %     74.08 %     68.29 %     67.25 %     67.93 %
                                               
    Other Selected Data:                                          
    Average yield on loans     5.82 %     5.17 %     6.31 %     5.64 %     5.48 %     5.55 %     5.57 %
    Average cost of interest bearing deposits     3.12 %     2.23 %     3.11 %     3.21 %     3.07 %     3.10 %     2.65 %
    Average cost of total deposits, including non-interest bearing     2.64 %     1.88 %     2.59 %     2.72 %     2.61 %     2.63 %     2.24 %
    Deposits/branch (4)   $ 99,684     $ 102,532     $ 99,684     $ 100,116     $ 104,192     $ 101,824     $ 102,532  
    Pre-tax, pre-provision net income (1)   $ 9,714     $ 11,221     $ 3,368     $ 2,767     $ 3,579     $ 3,431     $ 3,613  
    Total revenue (1)   $ 35,587     $ 33,572     $ 13,627     $ 10,675     $ 11,285     $ 10,475     $ 11,266  
                                               
    Share and Per Share Data:                                          
    Cash dividends per share   $ 0.30     $ 0.27     $ 0.10     $ 0.10     $ 0.10     $ 0.09     $ 0.09  
    Book value per common share   $ 19.71     $ 18.67     $ 19.71     $ 20.22     $ 19.97     $ 19.59     $ 18.67  
    Tangible book value per common share (1)   $ 17.75     $ 17.91     $ 17.75     $ 19.46     $ 19.21     $ 18.83     $ 17.91  
    Basic and diluted weighted average shares outstanding – Voting     4,708       4,640       4,714       4,708       4,701       4,693       4,671  
    Basic and diluted earnings per share – Voting (3)   $ (0.09 )   $ 1.10     $ (0.75 )   $ 0.32     $ 0.34     $ 0.41     $ 0.35  
    Basic and diluted weighted average shares outstanding – Series A Non-Voting     1,380       1,380       1,380       1,380       1,380       1,380       1,380  
    Basic and diluted earnings per share – Series A Non-Voting (3)   $ (0.09 )   $ 1.10     $ (0.75 )   $ 0.32     $ 0.34     $ 0.41     $ 0.35  
    Common shares outstanding at period end     6,100       6,094       6,100       6,100       6,100       6,100       6,094  
                                               
    Pathfinder Bancorp, Inc. Capital Ratios:                                          
    Company tangible common equity to tangible assets (1)     7.36 %     7.82 %     7.36 %     8.24 %     8.09 %     7.86 %     7.82 %
    Company Total Core Capital (to Risk-Weighted Assets)     15.55 %     17.00 %     15.55 %     16.19 %     16.23 %     16.17 %     17.00 %
    Company Tier 1 Capital (to Risk-Weighted Assets)     11.84 %     12.39 %     11.84 %     12.31 %     12.33 %     12.30 %     12.39 %
    Company Tier 1 Common Equity (to Risk-Weighted Assets)     11.33 %     12.91 %     11.33 %     11.83 %     11.85 %     11.81 %     12.91 %
    Company Tier 1 Capital (to Assets)     8.29 %     9.21 %     8.29 %     9.16 %     9.16 %     9.35 %     9.21 %
                                               
    Pathfinder Bank Capital Ratios:                                          
    Bank Total Core Capital (to Risk-Weighted Assets)     14.52 %     14.76 %     14.52 %     16.04 %     15.65 %     15.05 %     14.76 %
    Bank Tier 1 Capital (to Risk-Weighted Assets)     13.26 %     13.51 %     13.26 %     14.79 %     14.39 %     13.80 %     13.51 %
    Bank Tier 1 Common Equity (to Risk-Weighted Assets)     13.26 %     13.51 %     13.26 %     14.79 %     14.39 %     13.80 %     13.51 %
    Bank Tier 1 Capital (to Assets)     9.13 %     10.11 %     9.13 %     10.30 %     10.13 %     10.11 %     10.11 %

    (1) Non-GAAP financial metrics. See non-GAAP reconciliation included herein for the most directly comparable GAAP measures.
    (2) Non-brokered deposits excluding certificates of deposit of $250,000 or more.
    (3) Basic and diluted earnings per share are calculated based upon the two-class method. Weighted average shares outstanding do not include unallocated ESOP shares.
    (4) Includes 11 full-service branches and one motor bank for September 30, 2024. Includes 10 full-service branches and one motor bank for all periods prior.

    The above information is preliminary and based on the Company’s data available at the time of presentation.

        Nine Months
    Ended September
    30,
        2024     2023  
    ASSET QUALITY:   2024     2023     Q3     Q2     Q1     Q4     Q3  
    Total loan charge-offs   $ 8,992     $ 4,365     $ 8,812     $ 112     $ 68     $ 211     $ 3,874  
    Total recoveries     174       252       90       46       38       103       45  
    Net loan charge-offs     8,818       4,113       8,722       66       30       108       3,829  
    Allowance for credit losses at period end     17,274       15,767       17,274       16,892       16,655       15,975       15,767  
    Nonperforming loans at period end     16,170       16,173       16,170       24,490       19,652       17,227       16,173  
    Nonperforming assets at period end   $ 16,170     $ 16,362     $ 16,170     $ 24,550     $ 19,734     $ 17,378     $ 16,362  
    Annualized net loan charge-offs to average loans     1.29 %     0.61 %     1.29 %     0.02 %     0.01 %     0.47 %     0.61 %
    Allowance for credit losses to period end loans     1.87 %     1.76 %     1.87 %     1.90 %     1.87 %     1.78 %     1.76 %
    Allowance for credit losses to nonperforming loans     106.83 %     97.49 %     106.83 %     68.98 %     84.75 %     92.73 %     97.49 %
    Nonperforming loans to period end loans     1.75 %     1.80 %     1.75 %     2.76 %     2.20 %     1.92 %     1.80 %
    Nonperforming assets to period end assets     1.09 %     1.17 %     1.09 %     1.70 %     1.36 %     1.19 %     1.17 %
        2024     2023  
    LOAN COMPOSITION:   September 30,     June 30,     March 31,     December 31,     September 30,  
    1-4 family first-lien residential mortgages   $ 255,235     $ 250,106     $ 252,026     $ 257,604     $ 252,956  
    Residential construction     4,077       309       1,689       1,355       2,090  
    Commercial real estate     378,805       370,361       363,467       358,707       362,822  
    Commercial lines of credit     64,672       62,711       67,416       72,069       73,497  
    Other commercial and industrial     88,247       90,813       91,178       89,803       85,506  
    Paycheck protection program loans     125       136       147       158       169  
    Tax exempt commercial loans     2,658       3,228       3,374       3,430       3,451  
    Home equity and junior liens     52,709       35,821       35,723       34,858       34,666  
    Other consumer     76,703       75,195       77,106       79,797       81,319  
    Subtotal loans     923,231       888,680       892,126       897,781       896,476  
    Deferred loan fees     (1,571 )     (417 )     (595 )     (574 )     (353 )
    Total loans   $ 921,660     $ 888,263     $ 891,531     $ 897,207     $ 896,123  
        2024     2023  
    DEPOSIT COMPOSITION:   September 30,     June 30,     March 31,     December 31,     September 30,  
    Savings accounts   $ 129,053     $ 106,048     $ 111,465     $ 113,543     $ 118,406  
    Time accounts     352,729       368,262       378,103       377,570       359,011  
    Time accounts in excess of $250,000     140,181       117,021       114,514       95,272       96,686  
    Money management accounts     11,520       12,154       11,676       12,364       13,052  
    MMDA accounts     250,007       193,915       215,101       224,707       235,165  
    Demand deposit interest-bearing     97,344       128,168       134,196       119,321       125,585  
    Demand deposit noninterest-bearing     210,110       169,145       176,434       170,169       174,712  
    Mortgage escrow funds     5,269       6,564       4,624       7,121       5,236  
    Total deposits   $ 1,196,213     $ 1,101,277     $ 1,146,113     $ 1,120,067     $ 1,127,853  

    The above information is preliminary and based on the Company’s data available at the time of presentation.

        Nine Months Ended
    September 30,
        2024     2023  
    SELECTED AVERAGE BALANCES:   2024     2023     Q3     Q2     Q3  
    Interest-earning assets:                              
    Loans   $ 898,361     $ 900,917     $ 914,467     $ 885,384     $ 895,900  
    Taxable investment securities     427,311       371,615       415,751       434,572       376,455  
    Tax-exempt investment securities     29,499       31,077       30,382       28,944       27,831  
    Fed funds sold and interest-earning deposits     20,161       11,750       42,897       13,387       11,395  
    Total interest-earning assets     1,375,332       1,315,359       1,403,497       1,362,287       1,311,581  
    Noninterest-earning assets:                              
    Other assets     99,200       99,431       103,856       98,746       102,738  
    Allowance for credit losses     (16,511 )     (18,043 )     (16,537 )     (16,905 )     (19,028 )
    Net unrealized losses on available-for-sale securities     (10,184 )     (12,919 )     (9,161 )     (10,248 )     (13,275 )
    Total assets   $ 1,447,837     $ 1,383,828     $ 1,481,655     $ 1,433,880     $ 1,382,016  
    Interest-bearing liabilities:                              
    NOW accounts   $ 100,922     $ 94,116     $ 102,868     $ 92,918     $ 90,992  
    Money management accounts     11,782       14,651       11,828       12,076       14,503  
    MMDA accounts     217,580       241,550       227,247       214,364       218,601  
    Savings and club accounts     115,875       127,490       127,262       107,558       121,710  
    Time deposits     521,832       472,614       514,050       524,276       493,907  
    Subordinated loans     29,978       29,793       30,025       29,977       29,837  
    Borrowings     129,943       99,029       122,129       141,067       110,780  
    Total interest-bearing liabilities     1,127,912       1,079,243       1,135,409       1,122,236       1,080,330  
    Noninterest-bearing liabilities:                              
    Demand deposits     177,202       174,143       195,765       171,135       169,825  
    Other liabilities     19,382       16,100       24,855       17,298       15,768  
    Total liabilities     1,324,496       1,269,486       1,356,029       1,310,669       1,265,923  
    Shareholders’ equity     123,341       114,342       125,626       123,211       116,093  
    Total liabilities & shareholders’ equity   $ 1,447,837     $ 1,383,828     $ 1,481,655     $ 1,433,880     $ 1,382,016  
        Nine Months Ended
    September 30,
        2024     2023  
    SELECTED AVERAGE YIELDS:   2024     2023     Q3     Q2     Q3  
    Interest-earning assets:                              
    Loans     5.82 %     5.17 %     6.31 %     5.64 %     5.57 %
    Taxable investment securities     5.45 %     4.57 %     5.59 %     5.44 %     4.92 %
    Tax-exempt investment securities     6.67 %     6.18 %     6.17 %     6.88 %     7.29 %
    Fed funds sold and interest-earning deposits     4.70 %     2.56 %     4.59 %     3.62 %     2.32 %
    Total interest-earning assets     5.70 %     5.00 %     6.04 %     5.59 %     5.39 %
    Interest-bearing liabilities:                              
    NOW accounts     1.06 %     0.45 %     1.09 %     1.14 %     0.55 %
    Money management accounts     0.11 %     0.11 %     0.10 %     0.10 %     0.11 %
    MMDA accounts     3.64 %     2.51 %     3.54 %     3.74 %     3.00 %
    Savings and club accounts     0.26 %     0.21 %     0.25 %     0.26 %     0.22 %
    Time deposits     4.01 %     3.05 %     4.09 %     4.03 %     3.55 %
    Subordinated loans     6.56 %     6.48 %     6.61 %     6.53 %     6.60 %
    Borrowings     4.18 %     3.02 %     4.38 %     4.05 %     3.24 %
    Total interest-bearing liabilities     3.34 %     2.42 %     3.34 %     3.40 %     2.82 %
    Net interest rate spread     2.36 %     2.58 %     2.70 %     2.19 %     2.57 %
    Net interest margin     2.97 %     3.02 %     3.34 %     2.78 %     3.07 %
    Ratio of average interest-earning assets to average interest-bearing liabilities     121.94 %     121.88 %     123.61 %     121.39 %     121.41 %

    The above information is preliminary and based on the Company’s data available at the time of presentation.

        Nine Months
    Ended September
    30,
        2024     2023  
    NON-GAAP RECONCILIATIONS:   2024     2023     Q3     Q2     Q1     Q4     Q3  
    Tangible book value per common share:                                          
    Total equity               $ 120,246     $ 123,348     $ 121,818     $ 119,495     $ 113,770  
    Intangible assets                 (11,969 )     (4,612 )     (4,616 )     (4,621 )     (4,624 )
    Tangible common equity (non-GAAP)                 108,277       118,736       117,202       114,874       109,146  
    Common shares outstanding                 6,100       6,100       6,100       6,100       6,094  
    Tangible book value per common share (non-GAAP)               $ 17.75     $ 19.46     $ 19.21     $ 18.83     $ 17.91  
    Tangible common equity to tangible assets:                                          
    Tangible common equity (non-GAAP)               $ 108,277     $ 118,736     $ 117,202     $ 114,874     $ 109,146  
    Tangible assets                 1,471,157       1,441,599       1,449,056       1,461,177       1,396,025  
    Tangible common equity to tangible assets ratio (non-GAAP)                 7.36 %     8.24 %     8.09 %     7.86 %     7.82 %
    Return on average tangible common equity:                                          
    Average shareholders’ equity   $ 123,341     $ 114,342     $ 125,626     $ 123,211     $ 121,031     $ 116,265     $ 116,093  
    Average intangible assets     4,642       4,631       4,691       4,614       4,619       4,623       4,627  
    Average tangible equity (non-GAAP)     118,699       109,711       120,935       118,597       116,412       111,642       111,466  
    Net income (loss)     (524 )     6,757       (4,644 )     2,000       2,120       2,536       2,176  
    Net income (loss), annualized   $ (700 )   $ 9,034     $ (18,475 )   $ 8,044     $ 8,527     $ 10,061     $ 8,633  
    Return on average tangible common equity (non-GAAP) (1)     -0.59 %     8.23 %     -15.28 %     6.78 %     7.32 %     9.01 %     7.75 %
    Revenue, pre-tax, pre-provision net income, and efficiency ratio:                                          
    Net interest income   $ 30,612     $ 29,760     $ 11,732     $ 9,480     $ 9,400     $ 9,159     $ 10,060  
    Total noninterest income     4,655       3,872       1,707       1,211       1,737       1,318       1,193  
    Net realized (gains) losses on sales and redemptions of investment securities     (320 )     60       (188 )     16       (148 )     2       (13 )
    Revenue (non-GAAP) (2)     35,587       33,572       13,627       10,675       11,285       10,475       11,266  
    Total non-interest expense     25,873       22,351       10,259       7,908       7,706       7,044       7,653  
    Pre-tax, pre-provision net income (non-GAAP) (3)   $ 9,714     $ 11,221     $ 3,368     $ 2,767     $ 3,579     $ 3,431     $ 3,613  
    Efficiency ratio (non-GAAP) (4)     72.70 %     66.58 %     75.28 %     74.08 %     68.29 %     67.25 %     67.93 %

    (1) Return on average tangible common equity equals annualized net income (loss) divided by average tangible equity
    (2) Revenue equals net interest income plus total noninterest income less net realized gains or losses on sales and redemptions of investment securities
    (3) Pre-tax, pre-provision net income equals revenue less total non-interest expense
    (4) Efficiency ratio equals noninterest expense divided by revenue

    The above information is preliminary and based on the Company’s data available at the time of presentation.

    Investor/Media Contacts
    James A. Dowd, President, CEO
    Justin K. Bigham, Senior Vice President, CFO
    Telephone: (315) 343-0057

    The MIL Network –

    January 25, 2025
  • MIL-OSI: LPL Financial Announces Third Quarter 2024 Results

    Source: GlobeNewswire (MIL-OSI)

    Key Financial Results

    • Net Income was $255 million, translating to diluted earnings per share (“EPS”) of $3.39, up 16% from a year ago
    • Adjusted EPS* increased 11% year-over-year to $4.16
      • Gross profit* increased 12% year-over-year to $1,128 million
      • Core G&A* increased 5% year-over-year to $359 million  
      • Adjusted EBITDA* increased 12% year-over-year to $566 million

    Key Business Results

    • Total advisory and brokerage assets increased 29% year-over-year to $1.6 trillion
      • Advisory assets increased 35% year-over-year to $892 billion
      • Advisory assets as a percentage of total assets increased to 56.0%, up from 53.5% a year ago
    • Total organic net new assets were $27 billion, representing 7% annualized growth
      • Excluding a $6 billion outflow related to a planned separation from misaligned large OSJs, total organic net new assets were $33 billion, translating to a 9% annualized growth rate
      • Organic net new advisory assets were $23 billion, representing 11% annualized growth. Excluding the impact of the planned separations, total organic net new advisory assets were $28 billion, translating to a 14% annualized growth rate.
    • Recruited assets(1)were $26 billion
      • Recruited assets over the trailing twelve months were $87 billion, up approximately 12% from a year ago
    • Advisor count(2)was 23,686, up 224 sequentially and 1,282 year-over-year
    • Total client cash balances were $46 billion, an increase of $2 billion sequentially and a decrease of $1 billion year-over-year
      • Client cash balances as a percentage of total assets were 2.9%, in-line with the prior quarter and down from 3.8% a year ago

    Key Capital and Liquidity Results

    • Corporate cash(3)was $708 million
    • Leverage ratio(4)was 1.61x
    • Dividends paid were $22.4 million

    Key Updates

    • M&A:
      • Atria Wealth Solutions, Inc. (“Atria”): In October 2024, closed the acquisition of Atria, a wealth management solutions holding company. Atria supports ~2,200 advisors and ~160 banks and credit unions, managing ~$110 billion of brokerage and advisory assets. Conversion is expected to be completed in mid-2025.
        • Estimated run-rate EBITDA has increased from $140 million at announcement to $150 million
      • The Investment Center, Inc. (“The Investment Center”): Announced a definitive agreement to acquire The Investment Center, a firm with ~240 advisors serving ~$9 billion of brokerage and advisory assets. We expect to close and convert the acquisition in the first half of 2025.
      • Liquidity & Succession: Deployed approximately $34 million of capital to close six deals, including our first three external practices
    • Prudential Advisors (“Prudential”): On track to onboard the retail wealth management business of Prudential during Q4
      • Estimated run-rate EBITDA has increased from $60 million at announcement to $70 million
    • Core G&A*:
      • While there are variable costs associated with supporting our strong levels of organic growth, given our ongoing focus on efficiency, we are tightening our 2024 Core G&A* outlook to a range of $1,475 million to $1,485 million
      • Additionally, we are increasing the range by $35 million to $40 million to include costs related to the acquisition of Atria and onboarding of Prudential, resulting in an updated range of $1,510 million to $1,525 million
    • Share Repurchases: We plan to resume our share repurchase program in Q4 2024, with an estimated $100 million of repurchases planned during the fourth quarter

    *See the Non-GAAP Financial Measures section and the endnotes to this release for further details about these non-GAAP financial measures

    SAN DIEGO, Oct. 30, 2024 (GLOBE NEWSWIRE) — LPL Financial Holdings Inc. (Nasdaq: LPLA) (the “Company”) today announced results for its third quarter ended September 30, 2024, reporting net income of $255 million or $3.39 per share. This compares with $224 million, or $2.91 per share, in the third quarter of 2023 and $244 million, or $3.23 per share, in the prior quarter.

    “I joined LPL with the mandate to accelerate our growth, and for the past six years, have worked closely with Matt Audette and the rest of our leadership team, to set our strategic vision, and to build and execute on the plan to achieve that vision,” said Rich Steinmeier, CEO. “Looking forward, our opportunity is clear – to assert our leadership and shape both the advisor and institutional markets. Our focus is on creating the culture, workplace environment, and capabilities, to achieve sustainable outperformance through becoming an indispensable partner to our advisors and institutions, while delivering long-term value to shareholders.”

    “We’re operating from a position of strength with a leadership team that is focused on supporting our advisors’ success through innovative solutions,” said Matt Audette, President and CFO. “In my expanded role, I look forward to the opportunity to help extend our leadership position in the advisor-mediated markets and to enhance value for our shareholders. Specific to the third quarter, we delivered strong organic growth in both our traditional and new markets. As a complement, we announced our acquisition of The Investment Center, and early in the fourth quarter we closed our acquisition of Atria. As we look ahead, we remain excited by the opportunities we have to serve and support our advisors, while continuing to deliver an industry leading value proposition.”

    Dividend Declaration

    The Company’s Board of Directors declared a $0.30 per share dividend to be paid on December 2, 2024 to all stockholders of record as of November 14, 2024.

    Conference Call and Additional Information

    The Company will hold a conference call to discuss its results at 5:00 p.m. ET on Wednesday, October 30, 2024. The conference call will be accessible and available for replay at investor.lpl.com/events.

    Contacts

    Investor Relations
    investor.relations@lplfinancial.com

    Media Relations
    media.relations@lplfinancial.com

    About LPL Financial

    LPL Financial Holdings Inc. (Nasdaq: LPLA) was founded on the principle that the firm should work for advisors and institutions, and not the other way around. Today, LPL is a leader in the markets we serve(5), serving more than 23,000 financial advisors, including advisors at approximately 1,000 institutions and at approximately 580 registered investment advisor (“RIA”) firms nationwide. We are steadfast in our commitment to the advisor-mediated model and the belief that Americans deserve access to personalized guidance from a financial professional. At LPL, independence means that advisors and institution leaders have the freedom they deserve to choose the business model, services, and technology resources that allow them to run a thriving business. They have the flexibility to do business their way. And they have the freedom to manage their client relationships, because they know their clients best. Simply put, we take care of our advisors and institutions, so they can take care of their clients.

    Securities and Advisory services offered through LPL Financial LLC (“LPL Financial”), a registered investment advisor. Member FINRA/SIPC. LPL Financial and its affiliated companies provide financial services only from the United States.

    Throughout this communication, the terms “financial advisors” and “advisors” are used to refer to registered representatives and/or investment advisor representatives affiliated with LPL Financial.

    We routinely disclose information that may be important to shareholders in the “Investor Relations” or “Press Releases” section of our website.

    Forward-Looking Statements

    This press release contains statements regarding:

    • the amount and timing of the onboarding of acquired, recruited or transitioned brokerage and advisory assets, including Atria, Prudential and The Investment Center;
    • the Company’s future financial and operating results, growth, plans, priorities and business strategies, including forecasts and statements related to the Company’s core G&A expenses; and
    • future capabilities, future advisor service experience, future investments and capital deployment, including share repurchase activity and dividends, if any, and long-term shareholder value.

    These and any other statements that are not related to present facts or current conditions, or that are not purely historical, constitute forward-looking statements. They reflect the Company’s expectations and objectives as of October 30, 2024 and are not guarantees that expectations or objectives expressed or implied will be achieved. The achievement of such expectations and objectives involves risks and uncertainties that may cause actual results, levels of activity or the timing of events to differ materially from those expressed or implied by forward-looking statements. Important factors that could cause or contribute to such differences include:

    • the failure to satisfy the closing conditions applicable to the Company’s strategic relationship agreement with Prudential, or the Company’s purchase agreement with The Investment Center, including regulatory approvals;
    • difficulties and delays in onboarding the assets of acquired, recruited or transitioned advisors, including the receipt and timing of regulatory approvals that may be required;
    • disruptions in the businesses of the Company that could make it more difficult to maintain relationships with advisors and their clients;
    • the choice by clients of acquired or recruited advisors not to open brokerage and/or advisory accounts at the Company;
    • changes in general economic and financial market conditions, including retail investor sentiment;
    • changes in interest rates and fees payable by banks participating in the Company’s client cash programs, including the Company’s success in negotiating agreements with current or additional counterparties;
    • the Company’s strategy and success in managing client cash program fees;
    • fluctuations in the levels of advisory and brokerage assets, including net new assets, and the related impact on revenue;
    • effects of competition in the financial services industry and the success of the Company in attracting and retaining financial advisors and institutions, and their ability to provide financial products and services effectively;
    • whether the retail investors served by newly-recruited advisors choose to move their respective assets to new accounts at the Company;
    • changes in the growth and profitability of the Company’s fee-based offerings and asset-based revenues;
    • the effect of current, pending and future legislation, regulation and regulatory actions, including disciplinary actions imposed by federal and state regulators and self-regulatory organizations;
    • the cost of defending, settling and remediating issues related to regulatory matters or legal proceedings, including civil monetary penalties or actual costs of reimbursing customers for losses in excess of our reserves or insurance;
    • changes made to the Company’s services and pricing, including in response to competitive developments and current, pending and future legislation, regulation and regulatory actions, and the effect that such changes may have on the Company’s gross profit streams and costs;
    • execution of the Company’s capital management plans, including its compliance with the terms of the Company’s amended and restated credit agreement, the committed revolving credit facilities of the Company and LPL Financial, and the indentures governing the Company’s senior unsecured notes;
    • strategic acquisitions and investments, including pursuant to the Company’s Liquidity & Succession solution, and the effect that such acquisitions and investments may have on the Company’s capital management plans and liquidity;
    • the price, availability and trading volumes of shares of the Company’s common stock, which will affect the timing and size of future share repurchases by the Company, if any;
    • the execution of the Company’s plans and its success in realizing the synergies, expense savings, service improvements or efficiencies expected to result from its investments, initiatives and acquisitions, expense plans and technology initiatives;
    • whether advisors affiliated with Atria, Prudential, and The Investment Center will transition registration to the Company and whether assets reported as serviced by such financial advisors will translate into assets of the Company;
    • the performance of third-party service providers to which business processes have been transitioned;
    • the Company’s ability to control operating risks, information technology systems risks, cybersecurity risks and sourcing risks; and
    • the other factors set forth in the Company’s most recent Annual Report on Form 10-K, as may be amended or updated in the Company’s Quarterly Reports on Form 10-Q or other filings with the Securities and Exchange Commission. 

    Except as required by law, the Company specifically disclaims any obligation to update any forward-looking statements as a result of developments occurring after the date of this earnings release, and you should not rely on statements contained herein as representing the Company’s view as of any date subsequent to the date of this press release.

     
    LPL Financial Holdings Inc.
    Condensed Consolidated Statements of Income
    (In thousands, except per share data)
    (Unaudited)
             
      Three Months Ended
        Three Months Ended
       
      September 30,
      June 30,
        September 30,
       
      2024
      2024
      Change 2023   Change
    REVENUE          
    Advisory $ 1,378,050     $ 1,288,163     7 % $ 1,081,562     27 %
    Commission:          
    Sales-based   429,132       423,070     1 %   311,792     38 %
    Trailing   377,400       363,976     4 %   331,808     14 %
    Total commission   806,532       787,046     2 %   643,600     25 %
    Asset-based:          
    Client cash   353,855       341,475     4 %   360,518     (2 %)
    Other asset-based   272,336       259,533     5 %   224,614     21 %
    Total asset-based   626,191       601,008     4 %   585,132     7 %
    Service and fee   145,729       135,000     8 %   135,648     7 %
    Transaction   58,546       58,935     (1 %)   50,210     17 %
    Interest income, net   49,923       47,478     5 %   40,773     22 %
    Other   43,423       14,139     n/m   (14,542 )   n/m
    Total revenue   3,108,394       2,931,769     6 %   2,522,383     23 %
    EXPENSE          
    Advisory and commission   1,948,065       1,819,027     7 %   1,488,432     31 %
    Compensation and benefits   266,415       274,000     (3 %)   243,759     9 %
    Promotional   164,538       136,125     21 %   131,645     25 %
    Depreciation and amortization   78,338       70,999     10 %   64,627     21 %
    Occupancy and equipment   69,879       69,529     1 %   61,339     14 %
    Interest expense on borrowings   67,779       64,341     5 %   48,363     40 %
    Amortization of other intangibles   32,461       30,607     6 %   27,760     17 %
    Brokerage, clearing and exchange   29,636       32,984     (10 %)   24,793     20 %
    Professional services   26,295       22,100     19 %   18,699     41 %
    Communications and data processing   17,916       19,406     (8 %)   19,634     (9 %)
    Other   59,724       62,580     (5 %)   75,660     (21 %)
    Total expense   2,761,046       2,601,698     6 %   2,204,711     25 %
    INCOME BEFORE PROVISION FOR INCOME TAXES   347,348       330,071     5 %   317,672     9 %
    PROVISION FOR INCOME TAXES   92,045       86,271     7 %   93,381     (1 %)
    NET INCOME $ 255,303     $ 243,800     5 % $ 224,291     14 %
    EARNINGS PER SHARE          
    Earnings per share, basic $ 3.41     $ 3.26     5 % $ 2.95     16 %
    Earnings per share, diluted $ 3.39     $ 3.23     5 % $ 2.91     16 %
    Weighted-average shares outstanding, basic   74,776       74,725     — %   76,062     (2 %)
    Weighted-average shares outstanding, diluted   75,405       75,548     — %   77,147     (2 %)
                                     
     
    LPL Financial Holdings Inc.
    Condensed Consolidated Statements of Income
    (In thousands, except per share data)
    (Unaudited)
         
      Nine Months Ended
       
      September 30,
       
      2024
      2023
      Change
    REVENUE      
    Advisory $ 3,866,024     $ 3,050,184     27 %
    Commission:      
    Sales-based   1,237,437       896,825     38 %
    Trailing   1,102,587       973,386     13 %
    Total commission   2,340,024       1,870,211     25 %
    Asset-based:      
    Client cash   1,047,712       1,157,208     (9 %)
    Other asset-based   780,208       639,387     22 %
    Total asset-based   1,827,920       1,796,595     2 %
    Service and fee   412,901       377,757     9 %
    Transaction   174,739       146,081     20 %
    Interest income, net   140,926       116,103     21 %
    Other   110,222       52,088     112 %
    Total revenue   8,872,756       7,409,019     20 %
    EXPENSE      
    Advisory and commission   5,500,579       4,307,829     28 %
    Compensation and benefits   814,784       708,972     15 %
    Promotional   427,282       332,433     29 %
    Depreciation and amortization   216,495       179,058     21 %
    Occupancy and equipment   205,672       186,517     10 %
    Interest expense on borrowings   192,202       132,389     45 %
    Brokerage, clearing and exchange   93,152       80,067     16 %
    Amortization of other intangibles   92,620       78,593     18 %
    Professional services   61,674       51,011     21 %
    Communications and data processing   57,066       57,903     (1 %)
    Other   159,619       143,259     11 %
    Total expense   7,821,145       6,258,031     25 %
    INCOME BEFORE PROVISION FOR INCOME TAXES   1,051,611       1,150,988     (9 %)
    PROVISION FOR INCOME TAXES   263,744       302,293     (13 %)
    NET INCOME $ 787,867     $ 848,695     (7 %)
    EARNINGS PER SHARE      
    Earnings per share, basic $ 10.55     $ 10.97     (4 %)
    Earnings per share, diluted $ 10.45     $ 10.82     (3 %)
    Weighted-average shares outstanding, basic   74,688       77,339     (3 %)
    Weighted-average shares outstanding, diluted   75,424       78,439     (4 %)
                         
     
    LPL Financial Holdings Inc.
    Condensed Consolidated Statements of Financial Condition
    (In thousands, except share data)
    (Unaudited)
           
      September 30, 2024
      June 30, 2024
      December 31, 2023
    ASSETS
    Cash and equivalents $ 1,474,954     $ 1,318,894     $ 465,671  
    Cash and equivalents segregated under federal or other regulations   1,382,867       1,530,150       2,007,312  
    Restricted cash   104,881       109,618       108,180  
    Receivables from clients, net   622,015       563,923       588,585  
    Receivables from brokers, dealers and clearing organizations   53,763       74,432       50,069  
    Advisor loans, net   1,913,363       1,757,727       1,479,690  
    Other receivables, net   802,186       763,632       743,317  
    Investment securities ($94,694, $73,463 and $76,088 at fair value at September 30, 2024, June 30, 2024 and December 31, 2023, respectively)   111,096       89,853       91,311  
    Property and equipment, net   1,144,676       1,066,395       933,091  
    Goodwill   1,868,193       1,860,062       1,856,648  
    Other intangibles, net   782,426       783,031       671,585  
    Other assets   1,681,455       1,586,010       1,390,021  
    Total assets $ 11,941,875     $ 11,503,727     $ 10,385,480  
    LIABILITIES AND STOCKHOLDERS’ EQUITY
    LIABILITIES:      
    Client payables $ 2,039,140     $ 1,963,988     $ 2,266,176  
    Payables to brokers, dealers and clearing organizations   211,054       212,394       163,337  
    Accrued advisory and commission expenses payable   252,881       240,370       216,541  
    Corporate debt and other borrowings, net   4,441,913       4,442,840       3,734,111  
    Accounts payable and accrued liabilities   485,927       461,277       485,963  
    Other liabilities   1,739,209       1,667,511       1,440,373  
    Total liabilities   9,170,124       8,988,380       8,306,501  
    STOCKHOLDERS’ EQUITY:      
    Common stock, $0.001 par value; 600,000,000 shares authorized; 130,779,259, 130,746,590 shares and 130,233,328 shares issued at September 30, 2024, June 30, 2024 and December 31, 2023, respectively   131       131       130  
    Additional paid-in capital   2,059,207       2,038,216       1,987,684  
    Treasury stock, at cost — 55,968,552, 55,985,188 shares and 55,576,970 shares at September 30, 2024, June 30, 2024 and December 31, 2023, respectively   (4,102,319 )     (4,101,955 )     (3,993,949 )
    Retained earnings   4,814,732       4,578,955       4,085,114  
    Total stockholders’ equity   2,771,751       2,515,347       2,078,979  
    Total liabilities and stockholders’ equity $ 11,941,875     $ 11,503,727     $ 10,385,480  
                           
     
    LPL Financial Holdings Inc.
    Management’s Statements of Operations
    (In thousands, except per share data)
    (Unaudited)
     

    Certain information in this release is presented as reviewed by the Company’s management and includes information derived from the Company’s unaudited condensed consolidated statements of income, non-GAAP financial measures and operational and performance metrics. For information on non-GAAP financial measures, please see the section titled “Non-GAAP Financial Measures” in this release.

      Quarterly Results
      Q3 2024
      Q2 2024
      Change
      Q3 2023
      Change
    Gross Profit(6)          
    Advisory $ 1,378,050     $ 1,288,163     7 %   $ 1,081,562     27 %
    Trailing commissions   377,400       363,976     4 %     331,808     14 %
    Sales-based commissions   429,132       423,070     1 %     311,792     38 %
    Advisory fees and commissions   2,184,582       2,075,209     5 %     1,725,162     27 %
    Production-based payout(7)   (1,910,634 )     (1,812,050 )   5 %     (1,506,080 )   27 %
    Advisory fees and commissions, net of payout   273,948       263,159     4 %     219,082     25 %
    Client cash(8)   372,333       361,316     3 %     377,782     (1 %)
    Other asset-based(9)   272,336       259,533     5 %     224,614     21 %
    Service and fee   145,729       135,000     8 %     135,648     7 %
    Transaction   58,546       58,935     (1 %)     50,210     17 %
    Interest income, net(10)   31,428       27,618     14 %     23,485     34 %
    Other revenue(11)   3,392       6,621     (49 %)     4,113     (18 %)
    Total net advisory fees and commissions and attachment revenue   1,157,712       1,112,182     4 %     1,034,934     12 %
    Brokerage, clearing and exchange expense   (29,636 )     (32,984 )   (10 %)     (24,793 )   20 %
    Gross Profit(6)   1,128,076       1,079,198     5 %     1,010,141     12 %
               
    G&A Expense          
    Core G&A(12)   359,134       370,912     (3 %)     341,728     5 %
    Regulatory charges(13)   24,879       7,594     n/m   48,083     (48 %)
    Promotional (ongoing)(14)(15)   175,605       147,830     19 %     140,171     25 %
    Acquisition costs(15)   22,243       36,876     (40 %)     5,989     n/m
    Employee share-based compensation   20,289       19,968     2 %     15,748     29 %
    Total G&A   602,150       583,180     3 %     551,719     9 %
    EBITDA(16)   525,926       496,018     6 %     458,422     15 %
    Depreciation and amortization   78,338       70,999     10 %     64,627     21 %
    Amortization of other intangibles   32,461       30,607     6 %     27,760     17 %
    Interest expense on borrowings   67,779       64,341     5 %     48,363     40 %
    INCOME BEFORE PROVISION FOR INCOME TAXES   347,348       330,071     5 %     317,672     9 %
    PROVISION FOR INCOME TAXES   92,045       86,271     7 %     93,381     (1 %)
    NET INCOME $ 255,303     $ 243,800     5 %   $ 224,291     14 %
    Earnings per share, diluted $ 3.39     $ 3.23     5 %   $ 2.91     16 %
    Weighted-average shares outstanding, diluted   75,405       75,548     — %     77,147     (2 %)
    Adjusted EBITDA(16) $ 566,169     $ 532,894     6 %   $ 504,411     12 %
    Adjusted EPS(17) $ 4.16     $ 3.88     7 %   $ 3.74     11 %
                                       
     
    LPL Financial Holdings Inc.
    Operating Metrics
    (Dollars in billions, except where noted)
    (Unaudited)
               
      Q3 2024
      Q2 2024
      Change
      Q3 2023
      Change
    Market Drivers          
    S&P 500 Index (end of period)   5,762       5,460     6 %     4,288     34 %
    Russell 2000 Index (end of period)   2,230       2,048     9 %     1,785     25 %
    Fed Funds daily effective rate (average bps)   527       533     (6bps)   526     1bps
               
    Advisory and Brokerage Assets(18)          
    Advisory assets $ 892.0     $ 829.1     8 %   $ 662.7     35 %
    Brokerage assets   700.1       668.7     5 %     575.7     22 %
    Total Advisory and Brokerage Assets $ 1,592.1     $ 1,497.8     6 %   $ 1,238.4     29 %
    Advisory as a % of Total Advisory and Brokerage Assets   56.0 %     55.4 %   60bps   53.5 %   250bps
               
    Assets by Platform          
    Corporate advisory assets(19) $ 618.8     $ 567.8     9 %   $ 444.4     39 %
    Independent RIA advisory assets(19)   273.2       261.3     5 %     218.3     25 %
    Brokerage assets   700.1       668.7     5 %     575.7     22 %
    Total Advisory and Brokerage Assets $ 1,592.1     $ 1,497.8     6 %   $ 1,238.4     29 %
               
    Centrally Managed Assets          
    Centrally managed assets(20) $ 138.1     $ 126.9     9 %   $ 100.5     37 %
    Centrally Managed as a % of Total Advisory Assets   15.5 %     15.3 %   20bps   15.2 %   30bps
                                 
     
    LPL Financial Holdings Inc.
    Operating Metrics
    (Dollars in billions, except where noted)
    (Unaudited)
                 
      Q3 2024
      Q2 2024
      Change   Q3 2023
      Change
    Organic Net New Assets (NNA)(21)            
    Organic net new advisory assets $ 23.2     $ 26.6     n/m   $ 22.7     n/m
    Organic net new brokerage assets   3.8       2.5     n/m     10.5     n/m
    Total Organic Net New Assets $ 27.0     $ 29.0     n/m   $ 33.2     n/m
                 
    Acquired Net New Assets(21)            
    Acquired net new advisory assets $ 0.5     $ 0.3     n/m   $ —     n/m
    Acquired net new brokerage assets   0.1       4.8     n/m     —     n/m
    Total Acquired Net New Assets $ 0.6     $ 5.0     n/m   $ —     n/m
                 
    Total Net New Assets(21)            
    Net new advisory assets $ 23.7     $ 26.8     n/m   $ 22.7     n/m
    Net new brokerage assets   3.8       7.2     n/m     10.5     n/m
    Total Net New Assets $ 27.5     $ 34.0     n/m   $ 33.2     n/m
                 
    Net brokerage to advisory conversions(22) $ 3.5     $ 3.7     n/m   $ 2.7     n/m
    Organic advisory NNA annualized growth(23)   11.2 %     13.4 %   n/m     13.7 %   n/m
    Total organic NNA annualized growth(23)   7.2 %     8.1 %   n/m     10.7 %   n/m
                 
    Net New Advisory Assets(21)            
    Corporate RIA net new advisory assets $ 24.0     $ 23.4     n/m   $ 17.0     n/m
    Independent RIA net new advisory assets   (0.3 )     3.4     n/m     5.7     n/m
    Total Net New Advisory Assets $ 23.7     $ 26.8     n/m   $ 22.7     n/m
    Centrally managed net new advisory assets(21) $ 4.4     $ 4.4     n/m   $ 4.4     n/m
                 
    Net buy (sell) activity(24) $ 37.7     $ 39.3     n/m   $ 35.6     n/m
                                   

    Note: Totals may not foot due to rounding.

     
    LPL Financial Holdings Inc.
    Client Cash Data
    (Dollars in thousands, except where noted)
    (Unaudited)
               
      Q3 2024
      Q2 2024
      Change
      Q3 2023
      Change
    Client Cash Balances (in billions)(25)          
    Insured cash account sweep $ 32.1     $ 31.0     4 %   $ 33.6     (4 %)
    Deposit cash account sweep   9.6       9.2     4 %     9.1     5 %
    Total Bank Sweep   41.7       40.2     4 %     42.7     (2 %)
    Money market sweep   2.3       2.3     — %     2.6     (12 %)
    Total Client Cash Sweep Held by Third Parties   44.0       42.5     4 %     45.3     (3 %)
    Client cash account (CCA)(26)   1.8       1.5     20 %     1.5     20 %
    Total Client Cash Balances $ 45.8     $ 44.0     4 %   $ 46.9     (2 %)
    Client Cash Balances as a % of Total Assets   2.9 %     2.9 %   —bps   3.8 %   (90bps)
                                 

    Note: Totals may not foot due to rounding.

       
      Three Months Ended
      September 30, 2024 June 30, 2024 September 30, 2023
    Interest-Earnings Assets Average Balance
    (in billions)
    Revenue Net Yield (bps)(27)   Average Balance
    (in billions)
    Revenue Net Yield (bps)(27)   Average Balance
    (in billions)
    Revenue Net Yield (bps)(27)  
    Insured cash account sweep $ 31.1   $ 259,503   332   $ 31.7   $ 250,804   318   $ 34.5   $ 276,944   318  
    Deposit cash account sweep   9.2     92,765   400     9.0     89,070   399     9.1     81,826   357  
    Total Bank Sweep   40.3     352,268   348     40.7     339,874   336     43.6     358,770   326  
    Money market sweep   2.3     1,587   28     2.3     1,601   28     2.4     1,748   29  
    Total Client Cash Held By Third Parties   42.6     353,855   330     43.0     341,475   320     46.0     360,518   311  
    Client cash account (CCA)(26)   1.6     18,478   472     1.7     19,841   472     1.5     17,264   454  
    Total Client Cash   44.2     372,333   335     44.7     361,316   326     47.5     377,782   315  
    Margin receivables   0.5     11,199   885     0.5     10,521   889     0.5     10,740   883  
    Other interest revenue   1.5     20,229   533     1.3     17,097   545     0.9     12,745   576  
    Total Client Cash and Interest Income, Net $ 46.2   $ 403,761   348   $ 46.5   $ 388,934   337   $ 48.9   $ 401,267   326  
                                                     

    Note: Totals may not foot due to rounding.

     
    LPL Financial Holdings Inc.
    Monthly Metrics
    (Dollars in billions, except where noted)
    (Unaudited)
               
      September 2024 August 2024 Change July 2024 June 2024
    Advisory and Brokerage Assets(18)          
    Advisory assets $ 892.0   $ 869.5   3 % $ 850.6   $ 829.1  
    Brokerage assets   700.1     690.6   1 %   678.7     668.7  
    Total Advisory and Brokerage Assets $ 1,592.1   $ 1,560.1   2 % $ 1,529.3   $ 1,497.8  
               
    Organic Net New Assets (NNA)(21)          
    Organic net new advisory assets $ 11.0   $ 5.4   n/m $ 6.8   $ 9.2  
    Organic net new brokerage assets   0.5     1.1   n/m   2.2     1.6  
    Total Organic Net New Assets $ 11.4   $ 6.6   n/m $ 9.0   $ 10.8  
               
    Acquired Net New Assets(21)          
    Acquired net new advisory assets $ 0.2   $ 0.2   n/m $ —   $ —  
    Acquired net new brokerage assets   0.1     —   n/m   —     —  
    Total Acquired Net New Assets $ 0.3   $ 0.3   n/m $ —   $ —  
               
    Total Net New Assets(21)          
    Net new advisory assets $ 11.2   $ 5.7   n/m $ 6.8   $ 9.2  
    Net new brokerage assets   0.5     1.2   n/m   2.2     1.6  
    Total Net New Assets $ 11.7   $ 6.8   n/m $ 9.0   $ 10.8  
    Net brokerage to advisory conversions(22) $ 1.2   $ 1.3   n/m $ 1.0   $ 1.2  
               
    Client Cash Balances(25)          
    Insured cash account sweep $ 32.1   $ 30.4   6 % $ 31.1   $ 31.0  
    Deposit cash account sweep   9.6     9.3   3 %   9.1     9.2  
    Total Bank Sweep   41.7     39.7   5 %   40.2     40.2  
    Money market sweep   2.3     2.2   5 %   2.3     2.3  
    Total Client Cash Sweep Held by Third Parties   44.0     41.9   5 %   42.5     42.5  
    Client cash account (CCA)(26)   1.8     1.4   29 %   1.5     1.5  
    Total Client Cash Balances $ 45.8   $ 43.3   6 % $ 44.0   $ 44.0  
               
    Net buy (sell) activity(24) $ 12.2   $ 12.6   n/m $ 12.9   $ 12.1  
               
    Market Drivers          
    S&P 500 Index (end of period)   5,762     5,648   2 %   5,522     5,460  
    Russell 2000 Index (end of period)   2,230     2,218   1 %   2,254     2,048  
    Fed Funds effective rate (average bps)   513     533   (20bps)   533     533  
                               

    Note: Totals may not foot due to rounding.

     
    LPL Financial Holdings Inc.
    Financial Measures
    (Dollars in thousands, except where noted)
    (Unaudited)
               
      Q3 2024 Q2 2024 Change Q3 2023 Change
    Commission Revenue by Product          
    Annuities $ 481,852   $ 469,100   3 % $ 371,304   30 %
    Mutual funds   193,451     187,432   3 %   169,318   14 %
    Fixed income   55,707     53,192   5 %   42,286   32 %
    Equities   36,786     34,434   7 %   27,414   34 %
    Other   38,736     42,888   (10 %)   33,278   16 %
    Total commission revenue $ 806,532   $ 787,046   2 % $ 643,600   25 %
               
    Commission Revenue by Sales-based and Trailing      
    Sales-based commissions          
    Annuities $ 265,955   $ 260,188   2 % $ 183,974   45 %
    Mutual funds   42,310     42,981   (2 %)   34,718   22 %
    Fixed income   55,707     53,192   5 %   42,286   32 %
    Equities   36,786     34,434   7 %   27,414   34 %
    Other   28,374     32,275   (12 %)   23,400   21 %
    Total sales-based commissions $ 429,132   $ 423,070   1 % $ 311,792   38 %
    Trailing commissions          
    Annuities $ 215,897   $ 208,912   3 % $ 187,330   15 %
    Mutual funds   151,141     144,451   5 %   134,600   12 %
    Other   10,362     10,613   (2 %)   9,878   5 %
    Total trailing commissions $ 377,400   $ 363,976   4 % $ 331,808   14 %
    Total commission revenue $ 806,532   $ 787,046   2 % $ 643,600   25 %
               
    Payout Rate(7)   87.46 %   87.32 % 14bps   87.30 % 16bps
                           
     
    LPL Financial Holdings Inc.
    Capital Management Measures
    (Dollars in thousands, except where noted)
    (Unaudited)
           
      Q3 2024 Q2 2024 Q4 2023
    Cash and equivalents $ 1,474,954   $ 1,318,894   $ 465,671  
    Cash at regulated subsidiaries   (992,450 )   (828,145 )   (410,313 )
    Excess cash at regulated subsidiaries per the Credit Agreement   225,886     193,342     128,327  
    Corporate Cash(3) $ 708,390   $ 684,091   $ 183,685  
           
    Corporate Cash(3)      
    Cash at the Parent $ 435,109   $ 450,505   $ 26,587  
    Excess cash at regulated subsidiaries per the Credit Agreement   225,886     193,342     128,327  
    Cash at non-regulated subsidiaries   47,395     40,244     28,771  
    Corporate Cash $ 708,390   $ 684,091   $ 183,685  
           
    Leverage Ratio      
    Total debt $ 4,469,175   $ 4,471,850   $ 3,757,200  
    Total corporate cash   708,390     684,091     183,685  
    Credit Agreement Net Debt $ 3,760,785   $ 3,787,759   $ 3,573,515  
    Credit Agreement EBITDA (trailing twelve months)(28) $ 2,340,886   $ 2,260,165   $ 2,194,807  
    Leverage Ratio 1.61x 1.68x 1.63x
           
         
      September 30, 2024  
    Total Debt Balance Current Applicable
    Margin
    Interest Rate Maturity
    Revolving Credit Facility(a) $ —   ABR+37.5 bps / SOFR+147.5 bps 6.321 % 5/20/2029
    Broker-Dealer Revolving Credit Facility   —   SOFR+135 bps 6.310 % 5/19/2025
    Senior Secured Term Loan B   1,019,175   SOFR+185 bps(b) 7.051 % 11/12/2026
    Senior Unsecured Notes   500,000   5.700% Fixed 5.700 % 5/20/2027
    Senior Unsecured Notes   400,000   4.625% Fixed 4.625 % 11/15/2027
    Senior Unsecured Notes   750,000   6.750% Fixed 6.750 % 11/17/2028
    Senior Unsecured Notes   900,000   4.000% Fixed 4.000 % 3/15/2029
    Senior Unsecured Notes   400,000   4.375% Fixed 4.375 % 5/15/2031
    Senior Unsecured Notes   500,000   6.000% Fixed 6.000 % 5/20/2034
    Total / Weighted Average $ 4,469,175     5.661 %  
                   

    (a) Secured borrowing capacity of $2.25 billion at LPL Holdings, Inc. (the “Parent”).
    (b) The SOFR rate option is a one-month SOFR rate and subject to an interest rate floor of 0 bps.

     
    LPL Financial Holdings Inc.
    Key Business and Financial Metrics
    (Dollars in thousands, except where noted)
    (Unaudited)
               
      Q3 2024 Q2 2024 Change Q3 2023 Change
    Advisors          
    Advisors   23,686     23,462   1 %   22,404   6 %
    Net new advisors   224     578   (61 %)   462   (52 %)
    Annualized advisory fees and commissions per advisor(29) $ 371   $ 358   4 % $ 311   19 %
    Average total assets per advisor ($ in millions)(30) $ 67.2   $ 63.8   5 % $ 55.3   22 %
    Transition assistance loan amortization ($ in millions)(31) $ 69.1   $ 61.9   12 % $ 53.7   29 %
    Total client accounts (in millions)   8.7     8.6   1 %   8.2   6 %
               
    Employees   7,342     7,451   (1 %)   7,124   3 %
               
    Services Group          
    Services Group subscriptions(32)          
    Professional Services   1,890     1,892   — %   1,867   1 %
    Business Optimizers   3,798     3,606   5 %   3,251   17 %
    Planning and Advice   735     665   11 %   456   61 %
    Total Services Group subscriptions   6,423     6,163   4 %   5,574   15 %
    Services Group advisor count   4,340     4,169   4 %   3,695   17 %
               
    AUM retention rate (quarterly annualized)(33)   97.0 %   98.4 % (140bps)   98.8 % (180bps)
               
    Capital Management          
    Capital expenditures ($ in millions)(34) $ 147.1   $ 128.9   14 % $ 95.0   55 %
    Acquisitions, net ($ in millions)(35) $ 34.1   $ 115.1   (70 %) $ 60.3   (43 %)
               
    Share repurchases ($ in millions) $ —   $ —   — % $ 250.0   (100 %)
    Dividends ($ in millions)   22.4     22.4   — %   22.8   (2 %)
    Total Capital Returned ($ in millions) $ 22.4   $ 22.4   — % $ 272.8   (92 %)
                               

    Non-GAAP Financial Measures

    Management believes that presenting certain non-GAAP financial measures by excluding or including certain items can be helpful to investors and analysts who may wish to use this information to analyze the Company’s current performance, prospects and valuation. Management uses this non-GAAP information internally to evaluate operating performance and in formulating the budget for future periods. Management believes that the non-GAAP financial measures and metrics discussed below are appropriate for evaluating the performance of the Company.

    Adjusted EPS and Adjusted net income

    Adjusted EPS is defined as adjusted net income, a non-GAAP measure defined as net income plus the after-tax impact of amortization of other intangibles, acquisition costs, and certain regulatory charges, divided by the weighted average number of diluted shares outstanding for the applicable period. The Company presents adjusted net income and adjusted EPS because management believes that these metrics can provide investors with useful insight into the Company’s core operating performance by excluding non-cash items, acquisition costs, and certain regulatory charges that management does not believe impact the Company’s ongoing operations. Adjusted net income and adjusted EPS are not measures of the Company’s financial performance under GAAP and should not be considered as alternatives to net income, earnings per diluted share or any other performance measure derived in accordance with GAAP. For a reconciliation of net income and earnings per diluted share to adjusted net income and adjusted EPS, please see the endnote disclosures in this release.

    Gross profit

    Gross profit is calculated as total revenue less advisory and commission expense; brokerage, clearing and exchange expense; and market fluctuations on employee deferred compensation. All other expense categories, including depreciation and amortization of property and equipment and amortization of other intangibles, are considered general and administrative in nature. Because the Company’s gross profit amounts do not include any depreciation and amortization expense, the Company considers gross profit to be a non-GAAP financial measure that may not be comparable to similar measures used by others in its industry. Management believes that gross profit can provide investors with useful insight into the Company’s core operating performance before indirect costs that are general and administrative in nature. For a calculation of gross profit, please see the endnote disclosures in this release.

    Core G&A

    Core G&A consists of total expense less the following expenses: advisory and commission; depreciation and amortization; interest expense on borrowings; brokerage, clearing and exchange; amortization of other intangibles; market fluctuations on employee deferred compensation; promotional (ongoing); employee share-based compensation; regulatory charges; and acquisition costs. Management presents core G&A because it believes core G&A reflects the corporate expense categories over which management can generally exercise a measure of control, compared with expense items over which management either cannot exercise control, such as advisory and commission, or which management views as promotional expense necessary to support advisor growth and retention, including conferences and transition assistance. Core G&A is not a measure of the Company’s total expense as calculated in accordance with GAAP. For a reconciliation of the Company’s total expense to core G&A, please see the endnote disclosures in this release. The Company does not provide an outlook for its total expense because it contains expense components, such as advisory and commission, that are market-driven and over which the Company cannot exercise control. Accordingly, a reconciliation of the Company’s outlook for total expense to an outlook for core G&A cannot be made available without unreasonable effort.

    EBITDA and Adjusted EBITDA

    EBITDA is defined as net income plus interest expense on borrowings, provision for income taxes, depreciation and amortization, and amortization of other intangibles. Adjusted EBITDA is defined as EBITDA, a non-GAAP measure, plus acquisition costs and certain regulatory charges. The Company presents EBITDA and adjusted EBITDA because management believes that they can be useful financial metrics in understanding the Company’s earnings from operations. EBITDA and adjusted EBITDA are not measures of the Company’s financial performance under GAAP and should not be considered as alternatives to net income or any other performance measure derived in accordance with GAAP. For a reconciliation of net income to EBITDA and adjusted EBITDA, please see the endnote disclosures in this release.

    Credit Agreement EBITDA

    Credit Agreement EBITDA is defined in, and calculated by management in accordance with, the Company’s amended and restated credit agreement (“Credit Agreement”) as “Consolidated EBITDA,” which is Consolidated Net Income (as defined in the Credit Agreement) plus interest expense on borrowings, provision for income taxes, depreciation and amortization, and amortization of other intangibles, and is further adjusted to exclude certain non-cash charges and other adjustments, and to include future expected cost savings, operating expense reductions or other synergies from certain transactions. The Company presents Credit Agreement EBITDA because management believes that it can be a useful financial metric in understanding the Company’s debt capacity and covenant compliance under its Credit Agreement. Credit Agreement EBITDA is not a measure of the Company’s financial performance under GAAP and should not be considered as an alternative to net income or any other performance measure derived in accordance with GAAP. For a reconciliation of net income to Credit Agreement EBITDA, please see the endnote disclosures in this release.

    Endnote Disclosures

    (1) Represents the estimated total advisory and brokerage assets expected to transition to the Company’s primary broker-dealer subsidiary, LPL Financial, in connection with advisors who transferred their licenses to LPL Financial during the period. The estimate is based on prior business reported by the advisors, which has not been independently and fully verified by LPL Financial. The actual transition of assets to LPL Financial generally occurs over several quarters and the actual amount transitioned may vary from the estimate.

    (2) The terms “Financial Advisors” and “Advisors” refer to registered representatives and/or investment advisor representatives affiliated with LPL Financial, an SEC-registered broker-dealer and investment advisor.

    (3) Corporate cash, a component of cash and equivalents, is the sum of cash and equivalents from the following: (1) cash and equivalents held at LPL Holdings, Inc., (2) cash and equivalents held at regulated subsidiaries as defined by the Company’s Credit Agreement, which include LPL Financial and The Private Trust Company, N.A., in excess of the capital requirements of the Company’s Credit Agreement (which, in the case of LPL Financial is net capital in excess of 10% of its aggregate debits, or five times the net capital required in accordance with Exchange Act Rule 15c3-1) and (3) cash and equivalents held at non-regulated subsidiaries.

    (4) Compliance with the Leverage Ratio is only required under the Company’s revolving credit facility.

    (5) The Company was named Top RIA custodian (Cerulli Associates, 2023 U.S. RIA Marketplace Report); No. 1 Independent Broker-Dealer in the U.S. (based on total revenues, Financial Planning magazine 1996-2022); and, among third-party providers of brokerage services to banks and credit unions, No. 1 in AUM Growth from Financial Institutions; No. 1 in Market Share of AUM from Financial Institutions; No. 1 in Market Share of Revenue from Financial Institutions; No. 1 on Financial Institution Market Share; No. 1 on Share of Advisors (2021-2022 Kehrer Bielan Research and Consulting Annual TPM Report). Fortune 500 as of June 2021.

    (6) Gross profit is a non-GAAP financial measure. Please see a description of gross profit under the “Non-GAAP Financial Measures” section of this release for additional information. Below is a calculation of gross profit for the periods presented (in thousands):

      Q3 2024 Q2 2024 Q3 2023
    Total revenue $ 3,108,394   $ 2,931,769   $ 2,522,383  
    Advisory and commission expense   1,948,065     1,819,027     1,488,432  
    Brokerage, clearing and exchange expense   29,636     32,984     24,793  
    Employee deferred compensation   2,617     560     (983 )
    Gross profit $ 1,128,076   $ 1,079,198   $ 1,010,141  
                       

    (7) Production-based payout is a financial measure calculated as advisory and commission expense plus (less) advisor deferred compensation. The payout rate is calculated by dividing the production-based payout by total advisory and commission revenue. Below is a reconciliation of the Company’s advisory and commission expense to the production-based payout and a calculation of the payout rate for the periods presented (in thousands, except payout rate):

      Q3 2024 Q2 2024 Q3 2023
    Advisory and commission expense $ 1,948,065   $ 1,819,027   $ 1,488,432  
    (Less) Plus: Advisor deferred compensation   (37,431 )   (6,977 )   17,648  
    Production-based payout $ 1,910,634   $ 1,812,050   $ 1,506,080  
           
    Advisory and commission revenue $ 2,184,582   $ 2,075,209   $ 1,725,162  
           
    Payout rate   87.46 %   87.32 %   87.30 %
                       

    (8) Below is a reconciliation of client cash revenue per Management’s Statements of Operations to client cash revenue, a component of asset-based revenue, on the Company’s condensed consolidated statements of income for the periods presented (in thousands):

      Q3 2024 Q2 2024 Q3 2023
    Client cash on Management’s Statement of Operations   372,333   $ 361,316   $ 377,782  
    Interest income on CCA balances segregated under federal or other regulations(10)   (18,478 )   (19,841 )   (17,264 )
    Client cash on Condensed Consolidated Statements of Income $ 353,855   $ 341,475   $ 360,518  
                       

    (9) Consists of revenue from the Company’s sponsorship programs with financial product manufacturers, omnibus processing and networking services but does not include fees from client cash programs.

    (10) During the first quarter of 2024, the Company disaggregated the activity previously reported in the interest income and other, net line item into its interest income, net and other revenue components. Prior period amounts have been reclassified to conform to the current presentation. Below is a reconciliation of interest income, net per Management’s Statements of Operations to interest income, net on the Company’s condensed consolidated statements of income for the periods presented (in thousands):

      Q3 2024 Q2 2024 Q3 2023
    Interest income, net on Management’s Statement of Operations $ 31,428   $ 27,618   $ 23,485  
    Interest income on CCA balances segregated under federal or other regulations(8)   18,478     19,841     17,264  
    Interest income on deferred compensation   17     19     24  
    Interest income, net on Condensed Consolidated Statements of Income $ 49,923   $ 47,478   $ 40,773  
                       

    (11) During the first quarter of 2024, the Company disaggregated the activity previously reported in the interest income and other, net line item into its interest income, net and other revenue components. Prior period amounts have been reclassified to conform to the current presentation. Below is a reconciliation of other revenue per Management’s Statements of Operations to other revenue on the Company’s condensed consolidated statements of income for the periods presented (in thousands):

      Q3 2024 Q2 2024 Q3 2023
    Other revenue on Management’s Statement of Operations $ 3,392   $ 6,621   $ 4,113  
    Interest income on deferred compensation   (17 )   (19 )   (24 )
    Deferred compensation   40,048     7,537     (18,631 )
    Other revenue on Condensed Consolidated Statements of Income $ 43,423   $ 14,139   $ (14,542 )
                       

    (12) Core G&A is a non-GAAP financial measure. Please see a description of core G&A under the “Non-GAAP Financial Measures” section of this release for additional information. Below is a reconciliation of the Company’s total expense to core G&A for the periods presented (in thousands):

      Q3 2024 Q2 2024 Q3 2023
    Core G&A Reconciliation      
    Total expense $ 2,761,046   $ 2,601,698   $ 2,204,711  
    Advisory and commission   (1,948,065 )   (1,819,027 )   (1,488,432 )
    Depreciation and amortization   (78,338 )   (70,999 )   (64,627 )
    Interest expense on borrowings   (67,779 )   (64,341 )   (48,363 )
    Brokerage, clearing and exchange   (29,636 )   (32,984 )   (24,793 )
    Amortization of other intangibles   (32,461 )   (30,607 )   (27,760 )
    Employee deferred compensation   (2,617 )   (560 )   983  
    Total G&A   602,150     583,180     551,719  
    Promotional (ongoing)(14)(15)   (175,605 )   (147,830 )   (140,171 )
    Acquisition costs(15)   (22,243 )   (36,876 )   (5,989 )
    Employee share-based compensation   (20,289 )   (19,968 )   (15,748 )
    Regulatory charges(13)   (24,879 )   (7,594 )   (48,083 )
    Core G&A $ 359,134   $ 370,912   $ 341,728  
                       

    (13) Regulatory charges for the three months ended September 30, 2024 include charges related to a potential settlement with the SEC to resolve the Company’s civil investigation of certain elements of the Company’s Anti-Money Laundering (“AML”) compliance program. Under the SEC’s proposed resolution, the Company would pay an $18.0 million civil monetary penalty, and the Company has recorded an $18.0 million charge for the quarter ended September 30, 2024. Regulatory charges for the three months ended September 30, 2023 include a $40.0 million charge to reflect the amount of the penalty related to the SEC’s civil investigation of the Company’s compliance with records preservation requirements for business-related electronic communications that was not covered by the Company’s captive insurance subsidiary. The Company reached a settlement with the staff of the SEC and paid the civil monetary penalty of $50.0 million in August 2024.

    (14) Promotional (ongoing) includes $13.0 million, $12.2 million and $10.8 million for the three months ended September 30, 2024, June 30, 2024 and September 30, 2023, respectively, of support costs related to full-time employees that are classified within Compensation and benefits expense in the condensed consolidated statements of income and excludes costs that have been incurred as part of acquisitions that have been classified within acquisition costs for the same periods.

    (15) Acquisition costs include the costs to setup, onboard and integrate acquired entities and other costs that were incurred as a result of the acquisitions. The below table summarizes the primary components of acquisition costs for the periods presented (in thousands):

      Q3 2024 Q2 2024 Q3 2023
    Acquisition costs      
    Fair value mark on contingent consideration(36) $ 5,849   $ 24,624   $ —  
    Compensation and benefits   8,352     6,827     1,345  
    Professional services   6,685     3,567     2,199  
    Promotional(14)   1,964     539     2,260  
    Other   (607 )   1,319     185  
    Acquisition costs $ 22,243   $ 36,876   $ 5,989  
                       

    (16) EBITDA and adjusted EBITDA are non-GAAP financial measures. Please see a description of EBITDA and adjusted EBITDA under the “Non-GAAP Financial Measures” section of this release for additional information. Below is a reconciliation of net income to EBITDA and adjusted EBITDA for the periods presented (in thousands):

      Q3 2024 Q2 2024 Q3 2023
    EBITDA and adjusted EBITDA Reconciliation      
    Net income $ 255,303   $ 243,800   $ 224,291  
    Interest expense on borrowings   67,779     64,341     48,363  
    Provision for income taxes   92,045     86,271     93,381  
    Depreciation and amortization   78,338     70,999     64,627  
    Amortization of other intangibles   32,461     30,607     27,760  
    EBITDA $ 525,926   $ 496,018   $ 458,422  
    Regulatory charges(13)   18,000     —     40,000  
    Acquisition costs(15)   22,243     36,876     5,989  
    Adjusted EBITDA $ 566,169   $ 532,894   $ 504,411  
                       

    (17) Adjusted net income and adjusted EPS are non-GAAP financial measures. Please see a description of adjusted net income and adjusted EPS under the “Non-GAAP Financial Measures” section of this release for additional information. Below is a reconciliation of net income and earnings per diluted share to adjusted net income and adjusted EPS for the periods presented (in thousands, except per share data):

      Q3 2024 Q2 2024 Q3 2023
      Amount Per Share Amount Per Share Amount Per Share
    Net income / earnings per diluted share $ 255,303   $ 3.39   $ 243,800   $ 3.23   $ 224,291   $ 2.91  
    Regulatory charges(13)   18,000     0.24     —     —     40,000     0.52  
    Amortization of other intangibles   32,461     0.43     30,607     0.41     27,760     0.36  
    Acquisition costs(15)   22,243     0.29     36,876     0.49     5,989     0.08  
    Tax benefit   (14,650 )   (0.19 )   (17,816 )   (0.24 )   (9,143 )   (0.12 )
    Adjusted net income / adjusted EPS $ 313,357   $ 4.16   $ 293,467   $ 3.88   $ 288,897   $ 3.74  
    Diluted share count   75,405       75,548       77,147    
    Note: Totals may not foot due to rounding.            
                 

    (18) Consists of total advisory and brokerage assets under custody at the Company’s primary broker-dealer subsidiary, LPL Financial.

    (19) Assets on the Company’s corporate advisory platform are serviced by investment advisor representatives of LPL Financial. Assets on the Company’s independent RIA advisory platform are serviced by investment advisor representatives of separate registered investment advisor firms rather than representatives of LPL Financial.

    (20) Consists of advisory assets in LPL Financial’s Model Wealth Portfolios, Optimum Market Portfolios, Personal Wealth Portfolios and Guided Wealth Portfolios platforms.

    (21) Consists of total client deposits into advisory or brokerage accounts less total client withdrawals from advisory or brokerage accounts, plus dividends, plus interest, minus advisory fees. The Company considers conversions from and to brokerage or advisory accounts as deposits and withdrawals, respectively.

    (22) Consists of existing custodied assets that converted from brokerage to advisory, less existing custodied assets that converted from advisory to brokerage.

    (23) Calculated as annualized current period organic net new assets divided by preceding period assets in their respective categories of advisory assets or total advisory and brokerage assets.

    (24) Represents the amount of securities purchased less the amount of securities sold in client accounts custodied with LPL Financial.

    (25) Client cash balances include CCA and exclude purchased money market funds. CCA balances include cash that clients have deposited with LPL Financial that is included in Client payables in the condensed consolidated balance sheets. The following table presents purchased money market funds for the periods presented (in billions):

      Q3 2024 Q2 2024 Q3 2023
    Purchased money market funds $ 38.5   $ 35.7   $ 25.2  
                       

    (26) During the first quarter of 2024, the Company updated its definition of client cash account balances to exclude other client payables. Prior period disclosures have been updated to reflect this change as applicable.

    (27) Calculated by dividing revenue for the period by the average balance during the period.

    (28) EBITDA and Credit Agreement EBITDA are non-GAAP financial measures. Please see a description of EBITDA and Credit Agreement EBITDA under the “Non-GAAP Financial Measures” section of this release for additional information. Under the Credit Agreement, management calculates Credit Agreement EBITDA for a trailing twelve month period at the end of each fiscal quarter and in doing so may make further adjustments to prior quarters. Below are reconciliations of trailing twelve month net income to trailing twelve month EBITDA and Credit Agreement EBITDA for the periods presented (in thousands):

      Q3 2024 Q2 2024 Q4 2023
    EBITDA and Credit Agreement EBITDA Reconciliations      
    Net income $ 1,005,422   $ 974,410   $ 1,066,250  
    Interest expense on borrowings   246,618     227,201     186,804  
    Provision for income taxes   339,977     341,312     378,525  
    Depreciation and amortization   284,431     270,720     246,994  
    Amortization of other intangibles   121,238     116,537     107,211  
    EBITDA $ 1,997,686   $ 1,930,180   $ 1,985,784  
    Credit Agreement Adjustments:      
    Acquisition costs and other(15)(37) $ 236,007   $ 224,687   $ 110,170  
    Employee share-based compensation   78,425     73,884     66,024  
    M&A accretion(38)   26,265     28,843     30,268  
    Advisor share-based compensation   2,503     2,571     2,561  
    Credit Agreement EBITDA $ 2,340,886   $ 2,260,165   $ 2,194,807  
                       

    (29) Calculated based on the average advisor count from the current period and prior periods.

    (30) Calculated based on the end of period total advisory and brokerage assets divided by end of period advisor count.

    (31) Represents amortization expense on forgivable loans for transition assistance to advisors and institutions.

    (32) Refers to active subscriptions related to professional services offerings (CFO Solutions, Marketing Solutions, Admin Solutions, Advisor Institute, Bookkeeping, Partial Book Sales, CFO Essentials, and Digital Marketing) and business optimizer offerings (M&A Solutions, Digital Office, Resilience Plans and Assurance Plans), as well as planning and advice services (Paraplanning, Tax Planning, and High Net Worth Services) for which subscriptions are the number of advisors using the service.

    (33) Reflects retention of total advisory and brokerage assets, calculated by deducting quarterly annualized attrition from total advisory and brokerage assets, divided by the prior quarter total advisory and brokerage assets.

    (34) Capital expenditures represent cash payments for property and equipment during the period.

    (35) Acquisitions, net represent cash paid for acquisitions, net of cash acquired during the period.

    (36) Represents a fair value adjustment to our contingent consideration liabilities that is reflected in other expense in the condensed consolidated statements of income.

    (37) Acquisition costs and other primarily include acquisition costs, costs incurred related to the integration of the strategic relationship with Prudential, an $18.0 million regulatory charge recognized during the three months ended September 30, 2024 related to an investigation of the Company’s compliance with certain elements of the Company’s AML compliance program, and a $40.0 million regulatory charge recognized during the three months ended September 30, 2023 to reflect the amount of a penalty proposed by the SEC as part of its civil investigation of the Company’s compliance with records preservation requirements for business-related electronic communications stored on personal devices that have not been approved by the Company.

    (38) M&A accretion is an adjustment to reflect the annualized expected run rate EBITDA of an acquisition as permitted by the Credit Agreement for up to eight fiscal quarters following the close of the transaction.

    The MIL Network –

    January 25, 2025
  • MIL-OSI: Robinhood Reports Third Quarter 2024 Results

    Source: GlobeNewswire (MIL-OSI)

    Second highest Revenues on record, up 36% year-over-year to $637 million
    GAAP Diluted EPS of $0.17, up $0.26 year-over-year
    Year-to-date Net Deposits of $34 billion, Revenues of $1.94 billion, and GAAP Diluted EPS of $0.55 have all exceeded prior full year records

    MENLO PARK, Calif., Oct. 30, 2024 (GLOBE NEWSWIRE) — Robinhood Markets, Inc. (“Robinhood”) (NASDAQ: HOOD) today announced financial results for the third quarter of 2024, which ended September 30, 2024.

    “I’m really proud of our Q3 results and how smoothly our product engine is humming,” said Vlad Tenev, CEO and Co-Founder of Robinhood. “In the past month, we introduced Robinhood Legend, our new desktop offering, and announced index options, futures, and a realized profit and loss tool are coming soon. And just this week, we launched our Presidential Election Market. We have a ton of momentum, and we’re just getting started.”

    “Q3 was another strong quarter, as we drove 36% year-over-year revenue growth, and dropped most of that to the bottom line,” said Jason Warnick, Chief Financial Officer of Robinhood. “We entered 2024 with the goal of delivering another year of profitable growth, so we’re excited to have already broken prior full year records for both revenue and EPS.”

    Third Quarter Results:

    • Total net revenues increased 36% year-over-year to $637 million.
      • Transaction-based revenues increased 72% year-over-year to $319 million, primarily driven by options revenue of $202 million, up 63%, cryptocurrencies revenue of $61 million, up 165%, and equities revenue of $37 million, up 37%.
      • Net interest revenues increased 9% year-over-year to $274 million, primarily driven by growth in interest-earning assets.
      • Other revenues increased 42% year-over-year to $44 million, primarily due to increased Gold subscription revenues.
      • Total net revenues were reduced by $27 million in Q3 2024 (and $13 million in Q2 2024) due to matches paid to customers on transfers and deposits.
    • Net income increased year-over-year to $150 million, or diluted earnings per share (EPS) of $0.17, compared to a net loss of $85 million, or diluted EPS of -$0.09, in Q3 2023.
    • Total operating expenses decreased 10% year-over-year to $486 million. This includes a $10 million regulatory accrual, which compares to a $104 million regulatory accrual in Q3 2023.
      • Adjusted Operating Expenses (non-GAAP) increased 12% year-over-year to $397 million primarily due to increased marketing and growth investments.
      • Share-Based Compensation (SBC) decreased 5% year-over-year to $79 million.
    • Adjusted EBITDA (non-GAAP) increased 96% year-over-year to $268 million.
    • Funded Customers increased by 1.0 million year-over-year to 24.3 million.
      • Investment Accounts increased by 1.5 million year-over-year to 25.1 million.
    • Assets Under Custody (AUC) increased 76% year-over-year to $152.2 billion, driven by continued Net Deposits and higher equity and cryptocurrency valuations.
    • Net Deposits were $10.0 billion, an annualized growth rate of 29% relative to AUC at the end of Q2 2024. Over the past twelve months, Net Deposits were $39.0 billion, a growth rate of 45% relative to AUC at the end of Q3 2023.
    • Average Revenue Per User (ARPU) increased by 31% year-over-year to $105.
    • Gold Subscribers increased by 860 thousand, or 65%, year-over-year to 2.2 million.
    • Cash and cash equivalents totaled $4.6 billion compared with $4.9 billion at the end of Q3 2023.
    • Share repurchases were $97 million, representing 5.0 million shares of our Class A common stock at an average price per share of $19.42.
      • In July 2024, we began executing on our authorized $1 billion share repurchase program, which we continue to expect to complete over a total of two to three years.

    Highlights

    Robinhood takes major steps toward delivering on product roadmap and winning the active trader market.

    • Building for Active Traders – In October 2024, Robinhood began rolling out Robinhood Legend, a powerful, sleek browser-based desktop trading platform built from the ground up for active traders, and announced that it will launch futures and index options in the coming months with some of the lowest contract fees in the industry.
    • Robinhood Hosts its First Ever Customer-Focused Conference – In October 2024, Robinhood held its inaugural HOOD Summit, bringing together over 400 customers with Robinhood executives and other industry leaders for a three-day event to discuss the latest in trading technology, investing, and culture.
    • More than 9 percent of Robinhood Funded Customers benefit from Robinhood Gold – Gold Subscribers reached new highs of 2.2 million in Q3 2024. Additionally, Robinhood Gold Cards continue to roll out, now in the hands of nearly 100 thousand customers.
    • Robinhood Retirement Reaches $11 billion in AUC – In October 2024, Robinhood Retirement reached $11 billion in AUC across nearly one million funded retirement accounts. Offering the first ever IRA with a match, customers have received over $200 million in matches on retirement account transfers and contributions since launching in January 2023.
    • Expanding Our UK Product Offering – Robinhood introduced stock lending in the UK in September 2024 and launched margin investing for UK customers in October 2024. Robinhood has also received Financial Conduct Authority approval to offer options trading in the UK and plans to launch in 2025.

    Additional Q3 2024 Operating Data

    • Retirement AUC increased 9X year-over-year to $9.9 billion.
    • Cash Sweep increased 80% year-over-year to $24.5 billion.
    • Margin Book increased 53% year-over-year to $5.5 billion.
    • Equity Notional Trading Volumes increased 65% year-over-year to $286.2 billion.
    • Options Contracts Traded increased 47% year-over-year to 443.4 million.
    • Crypto Notional Trading Volumes increased 112% year-over-year to $14.4 billion.
    • Monthly Active Users (MAU) increased 7% year-over-year to 11.0 million.

    Webcast and Conference Call Information

    Robinhood will host a conference call to discuss its results at 2 p.m. PT / 5 p.m. ET today, October 30, 2024. The live webcast of Robinhood’s earnings conference call can be accessed at investors.robinhood.com, along with the earnings press release and accompanying slide presentation.

    Following the call, a replay and transcript will also be available at the same website.

    Financial Outlook

    Our 2024 expense plan includes growth investments in new products, features, and international expansion while also getting more efficient in our existing businesses. Our outlook for GAAP total operating expenses is $1.86 billion to $1.96 billion, including a $10 million regulatory accrual in Q3 2024.

    Our outlook for Non-GAAP combined Adjusted Operating Expenses and SBC for full-year 2024 is unchanged at $1.85 billion to $1.95 billion.

    Actual results might differ materially from our outlook due to several factors, including the rate of growth in Funded Customers and our effectiveness to cross-sell products which affects variable marketing costs, the degree to which we are successful in managing credit losses and preventing fraud, and our ability to manage web-hosting expenses efficiently, among other factors. The above expense outlook does not include potential significant regulatory matters or other significant expenses (such as impairments, restructuring charges, and business acquisition- or disposition-related expenses) that may arise or accruals we may determine in the future are required, as we are unable to accurately predict the size or timing of such matters, expenses or accruals at this time. See “Non-GAAP Financial Measures” for more information on Adjusted Operating Expenses and SBC, including significant items that we believe are not indicative of our ongoing expenses that would be adjusted out of total operating expenses (GAAP) to get to Adjusted Operating Expenses and SBC (non-GAAP) should they occur.

    About Robinhood

    Robinhood Markets, Inc. (NASDAQ: HOOD) transformed financial services by introducing commission-free stock trading and democratizing access to the markets for millions of investors. Today, Robinhood lets you trade stocks, options, commodity interests, and crypto, invest for retirement, and earn with Robinhood Gold. Headquartered in Menlo Park, California, Robinhood puts customers in the driver’s seat, delivering unprecedented value and products intentionally designed for a new generation of investors. Additional information about Robinhood can be found at www.robinhood.com.

    Robinhood uses the “Overview” tab of its Investor Relations website (accessible at investors.robinhood.com/overview) and its Newsroom (accessible at newsroom.aboutrobinhood.com), as means of disclosing information to the public in a broad, non-exclusionary manner for purposes of the U.S. Securities and Exchange Commission’s (“SEC”) Regulation Fair Disclosure (Reg. FD). Investors should routinely monitor those web pages, in addition to Robinhood’s press releases, SEC filings, and public conference calls and webcasts, as information posted on them could be deemed to be material information.

    “Robinhood” and the Robinhood feather logo are registered trademarks of Robinhood Markets, Inc. All other names are trademarks and/or registered trademarks of their respective owners.

    Contacts

    Investors:
    ir@robinhood.com

    Press:
    press@robinhood.com

    ROBINHOOD MARKETS, INC.
    CONDENSED CONSOLIDATED BALANCE SHEETS
    (Unaudited)
     
      December 31,   September 30,
    (in millions, except share and per share data)   2023       2024  
    Assets      
    Current assets:      
    Cash and cash equivalents $ 4,835     $ 4,611  
    Cash and cash equivalents segregated under federal and other regulations   4,448       5,547  
    Receivables from brokers, dealers, and clearing organizations   89       139  
    Receivables from users, net   3,495       5,546  
    Securities borrowed   1,602       3,704  
    Deposits with clearing organizations   338       464  
    Asset related to user cryptocurrencies safeguarding obligation   14,708       19,456  
    User-held fractional shares   1,592       2,201  
    Held-to-maturity investments   413       527  
    Prepaid expenses   63       86  
    Deferred customer match incentives   11       73  
    Other current assets   196       251  
    Total current assets   31,790       42,605  
    Property, software, and equipment, net   120       133  
    Goodwill   175       179  
    Intangible assets, net   48       39  
    Non-current held-to-maturity investments   73       —  
    Non-current deferred customer match incentives   19       159  
    Other non-current assets, including non-current prepaid expenses of $4 as of December 31, 2023 and $22 as of September 30, 2024   107       130  
    Total assets $ 32,332     $ 43,245  
    Liabilities and stockholders’ equity      
    Current liabilities:      
    Accounts payable and accrued expenses $ 384     $ 443  
    Payables to users   5,097       6,264  
    Securities loaned   3,547       7,306  
    User cryptocurrencies safeguarding obligation   14,708       19,456  
    Fractional shares repurchase obligation   1,592       2,201  
    Other current liabilities   217       288  
    Total current liabilities   25,545       35,958  
    Other non-current liabilities   91       79  
    Total liabilities   25,636       36,037  
    Commitments and contingencies      
    Stockholders’ equity:      
    Preferred stock, $0.0001 par value 210,000,000 shares authorized, no shares issued and outstanding as of December 31, 2023 and September 30, 2024.   —       —  
    Class A common stock, $0.0001 par value. 21,000,000,000 shares authorized, 745,401,862 shares issued and outstanding as of December 31, 2023; 21,000,000,000 shares authorized, 761,992,964 shares issued and outstanding as of September 30, 2024.   —       —  
    Class B common stock, $0.0001 par value. 700,000,000 shares authorized, 126,760,802 shares issued and outstanding as of December 31, 2023; 700,000,000 shares authorized, 121,616,044 shares issued and outstanding as of September 30, 2024.   —       —  
    Class C common stock, $0.0001 par value. 7,000,000,000 shares authorized, no shares issued and outstanding as of December 31, 2023 and September 30, 2024.   —       —  
    Additional paid-in capital   12,145       12,158  
    Accumulated other comprehensive income (loss)   (3 )     1  
    Accumulated deficit   (5,446 )     (4,951 )
    Total stockholders’ equity   6,696       7,208  
    Total liabilities and stockholders’ equity $ 32,332     $ 43,245  
                   
    ROBINHOOD MARKETS, INC.
    CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
    (Unaudited)
     
      Three Months Ended
    September 30,
        YOY%     Three Months Ended
    June 30,
        QOQ%  
    (in millions, except share, per share, and percentage data)   2023       2024        Change       2024       Change  
    Revenues:                  
    Transaction-based revenues $ 185     $ 319       72 %   $ 327       (2 )%
    Net interest revenues   251       274       9 %     285       (4 )%
    Other revenues   31       44       42 %     70       (37 )%
    Total net revenues   467       637       36 %     682       (7 )%
                           
    Operating expenses(1)(2):                      
    Brokerage and transaction   39       39       — %     40       (3 )%
    Technology and development   202       205       1 %     209       (2 )%
    Operations   41       50       22 %     46       9 %
    Marketing   28       59       111 %     64       (8 )%
    General and administrative   230       133       (42 )%     134       (1 )%
    Total operating expenses   540       486       (10 )%     493       (1 )%
                               
    Other income (expense), net   (2 )     2       NM       2       — %
    Income (loss) before income taxes   (75 )     153       NM       191       (20 )%
    Provision for income taxes   10       3       (70 )%     3       — %
    Net income (loss) $ (85 )   $ 150       NM     $ 188       (20 )%
    Net income (loss) attributable to common stockholders:                  
    Basic $ (85 )   $ 150         $ 188      
    Diluted $ (85 )   $ 150         $ 188      
    Net income (loss) per share attributable to common stockholders:                  
    Basic $ (0.09 )   $ 0.17         $ 0.21      
    Diluted $ (0.09 )   $ 0.17         $ 0.21      
    Weighted-average shares used to compute net income (loss) per share attributable to common stockholders:                  
    Basic   895,108,790       884,108,545           881,076,624      
    Diluted   895,108,790       905,544,750           904,490,572      
                                   
        Nine Months Ended
    September 30,
      YOY% Change
    (in millions, except share, per share, and percentage data)     2023       2024    
    Revenues:            
    Transaction-based revenues   $ 585     $ 975       67 %
    Net interest revenues     693       813       17 %
    Other revenues     116       149       28 %
    Total net revenues     1,394       1,937       39 %
                 
    Operating expenses(1)(2):            
    Brokerage and transaction     114       114       — %
    Technology and development     608       610       — %
    Operations     119       140       18 %
    Marketing     79       190       141 %
    General and administrative     1,036       385       (63 )%
    Total operating expenses     1,956       1,439       (26 )%
                     
    Other income, net     —       8       NM  
    Income (loss) before income taxes     (562 )     506       NM  
    Provision for income taxes     9       11       22 %
    Net income (loss)   $ (571 )   $ 495       NM  
    Net income (loss) attributable to common stockholders:            
    Basic   $ (571 )   $ 495      
    Diluted   $ (571 )   $ 495      
    Net income (loss) per share attributable to common stockholders:            
    Basic   $ (0.64 )   $ 0.56      
    Diluted   $ (0.64 )   $ 0.55      
    Weighted-average shares used to compute net income (loss) per share attributable to common stockholders:            
    Basic     898,999,464       880,182,573      
    Diluted     898,999,464       903,555,592      
                         

    ________________
    (1) The following table presents operating expenses as a percent of total net revenues:

      Three Months Ended
    September 30,
      Three Months Ended
    June 30,
      Nine Months Ended
    September 30,
        2023       2024       2024       2023       2024  
    Brokerage and transaction   8 %     6 %     5 %     8 %     6 %
    Technology and development   43 %     32 %     31 %     44 %     31 %
    Operations   9 %     8 %     7 %     9 %     7 %
    Marketing   6 %     9 %     9 %     6 %     10 %
    General and administrative   49 %     21 %     20 %     74 %     20 %
    Total operating expenses   115 %     76 %     72 %     141 %     74 %
                                           

    (2) The following table presents the SBC on our unaudited condensed consolidated statements of operations for the periods indicated:

      Three Months Ended
    September 30,
      Three Months Ended
    June 30,
      Nine Months Ended
    September 30,
    (in millions)   2023       2024       2024       2023       2024  
    Brokerage and transaction $ 2     $ 2     $ 3     $ 6     $ 7  
    Technology and development   51       48       52       161       144  
    Operations   3       1       2       6       5  
    Marketing   1       3       1       3       6  
    General and administrative   26       25       28       614       65  
    Total SBC $ 83     $ 79     $ 86     $ 790     $ 227  
                                           
    ROBINHOOD MARKETS, INC.
    CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
    (Unaudited)
     
      Three Months Ended
    September 30,
      Nine Months Ended
    September 30,
    (in millions)   2023       2024       2023       2024  
    Operating activities:              
    Net income (loss) $ (85 )   $ 150     $ (571 )   $ 495  
    Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:              
    Depreciation and amortization   19       20       54       55  
    Provision for credit losses   14       23       29       57  
    Share-based compensation   83       79       790       227  
    Other   (27 )     1       (27 )     —  
    Changes in operating assets and liabilities:              
    Securities segregated under federal and other regulations   —       547       —       —  
    Receivables from brokers, dealers, and clearing organizations   54       10       13       (50 )
    Receivables from users, net   (391 )     (433 )     (502 )     (1,971 )
    Securities borrowed   (244 )     (1,487 )     (687 )     (2,102 )
    Deposits with clearing organizations   (52 )     87       (89 )     (126 )
    Current and non-current prepaid expenses   17       (21 )     26       (41 )
    Current and non-current deferred customer match incentives   (4 )     (6 )     (10 )     (202 )
    Other current and non-current assets   62       117       10       (11 )
    Accounts payable and accrued expenses   94       54       145       28  
    Payables to users   (786 )     475       (376 )     1,167  
    Securities loaned   263       2,215       1,411       3,759  
    Other current and non-current liabilities   6       (19 )     5       (42 )
    Net cash provided by (used in) operating activities   (977 )     1,812       221       1,243  
    Investing activities:              
    Purchases of property, software, and equipment   (1 )     (7 )     (1 )     (9 )
    Capitalization of internally developed software   (5 )     (12 )     (14 )     (26 )
    Purchases of held-to-maturity investments   (76 )     (167 )     (651 )     (469 )
    Proceeds from maturities of held-to-maturity investments   75       150       167       439  
    Purchases of credit card receivables by Credit Card Funding Trust   —       (169 )     —       (239 )
    Collections of purchased credit card receivables   —       82       —       130  
    Business acquisition, net of cash and cash equivalents acquired   (90 )     —       (90 )     (6 )
    Asset acquisition, net of cash acquired   —       —       —       (3 )
    Other   —       —       10       1  
    Net cash used in investing activities   (97 )     (123 )     (579 )     (182 )
    Financing activities:              
    Proceeds from issuance of common stock under the Employee Stock Purchase Plan   —       —       9       10  
    Taxes paid related to net share settlement of equity awards   (4 )     (56 )     (9 )     (155 )
    Payments of debt issuance costs   —       —       (10 )     (14 )
    Draws on credit facilities   10       1       20       12  
    Repayments on credit facilities   (10 )     (1 )     (20 )     (12 )
    Borrowings on Credit Card Funding Trust   —       78       —       95  
    Repayments on Credit Card Funding Trust   —       —       —       (1 )
    Change in principal collected from customers due to Coastal Bank   (3 )     (22 )     (3 )     (15 )
    Repurchase of Class A common stock   (608 )     (97 )     (608 )     (97 )
    Proceeds from exercise of stock options, net of repurchases   —       2       2       10  
    Net cash used in financing activities   (615 )     (95 )     (619 )     (167 )
    Effect of foreign exchange rate changes on cash and cash equivalents   —       1       —       1  
    Net increase (decrease) in cash, cash equivalents, segregated cash, and restricted cash   (1,689 )     1,595       (977 )     895  
    Cash, cash equivalents, segregated cash, and restricted cash, beginning of the period   10,069       8,646       9,357       9,346  
    Cash, cash equivalents, segregated cash, and restricted cash, end of the period $ 8,380     $ 10,241     $ 8,380     $ 10,241  
    Reconciliation of cash, cash equivalents, segregated cash and restricted cash, end of the period:              
    Cash and cash equivalents, end of the period $ 4,889     $ 4,611     $ 4,889     $ 4,611  
    Segregated cash and cash equivalents, end of the period   3,448       5,547       3,448       5,547  
    Restricted cash in other current assets, end of the period   26       67       26       67  
    Restricted cash in other non-current assets, end of the period   17       16       17       16  
    Cash, cash equivalents, segregated cash and restricted cash, end of the period $ 8,380     $ 10,241     $ 8,380     $ 10,241  
    Supplemental disclosures:              
    Cash paid for interest $ 2     $ 4     $ 8     $ 12  
    Cash paid for income taxes, net of refund received $ 7     $ 8     $ 9     $ 14  
                                   
    Reconciliation of GAAP to Non-GAAP Results
    (Unaudited)
     
      Three Months Ended
    September 30,
      Three Months Ended
    June 30,
      Nine Months Ended
    September 30,
    (in millions)   2023       2024       2024       2023       2024  
    Net income (loss) $ (85 )   $ 150     $ 188     $ (571 )   $ 495  
    Net margin   (18 )%     24 %     28 %     (41 )%     26 %
    Add:                  
    Interest expenses related to credit facilities   6       6       6       17       18  
    Provision for income taxes   10       3       3       9       11  
    Depreciation and amortization   19       20       18       54       55  
    EBITDA (non-GAAP)   (50 )     179       215       (491 )     579  
    Add: SBC                  
    2021 Founders Award Cancellation   —       —       —       485       —  
    SBC Excluding 2021 Founders Award Cancellation   83       79       86       305       227  
    Significant legal and tax settlements and reserves   104       10       —       104       10  
    Adjusted EBITDA (non-GAAP) $ 137     $ 268     $ 301     $ 403     $ 816  
    Adjusted EBITDA margin (non-GAAP)   29 %     42 %     44 %     29 %     42 %
                                           
      Three Months Ended
    September 30,
      Three Months Ended
    June 30,
      Nine Months Ended
    September 30,
    (in millions)   2023       2024       2024       2023       2024  
    Total operating expenses (GAAP) $ 540     $ 486     $ 493     $ 1,956     $ 1,439  
    Add: SBC                  
    2021 Founders Award Cancellation   —       —       —       485       —  
    SBC Excluding 2021 Founders Award Cancellation   83       79       86       305       227  
    Significant legal and tax settlements and reserves   104       10       —       104       10  
    Adjusted Operating Expenses (Non-GAAP) $ 353     $ 397     $ 407     $ 1,062     $ 1,202  
                                           
    (in millions) Prior Financial Outlook1
    for the Year Ending
    December 31, 2024
    Current Financial Outlook
    for the Year Ending
    December 31, 2024
    Change
    Total operating expenses (GAAP) $1,850 – $1,950 $1,860 – $1,960 increased by $10
    Significant legal and tax settlements and reserves — $10 increased by $10
    Adjusted Operating Expenses and SBC (Non-GAAP)2 $1,850 – $1,950 $1,850 – $1,950 no change

    (1) Prior Outlook provided at Q2 2024 Earnings on August 7th, 2024.
    (2) Actual results might differ materially from our outlook, see “Financial Outlook” for more information. The above expense outlook does not include potential significant regulatory matters or other significant expenses (such as impairments, restructuring charges, and business acquisition- or disposition-related expenses) that may arise or accruals we may determine in the future are required, as we are unable to accurately predict the size or timing of such matters, expenses or accruals at this time. See “Non-GAAP Financial Measures” for more information on Adjusted Operating Expenses and SBC, including significant items that we believe are not indicative of our ongoing expenses that would be adjusted out of total operating expenses (GAAP) to get to Adjusted Operating Expenses and SBC (non-GAAP) should they occur.

    Cautionary Note Regarding Forward-Looking Statements

    This press release contains forward-looking statements regarding the expected financial performance of Robinhood Markets, Inc. and its consolidated subsidiaries (“we,” “Robinhood,” or the “Company”) and our strategic and operational plans, including (among others) statements regarding that index options, futures, and a realized profit and loss tool are coming soon; that we have a ton of momentum, and we’re just getting started; that in July 2024, we began executing on our authorized $1 billion share repurchase program, which we continue to expect to complete over a total of two to three years; that we will launch futures and index options in the coming months with some of the lowest contract fees in the industry; that we received Financial Conduct Authority approval to offer options trading in the UK and plan to launch in 2025; and all statements and information under the headings “Financial Outlook” and “Reconciliation of GAAP to Non-GAAP Financial Outlook.” Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as “believe,” “may,” “will” “should,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “estimate,” “predict,” “potential,” or “continue,” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans, or intentions. Our forward-looking statements are subject to a number of known and unknown risks, uncertainties, assumptions, and other factors that may cause our actual future results, performance, or achievements to differ materially from any future results expressed or implied in this press release. Reported results should not be considered an indication of future performance. Factors that contribute to the uncertain nature of our forward-looking statements include, among others: our limited operating experience at our current scale; the difficulty of managing our business effectively, including the size of our workforce, and the risk of continued declining or negative growth; the fluctuations in our financial results and key metrics from quarter to quarter; our reliance on transaction-based revenue, including payment for order flow (“PFOF”), and the risk of new regulation or bans on PFOF and similar practices; our exposure to fluctuations in interest rates and rapidly changing interest rate environments; the difficulty of raising additional capital (to provide liquidity needs and support business growth and objectives) on reasonable terms, if at all; the need to maintain capital levels required by regulators and self-regulatory organizations; the risk that we might mishandle the cash, securities, and cryptocurrencies we hold on behalf of customers, and our exposure to liability for processing, operational, or technical errors in clearing functions; the impact of negative publicity on our brand and reputation; the risk that changes in business, economic, or political conditions that impact the global financial markets, or a systemic market event, might harm our business; our dependence on key employees and a skilled workforce; the difficulty of complying with an extensive, complex, and changing regulatory environment and the need to adjust our business model in response to new or modified laws and regulations; the possibility of adverse developments in pending litigation and regulatory investigations; the effects of competition; our need to innovate and invest in new products, services, technologies, and geographies in order to attract and retain customers and deepen their engagement with us in order to maintain growth; our reliance on third parties to perform some key functions and the risk that processing, operational or technological failures could impair the availability or stability of our platforms; the risk of cybersecurity incidents, theft, data breaches, and other online attacks; the difficulty of processing customer data in compliance with privacy laws; our need as a regulated financial services company to develop and maintain effective compliance and risk management infrastructures; the risks associated with incorporating artificial intelligence technologies into some of our products and processes; the volatility of cryptocurrency prices and trading volumes; the risk that our platforms and services could be exploited to facilitate illegal payments; and the risk that substantial future sales of Class A common stock in the public market, or the perception that they may occur, could cause the price of our stock to fall. Because some of these risks and uncertainties cannot be predicted or quantified and some are beyond our control, you should not rely on our forward-looking statements as predictions of future events. More information about potential risks and uncertainties that could affect our business and financial results can be found in Part II, Item 1A of our Quarterly Report on Form 10-Q for the quarter ended June 30, 2024, and in our Quarterly Report on Form 10-Q for the quarter ended September 30, 2024, which we expect to be available on October 31, 2024, as well as in our other filings with the SEC, all of which are available on the SEC’s web site at www.sec.gov. Moreover, we operate in a very competitive and rapidly changing environment; new risks and uncertainties may emerge from time to time, and it is not possible for us to predict all risks nor identify all uncertainties. The events and circumstances reflected in our forward-looking statements might not be achieved and actual results could differ materially from those projected in the forward-looking statements. Except as otherwise noted, all forward-looking statements are made as of the date of this press release, October 30, 2024 and are based on information and estimates available to us at this time. Although we believe that the expectations reflected in our forward-looking statements are reasonable, we cannot guarantee future results, performance, or achievements. Except as required by law, Robinhood assumes no obligation to update any of the statements in this press release whether as a result of any new information, future events, changed circumstances, or otherwise. You should read this press release with the understanding that our actual future results, performance, events, and circumstances might be materially different from what we expect.

    Non-GAAP Financial Measures

    We collect and analyze operating and financial data to evaluate the health of our business, allocate our resources and assess our performance. In addition to total net revenues, net income (loss) and other results under GAAP, we utilize non-GAAP calculations of adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”), Adjusted EBITDA margin, Adjusted Operating Expenses, and Adjusted Operating Expenses and SBC. This non-GAAP financial information is presented for supplemental informational purposes only, should not be considered a substitute for or superior to financial information presented in accordance with GAAP and may be different from similarly titled non-GAAP measures used by other companies. Reconciliations of these non-GAAP measures to the most directly comparable financial measures calculated and presented in accordance with GAAP are provided in the financial tables included in this release.

    Adjusted EBITDA

    Adjusted EBITDA is defined as net income (loss), excluding (i) interest expenses related to credit facilities, (ii) provision for (benefit from) income taxes, (iii) depreciation and amortization, (iv) SBC, (v) significant legal and tax settlements and reserves, and (vi) other significant gains, losses, and expenses (such as impairments, restructuring charges, and business acquisition- or disposition-related expenses) that we believe are not indicative of our ongoing results.

    The above items are excluded from our Adjusted EBITDA measure because these items are non-cash in nature, or because the amount and timing of these items are unpredictable, are not driven by core results of operations, and render comparisons with prior periods and competitors less meaningful. We believe Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our results of operations, as well as providing a useful measure for period-to-period comparisons of our business performance. Moreover, Adjusted EBITDA is a key measurement used by our management internally to make operating decisions, including those related to operating expenses, evaluate performance, and perform strategic planning and annual budgeting.

    Adjusted EBITDA Margin

    Adjusted EBITDA Margin is calculated as Adjusted EBITDA divided by total net revenues. The most directly comparable GAAP measure is net margin (calculated as net income (loss) divided by total net revenues). We believe Adjusted EBITDA Margin provides useful information to investors and others in understanding and evaluating our results of operations, as well as providing a useful measure for period-to-period comparisons of our business performance. Adjusted EBITDA Margin is used by our management internally to make operating decisions, including those related to operating expenses, evaluate performance, and perform strategic planning and annual budgeting.

    Adjusted Operating Expenses

    Adjusted Operating Expenses is defined as GAAP total operating expenses minus (i) SBC, (ii) significant legal and tax settlements and reserves, and (iii) other significant expenses (such as impairments, restructuring charges, and business acquisition- or disposition-related expenses) that we believe are not indicative of our ongoing expenses. The amount and timing of the excluded items are unpredictable, are not driven by core results, of operations, and render comparisons with prior periods less meaningful. We believe Adjusted Operating Expenses provides useful information to investors and others in understanding and evaluating our results of operations, as well as providing a useful measure for period-to-period comparisons of our cost structure. Adjusted Operating Expenses is used by our management internally to make operating decisions, including those related to operating expenses, evaluate performance, and perform strategic planning and annual budgeting.

    Adjusted Operating Expenses and SBC

    Adjusted Operating Expenses and SBC is defined as GAAP total operating expenses minus (i) significant legal and tax settlements and reserves and (ii) other significant expenses (such as impairments, restructuring charges, and business acquisition- or disposition-related expenses), that we believe are not indicative of our ongoing expenses. The amount and timing of the excluded items are unpredictable, are not driven by core results, of operations, and render comparisons with prior periods less meaningful. Unlike Adjusted Operating Expenses, Adjusted Operating Expenses and SBC does not adjust for SBC. We believe Adjusted Operating Expense and SBC provides useful information to investors and others in understanding and evaluating our results of operations, as well as providing a useful measure for period-to-period comparisons of our cost structure. Adjusted Operating Expenses and SBC is used by our management internally to make operating decisions, including those related to operating expenses, evaluate performance, and perform strategic planning and annual budgeting.

    Key Performance Metrics

    In addition to the measures presented in our unaudited condensed consolidated financial statements, we use the following key performance metrics to help us evaluate our business, identify trends affecting our business, formulate business plans, and make strategic decisions.

    Funded Customers

    We define a Funded Customer as a unique person who has at least one account with a Robinhood entity and, within the past 45 calendar days (a) had an account balance that was greater than zero (excluding amounts that are deposited into a Funded Customer account by the Company with no action taken by the unique person) or (b) completed a transaction using any such account. Individuals who share a funded joint investing account (which launched in July 2024) are each considered to be a Funded Customer.

    Assets Under Custody (“AUC”)

    We define AUC as the sum of the fair value of all equities, options, cryptocurrency and cash held by users in their accounts, net of receivables from users, as of a stated date or period end on a trade date basis. Net Deposits and net market gains (losses) drive the change in AUC in any given period.

    Net Deposits

    We define Net Deposits as all cash deposits and asset transfers from customers, as well as dividends, interest, and cash and assets earned in connection with Company promotions (such as account transfer and retirement match incentives and free stock bonuses) received by customers, net of reversals, customer cash withdrawals, margin interest, Gold subscription fees, and other assets transferred out of our platforms (assets transferred in or out include debit card transactions, Automated Customer Account Transfer Service transfers, and custodial crypto wallet transfers) for a stated period. Prior to the second quarter of 2024, Net Deposits did not include inflows from cash and assets earned in connection with Company promotions and prior to January 2024, Net Deposits did not include inflows from dividends and interest or outflows from Robinhood Gold subscription fees and margin interest, although we have not restated amounts in prior periods as the impact to those figures was immaterial.

    Average Revenue Per User (“ARPU”)

    We define ARPU as total revenue for a given period divided by the average number of Funded Customers on the last day of that period and the last day of the immediately preceding period. Figures in this release represent ARPU annualized for each three-month period presented.

    Gold Subscribers

    We define a Gold Subscriber as a unique person who has at least one account with a Robinhood entity and who, as of the end of the relevant period (a) is subscribed to Robinhood Gold and (b) has made at least one Robinhood Gold subscription fee payment.

    Additional Operating Metrics

    Retirement AUC

    We define Retirement AUC as the total AUC in traditional IRAs and Roth IRAs.

    Cash Sweep

    We define Cash Sweep as the period-end aggregate balances in our brokerage sweep program (i.e., the period-end total amount of participating users’ uninvested brokerage cash that has been automatically “swept” or moved from their brokerage accounts into deposits for their benefit at a network of program banks). This is an off-balance-sheet amount. Robinhood earns a net interest spread on Cash Sweep balances based on the interest rate offered by the banks less the interest rate given to users as stated in our program terms.

    Margin Book

    We define Margin Book as our period-end aggregate outstanding margin loan balances receivable (i.e., the period-end total amount we are owed by customers on loans made for the purchase of securities, supported by a pledge of assets in their margin-enabled brokerage accounts).

    Notional Trading Volume

    We define Notional Trading Volume for any specified asset class as the aggregate dollar value (purchase price or sale price as applicable) of trades executed in that asset class over a specified period of time.

    Options Contracts Traded

    We define Options Contracts Traded as the total number of options contracts bought or sold over a specified period of time. Each contract generally entitles the holder to trade 100 shares of the underlying stock.

    Monthly Active Users (“MAU”)

    We define MAUs as the number of unique persons who, using one or more accounts with a Robinhood entity, meet one of the following criteria at any point during a specified calendar month: a) executes a debit card or credit card transaction, b) transitions between two different screens on a mobile device while logged into their account or c) loads a page in a web browser while logged into their account. A person need not satisfy these conditions on a recurring monthly basis or be a Funded Customer to be included in MAU. MAU figures in this release reflect MAU for the last month of the relevant period presented. We utilize MAU to measure how many customers interact with our products and services during a given month. MAU does not measure the frequency or duration of the interaction, but we consider it a useful indicator for engagement. Additionally, MAUs are positively correlated with, but are not indicative of, the performance of revenue and other key performance indicators.

    Glossary Terms

    Investment Accounts

    We define an Investment Account as a funded individual brokerage account, a funded joint investing account, or a funded individual retirement account (“IRA”). As of September 30, 2024, a Funded Customer can have up to four Investment Accounts – individual brokerage account, joint investing account (which launched in July 2024), traditional IRA, and Roth IRA.

    Growth Rate and Annualized Growth Rate with respect to Net Deposits

    When used with respect to Net Deposits, “growth rate” and “annualized growth rate” provide information about Net Deposits relative to total AUC. “Growth rate” is calculated as aggregate Net Deposits over a specified 12 month period, divided by AUC for the fiscal quarter that immediately precedes such 12 month period. “Annualized growth rate” is calculated as Net Deposits for a specified quarter multiplied by 4 and divided by AUC for the immediately preceding quarter.

    The MIL Network –

    January 25, 2025
  • MIL-OSI: Orange County Bancorp, Inc. Announces Third Quarter 2024 results:

    Source: GlobeNewswire (MIL-OSI)

    • Net Interest Income increased $467 thousand, or 2.1%, to $23.0 million for the quarter ended September 30, 2024, from $22.5 million for the quarter ended September 30, 2023
    • Net Interest Margin grew 3 basis points to 3.81% for the quarter ended September 30, 2024, as compared to 3.78% for the quarter ended September 30, 2023
    • Total Loans grew $49.0 million, or 2.8%, reaching $1.8 billion at September 30, 2024 as compared to $1.7 billion at December 31, 2023.
    • Total Deposits rose $101.3 million, or 5.0%, to $2.1 billion at September 30, 2024, from $2.0 billion at year-end 2023
    • Book value per share increased $4.77, or 16.3%, to $34.03 at September 30, 2024, from $29.26 at December 31, 2023
    • Trust and investment advisory income rose $521 thousand, or 20.1%, to $3.1 million for Q3 2024, as compared to $2.6 million for Q3 2023

    MIDDLETOWN, N.Y., Oct. 30, 2024 (GLOBE NEWSWIRE) — Orange County Bancorp, Inc. (the “Company” – Nasdaq: OBT), parent company of Orange Bank & Trust Co. (the “Bank”) and Hudson Valley Investment Advisors, Inc. (“HVIA”), today announced net income of $3.2 million, or $0.57 per basic and diluted share, for the three months ended September 30, 2024. This compares with net income of $9.0 million, or $1.61 per basic and diluted share, for the three months ended September 30, 2023.   The decrease in earnings per share, basic and diluted, was due primarily to increases in the provision for credit losses and non-interest expense offset by increases in net interest income and non-interest income during the current period. For the nine months ended September 30, 2024, net income was $20.7 million, or $3.67 per basic and diluted share, as compared to $21.4 million, or $3.79 per basic and diluted share, for the nine months ended September 30, 2023.

    Book value per share rose $4.77, or 16.3%, year-to-date, from $29.26 at December 31, 2023 to $34.03 at September 30, 2024. Tangible book value per share increased $4.81, or 17.1%, during the same period, from $28.12 at December 31, 2023 to $32.93 at September 30, 2024 (see “Non-GAAP Financial Measure Reconciliation” below for additional detail). These increases were due primarily to earnings during the nine months ended September 30, 2024, as well as a decrease in accumulated other comprehensive income (loss) associated with a reduction in unrealized losses within the investment securities portfolio.  

    “This quarter was one in which our core and ancillary businesses continued to perform well,” said Company President and CEO Michael Gilfeather, “but earnings were negatively impacted by a significant commercial office space loan. For the quarter, we increased our provision for loan losses by $7.2 million.  This was primarily attributable to a $5.6 million reserve against an office space participation loan identified as problematic in the prior quarter, and against which we’ve already reserved nearly $4 million.  Our decision to add to the reserves was the result of further deterioration of the loan and uncertainty regarding the borrower’s commitment to payment performance and we are pursuing all remedies at our disposal. The remainder of the quarterly provision, approximately $1.6 million, was primarily attributable to loan growth during the quarter, as well as the impact associated with periodic review of our loan portfolio. We are fortunate that, despite this reserve, the strength and resilience of our business model enabled us to record $3.2 million of net income for the quarter, bringing our 9-month total to $20.7 million, as compared to $21.4 million for the same period last year.

    Loan demand and economic activity in the communities we serve remains strong. This was aided by the Federal Reserve’s long-awaited reduction in interest rates – an outsized 50 basis points – which contributed to quality loan growth experienced in the quarter.  For the quarter, total loans increased $62.3 million, or 3.6%, increasing our total loan portfolio to $1.8 billion at quarter end, up from $1.7 billion at year end 2023.   Total deposits at quarter end, though below second quarter levels due to seasonal reductions in municipal deposits and IOLA business, have grown $101.3 million, or 5.0%, since year end, eclipsing $2.1 billion. Attorneys, while not the only source of our IOLA deposits, are a significant component which have the added benefit of providing meaningful business referrals to the Bank. Total cost of deposits was 1.25% for Q3, reflecting the Bank’s ongoing commitment to growing commercial checking accounts and other low-cost deposits. Given the challenges our industry has confronted retaining, much less growing deposits in the current interest rate environment, I am very proud of these results.

    Net interest margin for the quarter was 3.81%, down 29 basis points, or 7.1%, from the previous quarter, but still well above industry averages.

    Our Wealth Management divisions continued their strong performance in Q3. Trust and Advisory income rose approximately $521 thousand, or 20.1% to $3.1 million, as compared to $2.6 million during Q3 2023. While a portion of this is attributable to asset growth from favorable market performance, gathering new AUM has become a bank wide area of focus. Bank clients seeking higher returns on their idle deposits are introduced to our HVIA asset management staff, who have competitive alternatives, financial market insight, and can provide tailored investment solutions for their overall cash strategies. This has enabled us to retain those funds, attract new AUM from outside and keep client assets in-house for easy access as business and personal needs evolve over time.

    As frustrating as aspects of this quarter have been, overall performance of the Bank and our employees has been exemplary.   We recognize success in our industry isn’t judged by quarters, but by years, with our 132-year history serving as testimony to the commitment of our employees and consistency of our performance over time. This perspective has been critical to our success and is why our staff and clients have remained close and loyal to our vision. So I once again thank our employees for their hard work and dedication, our customers for their trust and business, and our investors for their continued confidence and support.” 

    Third Quarter 2024 Financial Review

    Net Income

    Net income for the third quarter of 2024 was $3.2 million, a decrease of $5.8 million, or 64.4%, from net income of $9.0 million for the third quarter of 2023. The decrease was the result of a substantial provision for estimated credit losses as well as increased interest and non-interest expense over the same quarter last year. Net income for the nine months ended September 30, 2024 was $20.7 million, as compared to $21.4 million for the same period in 2023. The decrease similarly reflected the effect of an increase in provision for credit losses coupled with increased non-interest expense during the first nine months of 2024, as compared to the same period in 2023. The provision includes the impact of additional reserves associated with a nonaccrual loan during the current quarter.

    Net Interest Income

    For the three months ended September 30, 2024, net interest income rose $467 thousand, or 2.1%, to $23.0 million, versus $22.5 million during the same period last year. The increase was driven primarily by a $1.7 million increase in interest and fees on loans during the current period. For the nine months ended September 30, 2024, net interest income reached $68.7 million, representing an increase of $2.4 million, or 3.7%, over the first nine months of 2023.

    Total interest income rose $1.3 million, or 4.4%, to $31.4 million for the three months ended September 30, 2024, compared to $30.1 million for the three months ended September 30, 2023. The increase reflected 6.9% growth in interest and fees associated with loans, a 1.6% increase in interest income from tax-exempt investment securities, and an 8.2% increase in interest income related to fed funds interest and balances held at correspondent banks. For the nine months ended September 30, 2024, total interest income rose $8.8 million, or 10.2%, to $95.0 million as compared to $86.2 million for the nine months ended September 30, 2023.

    Total interest expense increased $870 thousand during the third quarter of 2024, to $8.5 million, as compared to $7.6 million in the third quarter of 2023. The increase represented the combined effect of rising interest rates on customer deposits and brokered deposits partially offset by a decrease in the cost associated with borrowed funds utilized as alternate sources of funding. Interest expense associated with savings and NOW accounts totaled $5.4 million during the third quarter of 2024, as compared to $3.5 million during the third quarter of 2023. Interest expense associated with FHLB advances drawn and other borrowings during the current quarter totaled $1.6 million, as compared to $1.9 million during the third quarter of 2023. During the nine months ended September 30, 2024, total interest expense rose $6.4 million, to $26.3 million, as compared to $20.0 million for the same period last year.

    Provision for Credit Losses

    As of January 1, 2023, the Company adopted the current expected credit losses methodology (“CECL”) accounting standard, which includes loans individually evaluated, as well as loans evaluated on a pooled basis to assess the adequacy of the allowance for credit losses. The Bank seeks to estimate lifetime losses in its loan and investment portfolio by using expected discounted cash flows and supplemental qualitative considerations, including relevant economic considerations, portfolio concentrations, and other external factors, as well as evaluating investment securities held by the Bank.

    The Company recognized a provision for credit losses of $7.2 million for the three months ended September 30, 2024, as compared to $837 thousand for the three months ended September 30, 2023. This increase was primarily driven by a $5.6 million reserve associated with a specific non-accrual commercial loan as well as the impact of the methodology associated with estimated lifetime losses and the increase in loans closed during the quarter. The allowance for credit losses to total loans was 1.73% as of September 30, 2024 versus 1.44% as of December 31, 2023. For the nine months ended September 30, 2024, the provision for credit losses totaled $7.8 million as compared to $7.4 million for the nine months ended September 30, 2023. No reserves for investment securities were recorded during 2024.

    Non-Interest Income

    Non-interest income rose $954 thousand, or 29.6%, to $4.2 million for the three months ended September 30, 2024, as compared to $3.2 million for the three months ended September 30, 2023. This growth was related to continued increased fee income within several of the Company’s fee income categories, including investment advisory income, trust income, and service charges on deposit accounts. For the nine months ended September 30, 2024, non-interest income increased approximately $2.0 million, to $11.7 million, as compared to $9.7 million for the nine months ended September 30, 2023.

    Non-Interest Expense

    Non-interest expense was $16.0 million for the third quarter of 2024, reflecting an increase of $2.4 million, or 17.3%, as compared to $13.6 million for the same period in 2023. The increase in non-interest expense for the current three-month period reflected the Company’s continued commitment to growth. This investment consists primarily of increases in compensation, information technology, and deposit insurance costs, as well as professional fees associated with certain corporate initiatives. Our efficiency ratio increased to 58.8% for the three months ended September 30, 2024, from 52.8% for the same period in 2023. For the nine months ended September 30, 2024, our efficiency ratio increased to 58.2% from 55.4% for the same period in 2023. Non-interest expense for the nine months ended September 30, 2024 reached $46.7 million, reflecting a $4.7 million increase over non-interest expense of $42.1 million for the nine months ended September 30, 2023.

    Income Tax Expense

    Provision for income taxes for the three months ended September 30, 2024 was $788 thousand, as compared to $2.3 million for the same period in 2023. The decrease was directly related to lower income before income taxes. For the nine months ended September 30, 2024, the provision for income taxes was $5.1 million, approximately the same as for the nine months ended September 30, 2023. Our effective tax rate for the three-month period ended September 30, 2024 was 19.7%, as compared to 20.0% for the same period in 2023. Our effective tax rate for the nine-month period ended September 30, 2024 was 19.9%, as compared to 19.3% for the same period in 2023.

    Financial Condition

    Total consolidated assets increased $33.6 million, or 1.4%, to remain relatively level at $2.5 billion at September 30, 2024 and December 31, 2023. The stability of the balance sheet included loan growth and continued increases in deposits and cash as well as paydowns of borrowings during the current nine-month period.

    Total cash and due from banks increased from $147.4 million at December 31, 2023, to $160.9 million at September 30, 2024, an increase of approximately $13.5 million, or 9.2%. This increase resulted primarily from increases in deposit balances and slower loan growth which increased cash levels while reducing short-term borrowings.

    Total investment securities decreased $26.7 million, or 5.3%, from $504.5 million at December 31, 2023 to $477.8 million at September 30, 2024. The decrease continues to be driven primarily by investment maturities during the first nine months of 2024.

    Total loans increased $49.0 million, or 2.8%, from $1.7 billion at December 31, 2023 to $1.8 billion at September 30, 2024. The increase was primarily driven by an increase of $75.2 million related to commercial real estate loans as well as a $4.7 million increase in consumer loans offset by decreases in all other loan categories during 2024.

    Total deposits increased $101.3 million, to $2.1 billion at September 30, 2024, from $2.0 billion at December 31, 2023. This increase was due primarily to $122.1 million of growth in money market accounts, $37.4 million increase in interest bearing demand accounts, and $30.1 million increase in savings accounts. The increases in deposit accounts were offset by an $8.8 million decrease in noninterest-bearing demand accounts and a $79.6 million decrease in certificates of deposit, mainly associated with brokered deposits utilized by the Bank for short term funding purposes. Deposit composition at September 30, 2024 included 48.3% in demand deposit accounts (including NOW accounts) as a percentage of total deposits. Uninsured deposits, net of fully collateralized municipal relationships, remain stable and represent approximately 39% of total deposits at September 30, 2024, as compared to 37% of total deposits at December 31, 2023.

    FHLBNY short-term borrowings decreased by $142.5 million, or 63.5%, to $82 million as of September 30, 2024, as compared to $224.5 million at December 31, 2023. The decrease in borrowings was driven by increased deposits which outpaced loan growth during the first nine months of 2024 and allowed for paydowns of borrowings while maintaining adequate levels of cash at September 30, 2024. The decrease in borrowings reflects a strategic decision to actively manage liquidity sources and take advantage of opportunities to reduce funding costs.

    Stockholders’ equity increased approximately $27.7 million during the first nine months of 2024, reaching $193.1 million at September 30, 2024 from $165.4 million at December 31, 2023. The increase was due primarily to $20.7 million of net income during the first nine months of 2024, partially reduced by dividends and favorably impacted by a reduction of unrealized losses of approximately $9.7 million, net of taxes, on the market value of investment securities within the Company’s equity as accumulated other comprehensive income (loss).

    At September 30, 2024, the Bank maintained capital ratios in excess of regulatory standards for well capitalized institutions. The Bank’s Tier 1 capital to average assets ratio was 10.06%, both common equity and Tier 1 capital to risk weighted assets were 13.64%, and total capital to risk weighted assets was 14.89%.  

    Wealth Management

    At September 30, 2024, our Wealth Management Division, which includes trust and investment advisory, totaled $1.8 billion in assets under management or advisory, as compared to $1.6 billion at December 31, 2023, a 13.4% increase. Trust and investment advisory income for the quarter ended September 30, 2024 reached $3.1 million and represented an increase of 20.0%, or $521 thousand, as compared to $2.6 million for the quarter ended September 30, 2023.

    The breakdown of trust and investment advisory assets as of September 30, 2024 and December 31, 2023, respectively, is as follows:

    ORANGE COUNTY BANCORP, INC.
    SUMMARY OF AUM/AUA
    (UNAUDITED)
    (Dollar Amounts in thousands)
      At September 30, 2024   At December 31, 2023
      Amount   Percent   Amount   Percent
    Investment Assets Under Management & Advisory $ 1,107,182   61.78 %   $ 909,384   57.56 %
    Trust Asset Under Administration & Management   684,937   38.22 %     670,515   42.44 %
    Total $ 1,792,119   100.00 %   $ 1,579,899   100.00 %
                   

    Loan Quality

    At September 30, 2024, the Bank had total non-performing loans of $11.2 million, or 0.62% of total loans. Total non-accrual loans represented approximately $10.9 million of loans as of September 30, 2024, compared to $4.4 million at December 31, 2023. The increase in non-accrual loans was primarily the result of one $10.7 million commercial real estate participation which remains non-performing and in non-accrual status at quarter end.

    On October 25, 2024, the Bank filed a civil complaint in the United States District Court for the District of New Jersey against the lead lender, Valley National Bank, of the non-performing commercial real estate loan participation noted above. This action cites breach of contract and other claims related to the participation agreement with the lead lender. The lawsuit requests damages and demands repurchase by the lead lender of the participated loan amount in accordance with the rights available under the terms of the participation agreement.

    Liquidity

    Management believes the Bank has the necessary liquidity to meet normal business needs. The Bank uses a variety of resources to manage its liquidity position. These include short term investments, cash from lending and investing activities, core-deposit growth, and non-core funding sources, such as time deposits exceeding $250,000, brokered deposits, FHLBNY advances, and other borrowings. As of September 30, 2024, the Bank’s cash and due from banks totaled $160.9 million. The Bank maintains an investment portfolio of securities available for sale, comprised mainly of US Government agency and treasury securities, Small Business Administration loan pools, mortgage-backed securities, and municipal bonds. Although the portfolio generates interest income for the Bank, it also serves as an available source of liquidity and funding. As of September 30, 2024, the Bank’s investment in securities available for sale was $477.8 million, of which $24.2 million was not pledged as collateral and additional $45.5 million with the Federal Reserve which is not specifically designated to any borrowings. Additionally, as of September 30, 2024, the Bank’s overnight advance line capacity at the Federal Home Loan Bank of New York was $577.6 million, of which $76.0 million was used to collateralize municipal deposits and $10.0 million was utilized for long term advances. As of September 30, 2024, the Bank’s unused borrowing capacity at the FHLBNY was $491.6 million. The Bank also maintains additional borrowing capacity of $20 million with other correspondent banks. Additional funding is available to the Bank through the discount window lending by the Federal Reserve.   At September 30, 2024, the Bank was utilizing $50 million of funding through the Bank Term Funding Program from the Federal Reserve under a one-year facility.

    The Bank also considers brokered deposits an element of its deposit strategy. As of September 30, 2024, the Bank had brokered deposit arrangements with various terms totaling $107.3 million.

    Non-GAAP Financial Measure Reconciliations      
    The following table reconciles, as of the dates set forth below, stockholders’ equity (on a GAAP basis) to tangible equity and total assets (on a GAAP basis) to tangible assets and calculates our tangible book value per share.
           
      September 30, 2024   December 31, 2023
      (Dollars in thousands except for share data)
    Tangible Common Equity:      
    Total stockholders’ equity $ 193,094     $ 165,376  
    Adjustments:      
    Goodwill   (5,359 )     (5,359 )
    Other intangible assets   (892 )     (1,107 )
    Tangible common equity $ 186,843     $ 158,910  
    Common shares outstanding   5,674,126       5,651,311  
    Book value per common share $ 34.03     $ 29.26  
    Tangible book value per common share $ 32.93     $ 28.12  
           
    Tangible Assets      
    Total assets $ 2,519,099     $ 2,485,468  
    Adjustments:      
    Goodwill   (5,359 )     (5,359 )
    Other intangible assets   (892 )     (1,107 )
    Tangible assets $ 2,512,848     $ 2,479,002  
    Tangible common equity to tangible assets   7.44 %     6.41 %
           

    About Orange County Bancorp, Inc

    Orange County Bancorp, Inc. is the parent company of Orange Bank & Trust Company and Hudson Valley Investment Advisors, Inc. Orange Bank & Trust Company is an independent bank that began with the vision of 14 founders over 125 years ago. It has grown through innovation and an unwavering commitment to its community and business clientele to approximately $2.5 billion in total assets. Hudson Valley Investment Advisors, Inc. is a Registered Investment Advisor in Goshen, NY. It was founded in 1996 and acquired by the Company in 2012.

    Forward Looking Statements

    Certain statements contained herein are “forward looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward looking statements may be identified by reference to a future period or periods, or by the use of forward looking terminology, such as “may,” “will,” “believe,” “expect,” “estimate,” “anticipate,” “continue,” or similar terms or variations on those terms, or the negative of those terms. Forward looking statements are subject to numerous risks and uncertainties, including, but not limited to, those related to the real estate and economic environment, particularly in the market areas in which the Company operates, competitive products and pricing, fiscal and monetary policies of the U.S. Government, inflation, changes in government regulations affecting financial institutions, including regulatory fees and capital requirements, changes in prevailing interest rates, increased levels of loan delinquencies, problem assets and foreclosures, credit risk management, asset-liability management, cybersecurity risks, geopolitical conflicts, public health issues, the financial and securities markets and the availability of and costs associated with sources of liquidity.

    The Company wishes to caution readers not to place undue reliance on any such forward looking statements, which speak only as of the date made. The Company wishes to advise readers that the factors listed above could affect the Company’s financial performance and could cause the Company’s actual results for future periods to differ materially from any opinions or statements expressed with respect to future periods in any current statements. The Company does not undertake and specifically declines any obligation to publicly release the results of any revisions that may be made to any forward looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.

    For further information:
    Michael Lesler
    EVP & Chief Financial Officer
    mlesler@orangebanktrust.com
    Phone: (845) 341-5111

    ORANGE COUNTY BANCORP, INC.
    CONDENSED CONSOLIDATED STATEMENTS OF CONDITION
    (UNAUDITED)
      (Dollar Amounts in thousands except per share data)
               
          September 30, 2024   December 31, 2023
               
        ASSETS      
               
    Cash and due from banks $ 160,872     $ 147,383  
    Investment securities – available-for-sale   469,532       489,948  
    (Amortized cost $529,161 at September 30, 2024 and $560,994 at December 31, 2023)    
    Restricted investment in bank stocks   8,267       14,525  
    Loans   1,796,094       1,747,062  
    Allowance for credit losses   (31,023 )     (25,182 )
      Loans, net   1,765,071       1,721,880  
               
    Premises and equipment, net   15,624       16,160  
    Accrued interest receivable   10,007       5,934  
    Bank owned life insurance   41,993       41,447  
    Goodwill   5,359       5,359  
    Intangible assets   892       1,107  
    Other assets   41,482       41,725  
               
        TOTAL ASSETS $ 2,519,099     $ 2,485,468  
               
        LIABILITIES AND STOCKHOLDERS’ EQUITY      
               
    Deposits:      
      Noninterest bearing $ 690,419     $ 699,203  
      Interest bearing   1,449,604       1,339,546  
        Total deposits   2,140,023       2,038,749  
               
    FHLB advances, short term   82,000       224,500  
    FHLB advances, long term   10,000       10,000  
    BTFP borrowing   50,000       –  
    Subordinated notes, net of issuance costs   19,573       19,520  
    Accrued expenses and other liabilities   24,409       27,323  
               
        TOTAL LIABILITIES   2,326,005       2,320,092  
               
        STOCKHOLDERS’ EQUITY      
               
    Common stock, $0.50 par value; 15,000,000 shares authorized;      
      5,683,304 issued; 5,674,126 and 5,651,311 outstanding,      
      at September 30, 2024 and December 31, 2023, respectively   2,842       2,842  
    Surplus   120,874       120,392  
    Retained Earnings   124,174       107,361  
    Accumulated other comprehensive income (loss), net of taxes   (54,386 )     (64,108 )
    Treasury stock, at cost; 9,178 and 31,993 shares at September 30,      
      2024 and December 31, 2023, respectively   (410 )     (1,111 )
        TOTAL STOCKHOLDERS’ EQUITY   193,094       165,376  
               
        TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 2,519,099     $ 2,485,468  
               
    ORANGE COUNTY BANCORP, INC.
    CONDENSED CONSOLIDATED STATEMENTS OF INCOME
    (UNAUDITED)
    (Dollar Amounts in thousands except per share data)
          For Three Months Ended September 30,   Nine Months Ended September 30,
          2024   2023   2024   2023
    INTEREST INCOME              
      Interest and fees on loans $ 26,375   $ 24,682   $ 78,767   $ 70,398
      Interest on investment securities:              
        Taxable   2,645     3,150     8,976     9,570
        Tax exempt   573     564     1,722     1,721
      Interest on Federal funds sold and other   1,843     1,703     5,556     4,514
                       
        TOTAL INTEREST INCOME   31,436     30,099     95,021     86,203
                       
    INTEREST EXPENSE              
      Savings and NOW accounts   5,432     3,506     15,167     9,081
      Time deposits   1,213     1,954     5,741     3,893
      FHLB advances and borrowings   1,593     1,907     4,734     6,295
      Note payable   –     –     –     –
      Subordinated notes   230     231     691     692
        TOTAL INTEREST EXPENSE   8,468     7,598     26,333     19,961
                       
        NET INTEREST INCOME   22,968     22,501     68,688     66,242
                       
    Provision for credit losses   7,191     837     7,761     7,406
        NET INTEREST INCOME AFTER              
        PROVISION FOR CREDIT LOSSES   15,777     21,664     60,927     58,836
                       
    NONINTEREST INCOME              
      Service charges on deposit accounts   270     210     737     588
      Trust income   1,379     1,266     4,000     3,707
      Investment advisory income   1,741     1,333     4,966     3,819
      Investment securities gains(losses)   –     –     –     107
      Earnings on bank owned life insurance   39     243     551     725
      Other   745     168     1,413     730
        TOTAL NONINTEREST INCOME   4,174     3,220     11,667     9,676
                       
    NONINTEREST EXPENSE              
      Salaries   6,687     6,135     20,298     18,606
      Employee benefits   2,269     1,752     6,695     5,359
      Occupancy expense   1,222     1,180     3,547     3,614
      Professional fees   1,557     799     4,330     3,512
      Directors’ fees and expenses   584     295     781     682
      Computer software expense   1,526     1,233     4,191     3,714
      FDIC assessment   210     463     978     1,023
      Advertising expenses   364     364     1,166     1,074
      Advisor expenses related to trust income   30     30     95     89
      Telephone expenses   190     184     565     534
      Intangible amortization   71     71     214     214
      Other   1,237     1,084     3,884     3,644
        TOTAL NONINTEREST EXPENSE   15,947     13,590     46,744     42,065
                       
      Income before income taxes   4,004     11,294     25,850     26,447
                       
    Provision for income taxes   788     2,256     5,131     5,093
        NET INCOME $ 3,216   $ 9,038   $ 20,719   $ 21,354
                       
    Basic and diluted earnings per share $ 0.57   $ 1.61   $ 3.67   $ 3.79
                       
    Weighted average shares outstanding   5,653,904     5,629,642     5,643,591     5,628,036
                       
    ORANGE COUNTY BANCORP, INC.
    NET INTEREST MARGIN ANALYSIS
    (UNAUDITED)
    (Dollar Amounts in thousands)
                           
      Three Months Ended September 30,
      2024   2023
      Average Balance   Interest   Average Rate   Average Balance   Interest   Average Rate
    Assets:                      
    Loans Receivable (net of PPP) $ 1,759,989     $ 26,372     5.94 %   $ 1,697,745     $ 24,677   5.77 %
    PPP Loans   186       3     6.40 %     996       5   1.99 %
    Investment securities   463,347       3,252     2.78 %     495,803       3,466   2.77 %
    Due from banks   160,563       1,843     4.55 %     154,335       1,703   4.38 %
    Other   7,601       (34 )   -1.77 %     10,299       248   9.55 %
    Total interest earning assets   2,391,686       31,436     5.21 %     2,359,178       30,099   5.06 %
    Non-interest earning assets   94,476               96,894          
    Total assets $ 2,486,162             $ 2,456,072          
                           
    Liabilities and equity:                      
    Interest-bearing demand accounts $ 370,442     $ 425     0.46 %   $ 334,658     $ 332   0.39 %
    Money market accounts   695,516       4,083     2.33 %     632,300       2,551   1.60 %
    Savings accounts   256,934       924     1.43 %     242,627       623   1.02 %
    Certificates of deposit   116,817       1,213     4.12 %     176,369       1,954   4.40 %
    Total interest-bearing deposits   1,439,709       6,645     1.83 %     1,385,954       5,460   1.56 %
    FHLB Advances and other borrowings   127,197       1,593     4.97 %     140,560       1,907   5.38 %
    Subordinated notes   19,561       230     4.66 %     19,490       231   4.70 %
    Total interest bearing liabilities   1,586,467       8,468     2.12 %     1,546,004       7,598   1.95 %
    Non-interest bearing demand accounts   688,138               736,313          
    Other non-interest bearing liabilities   25,947               23,279          
    Total liabilities   2,300,552               2,305,596          
    Total shareholders’ equity   185,610               150,476          
    Total liabilities and shareholders’ equity $ 2,486,162             $ 2,456,072          
                           
    Net interest income     $ 22,968             $ 22,501    
    Interest rate spread 1         3.10 %           3.11 %
    Net interest margin 2         3.81 %           3.78 %
    Average interest earning assets to interest-bearing liabilities   150.8 %             152.6 %        
                           
    Notes:                      
    1 The Interest rate spread is the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities
    2 Net interest margin is the annualized net interest income divided by average interest-earning assets          
                           
    ORANGE COUNTY BANCORP, INC.
    NET INTEREST MARGIN ANALYSIS
    (UNAUDITED)
    (Dollar Amounts in thousands)
                           
      Nine Months Ended September 30,
      2024   2023
      Average Balance   Interest   Average Rate   Average Balance   Interest   Average Rate
    Assets:                      
    Loans Receivable (net of PPP) $ 1,742,193     $ 78,761   6.02 %   $ 1,668,967     $ 70,374   5.64 %
    PPP Loans   197       6   4.06 %     1,440       24   2.23 %
    Investment securities   470,701       10,048   2.84 %     514,011       10,575   2.75 %
    Due from banks   156,899       5,556   4.72 %     139,539       4,514   4.33 %
    Other   7,945       650   10.90 %     11,268       716   8.50 %
    Total interest earning assets   2,377,935       95,021   5.32 %     2,335,225       86,203   4.94 %
    Non-interest earning assets   96,047               95,597          
    Total assets $ 2,473,982             $ 2,430,822          
                           
    Liabilities and equity:                      
    Interest-bearing demand accounts $ 375,124     $ 1,348   0.48 %   $ 336,801     $ 875   0.35 %
    Money market accounts   660,795       11,233   2.26 %     623,039       6,471   1.39 %
    Savings accounts   249,013       2,586   1.38 %     251,588       1,735   0.92 %
    Certificates of deposit   170,079       5,741   4.50 %     147,750       3,893   3.52 %
    Total interest-bearing deposits   1,455,011       20,908   1.91 %     1,359,178       12,974   1.28 %
    FHLB Advances and other borrowings   123,880       4,734   5.09 %     164,434       6,295   5.12 %
    Subordinated notes   19,544       691   4.71 %     19,472       692   4.75 %
    Total interest bearing liabilities   1,598,435       26,333   2.19 %     1,543,084       19,961   1.73 %
    Non-interest bearing demand accounts   674,727               717,067          
    Other non-interest bearing liabilities   26,701               22,988          
    Total liabilities   2,299,863               2,283,139          
    Total shareholders’ equity   174,119               147,683          
    Total liabilities and shareholders’ equity $ 2,473,982             $ 2,430,822          
                           
    Net interest income     $ 68,688           $ 66,242    
    Interest rate spread 1         3.13 %           3.21 %
    Net interest margin 2         3.85 %           3.79 %
    Average interest earning assets to interest-bearing liabilities   148.8 %             151.3 %        
                           
    Notes:                      
    1 The Interest rate spread is the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities
    2  Net interest margin is the annualized net interest income divided by average interest-earning assets          
                           
    ORANGE COUNTY BANCORP, INC.
    SELECTED RATIOS AND OTHER DATA
    (UNAUDITED)
     
      Three Months Ended September 30,   Nine Months Ended September 30,
      2024   2023   2024   2023
    Performance Ratios:              
    Return on average assets (1) 0.52 %   1.47 %   1.12 %   1.17 %
    Return on average equity (1) 6.93 %   24.03 %   15.87 %   19.28 %
    Interest rate spread (2) 3.10 %   3.11 %   3.13 %   3.21 %
    Net interest margin (3) 3.81 %   3.78 %   3.85 %   3.79 %
    Dividend payout ratio (4) 40.44 %   14.33 %   18.79 %   18.18 %
    Non-interest income to average total assets 0.67 %   0.52 %   0.63 %   0.53 %
    Non-interest expenses to average total assets 2.57 %   2.21 %   2.52 %   2.31 %
    Average interest-earning assets to average interest-bearing liabilities 150.76 %   152.60 %   148.77 %   151.33 %
                   
      At   At        
      September 30, 2024   December 31, 2023        
    Asset Quality Ratios:              
    Non-performing assets to total assets 0.44 %   0.18 %        
    Non-performing loans to total loans 0.62 %   0.25 %        
    Allowance for credit losses to non-performing loans 277.76 %   568.83 %        
    Allowance for credit losses to total loans 1.73 %   1.44 %        
                   
    Capital Ratios (5):              
    Total capital (to risk-weighted assets) 14.89 %   14.16 %        
    Tier 1 capital (to risk-weighted assets) 13.64 %   12.91 %        
    Common equity tier 1 capital (to risk-weighted assets) 13.64 %   12.91 %        
    Tier 1 capital (to average assets) 10.06 %   9.42 %        
                   
    Notes:              
    (1) Annualized for the three and nine month periods ended September 30, 2024 and 2023, respectively.
    (2) Represents the difference between the weighted-average yield on interest-earning assets and the weighted-average cost of interest-bearing liabilities for the periods.
    (3) The net interest margin represents net interest income as a percent of average interest-earning assets for the periods.
    (4) The dividend payout ratio represents dividends paid per share divided by net income per share.
    (5) Ratios are for the Bank only.
                   
    ORANGE COUNTY BANCORP, INC.
    SELECTED OPERATING DATA
    (UNAUDITED)
    (Dollar Amounts in thousands except per share data)
      Three Months Ended September 30,   Nine Months Ended September 30,
      2024   2023   2024   2023
    Interest income $ 31,436   $ 30,099   $ 95,021   $ 86,203
    Interest expense   8,468     7,598     26,333     19,961
    Net interest income   22,968     22,501     68,688     66,242
    Provision for credit losses   7,191     837     7,761     7,406
    Net interest income after provision for credit losses   15,777     21,664     60,927     58,836
    Noninterest income   4,174     3,220     11,667     9,676
    Noninterest expenses   15,947     13,590     46,744     42,065
    Income before income taxes   4,004     11,294     25,850     26,447
    Provision for income taxes   788     2,256     5,131     5,093
    Net income $ 3,216   $ 9,038   $ 20,719   $ 21,354
                   
    Basic and diluted earnings per share $ 0.57   $ 1.61   $ 3.67   $ 3.79
    Weighted average common shares outstanding   5,653,904     5,629,642     5,643,591     5,628,036
                   
      At   At        
      September 30, 2024   December 31, 2023        
    Book value per share $ 34.03   $ 29.26        
    Net tangible book value per share (1) $ 32.93   $ 28.12        
    Outstanding common shares   5,674,126     5,651,311        
                   
    Notes:              
    (1)      Net tangible book value represents the amount of total tangible assets reduced by our total liabilities. Tangible assets are calculated by reducing total assets, as defined by GAAP, by $5,359 in goodwill and $892, and $1,107 in other intangible assets for September 30, 2024 and December 31, 2023, respectively.
                   
    ORANGE COUNTY BANCORP, INC.
    LOAN COMPOSITION
    (UNAUDITED)
    (Dollar Amounts in thousands)
      At September 30, 2024   At December 31, 2023
      Amount   Percent   Amount   Percent
    Commercial and industrial (a) $ 251,484   14.00 %   $ 273,562   15.66 %
    Commercial real estate   1,334,580   74.30 %     1,259,356   72.08 %
    Commercial real estate construction   78,227   4.36 %     85,725   4.91 %
    Residential real estate   74,462   4.15 %     78,321   4.48 %
    Home equity   16,064   0.89 %     13,546   0.78 %
    Consumer   41,277   2.30 %     36,552   2.09 %
    Total loans   1,796,094   100.00 %     1,747,062   100.00 %
    Allowance for loan losses   31,023         25,182    
    Total loans, net $ 1,765,071       $ 1,721,880    
                   
    (a) – Includes PPP loans of: $ 181       $ 215    
                   
    ORANGE COUNTY BANCORP, INC.
    DEPOSITS BY ACCOUNT TYPE
    (UNAUDITED)
    (Dollar Amounts in thousands)
      At September 30, 2024   At December 31, 2023
      Amount   Percent   Average Rate   Amount   Percent   Average Rate
    Noninterest-bearing demand accounts $ 690,419   32.26 %   0.00 %   $ 699,203   34.30 %   0.00 %
    Interest bearing demand accounts   342,306   16.00 %   0.49 %     304,892   14.95 %   0.49 %
    Money market accounts   707,065   33.04 %   2.27 %     584,976   28.69 %   2.04 %
    Savings accounts   258,302   12.07 %   1.39 %     228,161   11.19 %   1.19 %
    Certificates of Deposit   141,931   6.63 %   4.06 %     221,517   10.87 %   4.57 %
    Total $ 2,140,023   100.00 %   1.27 %   $ 2,038,749   100.00 %   1.29 %
                           
    ORANGE COUNTY BANCORP, INC.
    NON-PERFORMING ASSETS
    (UNAUDITED)
      (Dollar Amounts in thousands)
           
      September 30, 2024   December 31, 2023
           
    Non-accrual loans:      
    Commercial and industrial $ 199     $ 556  
    Commercial real estate   10,725       2,692  
    Commercial real estate construction   –       –  
    Residential real estate   8       1,179  
    Home equity   –       –  
    Consumer   –       –  
    Total non-accrual loans   10,932       4,427  
    Accruing loans 90 days or more past due:      
    Commercial and industrial   237       –  
    Commercial real estate   –       –  
    Commercial real estate construction   –       –  
    Residential real estate   –       –  
    Home equity   –       –  
    Consumer   –       –  
    Total loans 90 days or more past due   237       –  
    Total non-performing loans   11,169       4,427  
    Other real estate owned   –       –  
    Other non-performing assets   –       –  
    Total non-performing assets $ 11,169     $ 4,427  
           
    Ratios:      
    Total non-performing loans to total loans   0.62 %     0.25 %
    Total non-performing loans to total assets   0.44 %     0.18 %
    Total non-performing assets to total assets   0.44 %     0.18 %
           
    Notes:      
    1 – Includes non-accruing TDRs: $ –     $ 2,391  
           

    The MIL Network –

    January 25, 2025
  • MIL-OSI: Employers Holdings, Inc. Reports Third Quarter 2024 Results and Declares Regular Quarterly Dividend of $0.30 per Share

    Source: GlobeNewswire (MIL-OSI)

    RENO, Nev., Oct. 30, 2024 (GLOBE NEWSWIRE) — Employers Holdings, Inc. (the “Company”) (NYSE:EIG), a holding company with subsidiaries that are specialty providers of workers’ compensation insurance and services focused on small and mid-sized businesses engaged in low-to-medium hazard industries, today reported financial results for its third quarter ended September 30, 2024.

    Financial Highlights:
    (All comparisons vs. the third quarter of 2023).

    • Net income per diluted share increased by 124%, from $0.54 to $1.21,
    • Adjusted net income per diluted share increased 19%, from $0.68 to $0.81,
    • Gross premiums written decreased 8%, from $196.2 million to $181.2 million,
    • Net premiums earned increased 1%, from $184.6 million to $186.6 million,
    • Underwriting and general and administrative expense ratio of 23.2%, versus 23.6%,
    • GAAP combined ratio of 100.4% (101.2% excluding LPT), versus 100.3% (101.3% excluding LPT),
    • Net investment income increased 3%, from $25.9 million to $26.6 million, and
    • Record number of ending policies in-force of 129,879.

    Management Commentary

    Chief Executive Officer Katherine Antonello commented: “Higher earned premiums, strong net investment income and continued net investment gains drove year-over-year increases in revenue of 10% and 6% for the third quarter and the first nine months of 2024. We also ended the period with yet another record number of policies in-force, which were up 3% year-over-year.

    During the quarter we grew our new and renewal premiums, but reductions in final audit premiums and endorsements more than offset that growth.

    Our current accident year loss and LAE ratio was 63.9%, slightly above the loss and LAE ratio we maintained throughout 2023 and consistent with that of 2022. As was the case in the third quarter of 2023, we did not recognize any prior year loss reserve development on our voluntary business because a full actuarial study was not performed. We will evaluate our prior year reserves in more detail at year-end when we routinely perform a full reserve study.

    Our commission expense ratio was 14.1%, versus 14.5% a year ago. The reduction in this ratio was largely attributable to a decrease in anticipated 2024 agency incentives, which are specific to individual contracts and vary with agency targets. Our underwriting and general and administrative expense ratio was 23.2%, down from 23.6% a year ago. The reduction in this ratio was primarily the result of the Cerity integration plan we executed in the fourth quarter of 2023.

    Our resulting combined ratio excluding LPT was 101.2% for the third quarter, versus 101.3%, a year ago.

    Our net investment income was $26.6 million, up 3% from a year ago. When considering the $1.0 million of interest expense we incurred in the third quarter of 2023 through our Federal Home Loan Bank leveraged investment strategy, which we unwound during the fourth quarter of 2023, our net investment income was actually up 7% year-over-year.

    Lastly, our strong operating results, coupled with our proactive and opportunistic management of our investment portfolio and our capital position, contributed to year-over year increases of 27% and 24% in our book value per share and book value per share including the deferred gain, respectively. As a result, our balance sheet is strong, our underwriting capital is abundant and our confidence in the Company’s future operations remains high.”

    Summary of Third Quarter 2024 Results

    (All comparisons vs. the third quarter of 2023, unless otherwise noted).

    Gross premiums written were $181.2 million, a decrease of 8%. The decrease was due to higher new and renewal business writings being more than offset by lower final audit premiums and endorsements. Net premiums earned were $186.6 million, an increase of 1%.

    Losses and loss adjustment expenses were $117.7 million, an increase of 2%. The increase was primarily due to higher earned premiums and a slightly higher current accident year loss and loss adjustment expense estimate. The Company’s loss and loss adjustment expense ratio was 63.1% (63.9% excluding LPT), versus 62.2% (63.2% excluding LPT).

    Commission expenses were $26.4 million, a decrease of 1%. The Company’s commission expense ratio was 14.1%, versus 14.5% a year ago.

    Underwriting and general and administrative expenses were $43.2 million, a decrease of 1%. The Company’s underwriting and general and administrative expense ratio was 23.2%, versus 23.6% a year ago. The decrease primarily related to lower professional fees and information technology expenses, partially offset by higher bad debt expense.

    Net investment income was $26.6 million, an increase of 2.7%. The increase was primarily due to higher yields on our fixed maturity securities.

    Net realized and unrealized gains (losses) on investments reflected on the income statement were $10.9 million, versus $(7.1) million.

    Interest and financing expenses were less than $0.1 million, versus $1.0 million. The decrease resulted from the unwinding of our former FHLB leveraged investment strategy.

    Income tax expense was $6.4 million (17.4% effective rate), versus $3.4 million (19.5% effective rate). The effective rates during each of the periods included income tax benefits and exclusions associated with tax-advantaged investment income, LPT adjustments, deferred gain amortization and related adjustments and tax credits utilized.

    The Company’s book value per share including the deferred gain of $47.99 increased 24.0% year-over-year and 7.5% during the third quarter of 2024, computed after considering dividends declared. During the third quarter this measure was favorably impacted by $52.2 million of after-tax unrealized gains arising from fixed maturity securities (which are reflected on the balance sheet) and $10.1 million of net after tax unrealized gains arising from equity securities and other investments (which are reflected on the income statement). The Company’s adjusted book value per share of $49.83 increased by 11.5% year-over-year and 2.5% during the third quarter of 2024, computed after considering dividends declared. During the third quarter this measure was favorably impacted by the net after tax unrealized gains arising from equity securities and other investments previously described.

    Share Repurchases and Fourth Quarter 2024 Dividend Declaration

    During the third quarter of 2024, the Company repurchased 163,221 shares of its common stock at an average price of $45.27 per share. During the period from October 1, 2024 through October 29, 2024, the Company repurchased a further 20,602 shares of its common stock at an average price of $47.45 per share. The Company currently has a remaining share repurchase authorization of $38.6 million.

    On October 30, 2024, the Company’s Board of Directors declared a regular quarterly dividend of $0.30. The dividend is payable on November 27, 2024 to stockholders of record as of November 13, 2024.

    Earnings Conference Call and Webcast

    The Company will host a conference call on Thursday, October 31, 2024 at 11:00 a.m. Eastern Daylight Time / 8:00 a.m. Pacific Daylight Time.

    To participate in the live conference call, you must first register here. Once registered you will receive dial-in numbers and a unique PIN number.

    The webcast will be accessible on the Company’s website at www.employers.com through the “Investors” link.

    Reconciliation of Non-GAAP Financial Measures to GAAP

    The information in this press release should be read in conjunction with the Financial Supplement that is attached to this press release and available on our website.

    Within this earnings release we present various financial measures, some of which are “non-GAAP financial measures” as defined in Regulation G pursuant to Section 401 of the Sarbanes – Oxley Act of 2002. A description of these non-GAAP financial measures, as well as a reconciliation of such non-GAAP measures to our most directly comparable GAAP financial measures is included in the attached Financial Supplement. Management believes that these non-GAAP measures are important to the Company’s investors, analysts and other interested parties who benefit from having an objective and consistent basis for comparison with other companies within our industry. Management further believes that these measures are more relevant than comparable GAAP measures in evaluating our financial performance.

    Forward-Looking Statements

    In this press release, the Company and its management discuss and make statements based on currently available information regarding their intentions, beliefs, current expectations, and projections of, among other things, the Company’s future performance, economic or market conditions, including current or future levels of inflation, changes in interest rates, labor market expectations, catastrophic events or geo-political conditions, legislative or regulatory actions or court decisions, business growth, retention rates, loss costs, claim trends and the impact of key business initiatives, future technologies and planned investments. Certain of these statements may constitute “forward-looking” statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts and are often identified by words such as “may,” “will,” “could,” “would,” “should,” “expect,” “plan,” “anticipate,” “target,” “project,” “intend,” “believe,” “estimate,” “predict,” “potential,” “pro forma,” “seek,” “likely,” or “continue,” or other comparable terminology and their negatives. The Company and its management caution investors that such forward-looking statements are not guarantees of future performance. Risks and uncertainties are inherent in the Company’s future performance. Factors that could cause the Company’s actual results to differ materially from those indicated by such forward-looking statements include, among other things, those discussed or identified from time to time in the Company’s public filings with the Securities and Exchange Commission (SEC), including the risks detailed in the Company’s Quarterly Reports on Form 10-Q and the Company’s Annual Reports on Form 10-K. Except as required by applicable securities laws, the Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

    Filings with the SEC

    The Company’s filings with the SEC and its quarterly investor presentations can be accessed through the “Investors” link on the Company’s website, www.employers.com. The Company’s filings with the SEC can also be accessed through the SEC’s EDGAR Database at www.sec.gov (EDGAR CIK No. 0001379041).

    About Employers Holdings, Inc.

    Employers Holdings, Inc. (NYSE: EIG), is a holding company with subsidiaries that are specialty providers of workers’ compensation insurance and services (collectively “EMPLOYERS®”) focused on small and mid-sized businesses engaged in low-to-medium hazard industries. EMPLOYERS leverages over a century of experience to deliver comprehensive coverage solutions that meet the unique needs of its customers. Drawing from its long history and extensive knowledge, EMPLOYERS empowers businesses by protecting their most valuable asset – their employees – through exceptional claims management, loss control, and risk management services, creating safer work environments.

    EMPLOYERS is also proud to offer Cerity®, which is focused on providing digital-first, direct-to-consumer workers’ compensation insurance solutions with fast, and affordable coverage options through a user-friendly online platform.

    EMPLOYERS operates throughout the United States, apart from four states that are served exclusively by their state funds. Insurance is offered through Employers Insurance Company of Nevada, Employers Compensation Insurance Company, Employers Preferred Insurance Company, Employers Assurance Company and Cerity Insurance Company, all rated A- (Excellent) by A.M. Best. Not all companies do business in all jurisdictions. EIG Services, Inc., and Cerity Services, Inc., are subsidiaries of Employers Holdings, Inc. EMPLOYERS® is a registered trademark of EIG Services, Inc., and Cerity® is a registered trademark of Cerity Services, Inc. For more information, please visit www.employers.com and www.cerity.com.

    Contact Information

    Mike Paquette (775) 327-2562 or mpaquette@employers.com

     
    EMPLOYERS HOLDINGS, INC.
    Table of Contents
     
      Page      
             
      1   Consolidated Financial Highlights  
             
      2   Summary Consolidated Balance Sheets  
             
      3   Summary Consolidated Income Statements  
             
      4   Return on Equity  
             
      5   Combined Ratios  
             
      6   Roll-forward of Unpaid Losses and LAE  
             
      7   Consolidated Investment Portfolio  
             
      8   Book Value Per Share  
             
      9   Earnings Per Share  
             
      10   Non-GAAP Financial Measures  
             
       
    EMPLOYERS HOLDINGS, INC.
    Consolidated Financial Highlights (unaudited)
    $ in millions, except per share amounts
     
       
        Three Months Ended   Nine Months Ended
        September 30,   September 30,
          2024       2023     % change     2024       2023     % change
    Selected financial highlights:                        
    Gross premiums written   $ 181.2     $ 196.2       (8 )%   $ 599.9     $ 589.5       2 %
    Net premiums written     179.6       194.5       (8 )     594.8       584.2       2  
    Net premiums earned     186.6       184.6       1       559.3       534.4       5  
    Net investment income     26.6       25.9       3       80.3       80.3       —  
    Net income excluding LPT(1)     28.8       12.1       138       84.5       66.6       27  
    Adjusted net income(1)     20.2       17.7       14       65.1       65.6       (1 )
    Net Income before income taxes     36.7       17.4       111       112.1       90.3       24  
    Net Income     30.3       14.0       116       90.3       72.5       25  
    Comprehensive income (loss)     84.0       (12.1 )     794       131.0       54.8       139  
    Total assets                 3,617.3       3,527.0       3  
    Stockholders’ equity                 1,093.4       919.0       19  
    Stockholders’ equity including the Deferred Gain(2)                 1,187.2       1,019.2       16  
    Adjusted stockholders’ equity(2)                 1,232.5       1,175.8       5  
    Annualized adjusted return on stockholders’ equity(3)     6.6 %     6.0 %     10 %     7.1 %     7.4 %     (4) %
    Amounts per share:                        
    Cash dividends declared per share   $ 0.30     $ 0.28       7 %   $ 0.88     $ 0.82       7 %
    Earnings per diluted share(4)     1.21       0.54       124       3.57       2.71       32  
    Earnings per diluted share excluding LPT(4)     1.15       0.46       150       3.34       2.49       34  
    Adjusted earnings per diluted share(4)     0.81       0.68       19       2.57       2.45       5  
    Book value per share(2)                 44.20       35.73       24  
    Book value per share including the Deferred Gain(2)                 47.99       39.63       21  
    Adjusted book value per share(2)                 49.83       45.72       9  
    Combined ratio excluding LPT:(5):                        
    Loss and loss adjustment expense ratio:                        
    Current Year     63.9 %     63.3 %         64.0 %     63.4 %    
    Prior Year     —       (0.1 )         (1.7 )     (3.8 )    
    Loss and loss adjustment expense ratio     63.9 %     63.2 %         62.3 %     59.6 %    
    Commission expense ratio     14.1 %     14.5 %         14.1 %     13.8 %    
    Underwriting and general and administrative expense ratio     23.2 %     23.6 %         23.3 %     25.0 %    
    Combined ratio excluding LPT     101.2 %     101.3 %         99.7 %     98.4 %    
                             
                             
    (1) See Page 3 for calculations and Page 10 for information regarding our use of Non-GAAP Financial Measures.  
    (2) See Page 8 for calculations and Page 10 for information regarding our use of Non-GAAP Financial Measures.  
    (3) See Page 4 for calculations and Page 10 for information regarding our use of Non-GAAP Financial Measures.  
    (4) See Page 9 for description and calculations and Page 10 for information regarding our use of Non-GAAP Financial Measures.  
    (5) See Pages 5 for details and Page 10 for information regarding our use of Non-GAAP Financial Measures.  
     
    EMPLOYERS HOLDINGS, INC.
    Summary Consolidated Balance Sheets (unaudited)
    $ in millions, except per share amounts
     
        September 30,
    2024
      December 31,
    2023
    ASSETS        
    Investments, cash and cash equivalents   $ 2,601.5     $ 2,504.7  
    Accrued investment income     15.8       16.3  
    Premiums receivable, net     378.8       359.4  
    Reinsurance recoverable, net of allowance, on paid and unpaid losses and LAE     418.8       433.8  
    Deferred policy acquisition costs     60.9       55.6  
    Deferred income tax asset, net     26.2       43.4  
    Contingent commission receivable—LPT Agreement     —       14.2  
    Other assets     115.3       123.0  
    Total assets   $ 3,617.3     $ 3,550.4  
             
    LIABILITIES        
    Unpaid losses and LAE   $ 1,836.5     $ 1,884.5  
    Unearned premiums     412.5       379.7  
    Commissions and premium taxes payable     65.4       66.0  
    Deferred Gain     93.8       99.2  
    Other liabilities     115.7       107.1  
    Total liabilities   $ 2,523.9     $ 2,536.5  
             
    STOCKHOLDERS’ EQUITY        
    Common stock and additional paid-in capital   $ 423.1     $ 420.4  
    Retained earnings     1,452.1       1,384.3  
    Accumulated other comprehensive loss     (45.3 )     (86.0 )
    Treasury stock, at cost     (736.5 )     (704.8 )
    Total stockholders’ equity     1,093.4       1,013.9  
    Total liabilities and stockholders’ equity   $ 3,617.3     $ 3,550.4  
             
    Stockholders’ equity including the Deferred Gain (1)   $ 1,187.2     $ 1,113.1  
    Adjusted stockholders’ equity (1)     1,232.5       1,199.1  
    Book value per share (1)   $ 44.20     $ 39.96  
    Book value per share including the Deferred Gain(1)     47.99       43.88  
    Adjusted book value per share (1)     49.83       47.26  
             
    (1) See Page 8 for calculations and Page 10 for information regarding our use of Non-GAAP Financial Measures.
     
    EMPLOYERS HOLDINGS, INC.
    Summary Consolidated Income Statements (unaudited)
    $ in millions
     
      Three Months Ended   Nine Months Ended
      September 30,   September 30,
        2024       2023       2024       2023  
    Revenues:      
    Net premiums earned $ 186.6     $ 184.6     $ 559.3     $ 534.4  
    Net investment income   26.6       25.9       80.3       80.3  
    Net realized and unrealized gains (losses) on investments(1)   10.9       (7.1 )     24.5       10.7  
    Other income (loss)   (0.1 )     0.1       —       (0.2 )
    Total revenues   224.0       203.5       664.1       625.2  
    Expenses:              
    Losses and LAE incurred   (117.7 )     (114.9 )     (343.0 )     (312.8 )
    Commission expense   (26.4 )     (26.7 )     (78.7 )     (73.8 )
    Underwriting and general and administrative expenses   (43.2 )     (43.5 )     (130.2 )     (133.7 )
    Interest and financing expenses   —       (1.0 )     (0.1 )     (5.2 )
    Other expenses   —       —       —       (9.4 )
    Total expenses   (187.3 )     (186.1 )     (552.0 )     (534.9 )
    Net income before income taxes   36.7       17.4       112.1       90.3  
    Income tax expense   (6.4 )     (3.4 )     (21.8 )     (17.8 )
    Net Income   30.3       14.0       90.3       72.5  
    Unrealized AFS investment gains (losses) arising during the period, net of tax(2)   52.2       (27.0 )     35.7       (20.0 )
    Reclassification adjustment for net realized AFS investment losses in net income, net of tax(2)   1.5       0.9       5.0       2.3  
    Total comprehensive income (loss) $ 84.0     $ (12.1 )   $ 131.0     $ 54.8  
    Net Income $ 30.3     $ 14.0     $ 90.3     $ 72.5  
    Amortization of the Deferred Gain – losses   (1.5 )     (1.5 )     (4.6 )     (4.7 )
    Amortization of the Deferred Gain – contingent commission   —       (0.4 )     (0.8 )     (1.2 )
    LPT contingent commission adjustments   —       —       (0.4 )     —  
    Net income excluding LPT Agreement (3)   28.8       12.1       84.5       66.6  
    Net realized and unrealized (gains) losses on investments   (10.9 )     7.1       (24.5 )     (10.7 )
    Lease termination and asset impairment charges   —       —       —       9.4  
    Income tax expense (benefit) related to items excluded from Net income   2.3       (1.5 )     5.1       0.3  
    Adjusted net income $ 20.2     $ 17.7     $ 65.1     $ 65.6  
                   
    (1) Includes net realized and unrealized gains (losses) on equity securities and other investments of $12.8 million and $(5.9) million for the three months ended September 30, 2024 and 2023, respectively, and $30.8 million and $13.6 million for the nine months ended September 30, 2024 and 2023, respectively.
    (2) AFS = Available for Sale securities.
    (3) See Page 10 regarding our use of Non-GAAP Financial Measures.              
     
    EMPLOYERS HOLDINGS, INC.
    Return on Equity (unaudited)
    $ in millions
     
        Three Months Ended   Nine Months Ended
        September 30,   September 30,
          2024       2023       2024       2023  
                     
    Net income A $ 30.3     $ 14.0     $ 90.3     $ 72.5  
    Impact of the LPT Agreement     (1.5 )     (1.9 )     (5.8 )     (5.9 )
    Net realized and unrealized (gains) losses on investments     (10.9 )     7.1       (24.5 )     (10.7 )
    Lease termination and asset impairment charges     —       —       —       9.4  
    Income tax expense (benefit) related to items excluded from Net income     2.3       (1.5 )     5.1       0.3  
    Adjusted net income (1) B   20.2       17.7       65.1       65.6  
                     
    Stockholders’ equity – end of period   $ 1,093.4     $ 919.0     $ 1,093.4     $ 919.0  
    Stockholders’ equity – beginning of period     1,022.9       951.7       1,013.9       944.2  
    Average stockholders’ equity C   1,058.2       935.4       1,053.7       931.6  
                     
    Stockholders’ equity – end of period   $ 1,093.4     $ 919.0     $ 1,093.4     $ 919.0  
    Deferred Gain – end of period     93.8       100.2       93.8       100.2  
    Accumulated other comprehensive loss – end of period     57.3       198.2       57.3       198.2  
    Income taxes related to accumulated other comprehensive loss – end of period     (12.0 )     (41.6 )     (12.0 )     (41.6 )
    Adjusted stockholders’ equity – end of period     1,232.5       1,175.8       1,232.5       1,175.8  
    Adjusted stockholders’ equity – beginning of period     1,217.2       1,184.3       1,199.1       1,189.2  
    Average adjusted stockholders’ equity (1) D   1,224.9       1,180.1       1,215.8       1,182.5  
                     
    Return on stockholders’ equity A / C   2.9 %     1.5 %     8.6 %     7.8 %
    Annualized return on stockholders’ equity     11.5       6.0       11.4       10.4  
                     
    Adjusted return on stockholders’ equity (1) B / D   1.6 %     1.5 %     5.4 %     5.5 %
    Annualized adjusted return on stockholders’ equity (1)     6.6       6.0       7.1       7.4  
                     
    (1) See Page 10 for information regarding our use of Non-GAAP Financial Measures.
     
    EMPLOYERS HOLDINGS, INC.
    Combined Ratios (unaudited)
    $ in millions, except per share amounts
     
        Three Months Ended   Nine Months Ended
        September 30,   September 30,
          2024       2023       2024       2023  
                     
    Net premiums earned A $ 186.6     $ 184.6     $ 559.3     $ 534.4  
    Losses and LAE incurred B   117.7       114.9       343.0       312.8  
    Amortization of deferred reinsurance gain – losses     1.5       1.5       4.6       4.7  
    Amortization of deferred reinsurance gain – contingent commission     —       0.4       0.8       1.2  
    LPT contingent commission adjustments     —       —       0.4       —  
    Losses and LAE excluding LPT(1) C $ 119.2     $ 116.8     $ 348.8     $ 318.7  
    Prior year loss reserve development     (0.1 )     (0.1 )     (9.3 )     (20.0 )
    Losses and LAE excluding LPT – current accident year D $ 119.3     $ 116.9     $ 358.1     $ 338.7  
    Commission expense E $ 26.4     $ 26.7     $ 78.7     $ 73.8  
    Underwriting and general and administrative expense F $ 43.2     $ 43.5     $ 130.2     $ 133.7  
    GAAP combined ratio:                
    Loss and LAE ratio B/A   63.1 %     62.2 %     61.3 %     58.5 %
    Commission expense ratio E/A   14.1       14.5       14.1       13.8  
    Underwriting and general and administrative expense ratio F/A   23.2       23.6       23.3       25.0  
    GAAP combined ratio     100.4 %     100.3 %     98.7 %     97.3 %
    Combined ratio excluding LPT:(1)                
    Loss and LAE ratio excluding LPT C/A   63.9 %     63.2 %     62.3 %     59.6 %
    Commission expense ratio E/A   14.1       14.5       14.1       13.8  
    Underwriting and general and administrative expense ratio F/A   23.2       23.6       23.3       25.0  
    Combined ratio excluding LPT     101.2 %     101.3 %     99.7 %     98.4 %
    Combined ratio excluding LPT: current accident year:(1)                
    Loss and LAE ratio excluding LPT D/A   63.9 %     63.3 %     64.0 %     63.4 %
    Commission expense ratio E/A   14.1       14.5       14.1       13.8  
    Underwriting and general and administrative expenses ratio F/A   23.2       23.6       23.3       25.0  
    Combined ratio excluding LPT: current accident year     101.2 %     101.4 %     101.4 %     102.2 %
                     
    (1) See Page 10 for information regarding our use of Non-GAAP Financial Measures.
     
    EMPLOYERS HOLDINGS, INC.
    Roll-forward of Unpaid Losses and LAE (unaudited)
    $ in millions
     
      Three Months Ended   Nine Months Ended
      September 30,   September 30,
        2024       2023       2024       2023  
               
    Unpaid losses and LAE at beginning of period $ 1,850.9     $ 1,927.2     $ 1,884.5     $ 1,960.7  
    Reinsurance recoverable, excluding CECL allowance, on unpaid losses and LAE   418.3       436.2       428.4       445.4  
    Net unpaid losses and LAE at beginning of period   1,432.6       1,491.0       1,456.1       1,515.3  
    Losses and LAE incurred:              
    Current year losses   119.3       116.9       358.0       338.7  
    Prior year losses on voluntary business   —       —       (9.3 )     (20.0 )
    Prior year losses on involuntary business   (0.1 )     (0.1 )     —       —  
    Total losses incurred   119.2       116.8       348.7       318.7  
    Losses and LAE paid:              
    Current year losses   38.3       32.0       69.2       64.1  
    Prior year losses   90.1       89.0       312.2       283.1  
    Total paid losses   128.4       121.0       381.4       347.2  
    Net unpaid losses and LAE at end of period   1,423.4       1,486.8       1,423.4       1,486.8  
    Reinsurance recoverable, excluding CECL allowance, on unpaid losses and LAE   413.1       426.6       413.1       426.6  
    Unpaid losses and LAE at end of period $ 1,836.5     $ 1,913.4     $ 1,836.5     $ 1,913.4  
                                   
    Total losses and LAE shown in the above table exclude amortization of the Deferred Gain and LPT contingent commission adjustments, which totaled $1.5 million and $1.9 million for the three months ended September 30, 2024 and 2023, respectively, and $5.8 million and $5.9 million for the nine months ended September 30, 2024 and 2023, respectively.
                                   
     
    EMPLOYERS HOLDINGS, INC.
    Consolidated Investment Portfolio (unaudited)
    $ in millions
     
        September 30, 2024   December 31, 2023
    Investment Positions:   Cost or Amortized
    Cost (1)
      Net Unrealized Gain (Loss)   Fair Value   %   Fair Value   %
    Fixed maturity securities   $ 2,124.6   $ (57.4 )   $ 2,065.8   79 %   $ 1,936.3   77 %
    Equity securities     150.4     111.5       261.9   10       217.2   9  
    Short-term investments     30.6     —       30.6   1       33.1   1  
    Other invested assets     88.8     10.9       99.7   4       91.5   4  
    Cash and cash equivalents     143.3     —       143.3   6       226.4   9  
    Restricted cash and cash equivalents     0.2     —       0.2   —       0.2   —  
    Total investments and cash   $ 2,537.9   $ 65.0     $ 2,601.5   100 %   $ 2,504.7   100 %
                             
    Breakout of Fixed Maturity Securities:                        
    U.S. Treasuries and agencies   $ 62.4   $ (0.3 )   $ 62.1   3 %   $ 60.5   3 %
    States and municipalities     181.2     1.8       183.0   9       210.2   11  
    Corporate securities     930.9     (24.6 )     905.7   44       895.8   46  
    Mortgage-backed securities     552.8     (32.4 )     520.1   25       426.0   22  
    Asset-backed securities     209.5     0.6       210.1   10       128.0   7  
    Collateralized loan obligations     53.3     (0.2 )     53.1   3       91.5   5  
    Bank loans and other     134.5     (2.3 )     131.7   6       124.3   6  
    Total fixed maturity securities   $ 2,124.6   $ (57.4 )   $ 2,065.8   100 %   $ 1,936.3   100 %
    Weighted average book yield     4.4%         4.3%  
    Average credit quality (S&P)     A+         A  
    Duration     4.2         4.5  
    (1) Amortized cost excludes allowance for current expected credit losses of $1.4 million.              
     
    EMPLOYERS HOLDINGS, INC.
    Book Value Per Share (unaudited)
    $ in millions, except per share amounts
     
        September 30,
    2024
      June 30,
    2024
      December 31,
    2023
      September 30,
    2023
    Numerators:                
    Stockholders’ equity A $ 1,093.4     $ 1,022.9     $ 1,013.9     $ 919.0  
    Plus: Deferred Gain     93.8       95.3       99.2       100.2  
    Stockholders’ equity including the Deferred Gain (1) B   1,187.2       1,118.2       1,113.1       1,019.2  
    Accumulated other comprehensive loss     57.3       125.3       108.9       198.2  
    Income taxes related to accumulated other comprehensive loss     (12.0 )     (26.3 )     (22.9 )     (41.6 )
    Adjusted stockholders’ equity (1) C $ 1,232.5     $ 1,217.2     $ 1,199.1     $ 1,175.8  
                     
    Denominator (shares outstanding) D   24,736,533       24,896,116       25,369,753       25,719,074  
                     
    Book value per share (1) A / D $ 44.20     $ 41.09     $ 39.96     $ 35.73  
    Book value per share including the Deferred Gain(1) B / D   47.99       44.91       43.88       39.63  
    Adjusted book value per share (1) C / D   49.83       48.89       47.26       45.72  
                     
    Year-over-year change in: (2)                
    Book value per share     27.0 %     15.7 %     18.1 %     12.6 %
    Book value per share including the Deferred Gain     24.0       14.0       16.3       11.1  
    Adjusted book value per share     11.5       10.2       10.5       10.2  
                     
    (1) See Page 10 for information regarding our use of Non-GAAP Financial Measures.
    (2) Reflects the twelve month change in book value per share after taking into account dividends declared of $1.16, $1.14, $1.10 and $2.33 for the twelve month periods ended September 30, 2024, June 30, 2024, December 31, 2023, and September 30, 2023, respectively.
     
    EMPLOYERS HOLDINGS, INC.
    Earnings Per Share (unaudited)
    $ in millions, except per share amounts
     
        Three Months Ended   Nine Months Ended
        September 30,   September 30,
          2024       2023       2024       2023  
    Numerators:                
    Net income A $ 30.3     $ 14.0     $ 90.3     $ 72.5  
    Impact of the LPT Agreement     (1.5 )     (1.9 )     (5.8 )     (5.9 )
    Net income excluding LPT (1) B   28.8       12.1       84.5       66.6  
    Net realized and unrealized (gains) losses on investments     (10.9 )     7.1       (24.5 )     (10.7 )
    Lease termination and asset impairment charges     —       —       —       9.4  
    Income tax expense (benefit) related to items excluded from Net income     2.3       (1.5 )     5.1       0.3  
    Adjusted net income (1) C $ 20.2     $ 17.7     $ 65.1     $ 65.6  
                     
    Denominators:                
    Average common shares outstanding (basic) D   24,858,159       25,981,984       25,159,753       26,612,443  
    Average common shares outstanding (diluted) E   24,982,463       26,118,280       25,293,020       26,767,056  
                     
    Earnings per share:                
    Basic A / D $ 1.22     $ 0.54     $ 3.59     $ 2.72  
    Diluted A / E   1.21       0.54       3.57       2.71  
                     
    Earnings per share excluding LPT: (1)                
    Basic B / D $ 1.16     $ 0.47     $ 3.36     $ 2.50  
    Diluted B / E   1.15       0.46       3.34       2.49  
                     
    Adjusted earnings per share: (1)                
    Basic C / D $ 0.81     $ 0.68     $ 2.59     $ 2.47  
    Diluted C / E   0.81       0.68       2.57       2.45  
                     
    (1) See Page 10 for information regarding our use of Non-GAAP Financial Measures.
     

    Non-GAAP Financial Measures

    Within this earnings release we present the following measures, each of which are “non-GAAP financial measures.” A reconciliation of these measures to the Company’s most directly comparable GAAP financial measures is included herein. Management believes that these non-GAAP measures are important to the Company’s investors, analysts and other interested parties who benefit from having an objective and consistent basis for comparison with other companies within our industry. Management further believes that these measures are more relevant than comparable GAAP measures in evaluating our financial performance.

    The LPT Agreement is a non-recurring transaction that no longer provides any ongoing cash benefits to the Company. Management believes that providing non-GAAP measures that exclude the effects of the LPT Agreement (amortization of deferred reinsurance gain, adjustments to LPT Agreement ceded reserves and adjustments to the contingent commission receivable) is useful in providing investors, analysts and other interested parties a meaningful understanding of the Company’s ongoing underwriting performance.

    Deferred reinsurance gain (Deferred Gain) reflects the unamortized gain from the LPT Agreement. This gain has been deferred and is being amortized using the recovery method, whereby the amortization is determined by the proportion of actual reinsurance recoveries to total estimated recoveries, except for the contingent profit commission, which was amortized through June 30, 2024, the date of its final settlement. Amortization is reflected in losses and LAE incurred.

    Adjusted net income (see Page 3 for calculations) is net income excluding the effects of the LPT Agreement, and net realized and unrealized gains and losses on investments (net of tax), and any miscellaneous non-recurring transactions (net of tax). Management believes that providing this non-GAAP measures is helpful to investors, analysts and other interested parties in identifying trends in the Company’s operating performance because such items have limited significance to its ongoing operations or can be impacted by both discretionary and other economic factors and may not represent operating trends.

    Stockholders’ equity including the Deferred Gain (see Page 8 for calculations) is stockholders’ equity including the Deferred Gain. Management believes that providing this non-GAAP measure is useful in providing investors, analysts and other interested parties a meaningful measure of the Company’s total underwriting capital.

    Adjusted stockholders’ equity (see Page 8 for calculations) is stockholders’ equity including the Deferred Gain, less accumulated other comprehensive income (net of tax). Management believes that providing this non-GAAP measure is useful to investors, analysts and other interested parties since it serves as the denominator to the Company’s adjusted return on stockholders’ equity metric.

    Return on stockholders’ equity and Adjusted return on stockholders’ equity (see Page 4 for calculations). Management believes that these profitability measures are widely used by our investors, analysts and other interested parties.

    Book value per share, Book value per share including the Deferred Gain, and Adjusted book value per share (see Page 8 for calculations). Management believes that these valuation measures are widely used by our investors, analysts and other interested parties.

    Net income excluding LPT (see Page 3 for calculations). Management believes that these performance and underwriting measures are widely used by our investors, analysts and other interested parties.

    The MIL Network –

    January 25, 2025
  • MIL-OSI: Ponce Financial Group, Inc. Reports Third Quarter 2024 Results

    Source: GlobeNewswire (MIL-OSI)

    NEW YORK, Oct. 30, 2024 (GLOBE NEWSWIRE) — Ponce Financial Group, Inc., (the “Company”) (NASDAQ: PDLB), the holding company for Ponce Bank (the “Bank”), today announced results for the third quarter of 2024.

    Third Quarter 2024 Highlights (Compared to Prior Periods):

    • Net income available to common stockholders was $2.2 million, or $0.10 per diluted share for the three months ended September 30, 2024, as compared to net income available to common stockholders of $3.1 million, or $0.14 per diluted share for the three months ended June 30, 2024 and net income available to common stockholders of $2.6 million, or $0.12 per diluted share for the three months ended September 30, 2023. Total net income for the three months ended September 30, 2024 was $2.4 million. The Company paid dividends of $0.3 million on its preferred stock during the quarter ended September 30, 2024.
    • Included in the $2.2 million of net income available to common stockholders for the third quarter of 2024 results is $41.3 million in interest and dividend income and $1.2 million in non-interest income, offset by $22.3 million in interest expense, $16.3 million in non-interest expense, $0.8 million in provision for credit losses, $0.6 million in provision for income taxes and $0.3 million in dividends on preferred shares.
    • Net interest income of $19.0 million for the third quarter of 2024 increased $1.1 million, or 6.25%, from the prior quarter and increased $2.5 million, or 15.00%, from the same quarter last year.
    • Net interest margin was 2.65% for the third quarter of 2024, versus 2.62% for the prior quarter and versus 2.58% for the same quarter last year.

    Nine Months 2024 Highlights (Compared to 2023):

    • Net income available to common stockholders was $7.7 million, or $0.34 per diluted share for the nine months ended September 30, 2024, as compared to net income available to common stockholders of $2.8 million, or $0.12 per diluted share for the nine months ended September 30, 2023. Total net income for the nine months ended September 30, 2024, prior to the payment of $0.4 million in dividends on preferred shares, was $8.0 million.
    • Net interest income for the nine months ended September 30, 2024 was $55.8 million, an increase of $7.7 million, or 15.98%, compared to $48.1 million for the nine months ended September 30, 2023.
    • Non-interest income for the nine months ended September 30, 2024 was $5.1 million, a decrease of $3.8 million, or 42.76%, from $8.9 million for the nine months ended September 30, 2023. The decrease was primarily driven by a $3.7 million in grants that were received in the prior year.
    • Non-interest expense for the nine months ended September 30, 2024 was $49.4 million, a decrease of $1.4 million, or 2.67%, compared to $50.8 million for the nine months ended September 30, 2023.
    • Cash and equivalents were $155.8 million as of September 30, 2024, an increase of $16.6 million, or 11.94%, from $139.2 million as of December 31, 2023.
    • Securities totaled $514.7 million as of September 30, 2024, a decrease of $66.9 million, or 11.50%, from $581.7 million as of December 31, 2023 primarily due to regular principal payments, maturity of one available-for-sale security in the amount of $4.0 million and call of one held-to-maturity security in the amount of $25.0 million.
    • Net loans receivable were $2.18 billion as of September 30, 2024, an increase of $284.4 million, or 15.00%, from $1.90 billion as of December 31, 2023.
    • Deposits were $1.87 billion as of September 30, 2024, an increase of $362.7 million, or 24.06%, from $1.51 billion as of December 31, 2023.

    President and Chief Executive Officer’s Comments

    Carlos P. Naudon, Ponce Financial Group’s President and CEO, stated, “We continue to make progress quarter over quarter both in terms of our economic performance as well as serving our communities. Book value per share continues to grow and is now $11.74 (up $0.75 vs last year) and total equity per common share stands at $21.18. Our levels of liquidity and capital remain strong. Our net interest income grew quarter over quarter, and we’re well positioned for a decline in interest rates. We reduced our borrowings during the quarter, paying off the entirety of our Bank Term Funding Program Loan, while lowering the overall cost and extending our maturities. We remain committed to the communities we serve and our status as a Minority Depository Institution (“MDI”)/Community Development Financial Institution (“CDFI”), and we continue to invest in our people and in technology to improve our efficiency.”

    Executive Chairman’s Comment

    Steven A. Tsavaris, Ponce Financial Group’s Executive Chairman added, “During the quarter, the US Treasury Department issued proposed guidelines under which it may sell their ECIP investment back to the issuers or related non-profit affiliates. We believe the adoption of the proposed regulations would be greatly beneficial to Ponce Financial Group, although there can be no assurance that the proposed regulations will be adopted, or that that will be adopted in their current form.  Most of our loan growth of $157.6 million this quarter is explained by our desire to ensure qualification under the proposed regulations, if adopted. Deposits also grew significantly during the quarter including $35.0 million from the Banking Development District program of New York.” 

    Selected performance metrics are as follows (refer to “Key Metrics” for additional information):

        At or for the Three Months Ended  
        September 30,     June 30,     March 31,     December 31,     September 30,  
    Performance Ratios (Annualized):   2024     2024     2024     2023     2023  
    Return on average assets (1)     0.33 %     0.45 %     0.33 %     0.08 %     0.39 %
    Return on average equity (1)     1.93 %     2.59 %     1.97 %     0.42 %     2.11 %
    Net interest rate spread (1) (2)     1.77 %     1.72 %     1.82 %     1.74 %     1.68 %
    Net interest margin (1) (3)     2.65 %     2.62 %     2.71 %     2.66 %     2.58 %
    Non-interest expense to average assets (1)     2.19 %     2.28 %     2.35 %     2.66 %     2.58 %
    Efficiency ratio (4)     80.87 %     80.09 %     82.56 %     96.83 %     78.11 %
    Average interest-earning assets to average interest- bearing liabilities     128.35 %     129.73 %     129.69 %     133.50 %     134.49 %
    Average equity to average assets     16.97 %     17.41 %     17.00 %     18.25 %     18.32 %
                                             
        At or for the Three Months Ended  
        September 30,     June 30,     March 31,     December 31,     September 30,  
    Capital Ratios (Annualized):   2024     2024     2024     2023     2023  
    Total capital to risk-weighted assets (Bank only)     21.61 %     22.47 %     22.79 %     23.30 %     25.10 %
    Tier 1 capital to risk-weighted assets (Bank only)     20.45 %     21.24 %     21.54 %     22.05 %     23.85 %
    Common equity Tier 1 capital to risk-weighted assets (Bank only)     20.45 %     21.24 %     21.54 %     22.05 %     23.85 %
    Tier 1 capital to average assets (Bank only)     16.19 %     16.70 %     16.26 %     17.49 %     17.51 %
                                             
        At or for the Three Months Ended  
        September 30,     June 30,     March 31,     December 31,     September 30,  
    Asset Quality Ratios (Annualized):   2024     2024     2024     2023     2023  
    Allowance for loan losses as a percentage of total loans     1.09 %     1.18 %     1.23 %     1.36 %     1.51 %
    Allowance for loan losses as a percentage of nonperforming loans     139.52 %     130.28 %     140.90 %     152.99 %     169.49 %
    Net (charge-offs) recoveries to average outstanding loans (1)     (0.17 %)     (0.10 %)     (0.25 %)     (0.24 %)     (0.34 %)
    Non-performing loans as a percentage of total gross loans     0.78 %     0.89 %     0.87 %     0.89 %     0.89 %
    Non-performing loans as a percentage of total assets     0.57 %     0.65 %     0.62 %     0.62 %     0.62 %
    Total non-performing assets as a percentage of total assets     0.57 %     0.65 %     0.62 %     0.62 %     0.62 %
    Total non-performing assets and accruing modifications to borrowers experiencing financial difficulty as a percentage of total assets (5)     0.73 %     0.82 %     0.79 %     0.81 %     0.82 %
                                             
      (1) Annualized where appropriate.
      (2) Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities.
      (3) Net interest margin represents net interest income divided by average total interest-earning assets.
      (4) Efficiency ratio represents noninterest expense divided by the sum of net interest income and noninterest income.
      (5) Balances include both modifications to borrowers experiencing financial difficulty, in accordance with ASU 2022-02 adopted on January 1, 2023, and previously existing troubled debt restructurings.
         

    Summary of Results of Operations

    Net income for the three months ended September 30, 2024 was $2.4 million compared to net income of $3.2 million for the three months ended June 30, 2024 and net income of $2.6 million for the three months ended September 30, 2023.

    The decrease of net income for the three months ended September 30, 2024 compared to the three months ended June 30, 2024 was attributed mainly to an increase of $1.2 million in provision for credit losses, a decrease of $1.1 million in non-interest income, an increase of $0.2 million in non-interest expense, partially offset by an increase of $1.1 million in net interest income and a decrease of $0.6 million in provision for income taxes .

    The decrease of net income for the three months ended September 30, 2024 compared to the three months ended September 30, 2023 was largely due to a decrease of $4.5 million in non-interest income as a result of a $3.7 million grant reported in the third quarter of 2023 and an increase of $0.3 million in provision for credit losses, partially offset by an increase of $2.5 million in net interest income and decreases of $1.1 million in provision for income taxes and $ 1.0 million in non-interest expense.

    Net income for the nine months ended September 30, 2024 was $8.0 million compared to a net income of $2.8 million for the nine months ended September 30, 2023. The increase of $5.2 million in net income was attributable to an increase of $7.7 million in net interest income, a decrease of $1.3 million in non-interest expense and a decrease of $1.1 million in provision for credit losses, partially offset by a decrease of $3.8 million in non-interest income and an increase of $1.1 million in provision for income taxes.

    Net Interest Income and Net Margin

    Net interest income for the three months ended September 30, 2024, increased $1.1 million, or 6.25%, to $19.0 million compared to $17.9 million for the three months ended June 30, 2024 and increased $2.5 million, or 15.00%, compared to $16.5 million for the three months ended September 30, 2023.

    Net interest income for the nine months ended September 30, 2024, increased $7.7 million, or 15.98%, to $55.8 million, compared to $48.1 million for the nine months ended September 30, 2023. The increase of $7.7 million of net interest income was attributable to an increase of $28.8 million in total interest and dividend income, offset by an increase of $21.1 million in total interest expense.

    For the nine months ended September 30, 2024, provision for credit losses amounted to $0.2 million consisting of a provision for credit losses on loans in the amount of $0.4 million and a benefit for credit losses on held-to-maturity securities in the amount of $0.2 million. The $0.4 million provision for credit losses on loans for the nine months ended September 30, 2024 resulted from a benefit of $2.1 million related to microloans offset by a provision of $2.5 million related to non-microloans.

    Net interest margin was 2.65% for the three months ended September 30, 2024 compared to 2.62% for the prior quarter, an increase of 3bps and 2.58% for the same period last year, an increase of 7bps.

    Net interest margin was 2.66% for the nine months ended September 30, 2024 compared to 2.65% for the nine months ended September 30, 2023, an increase of 1bp.

    Non-interest Income

    Non-interest income for the three months ended September 30, 2024, was $1.2 million, a decrease of $1.1 million, or 49.03%, compared to $2.3 million the three months ended June 30, 2024 and a decrease of $4.5 million, or 79.55%, compared to $5.6 million the three months ended September 30, 2023.

    The $1.1 million decrease in non-interest income for the three months ended September 30, 2024 compared to the three months ended June 30, 2024 was largely attributable to decreases of $0.7 million in other non-interest income related to the mark to market adjustments on a private equity fund investment and $0.3 million in late and prepayment charges.

    The $4.5 million decrease in non-interest income for the three months ended September 30, 2024 compared to the three months ended September 30, 2023 was largely attributable to $3.7 million in grants received in the third quarter of 2023 and a decrease of $0.8 million in late and prepayment charges.

    Non-interest income for the nine months ended September 30, 2024, was $5.1 million, a decrease of $3.8 million, or 42.76%, compared to $8.9 million for the nine months ended September 30, 2023. The decrease was largely attributable to $3.7 million related to grants received in the third quarter of 2023 and a decrease of $1.1 million in late and prepayment charges, partially, offset by increases of $0.6 million in other non-interest income and $0.4 million in income on sale of mortgage loans.

    Non-interest Expense

    Non-interest expense for the three months ended September 30, 2024, was $16.3 million, an increase of $0.2 million, or 1.03%, compared to $16.1 million for the three months ended June 30, 2024 and a decrease of $1.0 million, or 5.79%, compared to $17.3 million for the three months ended September 30, 2023.

    The $0.2 million increase from the three months ended September 30, 2024 compared to the three months ended June 30, 2024 was mainly attributable to a decrease of $0.2 million in benefit for contingencies and an increase of $0.2 million in occupancy and equipment, partially offset by a decrease of $0.3 million in other operating expense.

    The $1.0 million decrease from the three months ended September 30, 2023 compared to the three months ended September 30, 2023 was mainly attributable to decreases of $0.6 million in provision for contingencies, $0.5 million in data processing expenses and $0.3 million in professional fees, partially offset by increases of $0.2 million in direct loan expenses, $0.2 million in occupancy and equipment and $0.1 million in compensation and benefits.

    Non-interest expense for the nine months ended September 30, 2024, was $49.4 million, a decrease of $1.4 million, or 2.67%, compared to $50.8 million for the nine months ended September 30, 2023. The $1.4 million decrease from the nine months ended September 30, 2023 was mainly attributable to decreases of $2.5 million in provision for contingencies, $0.7 million in data processing expenses, $0.6 million in professional fees and $0.5 million in office supplies, telephone and postage, partially offset by a decrease of $1.2 million in microloans recoveries and increases of $0.8 million in compensation and benefits and $0.8 million in direct loan expenses.

    Balance Sheet Summary

    Total assets increased $265.2 million, or 9.64%, to $3.02 billion as of September 30, 2024 from $2.75 billion as of December 31, 2023. The increase in total assets is largely attributable to increases of $284.4 million in net loans receivable, $26.7 million in other assets, $16.6 million in cash and cash equivalents, $9.1 million in Federal Home Loan Bank of New York stock and $0.8 million in net premises and equipment, partially offset by decreases of $58.0 million in held-to-maturity securities, $8.9 million in available-for-sale securities, $2.5 million in deferred tax assets, $1.5 million in right of use assets, $1.1 million in accrued interest receivable and $0.4 million in mortgage loans held for sale.

    Total liabilities increased $252.1 million, or 11.16%, to $2.51 billion as of September 30, 2024 from $2.26 billion as of December 31, 2023. The increase in total liabilities was largely attributable to an increase of $362.7 million in deposits, $3.0 million in advance payments by borrowers for taxes and insurance and $0.8 million in other liabilities, partially offset by decreases of $104.0 million in borrowings, $9.0 million in accrued interest payable and $1.4 million in operating lease liabilities.

    Total stockholders’ equity increased $13.2 million, or 2.69%, to $504.6 million as of September 30, 2024, from $491.4 million as of December 31, 2023. This increase in stockholders’ equity was largely attributable to $8.0 million in net income, $3.0 million in other comprehensive income, $1.6 million impact to additional paid in capital as a result of share-based compensation and $1.0 million from release of ESOP shares, offset by $0.4 million in preferred stock dividend for shares issued pursuant to the ECIP.

    About Ponce Financial Group, Inc.

    Ponce Financial Group, Inc. is the holding company for Ponce Bank. Ponce Bank is a Minority Depository Institution, a Community Development Financial Institution, and a certified Small Business Administration lender. Ponce Bank’s business primarily consists of taking deposits from the general public and to a lesser extent alternative funding sources and investing those funds, together with funds generated from operations and borrowings, in mortgage loans, consisting of 1-4 family residences (investor-owned and owner-occupied), multifamily residences, nonresidential properties, construction and land, and, to a lesser extent, in business and consumer loans. Ponce Bank also invests in securities, which consist of U.S. Government and federal agency securities and securities issued by government-sponsored or government-owned enterprises, as well as, mortgage-backed securities, corporate bonds and obligations, and Federal Home Loan Bank stock.

    Forward Looking Statements

    Certain statements herein constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act and are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements may be identified by words such as “believes,” “will,” “would,” “expects,” “project,” “may,” “could,” “developments,” “strategic,” “launching,” “opportunities,” “anticipates,” “estimates,” “intends,” “plans,” “targets” and similar expressions. These statements are based upon the current beliefs and expectations of management and are subject to significant risks and uncertainties. Actual results may differ materially from those set forth in the forward-looking statements as a result of numerous factors. Factors that could cause such differences to exist include, but are not limited to, adverse conditions in the capital and debt markets and the impact of such conditions on business activities; changes in interest rates; competitive pressures from other financial institutions; the effects of general economic conditions on a national basis or in the local markets in which Ponce Bank operates, including changes that adversely affect borrowers’ ability to service and repay Ponce Bank’s loans; changes in the value of securities in the investment portfolio; changes in loan default and charge-off rates; fluctuations in real estate values; the adequacy of loan loss reserves; decreases in deposit levels necessitating increased borrowing to fund loans and investments; operational risks including, but not limited to, cybersecurity, fraud and natural disasters; changes in government regulation; changes in accounting standards and practices; the risk that intangibles recorded in the financial statements will become impaired; demand for loans in Ponce Bank’s market area; Ponce Bank’s ability to attract and maintain deposits; risks related to the implementation of acquisitions, dispositions, and restructurings; the risk that Ponce Financial Group, Inc. may not be successful in the implementation of its business strategy; changes in assumptions used in making such forward-looking statements and the risk factors described in Ponce Financial Group, Inc.’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q as filed with the Securities and Exchange Commission (the “SEC”), which are available at the SEC’s website, www.sec.gov. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release. Ponce Financial Group, Inc. disclaims any obligation to publicly update or revise any forward-looking statements to reflect changes in underlying assumptions or factors, new information, future events or other changes, except as may be required by applicable law or regulation.

    Ponce Financial Group, Inc. and Subsidiaries

    Consolidated Statements of Financial Condition
    (Dollars in thousands, except for share data)

                                 
      As of  
      September 30,     June 30,     March 31,     December 31,     September 30,  
      2024     2024     2024     2023     2023  
    ASSETS                            
    Cash and due from banks:                            
    Cash $ 32,061     $ 23,128     $ 29,972     $ 28,930     $ 26,046  
    Interest-bearing deposits   123,751       80,038       104,752       110,260       90,966  
    Total cash and cash equivalents   155,812       103,166       134,724       139,190       117,012  
    Available-for-sale securities, at fair value   111,005       113,125       116,044       119,902       116,753  
    Held-to-maturity securities, at amortized cost   403,736       442,113       452,955       461,748       471,065  
    Placement with banks   249       249       249       249       996  
    Mortgage loans held for sale, at fair value   9,566       37,764       7,860       9,980       14,103  
    Loans receivable, net   2,180,331       2,022,173       1,981,428       1,895,886       1,787,607  
    Accrued interest receivable   16,890       17,441       18,063       18,010       16,624  
    Premises and equipment, net   16,843       16,976       17,396       16,053       16,453  
    Right of use assets   29,785       30,349       31,021       31,272       32,110  
    Federal Home Loan Bank of New York stock (FHLBNY), at cost   28,515       23,972       23,892       19,377       18,870  
    Deferred tax assets   11,845       13,172       13,919       14,332       15,984  
    Other assets   51,392       21,507       21,151       24,723       16,286  
    Total assets $ 3,015,969     $ 2,842,007     $ 2,818,702     $ 2,750,722     $ 2,623,863  
    LIABILITIES AND STOCKHOLDERS’ EQUITY                            
    Liabilities:                            
    Deposits $ 1,870,323     $ 1,606,097     $ 1,585,784     $ 1,507,620     $ 1,401,132  
    Operating lease liabilities   31,343       31,861       32,486       32,684       33,459  
    Accrued interest payable   2,918       6,820       4,218       11,965       8,385  
    Advance payments by borrowers for taxes and insurance   13,733       10,838       13,245       10,778       13,743  
    Borrowings   580,421       680,421       680,421       684,421       675,100  
    Other liabilities   12,642       8,313       8,866       11,859       6,986  
    Total liabilities   2,511,380       2,344,350       2,325,020       2,259,327       2,138,805  
    Commitments and contingencies                            
    Stockholders’ Equity:                            
    Preferred stock, $0.01 par value; 100,000,000 shares authorized   225,000       225,000       225,000       225,000       225,000  
    Common stock, $0.01 par value; 200,000,000 shares authorized   249       249       249       249       249  
    Treasury stock, at cost   (9,445 )     (9,519 )     (9,702 )     (9,747 )     (10,975 )
    Additional paid-in-capital   208,478       207,934       207,584       207,106       207,626  
    Retained earnings   105,103       102,951       99,834       97,420       96,902  
    Accumulated other comprehensive loss   (12,686 )     (16,557 )     (16,590 )     (15,649 )     (20,468 )
    Unearned compensation ─ ESOP   (12,110 )     (12,401 )     (12,693 )     (12,984 )     (13,276 )
    Total stockholders’ equity   504,589       497,657       493,682       491,395       485,058  
    Total liabilities and stockholders’ equity $ 3,015,969     $ 2,842,007     $ 2,818,702     $ 2,750,722     $ 2,623,863  
                                           

    Ponce Financial Group, Inc. and Subsidiaries
    Consolidated Statements of Operations
    (Dollars in thousands, except per share data)

      Three Months Ended  
      September 30,     June 30,     March 31,     December 31,     September 30,  
      2024     2024     2024     2023     2023  
    Interest and dividend income:                            
    Interest on loans receivable $ 32,945     $ 31,281     $ 30,664     $ 27,814     $ 25,276  
    Interest on deposits due from banks   2,430       1,542       2,911       990       1,969  
    Interest and dividend on securities and FHLBNY stock   5,918       5,969       6,091       6,146       6,261  
    Total interest and dividend income   41,293       38,792       39,666       34,950       33,506  
    Interest expense:                            
    Interest on certificates of deposit   6,926       6,358       6,380       5,103       4,362  
    Interest on other deposits   8,519       7,389       6,540       5,706       5,639  
    Interest on borrowings   6,825       7,141       7,923       6,944       6,963  
    Total interest expense   22,270       20,888       20,843       17,753       16,964  
    Net interest income   19,023       17,904       18,823       17,197       16,542  
    Provision (benefit) for credit losses   789       (374 )     (180 )     (375 )     535  
    Net interest income after provision (benefit) for credit losses   18,234       18,278       19,003       17,572       16,007  
    Non-interest income:                            
    Service charges and fees   508       492       473       498       516  
    Brokerage commissions   —       9       8       13       17  
    Late and prepayment charges   77       426       359       365       899  
    Income on sale of mortgage loans   218       274       302       244       173  
    Grant income   —       —       —       438       3,718  
    Other   348       1,057       565       (273 )     304  
    Total non-interest income   1,151       2,258       1,707       1,285       5,627  
    Non-interest expense:                            
    Compensation and benefits   7,674       7,724       7,844       8,262       7,566  
    Occupancy and equipment   3,786       3,564       3,667       3,686       3,588  
    Data processing expenses   1,099       1,013       1,127       1,101       1,582  
    Direct loan expenses   573       633       732       497       369  
    (Benefit) provision for contingencies   (252 )     (493 )     164       418       391  
    Insurance and surety bond premiums   292       263       253       250       255  
    Office supplies, telephone and postage   222       233       249       294       301  
    Professional fees   1,351       1,369       1,723       2,040       1,693  
    Microloans recoveries   (54 )     (65 )     (53 )     (152 )     (69 )
    Marketing and promotional expenses   180       145       100       146       248  
    Directors fees and regulatory assessment   178       176       179       173       169  
    Other operating expenses   1,265       1,585       965       1,182       1,223  
    Total non-interest expense   16,314       16,147       16,950       17,897       17,316  
    Income before income taxes   3,071       4,389       3,760       960       4,318  
    Provision for income taxes   638       1,197       1,346       442       1,728  
    Net income $ 2,433     $ 3,192     $ 2,414     $ 518     $ 2,590  
    Dividends on preferred shares   281       75       —       —       —  
    Net income available to common stockholders $ 2,152     $ 3,117     $ 2,414     $ 518     $ 2,590  
    Earnings per common share:                            
    Basic $ 0.10     $ 0.14     $ 0.11     $ 0.02     $ 0.12  
    Diluted $ 0.10     $ 0.14     $ 0.11     $ 0.02     $ 0.12  
    Weighted average common shares outstanding:                            
    Basic   22,446,009       22,409,803       22,353,492       22,224,945       22,272,076  
    Diluted   22,612,028       22,419,309       22,366,728       22,406,102       22,349,217  
                                           

    Ponce Financial Group, Inc. and Subsidiaries
    Consolidated Statements of Operations
    (Dollars in thousands, except per share data)

        For the Nine Months Ended September 30,  
        2024     2023     Variance $     Variance %  
    Interest and dividend income:                        
    Interest on loans receivable   $ 94,890     $ 67,991     $ 26,899       39.56 %
    Interest on deposits due from banks     6,883       3,983       2,900       72.81 %
    Interest and dividend on securities and FHLBNY stock     17,978       18,943       (965 )     (5.09 %)
    Total interest and dividend income     119,751       90,917       28,834       31.71 %
    Interest expense:                        
    Interest on certificates of deposit     19,664       11,468       8,196       71.47 %
    Interest on other deposits     22,448       12,864       9,584       74.50 %
    Interest on borrowings     21,889       18,516       3,373       18.22 %
    Total interest expense     64,001       42,848       21,153       49.37 %
    Net interest income     55,750       48,069       7,681       15.98 %
    Provision for credit losses     235       1,348       (1,113 )     (82.57 %)
    Net interest income after provision for credit losses     55,515       46,721       8,794       18.82 %
    Non-interest income:                        
    Service charges and fees     1,473       1,488       (15 )     (1.01 %)
    Brokerage commissions     17       67       (50 )     (74.63 %)
    Late and prepayment charges     862       2,000       (1,138 )     (56.90 %)
    Income on sale of mortgage loans     794       354       440       124.29 %
    Grant income     —       3,718       (3,718 )     (100.00 %)
    Other     1,970       1,311       659       50.27 %
    Total non-interest income     5,116       8,938       (3,822 )     (42.76 %)
    Non-interest expense:                        
    Compensation and benefits     23,242       22,437       805       3.59 %
    Occupancy and equipment     11,017       10,882       135       1.24 %
    Data processing expenses     3,239       3,982       (743 )     (18.66 %)
    Direct loan expenses     1,938       1,126       812       72.11 %
    (Benefit) provision for contingencies     (581 )     1,893       (2,474 )     (130.69 %)
    Insurance and surety bond premiums     808       768       40       5.21 %
    Office supplies, telephone and postage     704       1,189       (485 )     (40.79 %)
    Professional fees     4,443       5,052       (609 )     (12.05 %)
    Microloans recoveries     (172 )     (1,329 )     1,157       (87.06 %)
    Marketing and promotional expenses     425       679       (254 )     (37.41 %)
    Directors fees and regulatory assessment     533       484       49       10.12 %
    Other operating expenses     3,815       3,603       212       5.88 %
    Total non-interest expense     49,411       50,766       (1,355 )     (2.67 %)
    Income before income taxes     11,220       4,893       6,327       129.31 %
    Provision for income taxes     3,181       2,059       1,122       54.49 %
    Net income   $ 8,039     $ 2,834     $ 5,205       183.66 %
    Dividends on preferred shares     356       —       356       100.00 %
    Net income available to common stockholders   $ 7,683     $ 2,834     $ 4,849       171.10 %
    Earnings per common share:                        
    Basic   $ 0.34     $ 0.12     $ 0.22       177.36 %
    Diluted   $ 0.34     $ 0.12     $ 0.22       177.10 %
    Weighted average common shares outstanding:                        
    Basic     22,403,258       22,920,680       (517,422 )     (2.26 %)
    Diluted     22,466,178       22,962,956       (496,778 )     (2.16 %)
                                     

    Ponce Financial Group, Inc. and Subsidiaries
    Key Metrics

      At or for the Three Months Ended  
      September 30,     June 30,     March 31,     December 31,     September 30,  
      2024     2024     2024     2023     2023  
    Performance Ratios:                            
    Return on average assets (1)   0.33 %     0.45 %     0.33 %     0.08 %     0.39 %
    Return on average equity (1)   1.93 %     2.59 %     1.97 %     0.42 %     2.11 %
    Net interest rate spread (1) (2)   1.77 %     1.72 %     1.82 %     1.74 %     1.68 %
    Net interest margin (1) (3)   2.65 %     2.62 %     2.71 %     2.66 %     2.58 %
    Non-interest expense to average assets (1)   2.19 %     2.28 %     2.35 %     2.66 %     2.58 %
    Efficiency ratio (4)   80.87 %     80.09 %     82.56 %     96.83 %     78.11 %
    Average interest-earning assets to average interest- bearing liabilities   128.35 %     129.73 %     129.69 %     133.50 %     134.49 %
    Average equity to average assets   16.97 %     17.41 %     17.00 %     18.25 %     18.32 %
    Capital Ratios:                            
    Total capital to risk-weighted assets (Bank only)   21.61 %     22.47 %     22.79 %     23.30 %     25.10 %
    Tier 1 capital to risk-weighted assets (Bank only)   20.45 %     21.24 %     21.54 %     22.05 %     23.85 %
    Common equity Tier 1 capital to risk-weighted assets (Bank only)   20.45 %     21.24 %     21.54 %     22.05 %     23.85 %
    Tier 1 capital to average assets (Bank only)   16.19 %     16.70 %     16.26 %     17.49 %     17.51 %
    Asset Quality Ratios:                            
    Allowance for credit losses on loans as a percentage of total loans   1.09 %     1.18 %     1.23 %     1.36 %     1.51 %
    Allowance for credit losses on loans as a percentage of nonperforming loans   139.52 %     130.28 %     140.90 %     152.99 %     169.49 %
    Net (charge-offs) recoveries to average outstanding loans (1)   (0.17 %)     (0.10 %)     (0.25 %)     (0.24 %)     (0.34 %)
    Non-performing loans as a percentage of total gross loans   0.78 %     0.89 %     0.87 %     0.89 %     0.89 %
    Non-performing loans as a percentage of total assets   0.57 %     0.65 %     0.62 %     0.62 %     0.62 %
    Total non-performing assets as a percentage of total assets   0.57 %     0.65 %     0.62 %     0.62 %     0.62 %
    Total non-performing assets and accruing modifications to borrowers experiencing financial difficulty as a percentage of total assets (5)   0.73 %     0.82 %     0.79 %     0.81 %     0.82 %
    Other:                            
    Number of offices   19       18       18       18       19  
    Number of full-time equivalent employees   228       227       233       237       243  
                                 
      (1) Annualized where appropriate.
      (2) Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average rate of interest-bearing liabilities.
      (3) Net interest margin represents net interest income divided by average total interest-earning assets.
      (4) Efficiency ratio represents noninterest expense divided by the sum of net interest income and non-interest income.
      (5) Balances include both modifications to borrowers experiencing financial difficulty, in accordance with ASU 2022-02 adopted on January 1, 2023, and previously existing troubled debt restructurings.
         

    Ponce Financial Group, Inc. and Subsidiaries
    Securities Portfolio

        September 30, 2024     December 31, 2023  
              Gross     Gross                 Gross     Gross        
        Amortized     Unrealized     Unrealized           Amortized     Unrealized     Unrealized        
        Cost     Gains     Losses     Fair Value     Cost     Gains     Losses     Fair Value  
        (in thousands)     (in thousands)  
    Available-for-Sale Securities:                                                
    U.S. Government Bonds   $ 2,993     $ —     $ (124 )   $ 2,869     $ 2,990     $ —     $ (206 )   $ 2,784  
    Corporate Bonds     21,766       —       (1,438 )     20,328       25,790       —       (2,122 )     23,668  
    Mortgage-Backed Securities:                                                
    Collateralized Mortgage Obligations (1)     35,620       —       (4,976 )     30,644       39,375       —       (6,227 )     33,148  
    FHLMC Certificates     9,310       —       (1,119 )     8,191       10,163       —       (1,482 )     8,681  
    FNMA Certificates     57,345       —       (8,463 )     48,882       61,359       —       (9,842 )     51,517  
    GNMA Certificates     91       —       —       91       104       —       —       104  
    Total available-for-sale securities   $ 127,125     $ —     $ (16,120 )   $ 111,005     $ 139,781     $ —     $ (19,879 )   $ 119,902  
                                                     
    Held-to-Maturity Securities:                                                
    U.S. Agency Bonds   $ 25,000     $ —     $ (49 )   $ 24,951     $ 25,000     $ —     $ (181 )   $ 24,819  
    Corporate Bonds     57,500       —       (618 )     56,882       82,500       —       (2,691 )     79,809  
    Mortgage-Backed Securities:                                                
    Collateralized Mortgage Obligations (1)     193,440       454       (2,946 )     190,948       212,093       104       (5,170 )     207,027  
    FHLMC Certificates     3,441       —       (169 )     3,272       3,897       —       (244 )     3,653  
    FNMA Certificates     108,577       22       (1,967 )     106,632       118,944       —       (4,088 )     114,856  
    SBA Certificates     15,985       153       —       16,138       19,712       166       —       19,878  
    Allowance for Credit Losses     (207 )     —       —       —       (398 )     —       —       —  
    Total held-to-maturity securities   $ 403,736     $ 629     $ (5,749 )   $ 398,823     $ 461,748     $ 270     $ (12,374 )   $ 450,042  
                                                                     
      (1) Comprised of Federal Home Loan Mortgage Corporation (“FHLMC”), Federal National Mortgage Association (“FNMA”) and Ginnie Mae (“GNMA”) issued securities.
         

    The following table presents the activity in the allowance for credit losses for held-to-maturity securities.

        For the Nine     For the  
        Months Ended     Year Ended  
        September 30, 2024     December 31, 2023  
    Allowance for credit losses on securities at beginning of the period   $ 398     $ —  
    CECL adoption     —       662  
    Benefit for credit losses     (191 )     (264 )
    Allowance for credit losses on securities at end of the period   $ 207     $ 398  
                     

    Ponce Financial Group, Inc. and Subsidiaries
    Loan Portfolio

        As of  
        September 30,     June 30,     March 31,     December 31,     September 30,  
        2024     2024     2024     2023     2023  
        Amount     Percent     Amount     Percent     Amount     Percent     Amount     Percent     Amount     Percent  
        (Dollars in thousands)  
    Mortgage loans:                                                            
    1-4 family residential                                                            
    Investor Owned   $ 332,380       15.09 %   $ 337,292       16.49 %   $ 339,331       16.92 %   $ 343,689       17.89 %   $ 347,082       19.13 %
    Owner-Occupied     145,065       6.59 %     147,485       7.21 %     150,842       7.52 %     152,311       7.93 %     151,866       8.37 %
    Multifamily residential     678,029       30.78 %     545,323       26.66 %     545,825       27.22 %     550,559       28.65 %     553,694       30.52 %
    Nonresidential properties     383,277       17.40 %     337,583       16.51 %     327,350       16.32 %     342,343       17.81 %     321,472       17.71 %
    Construction and land     631,461       28.67 %     641,879       31.39 %     608,665       30.35 %     503,925       26.22 %     411,383       22.67 %
    Total mortgage loans     2,170,212       98.53 %     2,009,562       98.26 %     1,972,013       98.33 %     1,892,827       98.50 %     1,785,497       98.40 %
    Non-mortgage loans:                                                            
    Business loans     28,499       1.29 %     30,222       1.48 %     26,664       1.33 %     19,779       1.03 %     18,416       1.02 %
    Consumer loans (1)     4,021       0.18 %     5,305       0.26 %     6,741       0.34 %     8,966       0.47 %     10,416       0.58 %
    Total non-mortgage loans     32,520       1.47 %     35,527       1.74 %     33,405       1.67 %     28,745       1.50 %     28,832       1.60 %
    Total loans, gross     2,202,732       100.00 %     2,045,089       100.00 %     2,005,418       100.00 %     1,921,572       100.00 %     1,814,329       100.00 %
    Net deferred loan origination costs     1,565             1,145             674             468             692        
    Allowance for credit losses on loans     (23,966 )           (24,061 )           (24,664 )           (26,154 )           (27,414 )      
    Loans, net   $ 2,180,331           $ 2,022,173           $ 1,981,428           $ 1,895,886           $ 1,787,607        
                                                                           
      (1) As of September 30, 2024, June 30,2024, March 31, 2024, December 31, 2023, and September 30, 2023, consumer loans include $3.0 million, $4.3 million, $5.7 million, $8.0 million, and $9.3 million, respectively, of microloans originated by the Bank.
         

    Ponce Financial Group, Inc. and Subsidiaries
    Microloans Exposure (previously originated by the Bank under its arrangement with Grain)

    Total Microloans Exposure as of September 30, 2024  
    (in thousands)  
    Microloans Receivable from Grain      
    Microloans originated – put back (inception-to-September 30, 2024)   $ 23,932  
    Write-downs, net of recoveries (inception-to-date as of September 30, 2024)     (15,287 )
    Cash receipts (inception-to-September 30, 2024)     (6,819 )
    Grant/reserve     (1,826 )
    Net receivable as of September 30, 2024   $ —  
    Microloans Receivables from Borrowers      
    Microloans receivable as of September 30, 2024   $ 3,033  
    Allowance for credit losses on loans as of September 30, 2024 (1)     (2,570 )
    Microloans, net of allowance for credit losses on loans as of September 30, 2024   $ 463  
    Investments      
    Investment in Grain   $ 1,000  
    Investment write-off in Q3 2022     (1,000 )
    Net investment as of September 30, 2024     —  
    Total exposure related to microloans as of September 30, 2024 (2)   $ 463  
             
      (1) Excludes $1.5 million of security deposits by microloans originated borrowers reported in deposits in the accompanying Consolidated Statements of Financial Conditions.
      (2) Total remaining exposure to microloan borrowers. These loans are now serviced by the Bank.
         

    On November 1, 2023, Ponce Financial Group, Inc. and Grain Technologies, Inc. (“Grain”) signed a Perpetual Software License Agreement in order for the Bank to assume the servicing of the remaining microloans. In order to facilitate the transfer of the servicing responsibilities to the Bank, Grain granted the Bank a perpetual right and license to use the Grain software, including the source code to service the remaining microloans.

    Ponce Financial Group, Inc. and Subsidiaries
    Allowance for Credit Losses on Loans

      For the Three Months Ended  
      September 30,     June 30,     March 31,     December 31,     September 30,  
      2024     2024     2024     2023     2023  
      (Dollars in thousands)  
    Allowance for credit losses on loans at beginning of the period $ 24,061     $ 24,664     $ 26,154     $ 27,414     $ 28,173  
    Provision (benefit) for credit losses on loans   801       (120 )     (255 )     (126 )     750  
    Charge-offs:                            
    Mortgage loans:                            
    1-4 family residences                            
    Investor owned   —       —       —       —       —  
    Owner occupied   —       —       —       —       —  
    Multifamily residences   —       —       —       —       —  
    Nonresidential properties   (7 )     —       —       —       —  
    Construction and land   —       —       —       —       —  
    Non-mortgage loans:                            
    Business   (450 )     —       (52 )     (63 )     —  
    Consumer   (634 )     (747 )     (1,302 )     (1,135 )     (1,592 )
    Total charge-offs   (1,091 )     (747 )     (1,354 )     (1,198 )     (1,592 )
    Recoveries:                            
    Non-mortgage loans:                            
    Business   1       7       1       —       3  
    Consumer   194       257       118       64       80  
    Total recoveries   195       264       119       64       83  
    Net (charge-offs) recoveries   (896 )     (483 )     (1,235 )     (1,134 )     (1,509 )
    Allowance for credit losses on loans at end of the period $ 23,966     $ 24,061     $ 24,664     $ 26,154     $ 27,414  
                                           

    Ponce Financial Group, Inc. and Subsidiaries
    Deposits

        As of  
        September 30,     June 30,     March 31,     December 31,     September 30,  
        2024     2024     2024     2023     2023  
        Amount     Percent     Amount     Percent     Amount     Percent     Amount     Percent     Amount     Percent  
        (Dollars in thousands)  
    Demand (1)   $ 182,737       9.78 %   $ 178,125       11.09 %   $ 191,541       12.07 %   $ 185,151       12.28 %   $ 214,326       15.30 %
    Interest-bearing deposits:                                                            
    NOW/IOLA accounts (1)     71,445       3.82 %     81,178       5.05 %     73,202       4.62 %     77,909       5.17 %     74,055       5.29 %
    Money market accounts     660,168       35.30 %     502,255       31.27 %     482,344       30.42 %     432,735       28.70 %     370,500       26.44 %
    Reciprocal deposits     94,145       5.03 %     109,945       6.85 %     97,718       6.16 %     96,860       6.42 %     82,670       5.90 %
    Savings accounts     108,941       5.82 %     109,694       6.83 %     112,713       7.11 %     114,139       7.57 %     117,870       8.41 %
    Total NOW, money market, reciprocal and savings accounts     934,699       49.97 %     803,072       50.00 %     765,977       48.31 %     721,643       47.86 %     645,095       46.04 %
    Certificates of deposit of $250K or more     174,053       9.31 %     156,224       9.73 %     146,296       9.23 %     132,153       8.77 %     122,353       8.73 %
    Brokered certificates of deposit (2)     94,531       5.05 %     94,614       5.89 %     94,689       5.97 %     98,729       6.55 %     98,729       7.05 %
    Listing service deposits (2)     7,376       0.39 %     9,361       0.58 %     12,688       0.80 %     14,433       0.96 %     15,180       1.08 %
    All other certificates of deposit less than $250K     476,927       25.50 %     364,701       22.71 %     374,593       23.62 %     355,511       23.58 %     305,449       21.80 %
    Total certificates of deposit     752,887       40.25 %     624,900       38.91 %     628,266       39.62 %     600,826       39.86 %     541,711       38.66 %
    Total interest-bearing deposits     1,687,586       90.22 %     1,427,972       88.91 %     1,394,243       87.93 %     1,322,469       87.72 %     1,186,806       84.70 %
    Total deposits   $ 1,870,323       100.00 %   $ 1,606,097       100.00 %   $ 1,585,784       100.00 %   $ 1,507,620       100.00 %   $ 1,401,132       100.00 %
                                                                                     
      (1) As of December 31, 2023 and September 30, 2023 $58.2 million and $51.5 million, respectively, were reclassified from demand to NOW/IOLA accounts.
      (2) As of December 31, 2023, and September 30, 2023, there were $0.3 million and $0.3 million, respectively, in individual listing service deposits amounting to $250,000 or more. As of September 30, 2024, there were no individual listing service deposits amounting to $250,000 or more. All brokered certificates of deposit individually amounted to less than $250,000.
         

    Ponce Financial Group, Inc. and Subsidiaries
    Borrowings

      September 30,     December 31,  
      2024     2023  
      Scheduled
    Maturity
        Redeemable
    at Call Date
        Weighted
    Average
    Rate
        Scheduled
    Maturity
        Redeemable
    at Call Date
        Weighted
    Average
    Rate
     
      (Dollars in thousands)  
    Term advances ending:                                  
    2024 $ 59,321     $ 59,321       4.00 %   $ 363,321     $ 363,321       4.55 %
    2025   50,000       50,000       4.41       50,000       50,000       4.41  
    2026   200,000       200,000       4.25       —       —       —  
    2027   212,000       212,000       3.44       212,000       212,000       3.44  
    2028   9,100       9,100       3.84       9,100       9,100       3.84  
    Thereafter   50,000       50,000       3.35       50,000       50,000       3.35  
      $ 580,421     $ 580,421       3.86 %   $ 684,421     $ 684,421       4.10 %
                                                   

    Ponce Financial Group, Inc. and Subsidiaries
    Nonperforming Assets

      As of Three Months Ended  
      September 30,     June 30,     March 31,     December 31,     September 30,  
      2024     2024     2024     2023     2023  
      (Dollars in thousands)  
    Non-accrual loans:                            
    Mortgage loans:                            
    1-4 family residential                            
    Investor owned $ 436     $ 436     $ 399     $ 793     $ 396  
    Owner occupied   1,423       1,423       1,426       1,682       1,685  
    Multifamily residential   4,685       5,754       4,098       2,979       1,444  
    Nonresidential properties   824       828       441       —       —  
    Construction and land   8,907       8,907       10,277       10,759       11,721  
    Non-mortgage loans:                            
    Business   180       396       146       165       209  
    Consumer   —       —       —       —       —  
    Total non-accrual loans (not including non-accruing modifications to borrowers experiencing financial difficulty) (1) $ 16,455     $ 17,744     $ 16,787     $ 16,378     $ 15,455  
                                 
    Non-accruing modifications to borrowers experiencing financial difficulty (1):              
    Mortgage loans:                            
    1-4 family residential                            
    Investor owned $ 278     $ 277     $ 270     $ 270     $ 270  
    Owner occupied   444       448       447       447       449  
    Multifamily residential   —       —       —       —       —  
    Nonresidential properties   —       —       —       —       —  
    Construction and land   —       —       —       —       —  
    Non-mortgage loans:                            
    Business   —       —       —       —       —  
    Consumer   —       —       —       —       —  
    Total non-accruing modifications to borrowers experiencing financial difficulty (1)   722       725       717       717       719  
    Total non-accrual loans (2) $ 17,177     $ 18,469     $ 17,504     $ 17,095     $ 16,174  
                                 
    Accruing modifications to borrowers experiencing financial difficulty (1):              
    Mortgage loans:                            
    1-4 family residential                            
    Investor owned $ 1,821     $ 1,830     $ 1,850     $ 2,112     $ 2,131  
    Owner occupied   2,116       2,171       2,288       2,313       2,335  
    Multifamily residential   —       —       —       —       —  
    Nonresidential properties   672       707       748       757       765  
    Construction and land   —       —       —       —       —  
    Non-mortgage loans:                            
    Business   222       —       —       —       —  
    Consumer   —       —       —       —       —  
    Total accruing modifications to borrowers experiencing financial difficulty (1) $ 4,831     $ 4,708     $ 4,886     $ 5,182     $ 5,231  
    Total non-performing assets and accruing modifications to borrowers experiencing financial difficulty (1) $ 22,008     $ 23,177     $ 22,390     $ 22,277     $ 21,405  
    Total non-performing loans to total gross loans   0.78 %     0.89 %     0.87 %     0.89 %     0.89 %
    Total non-performing assets to total assets   0.57 %     0.65 %     0.62 %     0.62 %     0.62 %
    Total non-performing assets and accruing modifications to borrowers experiencing financial difficulty as a percentage of total assets (1)   0.73 %     0.82 %     0.79 %     0.81 %     0.82 %
                                           
      (1) Balances include both modifications to borrowers experiencing financial difficulty, in accordance with ASU 2022-02 adopted on January 1, 2023, and previously existing troubled debt restructurings.
      (2) Includes nonperforming mortgage loans held for sale.
         

    Ponce Financial Group, Inc. and Subsidiaries
    Average Balance Sheets

      For the Three Months Ended September 30,
      2024   2023
      Average               Average            
      Outstanding           Average   Outstanding           Average
      Balance     Interest     Yield/Rate (1)   Balance     Interest     Yield/Rate (1)
      (Dollars in thousands)
    Interest-earning assets:                              
    Loans (2) $ 2,096,592     $ 32,945     6.25 %   $ 1,777,585     $ 25,276     5.64 %
    Securities (3)   548,708       5,324     3.86 %     599,573       5,821     3.85 %
    Other (4)   210,057       3,024     5.73 %     169,570       2,409     5.64 %
    Total interest-earning assets   2,855,357       41,293     5.75 %     2,546,728       33,506     5.22 %
    Non-interest-earning assets   107,153                 111,771            
    Total assets $ 2,962,510               $ 2,658,499            
    Interest-bearing liabilities:                              
    NOW/IOLA (5) (6) $ 74,690     $ 174     0.93 %   $ 69,935     $ 141     0.80 %
    Money market (6)   711,385       8,318     4.65 %     485,042       5,468     4.47 %
    Savings   109,571       25     0.09 %     118,095       29     0.10 %
    Certificates of deposit   655,562       6,926     4.20 %     527,302       4,362     3.28 %
    Total deposits   1,551,208       15,443     3.96 %     1,200,374       10,000     3.31 %
    Advance payments by borrowers   13,151       2     0.06 %     14,537       1     0.03 %
    Borrowings   660,312       6,825     4.11 %     678,676       6,963     4.07 %
    Total interest-bearing liabilities   2,224,671       22,270     3.98 %     1,893,587       16,964     3.55 %
    Non-interest-bearing liabilities:                              
    Non-interest-bearing demand (5)   185,543       —           231,299       —      
    Other non-interest-bearing liabilities   49,702       —           46,643       —      
    Total non-interest-bearing liabilities   235,245       —           277,942       —      
    Total liabilities   2,459,916       22,270           2,171,529       16,964      
    Total equity   502,594                 486,970            
    Total liabilities and total equity $ 2,962,510           3.98 %   $ 2,658,499           3.55 %
    Net interest income       $ 19,023               $ 16,542      
    Net interest rate spread (7)             1.77 %               1.67 %
    Net interest-earning assets (8) $ 630,686               $ 653,141            
    Net interest margin (9)             2.65 %               2.58 %
    Average interest-earning assets to interest-bearing liabilities             128.35 %               134.49 %
                                       
      (1) Annualized where appropriate.
      (2) Loans include loans and mortgage loans held for sale, at fair value.
      (3) Securities include available-for-sale securities and held-to-maturity securities.
      (4) Includes FHLBNY demand account, FHLBNY stock dividends and FRBNY demand deposits.
      (5) Includes reclassification of $47.1 million average outstanding balances from non-interest bearing demand to NOW/IOLA for the three months ended September 30, 2023.
      (6) Includes $0.1 million of interest expense reclassified from money market to NOW/IOLA for the three months ended September 30, 2023.
      (7) Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average rate of interest-bearing liabilities.
      (8) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.
      (9) Net interest margin represents net interest income divided by average total interest-earning assets.
         

    Ponce Financial Group, Inc. and Subsidiaries
    Average Balance Sheets

      For the Nine Months Ended September 30,  
      2024     2023  
      Average                 Average              
      Outstanding           Average     Outstanding           Average  
      Balance     Interest     Yield/Rate (1)     Balance     Interest     Yield/Rate  
      (Dollars in thousands)  
    Interest-earning assets:                                  
    Loans (2) $ 2,038,879     $ 94,890       6.22 %   $ 1,678,369     $ 67,991       5.42 %
    Securities (3)   562,451       16,429       3.90 %     614,987       17,627       3.83 %
    Other (4)   196,668       8,432       5.73 %     127,961       5,299       5.54 %
    Total interest-earning assets   2,797,998       119,751       5.72 %     2,421,317       90,917       5.02 %
    Non-interest-earning assets   106,500                   118,609              
    Total assets $ 2,904,498                 $ 2,539,926              
    Interest-bearing liabilities:                                  
    NOW/IOLA (5) (6) $ 76,817     $ 543       0.94 %   $ 69,331     $ 1,133       2.18 %
    Money market (6)   618,725       21,819       4.71 %     403,171       11,637       3.86 %
    Savings   111,636       80       0.10 %     123,218       88       0.10 %
    Certificates of deposit   640,369       19,664       4.10 %     522,740       11,468       2.93 %
    Total deposits   1,447,547       42,106       3.89 %     1,118,460       24,326       2.91 %
    Advance payments by borrowers   13,660       6       0.06 %     14,814       6       0.05 %
    Borrowings   703,775       21,889       4.15 %     617,912       18,516       4.01 %
    Total interest-bearing liabilities   2,164,982       64,001       3.95 %     1,751,186       42,848       3.27 %
    Non-interest-bearing liabilities:                                  
    Non-interest-bearing demand (5)   191,087       —             251,645       —        
    Other non-interest-bearing liabilities   51,061       —             43,864       —        
    Total non-interest-bearing liabilities   242,148       —             295,509       —        
    Total liabilities   2,407,130       64,001             2,046,695       42,848        
    Total equity   497,368                   493,231              
    Total liabilities and total equity $ 2,904,498             3.95 %   $ 2,539,926             3.27 %
    Net interest income       $ 55,750                 $ 48,069        
    Net interest rate spread (7)               1.77 %                 1.74 %
    Net interest-earning assets (8) $ 633,016                 $ 670,131              
    Net interest margin (9)               2.66 %                 2.65 %
    Average interest-earning assets to                                  
    interest-bearing liabilities               129.24 %                 138.27 %
                                           
      (1) Annualized where appropriate.
      (2) Loans include loans and mortgage loans held for sale, at fair value.
      (3) Securities include available-for-sale securities and held-to-maturity securities.
      (4) Includes FHLBNY demand account, FHLBNY stock dividends and FRBNY demand deposits.
      (5) Includes reclassification of $46.5 million average outstanding balances from non-interest bearing demand to NOW/IOLA for the nine months ended September 30, 2023.
      (6) Includes $1.1 million of interest expense reclassified from money market to NOW/IOLA for the nine months ended September 30, 2023.
      (7) Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average rate of interest-bearing liabilities.
      (8) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.
      (9) Net interest margin represents net interest income divided by average total interest-earning assets.
         

    Ponce Financial Group, Inc. and Subsidiaries
    Other Data

      As of  
      September 30,     June 30,     March 31,     December 31,     September 30,  
      2024     2024     2024     2023     2023  
    Other Data                            
    Common shares issued   24,886,711       24,886,711       24,886,711       24,886,711       24,886,711  
    Less treasury shares   1,067,248       1,074,979       1,096,214       1,101,191       1,233,111  
    Common shares outstanding at end of period   23,819,463       23,811,732       23,790,497       23,785,520       23,653,600  
                                 
    Book value per common share $ 11.74     $ 11.45     $ 11.29     $ 11.20     $ 10.99  
    Tangible book value per common share $ 11.74     $ 11.45     $ 11.29     $ 11.20     $ 10.99  
                                           

    Contact:
    Sergio Vaccaro
    sergio.vaccaro@poncebank.net
    718-931-9000

    The MIL Network –

    January 25, 2025
  • MIL-OSI: Landmark Bancorp, Inc. Announces 30.5% Increase in Third Quarter Net Earnings and Earnings Per Share of $0.72. Declares Cash Dividend of $0.21 per Share and 5% Stock Dividend

    Source: GlobeNewswire (MIL-OSI)

    Manhattan, KS, Oct. 30, 2024 (GLOBE NEWSWIRE) — Landmark Bancorp, Inc. (“Landmark”; Nasdaq: LARK) reported diluted earnings per share of $0.72 for the three months ended September 30, 2024, compared to $0.55 per share in the second quarter of 2024 and $0.52 per share in the same quarter last year. Net earnings for the third quarter of 2024 amounted to $3.9 million, compared to $3.0 million in the prior quarter and $2.9 million for the third quarter of 2023. For the three months ended September 30, 2024, the return on average assets was 1.00%, the return on average equity was 11.82%, and the efficiency ratio was 66.5%.

    For the first nine months of 2024, diluted earnings per share totaled $1.77 compared to $1.75 during the same period in 2023. Net earnings for the first nine months of 2024 totaled $9.7 million, compared to $9.6 million in the first nine months of 2023. For the nine months ended September 30, 2024, the return on average assets was 0.84%, the return on average equity was 10.18%, and the efficiency ratio was 68.8%.

    In making this announcement, Abby Wendel, President and Chief Executive Officer of Landmark, said, “The Company delivered strong results in the third quarter 2024. Net earnings grew 30.5 percent over the prior quarter and 36.6 percent over the same period last year. Earnings per share also increased 36.5 percent over the third quarter last year. Growth in loans, margin expansion, and higher non-interest income all contributed to strong revenue growth. This quarter total loans grew $21.3 million, or 8.6 percent annualized, driven mainly by strong growth in residential mortgage, agriculture and commercial real estate loans. Additionally, net interest income grew 5.7 percent, to $11.6 million, as higher interest on loans exceeded interest costs on deposits and our net interest margin expanded by nine basis points and was 3.30 percent for the quarter. Non-interest income also increased $533,000 over the prior quarter mainly due to increases in fees and service charges earned along with a gain on the sale of a former branch. During the third quarter 2024, non-interest expense declined by $536,000, as the prior quarter included a $979,000 valuation adjustment on a former branch facility. Deposit balances increased 8.0 percent annualized during the third quarter mainly due to growth in money market, checking, and certificate of deposit accounts. Stockholders’ equity also increased by $11.4 million as lower rates this quarter reduced our net unrealized securities losses and increased our book value per share.”

    Landmark’s Board of Directors declared a cash dividend of $0.21 per share, to be paid November 27, 2024, to common stockholders of record as of the close of business on November 13, 2024. The Board of Directors also declared a 5% stock dividend payable on December 16, 2024, to common stockholders of record on December 2, 2024. This is the 24th consecutive year that the Board has declared a 5% stock dividend.

    Management will host a conference call to discuss the Company’s financial results at 10:00 a.m. (Central time) on Thursday, October 31, 2024. Investors may participate via telephone by dialing (833) 470-1428 and using access code 242414. A replay of the call will be available through November 30, 2024, by dialing (866) 813-9403 and using access code 908094.

    SUMMARY OF THIRD QUARTER RESULTS

    Net earnings in the third quarter of 2024 increased $919,000, to $3.9 million mainly due to growth in net interest income coupled with higher non-interest income and lower non-interest expense. The current quarter included a gain of $273,000 on the sale of a former branch and we also recorded a provision for credit losses of $500,000.

    Net Interest Income

    Net interest income in the third quarter of 2024 amounted to $11.6 million representing an increase of $630,000, or 5.7%, compared to the previous quarter. The increase in net interest income was due mainly to growth in interest income on loans, but partially offset by higher interest expense on deposits. The net interest margin increased to 3.30% during the third quarter from 3.21% during the prior quarter. Compared to the previous quarter, interest income on loans increased $911,000, or 6.1%, to $15.9 million due to both higher average balances and rates. The average tax-equivalent yield on the loan portfolio increased 10 basis points to 6.43%. Interest expense on deposits increased $157,000, or 2.8%, in the third quarter 2024, compared to the prior quarter, mainly due to higher rates on interest-bearing deposits. The average rate on interest-bearing deposits increased in the third quarter to 2.48% compared to 2.44% in the prior quarter. Interest on borrowed funds increased $55,000 due to slightly higher average balances in the current quarter.

    Non-Interest Income

    Non-interest income totaled $4.3 million for the third quarter of 2024, an increase of $533,000, or 14.3%, from the previous quarter. The increase in non-interest income compared to the second quarter of 2024 was primarily the result of increases of $282,000 in other non-interest income and $189,000 in fees and service charges. Gain on sales of residential mortgage loans also increased 8.6% compared to the prior quarter. The increase in other non-interest income was primarily due to a $273,000 gain on the sale of a former branch.

    Non-Interest Expense

    During the third quarter of 2024, non-interest expense totaled $10.6 million, a decrease of $536,000, or 4.8%, compared to the prior quarter. As mentioned above, non-interest expense in the prior quarter included a valuation allowance of $979,000 recorded on a former branch facility that was ultimately sold in the third quarter of 2024. Partially offsetting that decline were increases of $299,000 in compensation and benefits and $135,000 in occupancy and equipment.

    Income Tax Expense

    Landmark recorded income tax expense of $867,000 in the third quarter of 2024 compared to $587,000 in the prior quarter. The effective tax rate was 18.1% in the third quarter of 2024 compared to 16.3% in the second quarter of 2024. The increase in the effective tax rate was primarily due to higher earnings before taxes as tax-exempt income was consistent between the periods.

    Balance Sheet Highlights

    As of September 30, 2024, gross loans totaled $1.0 billion, an increase of $21.3 million, or 8.6% annualized since June 30, 2024. During the quarter, loan growth was primarily comprised of one-to-four family residential real estate (growth of $12.3 million), agriculture (growth of $7.5 million) and commercial real estate (growth of $5.2 million) loans. The increase in one-to-four family residential real estate loans reflects continued demand for adjustable-rate mortgage loans which are retained in our portfolio. Investment securities decreased $9.4 million during the third quarter of 2024, while pre-tax unrealized net losses on these investment securities decreased from $24.8 million at June 30, 2024 to $13.3 million at September 30, 2024.

    Period end deposit balances increased $25.0 million to $1.3 billion at September 30, 2024. The increase in deposits was mainly driven by increases in money market and checking (increase of $19.2 million) and certificates of deposit (increase of $11.4 million). Average interest-bearing deposits however were down slightly this quarter compared to the second quarter. Total borrowings decreased $38.5 million during the third quarter 2024. Average borrowings, including FHLB advances and repurchase agreements increased $4.3 million this quarter compared to the second quarter. At September 30, 2024, the loan to deposits ratio was 77.6% compared to 77.5% in the prior quarter.

    Stockholders’ equity increased to $139.7 million (book value of $25.39 per share) as of September 30, 2024, from $128.3 million (book value of $23.45 per share) as of June 30, 2024. The increase in stockholders’ equity was primarily due to a decline in accumulated other comprehensive losses as the unrealized net losses on investments securities declined during the third quarter. The ratio of equity to total assets increased to 8.93% on September 30, 2024, from 8.22% on June 30, 2024.

    The allowance for credit losses totaled $11.5 million, or 1.15% of total gross loans on September 30, 2024, compared to $10.9 million, or 1.11% of total gross loans on June 30, 2024. Net loan charge-offs totaled $9,000 in the third quarter of 2024, compared to net loan recoveries of $52,000 during the second quarter of 2024. A provision for credit losses of $500,000 was recorded in the third quarter of 2024 compared to a no provision for credit losses in the second quarter of 2024.

    Non-performing loans totaled $13.4 million, or 1.34% of gross loans at September 30, 2024 compared to $5.0 million, or 0.51% of gross loans at June 30, 2024. The increase in non-accrual loans was primarily related to one commercial loan which was put on non-accrual status this quarter. Loans 30-89 days delinquent totaled $7.3 million, or 0.73% of gross loans, as of September 30, 2024, compared to $1.9 million, or 0.19% of gross loans, as of June 30, 2024. The increase in delinquent loans was primarily related to two commercial-related loans. Foreclosed real estate owned totaled $428,000 at September 30, 2024.

    About Landmark

    Landmark Bancorp, Inc., the holding company for Landmark National Bank, is listed on the Nasdaq Global Market under the symbol “LARK.” Headquartered in Manhattan, Kansas, Landmark National Bank is a community banking organization dedicated to providing quality financial and banking services. Landmark National Bank has 30 locations in 24 communities across Kansas: Manhattan (2), Auburn, Dodge City (2), Fort Scott (2), Garden City, Great Bend (2), Hoisington, Iola, Junction City, Kincaid, La Crosse, Lawrence (2), Lenexa, Louisburg, Mound City, Osage City, Osawatomie, Overland Park, Paola, Pittsburg, Prairie Village, Topeka (2), Wamego and Wellsville, Kansas. Visit www.banklandmark.com for more information.

    Contact:
    Mark A. Herpich
    Chief Financial Officer
    (785) 565-2000

    Special Note Concerning Forward-Looking Statements

    This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to the financial condition, results of operations, plans, objectives, future performance and business of Landmark. Forward-looking statements, which may be based upon beliefs, expectations and assumptions of our management and on information currently available to management, are generally identifiable by the use of words such as “believe,” “expect,” “anticipate,” “plan,” “intend,” “estimate,” “may,” “will,” “would,” “could,” “should” or other similar expressions. Additionally, all statements in this press release, including forward-looking statements, speak only as of the date they are made, and Landmark undertakes no obligation to update any statement in light of new information or future events. A number of factors, many of which are beyond our ability to control or predict, could cause actual results to differ materially from those in our forward-looking statements. These factors include, among others, the following: (i) the strength of the local, national and international economies, including the effects of inflationary pressures and supply chain constraints on such economies; (ii) changes in state and federal laws, regulations and governmental policies concerning banking, securities, consumer protection, insurance, monetary, trade and tax matters, including any changes in response to the recent failures of other banks; (iii) changes in interest rates and prepayment rates of our assets; (iv) increased competition in the financial services sector and the inability to attract new customers, including from non-bank competitors such as credit unions and “fintech” companies; (v) timely development and acceptance of new products and services; (vi) changes in technology and the ability to develop and maintain secure and reliable electronic systems; (vii) our risk management framework; (viii) interruptions in information technology and telecommunications systems and third-party services; (ix) changes and uncertainty in benchmark interest rates, including the timing of rate changes, if any, by the Federal Reserve; (x) the effects of severe weather, natural disasters, widespread disease or pandemics, or other external events; (xi) the loss of key executives or employees; (xii) changes in consumer spending; (xiii) integration of acquired businesses; (xiv) unexpected outcomes of existing or new litigation; (xv) changes in accounting policies and practices, such as the implementation of the current expected credit losses accounting standard; (xvi) the economic impact of past and any future terrorist attacks, acts of war, including the current Israeli-Palestinian conflict and the conflict in Ukraine, or threats thereof, and the response of the United States to any such threats and attacks; (xvii) the ability to manage credit risk, forecast loan losses and maintain an adequate allowance for loan losses; (xviii) fluctuations in the value of securities held in our securities portfolio; (xix) concentrations within our loan portfolio, large loans to certain borrowers, and large deposits from certain clients; (xx) the concentration of large deposits from certain clients who have balances above current FDIC insurance limits and may withdraw deposits to diversify their exposure; (xxi) the level of non-performing assets on our balance sheets; (xxii) the ability to raise additional capital; (xxiii) cyber-attacks; (xxiv) declines in real estate values; (xxv) the effects of fraud on the part of our employees, customers, vendors or counterparties; and (xxvi) any other risks described in the “Risk Factors” sections of reports filed by Landmark with the Securities and Exchange Commission. These risks and uncertainties should be considered in evaluating forward-looking statements, and undue reliance should not be placed on such statements. Additional information concerning Landmark and its business, including additional risk factors that could materially affect Landmark’s financial results, is included in our filings with the Securities and Exchange Commission.

    LANDMARK BANCORP, INC. AND SUBSIDIARIES
    Consolidated Balance Sheets (unaudited)

    (Dollars in thousands)   September 30,     June 30,     March 31,     December 31,     September 30,  
        2024     2024     2024     2023     2023  
    Assets                              
    Cash and cash equivalents   $ 21,211     $ 23,889     $ 16,468     $ 27,101     $ 23,821  
    Interest-bearing deposits at other banks     4,363       4,881       4,920       4,918       5,904  
    Investment securities available-for-sale, at fair value:                                        
    U.S. treasury securities     83,753       89,325       93,683       95,667       118,341  
    Municipal obligations, tax exempt     112,126       114,047       118,445       120,623       115,706  
    Municipal obligations, taxable     75,129       74,588       75,371       79,083       73,993  
    Agency mortgage-backed securities     140,004       142,499       149,777       157,396       148,817  
    Total investment securities available-for-sale     411,012       420,459       437,276       452,769       456,857  
    Investment securities held-to-maturity     3,643       3,613       3,584       3,555       3,525  
    Bank stocks, at cost     7,894       9,647       7,850       8,123       8,009  
    Loans:                                        
    One-to-four family residential real estate     344,380       332,090       312,833       302,544       289,571  
    Construction and land     23,454       30,480       24,823       21,090       21,657  
    Commercial real estate     324,016       318,850       323,397       320,962       323,427  
    Commercial     181,652       178,876       181,945       180,942       185,831  
    Agriculture     91,986       84,523       86,808       89,680       84,560  
    Municipal     7,098       6,556       5,690       4,507       3,200  
    Consumer     29,263       29,200       28,544       28,931       29,180  
    Total gross loans     1,001,849       980,575       964,040       948,656       937,426  
    Net deferred loan (fees) costs and loans in process     (63 )     (583 )     (578 )     (429 )     (396 )
    Allowance for credit losses     (11,544 )     (10,903 )     (10,851 )     (10,608 )     (10,970 )
    Loans, net     990,242       969,089       952,611       937,619       926,060  
    Loans held for sale, at fair value     3,250       2,513       2,697       853       1,857  
    Bank owned life insurance     39,176       38,826       38,578       38,333       38,090  
    Premises and equipment, net     20,976       20,986       20,696       19,709       23,911  
    Goodwill     32,377       32,377       32,377       32,377       32,377  
    Other intangible assets, net     2,729       2,900       3,071       3,241       3,414  
    Mortgage servicing rights     3,041       2,997       2,977       3,158       3,368  
    Real estate owned, net     428       428       428       928       934  
    Other assets     23,309       28,149       29,684       28,988       29,459  
    Total assets   $ 1,563,651     $ 1,560,754     $ 1,553,217     $ 1,561,672     $ 1,557,586  
                                             
    Liabilities and Stockholders’ Equity                                        
    Liabilities:                                        
    Deposits:                                        
    Non-interest-bearing demand     360,188       360,631       364,386       367,103       395,046  
    Money market and checking     565,629       546,385       583,315       613,613       586,651  
    Savings     145,825       150,996       154,000       152,381       157,112  
    Certificates of deposit     203,860       192,470       191,823       183,154       169,225  
    Total deposits     1,275,502       1,250,482       1,293,524       1,316,251       1,308,034  
    FHLB and other borrowings     92,050       131,330       74,716       64,662       82,569  
    Subordinated debentures     21,651       21,651       21,651       21,651       21,651  
    Repurchase agreements     9,528       8,745       15,895       12,714       12,590  
    Accrued interest and other liabilities     25,229       20,292       20,760       19,480       23,185  
    Total liabilities     1,423,960       1,432,500       1,426,546       1,434,758       1,448,029  
    Stockholders’ equity:                                        
    Common stock     55       55       55       55       52  
    Additional paid-in capital     89,532       89,469       89,364       89,208       84,568  
    Retained earnings     60,549       57,774       55,912       54,282       57,280  
    Treasury stock, at cost     (396 )     (330 )     (249 )     (75 )     –  
    Accumulated other comprehensive loss     (10,049 )     (18,714 )     (18,411 )     (16,556 )     (32,343 )
    Total stockholders’ equity     139,691       128,254       126,671       126,914       109,557  
    Total liabilities and stockholders’ equity   $ 1,563,651     $ 1,560,754     $ 1,553,217     $ 1,561,672     $ 1,557,586  


    LANDMARK BANCORP, INC. AND SUBSIDIARIES

    Consolidated Statements of Earnings (unaudited)

    (Dollars in thousands, except per share amounts)   Three months ended,     Nine months ended,  
        September 30,     June 30,     September 30,     September 30,     September 30,  
        2024     2024     2023     2024     2023  
    Interest income:                                        
    Loans   $ 15,933     $ 15,022     $ 13,531     $ 45,445     $ 37,530  
    Investment securities:                                        
    Taxable     2,301       2,359       2,445       7,088       7,141  
    Tax-exempt     747       759       772       2,270       2,333  
    Interest-bearing deposits at banks     41       40       46       144       193  
    Total interest income     19,022       18,180       16,794       54,947       47,197  
    Interest expense:                                        
    Deposits     5,830       5,673       4,384       16,960       10,375  
    FHLB and other borrowings     1,100       1,027       1,251       3,149       2,845  
    Subordinated debentures     416       418       417       1,246       1,168  
    Repurchase agreements     72       88       116       267       403  
    Total interest expense     7,418       7,206       6,168       21,622       14,791  
    Net interest income     11,604       10,974       10,626       33,325       32,406  
    Provision for credit losses     500       –       –       800       299  
    Net interest income after provision for credit losses     11,104       10,974       10,626       32,525       32,107  
    Non-interest income:                                        
    Fees and service charges     2,880       2,691       2,618       8,032       7,457  
    Gains on sales of loans, net     704       648       491       1,864       2,014  
    Bank owned life insurance     254       248       230       747       671  
    Other     415       133       313       730       834  
    Total non-interest income     4,253       3,720       3,652       11,373       10,976  
    Non-interest expense:                                        
    Compensation and benefits     5,803       5,504       5,811       16,839       16,925  
    Occupancy and equipment     1,429       1,294       1,373       4,113       4,136  
    Data processing     464       492       458       1,437       1,478  
    Amortization of mortgage servicing rights and other intangibles     256       256       474       924       1,407  
    Professional fees     573       649       624       1,869       1,722  
    Valuation allowance on real estate held for sale     –       979       –       1,108       –  
    Other     2,034       1,921       1,989       5,915       5,753  
    Total non-interest expense     10,559       11,095       10,729       32,205       31,421  
    Earnings before income taxes     4,798       3,599       3,549       11,693       11,662  
    Income tax expense     867       587       671       1,972       2,065  
    Net earnings   $ 3,931     $ 3,012     $ 2,878     $ 9,721     $ 9,597  
                                             
    Net earnings per share (1)                                        
    Basic   $ 0.72     $ 0.55     $ 0.53     $ 1.77     $ 1.75  
    Diluted     0.72       0.55       0.52       1.77       1.75  
    Dividends per share (1)     0.21       0.21       0.20       0.63       0.60  
    Shares outstanding at end of period (1)     5,501,221       5,469,566       5,481,805       5,501,221       5,481,805  
    Weighted average common shares outstanding – basic (1)     5,490,808       5,471,724       5,479,909       5,477,453       5,476,703  
    Weighted average common shares outstanding – diluted (1)     5,495,728       5,474,336       5,482,633       5,481,456       5,481,270  
                                             
    Tax equivalent net interest income   $ 11,777     $ 11,167     $ 10,809     $ 33,852     $ 32,974  

    (1) Share and per share values at or for the period ended September 30, 2023 have been adjusted to give effect to the 5% stock dividend paid during December 2023.

    LANDMARK BANCORP, INC. AND SUBSIDIARIES
    Select Ratios and Other Data (unaudited)

    (Dollars in thousands, except per share amounts)   As of or for the
    three months ended,
        As of or for the
    nine months ended,
     
        September 30,     June 30,     September 30,     September 30,     September 30,  
        2024     2024     2023     2024     2023  
    Performance ratios:                                        
    Return on average assets (1)     1.00 %     0.78 %     0.74 %     0.84 %     0.84 %
    Return on average equity (1)     11.82 %     9.72 %     9.87 %     10.18 %     11.13 %
    Net interest margin (1)(2)     3.30 %     3.21 %     3.06 %     3.21 %     3.19 %
    Effective tax rate     18.1 %     16.3 %     18.9 %     16.9 %     17.7 %
    Efficiency ratio (3)     66.5 %     67.9 %     73.8 %     68.8 %     71.0 %
    Non-interest income to total income (3)     25.5 %     25.4 %     25.6 %     25.0 %     25.3 %
                                             
    Average balances:                                        
    Investment securities   $ 428,301     $ 437,136     $ 486,706     $ 440,744     $ 493,853  
    Loans     985,659       955,104       906,289       962,252       877,048  
    Assets     1,562,482       1,545,816       1,549,724       1,554,682       1,528,938  
    Interest-bearing deposits     936,218       936,237       902,727       935,958       886,227  
    FHLB and other borrowings     77,958       72,875       89,441       74,496       70,774  
    Subordinated debentures     21,651       21,651       21,651       21,651       21,651  
    Repurchase agreements     10,774       11,524       15,387       12,218       19,903  
    Stockholders’ equity   $ 132,271     $ 124,624     $ 115,644     $ 127,597     $ 115,275  
                                             
    Average tax equivalent yield/cost (1):                                        
    Investment securities     2.99 %     3.04 %     2.77 %     2.99 %     2.72 %
    Loans     6.43 %     6.33 %     5.93 %     6.31 %     5.72 %
    Total interest-bearing assets     5.38 %     5.29 %     4.81 %     5.26 %     4.62 %
    Interest-bearing deposits     2.48 %     2.44 %     1.93 %     2.42 %     1.57 %
    FHLB and other borrowings     5.61 %     5.67 %     5.55 %     5.65 %     5.37 %
    Subordinated debentures     7.64 %     7.76 %     7.64 %     7.69 %     7.21 %
    Repurchase agreements     2.66 %     3.07 %     2.99 %     2.92 %     2.71 %
    Total interest-bearing liabilities     2.82 %     2.78 %     2.38 %     2.77 %     1.98 %
                                             
    Capital ratios:                                        
    Equity to total assets     8.93 %     8.22 %     7.03 %                
    Tangible equity to tangible assets (3)     6.84 %     6.09 %     4.85 %                
    Book value per share   $ 25.39     $ 23.45     $ 19.99                  
    Tangible book value per share (3)   $ 19.01     $ 17.00     $ 13.46                  
                                             
    Rollforward of allowance for credit losses (loans):                                        
    Beginning balance   $ 10,903     $ 10,851     $ 10,449     $ 10,608     $ 8,791  
    Adoption of CECL     –       –       –       –       1,523  
    Charge-offs     (153 )     (119 )     (142 )     (413 )     (408 )
    Recoveries     144       171       663       449       814  
    Provision for credit losses for loans     650       –       –       900       250  
    Ending balance   $ 11,544     $ 10,903     $ 10,970     $ 11,544     $ 10,970  
                                             
    Allowance for unfunded loan commitments   $ 150     $ 300     $ 200                  
                                             
    Non-performing assets:                                        
    Non-accrual loans   $ 13,415     $ 5,007     $ 4,440                  
    Accruing loans over 90 days past due     –       –       –                  
    Real estate owned     428       428       934                  
    Total non-performing assets   $ 13,843     $ 5,435     $ 5,374                  
                                             
    Loans 30-89 days delinquent   $ 7,301     $ 1,872     $ 6,173                  
                                             
    Other ratios:                                        
    Loans to deposits     77.64 %     77.50 %     70.80 %                
    Loans 30-89 days delinquent and still accruing to gross loans outstanding     0.73 %     0.19 %     0.66 %                
    Total non-performing loans to gross loans outstanding     1.34 %     0.51 %     0.47 %                
    Total non-performing assets to total assets     0.89 %     0.35 %     0.35 %                
    Allowance for credit losses to gross loans outstanding     1.15 %     1.11 %     1.17 %                
    Allowance for credit losses to total non-performing loans     86.05 %     217.76 %     247.07 %                
    Net loan charge-offs to average loans (1)     0.00 %     -0.02 %     -0.23 %     0.00 %     -0.06 %
    (1 ) Information is annualized.
    (2 ) Net interest margin is presented on a fully tax equivalent basis, using a 21% federal tax rate.
    (3 ) Non-GAAP financial measures. See the “Non-GAAP Financial Measures” section of this press release for a reconciliation to the most comparable GAAP equivalent.
         

    LANDMARK BANCORP, INC. AND SUBSIDIARIES
    Non-GAAP Finacials Measures (unaudited)

    (Dollars in thousands, except per share amounts)   As of or for the
    three months ended,
        As of or for the
    nine months ended,
     
        September 30,     June 30,     September 30,     September 30,     September 30,  
        2024     2024     2023     2024     2023  
                                   
    Non-GAAP financial ratio reconciliation:                                        
    Total non-interest expense   $ 10,559     $ 11,095     $ 10,729     $ 32,205     $ 31,421  
    Less: foreclosure and real estate owned expense     (23 )     39       (1 )     (34 )     (21 )
    Less: amortization of other intangibles     (171 )     (171 )     (196 )     (512 )     (591 )
    Less: valuation allowance on real estate held for sale     –       (979 )     –       (1,108 )     –  
    Adjusted non-interest expense (A)     10,365       9,984       10,532       30,551       30,809  
                                             
    Net interest income (B)     11,604       10,974       10,626       33,325       32,406  
                                             
    Non-interest income     4,253       3,720       3,652       11,373       10,976  
    Less: losses (gains) on sales of investment securities, net     –       –       –       –       –  
    Less: gains on sales of premises and equipment and foreclosed assets     (273 )     9       –       (264 )     (1 )
    Adjusted non-interest income (C)   $ 3,980     $ 3,729     $ 3,652     $ 11,109     $ 10,975  
                                             
    Efficiency ratio (A/(B+C))     66.5 %     67.9 %     73.8 %     68.8 %     71.0 %
    Non-interest income to total income (C/(B+C))     25.5 %     25.4 %     25.6 %     25.0 %     25.3 %
                                             
    Total stockholders’ equity   $ 139,691     $ 128,254     $ 109,557                  
    Less: goodwill and other intangible assets     (35,106 )     (35,277 )     (35,791 )                
    Tangible equity (D)   $ 104,585     $ 92,977     $ 73,766                  
                                             
    Total assets   $ 1,563,651     $ 1,560,754     $ 1,557,586                  
    Less: goodwill and other intangible assets     (35,106 )     (35,277 )     (35,791 )                
    Tangible assets (E)   $ 1,528,545     $ 1,525,477     $ 1,521,795                  
                                             
    Tangible equity to tangible assets (D/E)     6.84 %     6.09 %     4.85 %                
                                             
    Shares outstanding at end of period (F)     5,501,221       5,469,566       5,481,805                  
                                             
    Tangible book value per share (D/F)   $ 19.01     $ 17.00     $ 13.46                  

    The MIL Network –

    January 25, 2025
  • MIL-OSI: North American Construction Group Ltd. Announces Results for the Third Quarter Ended September 30, 2024

    Source: GlobeNewswire (MIL-OSI)

    ACHESON, Alberta, Oct. 30, 2024 (GLOBE NEWSWIRE) — North American Construction Group Ltd. (“NACG”) (TSX:NOA.TO/NYSE:NOA) today announced results for the third quarter ended September 30, 2024. Unless otherwise indicated, financial figures are expressed in Canadian dollars and compared to the prior period ended September 30, 2023.

    Third Quarter 2024 Highlights:

    • Combined revenue of $367.2 million compared favorably to $274.8 million in the same period last year, is a third quarter record, and reflected the best operational quarter to date from the Australian fleet of the MacKellar Group which was acquired on October 1, 2023.
    • Reported revenue of $286.9 million, compared to $196.9 million in the same period last year, was primarily driven by strong equipment utilization of 84% in Australia but was also supported by the Canadian heavy equipment fleet which posted an increase from 2024 Q2.
    • Our net share of revenue from equity consolidated joint ventures was $80.3 million in 2024 Q3 and compared to $77.9 million in the same period last year as the increases at the Fargo project in the current quarter were offset by gold mine project scopes in Northern Ontario completed in the prior quarter.
    • Adjusted EBITDA of $106.4 million and margin of 29.0% compared favorably to the prior period operating metrics of $59.4 million and 21.6%, respectively, as revenue increases resulted in higher gross EBITDA with margin improvements driven by effective operations in Australia and Canada.
    • Combined gross profit of $80.4 million and margin of 21.9% compares favorably to the 13.8% posted in the same period last year as both diversification efforts and effective operations during steady and consistent months contributed to improved margins in the quarter.
    • Cash flows generated from operating activities of $48.2 million was higher than the $37.5 million generated in the prior period as higher cash generation from the strong EBITDA was offset by the temporary impact of changes to working capital in the quarter.
    • Free cash flow generated in the quarter was $10.8 million. Free cash flow prior to working capital changes and increases in capital work in progress was over $55 million resulting from strong revenues and margins offset by our routine capital maintenance programs.
    • Net debt was $882.5 million at September 30, 2024, an increase of $159.1 million from December 31, 2023, as year-to-date free cash flow usage and growth asset purchases required debt financing. The cash-related interest rate was 6.5% driven by Bank of Canada posted rates and corresponding equipment financing rates.
    • On October 29, 2024, the Board of Directors declared a regular quarterly dividend of twelve cents which represents a 20% increase from the previous rate of ten cents per quarter.
    • Additional highlights include: i) in August, signed a $375 million five-year contract for fully maintained equipment fleet in Queensland; ii) in September, surpassed the 50% completion mark at the Fargo-Moorhead flood diversion project, iii) in October, completed delivery to site of twenty-five haul trucks from Canada to Australia; iv) commenced go-live activities for the Company’s ERP system in Australia phased integration ongoing through early November and iv) extended the credit facility agreement through to October 2027.

    Joe Lambert, President and CEO, stated, “I would like to thank our operations team for their safe and efficient performance this quarter. The quarterly records set in Australia demonstrate both growth and operational excellence. The recent five-year contract award and the 25 trucks delivered from Fort McMurray have pushed this region to higher than 50% of our overall business and are further indicators of what will be an exciting 2025. In the oil sands region, we are in discussions with producers and expect to secure meaningful contracts in the near term, reaffirming strong client relationships and supporting our targets for next year.”

    Consolidated Financial Highlights

        Three months ended   Nine months ended
        September 30,   September 30,
    (dollars in thousands, except per share amounts)   2024   2023(iv)   2024   2023(iv)
    Revenue   $ 286,857     $ 196,881     $ 860,197     $ 636,398  
    Total combined revenue(i)     367,155       274,757       1,042,591       875,666  
                     
    Gross profit     65,098       26,518       168,057       89,213  
    Gross profit margin(i)     22.7 %     13.5 %     19.5 %     14.0 %
                     
    Combined gross profit(i)     80,415       38,004       205,229       130,181  
    Combined gross profit margin(i)(ii)     21.9 %     13.8 %     19.7 %     14.9 %
                     
    Operating income     53,805       14,344       130,786       50,386  
                     
    Adjusted EBITDA(i)(iii)     106,384       59,371       286,516       195,827  
    Adjusted EBITDA margin(i)(iii)     29.0 %     21.6 %     27.5 %     22.4 %
                     
    Net income     13,901       11,387       39,277       45,495  
    Adjusted net earnings(i)     31,253       14,295       72,961       52,060  
                     
    Cash provided by operating activities     48,184       37,512       119,063       109,521  
    Cash provided by operating activities prior to change in working capital(i)     79,838       41,666       222,641       134,646  
                     
    Free cash flow(i)     10,785       8,940       (32,518 )     (21,817 )
                     
    Purchase of PPE     61,812       39,295       203,772       114,210  
    Sustaining capital additions(i)     21,127       42,290       118,317       127,792  
    Growth capital additions(i)     21,437       1,727       60,987       4,475  
                     
    Basic net income per share   $ 0.52     $ 0.43     $ 1.47     $ 1.72  
    Adjusted EPS(i)   $ 1.17     $ 0.54     $ 2.73     $ 1.96  

    (i)See “Non-GAAP Financial Measures”.
    (ii)Combined gross profit margin is calculated using combined gross profit over total combined revenue.
    (iii)Adjusted EBITDA margin is calculated using adjusted EBITDA over total combined revenue.
    (iv)The prior year amounts are adjusted to reflect a change in accounting policy. See “Change in significant accounting policy – Basis of presentation”.

        Three months ended   Nine months ended
        September 30,   September 30,
    (dollars in thousands)   2024   2023   2024   2023
    Consolidated Statements of Cash Flows                
    Cash provided by operating activities   $ 48,184     $ 37,512     $ 119,063     $ 109,521  
    Cash used in investing activities     (60,221 )     (26,970 )     (198,919 )     (107,123 )
    Effect of exchange rate on changes in cash     1,385       (1,100 )     508       (1,462 )
    Add back of growth and non-cash items included in the above figures:                
    Growth capital additions(i)(ii)     21,437       1,727       60,987       4,475  
    Capital additions financed by leases(i)     —       (2,229 )     (14,157 )     (27,228 )
    Free cash flow(i)   $ 10,785     $ 8,940     $ (32,518 )   $ (21,817 )

    (i)See “Non-GAAP Financial Measures”.
    (ii)Included above in Cash used in investing activities.

    Declaration of Quarterly Dividend

    On October 29, 2024, the NACG Board of Directors declared a regular quarterly dividend (the “Dividend”) of twelve Canadian cents ($0.12) per common share, payable to common shareholders of record at the close of business on November 27, 2024. The Dividend will be paid on January 3, 2025, and is an eligible dividend for Canadian income tax purposes.

    Financial Results for the Three Months Ended September 30, 2024

    Revenue for 2024 Q3 of $286.9 million represented an increase of approximately $90.0 million (or 46%) from 2023 Q3. The increase is primarily due to the inclusion of results from the MacKellar Group (“MacKellar”) following our acquisition on October 1, 2023.

    The Heavy Equipment – Australia segment showed strong performance, driven by MacKellar’s Q3 results generated from stable operating conditions during the quarter. Equipment utilization of the MacKellar fleet for the quarter of 84% was similar to 2024 Q2 but generated higher revenue as growth assets commissioned late in the second quarter in Western Australia and Queensland provided full quarter contributions. The month of July was particularly strong with utilization being above the target of 85% while August and September averaged 82%. DGI Trading Pty Ltd. (“DGI”) posted lower revenue in the quarter due to timing of large component sales but continues to benefit from international demand for low-cost used components and major parts required by heavy equipment fleets in the mining industry.

    The Heavy Equipment – Canada segment posted a decline in revenue compared to the prior year as equipment utilization was 51% for the quarter in comparison to 56% in 2023 Q3. Quarter over quarter, the decrease in revenue represented a 23% decrease and was primarily driven by changes in work scopes at the Fort Hills and Syncrude mines offset by increases in operating hours at the Millennium mine. Additionally, the prior year’s quarter benefited from higher utilization rates from NACG assets being operated at the gold mine in northern Ontario, a project that concluded in 2023 Q3. When comparing to 2024 Q2, top-line revenue achieved in the quarter was 8% higher on consistent operating conditions from July to September as well as increased work scopes at the Millennium mine.

    Combined revenue of $367.2 million represented a $92.4 million (or 34%) increase from 2023 Q3. Our share of revenue generated in 2024 Q3 by joint ventures and affiliates was $80.3 million, compared to $77.9 million in 2023 Q3. The Fargo-Moorhead flood diversion project, which completed another strong operational quarter, posted a 32% increase from scopes completed in the prior quarter and surpassed the 50% completion mark during the quarter. Mostly offsetting this variance was the completion of the gold mine project in northern Ontario which occurred in 2023 Q3.

    Combined gross profit and margin of $80.4 million and 21.9% compares favorably to the $38.0 million and 13.8% posted in the prior quarter and was the compilation of strong operations across all business lines. In particular, consistent weather conditions in Australia resulted in productive operations and a 24.6% gross margin over the three months. In Canada, heavy equipment operations posted a 19.4% margin as operations stabilized from the first half of the year. The joint ventures posted a 19.1% margin, up from 14.7% in the prior quarter, as Nuna returned to profitable operations. The increases in margin were offset slightly within the Fargo joint ventures as additional costs were recognized in the quarter primarily related to project cost escalation.

    Adjusted EBITDA and the associated margin of $106.4 million and 29.0% exceeded our 2023 Q3 results of $59.4 million and 21.6%, respectively. As mentioned above and despite lower revenue in the oil sands region, effective and efficient operation of the heavy equipment fleets in Australia and Canada generated a strong EBITDA margin. EBITDA margin for this quarter was more consistent with the first quarter and is reflective of the underlying consistent business of our heavy equipment fleets.

    Depreciation of our Canadian and Australian heavy equipment fleets was 13.4% of revenue in the quarter. Depreciation as a percentage of revenue was 16.4% for the Heavy Equipment – Canada fleet which is higher than our historical average as increased customer demand for heavy equipment rentals has changed the revenue profile. The Heavy Equipment – Australia fleet, which averaged approximately 11.7% of revenue reflected both productive operations in the quarter as well as the depreciation of fair market values allocated upon purchase. On a combined basis, depreciation averaged 12.1% of combined revenue in the quarter as the lower capital intensity in Fargo and Nuna joint ventures modestly reduced the ratio.

    General and administrative expenses (excluding stock-based compensation) were $9.6 million, or 3.4% of revenue, compared to $6.9 million, or 3.5% of revenue in 2023 Q3. The increase in expenses reflects the acquisition of the MacKellar Group. Cash related interest expense for the quarter was $14.2 million at an average cost of debt of 6.5%, compared to $7.8 million at an average cost of debt of 7.1% in 2023 Q3, as rates posted by the Bank of Canada directly impact our Credit Facility and have a delayed impact on the rates for secured equipment-backed financing. Total interest expense was $15.0 million in the quarter, compared to $8.1 million in 2023 Q3 based on the debt financing incurred upon acquisition of the MacKellar Group on October 1, 2023.

    Adjusted earnings per share (“EPS”) of $1.17 on adjusted net earnings of $31.3 million was up 117% from the prior year figure of $0.54, consistent with the adjusted EBIT performance which was up 144% quarter over quarter. As mentioned above, the step-changes in interest from the MacKellar acquisition offset EBIT performance with the effective income tax rates being comparable for both quarters. Weighted-average common shares for the third quarters of 2024 and 2023 were relatively stable at 26,823,124 and 26,700,303, respectively, net of shares classified as treasury shares.

    For the quarter, free cash flow generation was $10.8 million, driven primarily by adjusted EBITDA of $106.4 million. After accounting for sustaining capital additions of $21.1 million, cash interest expense of $14.2 million, and cash taxes paid of $9.3 million, the positive cash flow generation reached $61.8 million. However, changes in working capital and increases in capital work in progress deferred approximately $45 million of cash flow to future quarters, and the accumulation of distributable profits in our joint ventures negatively impacted cash flow by $10 million. Sustaining capital expenditures were focused on routine maintenance of heavy equipment fleets in Australia and Canada, with Canadian expenditures being lower than previous periods due to reduced operating hours and a disciplined approach in preparation for winter work scopes.

    2024 Strategic Focus Areas

    • Safety – now on an international basis, maintain our uncompromising commitment to health and safety while elevating the standard of excellence in the field;
    • Execution – enhance equipment availability in Canada and Australia through in-house fleet maintenance, reliability programs, technical improvements, and management systems;
    • Operational excellence – with a specific focus on Nuna Group of Companies, put into action practical and experienced-based protocols to ensure predictable high-quality project execution;
    • Integration – implement ERP and best practices at MacKellar, including identification of opportunities to better utilize our capital and equipment in Australia;
    • Diversification – pursue diversification of customers and resources through strategic partnerships, industry expertise and investment in Indigenous joint ventures; and
    • Sustainability – further develop and deliver into our environmental, social, and governance targets as disclosed and committed to in our annual reporting.

    Liquidity

    Our current liquidity positions us well moving forward to fund organic growth and the required correlated working capital investments. Including equipment financing availability and factoring in the amended Credit Facility agreement, total available capital liquidity of $173.1 million includes total liquidity of $135.7 million and $20.0 million of unused finance lease borrowing availability as at September 30, 2024. Liquidity is primarily provided by the terms of our $485.7 million credit facility which allows for funds availability based on a trailing twelve-month EBITDA as defined in the agreement.

        September 30,
    2024
      December 31,
    2023
    Cash   $ 77,670     $ 88,614  
    Credit Facility borrowing limit     485,700       478,022  
    Credit Facility drawn     (395,700 )     (317,488 )
    Letters of credit outstanding     (32,011 )     (31,272 )
    Cash liquidity(i)   $ 135,659     $ 217,876  
    Finance lease borrowing limit     350,000       350,000  
    Other debt borrowing limit     20,000       20,000  
    Equipment financing drawn     (267,544 )     (220,466 )
    Guarantees provided to joint ventures     (65,008 )     (74,831 )
    Total capital liquidity(i)   $ 173,107     $ 292,579  

    (i)See “Non-GAAP Financial Measures”.


    NACG’s Outlook for 2024

    The following table provides projected key measures for 2024. These measures are predicated on contracts currently in place, including expected renewals, and the heavy equipment fleet that we own and operate.

    Key measures   2024
    Combined revenue(i)   $1.4 – $1.5B
    Adjusted EBITDA(i)   $395 – $415M
    Sustaining capital(i)   $150 – $170M
    Adjusted EPS(i)   $3.95 – $4.15
    Free cash flow(i)   $100 – $120M
         
    Capital allocation    
    Growth spending(i)   $85 – $95M
    Net debt leverage(i)   Targeting 2.1x

    (i)See “Non-GAAP Financial Measures”.


    Conference Call and Webcast

    Management will hold a conference call and webcast to discuss our financial results for the quarter ended September 30, 2024, tomorrow, Thursday, October 31, 2024, at 7:00 am Mountain Time (9:00 am Eastern Time).

    The call can be accessed by dialing:
              Toll free: 1-800-717-1738
              Conference ID: 86919

    A replay will be available through November 29, 2024, by dialing:
              Toll Free: 1-888-660-6264
              Conference ID: 86919
              Playback Passcode: 86919

    The 2024 Q3 earnings presentation for the webcast will be available for download on the company’s website at www.nacg.ca/presentations/

    The live presentation and webcast can be accessed at:

    https://onlinexperiences.com/scripts/Server.nxp?LASCmd=AI:4;F:QS!10100&ShowUUID=71BDBAD7-6AC1-4CF9-9CFF-5BBCBBDEF924

    A replay will be available until November 29, 2024, using the link provided.

    Basis of Presentation

    We have prepared our consolidated financial statements in conformity with accounting principles generally accepted in the United States (“US GAAP”). Unless otherwise specified, all dollar amounts discussed are in Canadian dollars. Please see the Management’s Discussion and Analysis (“MD&A”) for the quarter ended September 30, 2024, for further detail on the matters discussed in this release. In addition to the MD&A, please reference the dedicated 2024 Q3 Results Presentation for more information on our results and projections which can be found on our website under Investors – Presentations.

    Change in significant accounting policy – Basis of presentation

    During the first quarter of 2024, we changed our accounting policy for the elimination of our proportionate share of profit from downstream sales to affiliates and joint ventures to record through equity earnings in affiliates and joint ventures on the Consolidated Statements of Operations and Comprehensive Income. Prior to this change, we eliminated our proportionate share of profit on downstream sales to affiliates and joint ventures through revenue and cost of sales. The change in accounting policy simplifies the presentation for downstream profit eliminations and has no cumulative impact on retained earnings. We have accounted for the change retrospectively in accordance with the requirements of US GAAP Accounting Standards Codification (“ASC”) 250 by restating the comparative period. For details of retrospective changes, refer to note 16 in the Financial Statements.

    Forward-Looking Information

    The information provided in this release contains forward-looking statements. Forward-looking statements include statements preceded by, followed by or that include the words “anticipate”, “believe”, “expect”, “should” or similar expressions and include all information provided under the above heading “NACG’s Outlook”.

    The material factors or assumptions used to develop the above forward-looking statements and the risks and uncertainties to which such forward-looking statements are subject, are highlighted in the MD&A for the three and nine months ended September 30, 2024. Actual results could differ materially from those contemplated by such forward-looking statements because of any number of factors and uncertainties, many of which are beyond NACG’s control. Undue reliance should not be placed upon forward-looking statements and NACG undertakes no obligation, other than those required by applicable law, to update or revise those statements. For more complete information about NACG, please read our disclosure documents filed with the SEC and the CSA. These free documents can be obtained by visiting EDGAR on the SEC website at www.sec.gov or on the CSA website at www.sedarplus.com.

    Non-GAAP Financial Measures

    This press release presents certain non-GAAP financial measures because management believes that they may be useful to investors in analyzing our business performance, leverage and liquidity. The non-GAAP financial measures we present include “adjusted EBIT”, “adjusted EBITDA”, “adjusted EBITDA margin”, “adjusted EPS”, “adjusted net earnings”, “capital additions”, “capital work in progress”, “cash provided by operating activities prior to change in working capital”, “combined gross profit”, “combined gross profit margin”, “equity investment EBIT”, “free cash flow”, “general and administrative expenses (excluding stock-based compensation)”, “gross profit margin”, “growth capital”, “margin”, “net debt”, “sustaining capital”, “total capital liquidity”, “total combined revenue”, and “total debt”. A non-GAAP financial measure is defined by relevant regulatory authorities as a numerical measure of an issuer’s historical or future financial performance, financial position or cash flow that is not specified, defined or determined under the issuer’s GAAP and that is not presented in an issuer’s financial statements. These non-GAAP measures do not have any standardized meaning and therefore are unlikely to be comparable to similar measures presented by other companies. They should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. Each non-GAAP financial measure used in this press release is defined and reconciled to its most directly comparable GAAP measure in the “Non-GAAP Financial Measures” section of our Management’s Discussion and Analysis filed concurrently with this press release.

    Reconciliation of total reported revenue to total combined revenue

        Three months ended   Nine months ended
        September 30,   September 30,
    (dollars in thousands)     2024   2023(ii)     2024   2023(ii)
    Revenue from wholly-owned entities per financial statements   $ 286,857     $ 196,881     $ 860,197     $ 636,398  
    Share of revenue from investments in affiliates and joint ventures     144,574       168,667       382,789       516,637  
    Elimination of joint venture subcontract revenue     (64,276 )     (90,791 )     (200,395 )     (277,369 )
    Total combined revenue(i)   $ 367,155     $ 274,757     $ 1,042,591     $ 875,666  

    (i)See “Non-GAAP Financial Measures”.
    (ii)The prior year amounts are adjusted to reflect a change in accounting policy. See “Change in significant accounting policy – Basis of presentation”.


    Reconciliation of reported gross profit to combined gross profit

        Three months ended   Nine months ended
        September 30,   September 30,
    (dollars in thousands)     2024
      2023(ii)     2024
      2023(ii)
    Gross profit from wholly-owned entities per financial statements   $ 65,098     $ 26,518     $ 168,057     $ 89,213  
    Share of gross profit from investments in affiliates and joint ventures     15,317       11,486       37,172       40,968  
    Combined gross profit(i)   $ 80,415     $ 38,004     $ 205,229     $ 130,181  

    (i)See “Non-GAAP Financial Measures”.
    (ii)The prior year amounts are adjusted to reflect a change in accounting policy. See “Change in significant accounting policy – Basis of presentation”.


    Reconciliation of net income to adjusted net earnings, adjusted EBIT, and adjusted EBITDA

        Three months ended   Nine months ended
        September 30,   September 30,
    (dollars in thousands)     2024     2023     2024     2023
    Net income   $ 13,901     $ 11,387     $ 39,277     $ 45,495  
    Adjustments:                
    Loss (gain) on disposal of property, plant and equipment     348       (311 )     641       189  
    Write-down on assets held for sale     —       —       4,181       —  
    Stock-based compensation (benefit) expense     1,332       5,583       3,081       16,324  
    Change in fair value of contingent obligation from adjustments to estimates     17,727       —       26,585       —  
    Restructuring costs     —       —       4,517       —  
    Acquisition costs     —       1,161       —       1,161  
    Loss on equity investment customer bankruptcy claim settlement     —       —       —       759  
    Loss (gain) on derivative financial instruments     572       (2,618 )     845       (6,979 )
    Net unrealized loss (gain) on derivative financial instruments included in equity earnings in affiliates and joint ventures     1,836       572       2,806       (649 )
    Tax effect of the above items     (4,463 )     (1,479 )     (8,972 )     (4,240 )
    Adjusted net earnings(i)     31,253       14,295       72,961       52,060  
    Adjustments:                
    Tax effect of the above items     4,463       1,479       8,972       4,240  
    Increase in fair value of contingent obligation from interest accretion expense     4,262       —       12,360       —  
    Interest expense, net     15,003       8,119       44,939       22,941  
    Income tax expense     6,768       1,733       16,325       11,892  
    Equity earnings in affiliates and joint ventures(iii)     (4,428 )     (4,277 )     (9,545 )     (22,963 )
    Equity investment EBIT(i)(iii)     4,365       3,983       7,152       23,307  
    Adjusted EBIT(i)     61,686       25,332       153,164       91,477  
    Adjustments:                
    Depreciation and amortization     38,662       28,884       122,844       90,239  
    Write-down on assets held for sale     —       —       (4,181 )     —  
    Equity investment depreciation and amortization(i)     6,036       5,155       14,689       14,111  
    Adjusted EBITDA(i)   $ 106,384     $ 59,371     $ 286,516     $ 195,827  
    Adjusted EBITDA margin(i)(ii)     29.0 %     21.6 %     27.5 %     22.4 %

    (i)See “Non-GAAP Financial Measures”.
    (ii)Adjusted EBITDA margin is calculated using adjusted EBITDA over total combined revenue.
    (iii)The prior year amounts are adjusted to reflect a change in presentation. See “Accounting Estimates, Pronouncements and Measures”.


    Reconciliation of equity earnings in affiliates and joint ventures to equity investment EBIT

        Three months ended   Nine months ended
        September 30,   September 30,
    (dollars in thousands)     2024   2023(ii)     2024   2023(ii)
    Equity earnings in affiliates and joint ventures   $ 4,428     $ 4,277     $ 9,545     $ 22,963  
    Adjustments:                
    Interest (income) expense, net     (618 )     (742 )     (1,337 )     (915 )
    Income tax expense     738       448       (698 )     1,294  
    Loss (gain) on disposal of property, plant and equipment     (183 )     —       (358 )     (35 )
    Equity investment EBIT(i)   $ 4,365     $ 3,983     $ 7,152     $ 23,307  

    (i)See “Non-GAAP Financial Measures”.
    (ii)The prior year amounts are adjusted to reflect a change in accounting policy. See “Change in significant accounting policy – Basis of presentation”.


    About the Company

    North American Construction Group Ltd. is a premier provider of heavy civil construction and mining services in Canada, the U.S. and Australia. For 70 years, NACG has provided services to the mining, resource and infrastructure construction markets.

    For further information contact:

    Jason Veenstra
    Chief Financial Officer
    North American Construction Group Ltd.
    (780) 960-7171
    IR@nacg.ca
    www.nacg.ca

    Interim Consolidated Balance Sheets

    (Expressed in thousands of Canadian Dollars)
    (Unaudited) 

        September 30,
    2024
      December 31,
    2023
    Assets        
    Current assets        
    Cash   $ 77,670     $ 88,614  
    Accounts receivable     158,179       97,855  
    Contract assets     16,128       35,027  
    Inventories     77,150       64,962  
    Prepaid expenses and deposits     8,477       7,402  
    Assets held for sale     7,355       1,340  
          344,959       295,200  
    Property, plant and equipment, net of accumulated depreciation of $474,655 (December 31, 2023 – $423,345)     1,235,447       1,142,946  
    Operating lease right-of-use assets     13,404       12,782  
    Investments in affiliates and joint ventures     85,192       81,435  
    Other assets     5,082       7,144  
    Intangible assets     10,052       6,971  
    Total assets   $ 1,694,136     $ 1,546,478  
    Liabilities and shareholders’ equity        
    Current liabilities        
    Accounts payable   $ 123,110     $ 146,190  
    Accrued liabilities     47,724       72,225  
    Contract liabilities     300       59  
    Current portion of long-term debt     94,485       81,306  
    Current portion of contingent obligations     37,601       22,501  
    Current portion of operating lease liabilities     1,852       1,742  
          305,072       324,023  
    Long-term debt     723,487       611,313  
    Contingent obligations     101,752       93,356  
    Operating lease liabilities     12,010       11,307  
    Other long-term obligations     41,768       41,001  
    Deferred tax liabilities     118,133       108,824  
          1,302,222       1,189,824  
    Shareholders’ equity        
    Common shares (authorized – unlimited number of voting common shares; issued and outstanding – September 30, 2024 – 27,827,282 (December 31, 2023 – 27,827,282))     229,455       229,455  
    Treasury shares (September 30, 2024 – 996,435 (December 31, 2023 – 1,090,187))     (15,809 )     (16,165 )
    Additional paid-in capital     22,524       20,739  
    Retained earnings     154,398       123,032  
    Accumulated other comprehensive income (loss)     1,346       (407 )
    Shareholders’ equity     391,914       356,654  
    Total liabilities and shareholders’ equity   $ 1,694,136     $ 1,546,478  

    Interim Consolidated Statements of Operations and
    Comprehensive Income

    (Expressed in thousands of Canadian Dollars, except per share amounts)
    (Unaudited) 

        Three months ended   Nine months ended
        September 30,   September 30,
          2024   2023(i)     2024   2023(i)
    Revenue   $ 286,857     $ 196,881     $ 860,197     $ 636,398  
    Cost of sales     183,405       141,771       570,222       457,856  
    Depreciation     38,354       28,592       121,918       89,329  
    Gross profit     65,098       26,518       168,057       89,213  
    General and administrative expenses     10,945       12,485       36,630       38,638  
    Loss (gain) on disposal of property, plant and equipment     348       (311 )     641       189  
    Operating income     53,805       14,344       130,786       50,386  
    Equity earnings in affiliates and joint ventures     (4,428 )     (4,277 )     (9,545 )     (22,963 )
    Interest expense, net     15,003       8,119       44,939       22,941  
    Change in fair value of contingent obligations     21,989       —       38,945       —  
    Loss (gain) on derivative financial instruments     572       (2,618 )     845       (6,979 )
    Income before income taxes     20,669       13,120       55,602       57,387  
    Current income tax expense     2,238       1,495       5,003       3,198  
    Deferred income tax expense     4,530       238       11,322       8,694  
    Net income   $ 13,901     $ 11,387     $ 39,277     $ 45,495  
    Other comprehensive income                
    Unrealized foreign currency translation (gain) loss     (1,115 )     1,100       (1,753 )     1,462  
    Comprehensive income   $ 15,016     $ 10,287     $ 41,030     $ 44,033  
    Per share information                
    Basic net income per share   $ 0.52     $ 0.43     $ 1.47     $ 1.72  
    Diluted net income per share   $ 0.47     $ 0.39     $ 1.32     $ 1.51  

    (i)The prior year amounts are adjusted to reflect a change in accounting policy. See “Accounting Estimates, Pronouncements and Measures”.

    The MIL Network –

    January 25, 2025
  • MIL-OSI Economics: IMF Executive Board Concludes the Seventh and Eighth Reviews under the Extended Fund Facility and Extended Credit Facility and Review under the Resilience and Sustainability Facility Arrangement with Kenya

    Source: International Monetary Fund

    October 30, 2024

    • The Executive Board’s decision to complete the reviews enables a combined disbursement of around US$606 million to support the authorities’ efforts to rebuild fiscal and external buffers, including to enhance resilience to climate shocks.
    • Resolution of the exceptional external financing pressure earlier this year has revived market confidence, aided stabilization of the shilling, and enabled a faster buildup of foreign exchange reserves. However, large revenue shortfalls in FY2023/24 and pushback against revenue measures owing to governance concerns pose a challenge to the ongoing fiscal consolidation efforts.
    • The Kenyan authorities face a difficult balancing act of boosting domestic revenues to protect critical spending in priority areas while meeting heavy debt service obligations. Delivering on this would call for improving governance and transparency to restore public trust in the effective use of public resources.

    Washington, DC: The Executive Board of the International Monetary Fund (IMF) concluded today the seventh and the eighth reviews under the extended arrangement under the Extended Fund Facility (EFF) and the arrangement under the Extended Credit Facility (ECF), approved in April 2021, and a review under the Resilience and Sustainability Facility (RSF) arrangement, approved in July 2023, with Kenya.

    The EFF/ECF arrangements aim to support Kenya’s program to address debt vulnerabilities while safeguarding resources for priority social and developmental needs; build resilience to shocks; improve governance and transparency; and support broader economic reforms to realize the country’s medium-term potential. The RSF arrangement aims to reinforce Kenya’s strong efforts to address climate-related challenges and catalyze further private climate finance.

    The Executive Board’s decision allows for the immediate disbursements of SDR365.28 million (about US$485.8 million) under the EFF/ECF arrangements and SDR90.47 million (about US$120.3 million) under the RSF arrangement. In addition, following the resolution of exceptional financing needs earlier this year, the Board approved a reduction in the total access under the EFF/ECF arrangements from exceptional access, approved in January 2024 (see PR24/12), to within the normal access limits and a rebalancing of access toward the zero-interest ECF arrangement. Together with the recent changes to the IMF’s charges and surcharges policy, these adjustments would lower Kenya’s interest payments to the IMF.

    Under the EFF/ECF arrangements, total IMF financial commitment stands at SDR2.714 billion (about US$3.61 billion), of which SDR2.343 billion (about US$3.12 billion) has been approved for disbursement. For the RSF arrangement, the corresponding amounts are SDR407.1 million (about US$541.3 million) and SDR135.70 million (about US$180.4 million), respectively.

    In completing the reviews, the Executive Board recognized that the resolution of the exceptional external financing pressure earlier this year has revived market confidence, supporting shilling stabilization and facilitating faster buildup of reserves. However, the fiscal consolidation efforts have faced headwinds following a sizable tax revenue shortfall in FY2023/24 and withdrawal of the 2024 Finance Bill after widespread public protests. Nevertheless, the EFF/ECF program has delivered on reducing inflation, strengthening external buffers, and stabilizing the exchange rate. In addition, the Board approved waivers of non-observance for the end-December 2023 tax revenue and the end-June 2024 primary budget balance and tax revenue targets based on the corrective action taken through the passage of the Supplementary FY2024/25 Budget, which together with medium-term fiscal consolidation would help reduce debt vulnerabilities, a core objective of the program. The Board also completed review under the RSF arrangement and approved the disbursements associated with two reform measures implemented.

    The Board emphasized that sustaining progress requires improving the quality of fiscal adjustment, addressing fiscal and financial sector vulnerabilities, advancing governance reforms, and implementing the structural agenda, including climate-related reforms. Continued efforts to support the vulnerable population, broadening the socio-political support for reforms, and ensuring agile policymaking will also be necessary.

    At the conclusion of the Executive Board’s discussion, Ms. Gita Gopinath, First Deputy Managing Director of the IMF and Acting Chair, made the following statement:

    “Kenya’s economy remains resilient, with growth above the regional average, inflation decelerating, and external inflows supporting the shilling and a buildup of external buffers, despite a difficult socio-economic environment.

    “The EFF/ECF and the RSF arrangements continue to support the authorities’ efforts to anchor macroeconomic stability, reduce debt vulnerabilities, promote reforms, and mitigate climate-related risks.

    “Performance since the last reviews of these arrangements has weakened. While accumulation of foreign exchange reserves and inflation were better than expected, the fiscal performance fell significantly short of the targets. The revenue and export underperformances increased debt vulnerabilities. Implementation of several reforms was also delayed.

    “In this context, a difficult adjustment path lies ahead. A credible fiscal consolidation strategy remains central to addressing debt vulnerabilities while protecting social and development spending. Reforms to make the tax regime more efficient, equitable, and progressive as well as strengthening accountability, transparency, and efficiency of public finances will help garner political and societal support for reforms. Clearly communicating the necessity and benefits of the reforms is paramount.

    “Given the elevated risks around the fiscal strategy, policymaking needs to be agile. Contingency planning remains critical, with policies adapting to evolving outcomes to safeguard stability and ensure that program objectives continue to be met.

    “The Central Bank of Kenya’s decisive actions have supported price stability and external sustainability, including through institutional changes to improve the functioning of the monetary policy operational framework and the money and foreign exchange markets. Exchange rate flexibility is vital to improve resilience to external shocks and competitiveness. Addressing banks’ deteriorating asset quality and emerging risks requires close monitoring and strengthened oversight.

    “Fast-tracking key reforms would raise medium-term potential. In particular, addressing deficiencies in governance, anti-corruption frameworks, and AML/CFT, including leveraging the requested governance diagnostic, is essential for garnering public trust and enhancing policy credibility, and for attracting fresh investments, including finance to build climate resilience.”

    Kenya: Selected Economic Indicators, 2021–2026

    2021

    2022

    2023

    2024

    2025

    2026

    Act.

    Act.

    Act.

    Est./ Proj.

    Proj.

    Proj.

    Output

    Real GDP growth (percent)

    7.6

    4.9

    5.6

    5.0

    5.0

    5.0

    Prices

    Inflation –average (percent)

    6.1

    7.6

    7.7

    5.0

    5.3

    5.1

    Central government finances (fiscal year)1

    Total revenue (percent of GDP)

    16.1

    17.5

    16.7

    17.2

    18.0

    18.7

    Expenditure and net lending (percent of GDP)

    24.4

    23.7

    22.5

    22.8

    22.3

    22.7

    Overall fiscal balance (percent of GDP)

    –8.3

    –6.2

    –5.6

    –5.3

    –4.3

    –4.0

    Public debt

    Gross nominal debt (percent of GDP)

    68.1

    67.8

    73.1

    67.0

    68.8

    68.8

    Gross external debt (percent of GDP)

    34.7

    34.6

    40.4

    34.9

    37.0

    37.4

    Money and Credit (end of period)

    Broad money (percent change)

    6.1

    7.1

    21.3

    5.6

    10.3

    10.2

    Credit to private sector (percent change)

    8.6

    12.5

    13.9

    3.3

    12.4

    11.2

    Policy rate, end-of-period (percent)

    7.0

    8.75

    12.50

    …

    …

    …

    Balance of payments

    Current account balance (percent of GDP)

    –5.2

    –5.0

    –4.0

    –3.9

    –4.0

    –4.1

    Gross international reserves (in months of imports)

    4.7

    4.4

    3.8

    4.1

    4.1

    4.2

    Exchange rate

    REER (average percent change; positive = appreciation)

    –2.6

    2.2

    –8.3

    …

    …

    …

    Sources: Kenyan authorities; and IMF staff estimates and projections.

    1 Based on fiscal year (i.e., 2025 represents fiscal year 2024/25, covering July 2024–June 2025).

    IMF Communications Department
    MEDIA RELATIONS

    PRESS OFFICER: Pavis Devahasadin

    Phone: +1 202 623-7100Email: MEDIA@IMF.org

    @IMFSpokesperson

    MIL OSI Economics –

    January 25, 2025
  • MIL-OSI Russia: IMF Executive Board Concludes the Seventh and Eighth Reviews under the Extended Fund Facility and Extended Credit Facility and Review under the Resilience and Sustainability Facility Arrangement with Kenya

    Source: IMF – News in Russian

    October 30, 2024

    • The Executive Board’s decision to complete the reviews enables a combined disbursement of around US$606 million to support the authorities’ efforts to rebuild fiscal and external buffers, including to enhance resilience to climate shocks.
    • Resolution of the exceptional external financing pressure earlier this year has revived market confidence, aided stabilization of the shilling, and enabled a faster buildup of foreign exchange reserves. However, large revenue shortfalls in FY2023/24 and pushback against revenue measures owing to governance concerns pose a challenge to the ongoing fiscal consolidation efforts.
    • The Kenyan authorities face a difficult balancing act of boosting domestic revenues to protect critical spending in priority areas while meeting heavy debt service obligations. Delivering on this would call for improving governance and transparency to restore public trust in the effective use of public resources.

    Washington, DC: The Executive Board of the International Monetary Fund (IMF) concluded today the seventh and the eighth reviews under the extended arrangement under the Extended Fund Facility (EFF) and the arrangement under the Extended Credit Facility (ECF), approved in April 2021, and a review under the Resilience and Sustainability Facility (RSF) arrangement, approved in July 2023, with Kenya.

    The EFF/ECF arrangements aim to support Kenya’s program to address debt vulnerabilities while safeguarding resources for priority social and developmental needs; build resilience to shocks; improve governance and transparency; and support broader economic reforms to realize the country’s medium-term potential. The RSF arrangement aims to reinforce Kenya’s strong efforts to address climate-related challenges and catalyze further private climate finance.

    The Executive Board’s decision allows for the immediate disbursements of SDR365.28 million (about US$485.8 million) under the EFF/ECF arrangements and SDR90.47 million (about US$120.3 million) under the RSF arrangement. In addition, following the resolution of exceptional financing needs earlier this year, the Board approved a reduction in the total access under the EFF/ECF arrangements from exceptional access, approved in January 2024 (see PR24/12), to within the normal access limits and a rebalancing of access toward the zero-interest ECF arrangement. Together with the recent changes to the IMF’s charges and surcharges policy, these adjustments would lower Kenya’s interest payments to the IMF.

    Under the EFF/ECF arrangements, total IMF financial commitment stands at SDR2.714 billion (about US$3.61 billion), of which SDR2.343 billion (about US$3.12 billion) has been approved for disbursement. For the RSF arrangement, the corresponding amounts are SDR407.1 million (about US$541.3 million) and SDR135.70 million (about US$180.4 million), respectively.

    In completing the reviews, the Executive Board recognized that the resolution of the exceptional external financing pressure earlier this year has revived market confidence, supporting shilling stabilization and facilitating faster buildup of reserves. However, the fiscal consolidation efforts have faced headwinds following a sizable tax revenue shortfall in FY2023/24 and withdrawal of the 2024 Finance Bill after widespread public protests. Nevertheless, the EFF/ECF program has delivered on reducing inflation, strengthening external buffers, and stabilizing the exchange rate. In addition, the Board approved waivers of non-observance for the end-December 2023 tax revenue and the end-June 2024 primary budget balance and tax revenue targets based on the corrective action taken through the passage of the Supplementary FY2024/25 Budget, which together with medium-term fiscal consolidation would help reduce debt vulnerabilities, a core objective of the program. The Board also completed review under the RSF arrangement and approved the disbursements associated with two reform measures implemented.

    The Board emphasized that sustaining progress requires improving the quality of fiscal adjustment, addressing fiscal and financial sector vulnerabilities, advancing governance reforms, and implementing the structural agenda, including climate-related reforms. Continued efforts to support the vulnerable population, broadening the socio-political support for reforms, and ensuring agile policymaking will also be necessary.

    At the conclusion of the Executive Board’s discussion, Ms. Gita Gopinath, First Deputy Managing Director of the IMF and Acting Chair, made the following statement:

    “Kenya’s economy remains resilient, with growth above the regional average, inflation decelerating, and external inflows supporting the shilling and a buildup of external buffers, despite a difficult socio-economic environment.

    “The EFF/ECF and the RSF arrangements continue to support the authorities’ efforts to anchor macroeconomic stability, reduce debt vulnerabilities, promote reforms, and mitigate climate-related risks.

    “Performance since the last reviews of these arrangements has weakened. While accumulation of foreign exchange reserves and inflation were better than expected, the fiscal performance fell significantly short of the targets. The revenue and export underperformances increased debt vulnerabilities. Implementation of several reforms was also delayed.

    “In this context, a difficult adjustment path lies ahead. A credible fiscal consolidation strategy remains central to addressing debt vulnerabilities while protecting social and development spending. Reforms to make the tax regime more efficient, equitable, and progressive as well as strengthening accountability, transparency, and efficiency of public finances will help garner political and societal support for reforms. Clearly communicating the necessity and benefits of the reforms is paramount.

    “Given the elevated risks around the fiscal strategy, policymaking needs to be agile. Contingency planning remains critical, with policies adapting to evolving outcomes to safeguard stability and ensure that program objectives continue to be met.

    “The Central Bank of Kenya’s decisive actions have supported price stability and external sustainability, including through institutional changes to improve the functioning of the monetary policy operational framework and the money and foreign exchange markets. Exchange rate flexibility is vital to improve resilience to external shocks and competitiveness. Addressing banks’ deteriorating asset quality and emerging risks requires close monitoring and strengthened oversight.

    “Fast-tracking key reforms would raise medium-term potential. In particular, addressing deficiencies in governance, anti-corruption frameworks, and AML/CFT, including leveraging the requested governance diagnostic, is essential for garnering public trust and enhancing policy credibility, and for attracting fresh investments, including finance to build climate resilience.”

    Kenya: Selected Economic Indicators, 2021–2026

    2021

    2022

    2023

    2024

    2025

    2026

    Act.

    Act.

    Act.

    Est./ Proj.

    Proj.

    Proj.

    Output

    Real GDP growth (percent)

    7.6

    4.9

    5.6

    5.0

    5.0

    5.0

    Prices

    Inflation –average (percent)

    6.1

    7.6

    7.7

    5.0

    5.3

    5.1

    Central government finances (fiscal year)1

    Total revenue (percent of GDP)

    16.1

    17.5

    16.7

    17.2

    18.0

    18.7

    Expenditure and net lending (percent of GDP)

    24.4

    23.7

    22.5

    22.8

    22.3

    22.7

    Overall fiscal balance (percent of GDP)

    –8.3

    –6.2

    –5.6

    –5.3

    –4.3

    –4.0

    Public debt

    Gross nominal debt (percent of GDP)

    68.1

    67.8

    73.1

    67.0

    68.8

    68.8

    Gross external debt (percent of GDP)

    34.7

    34.6

    40.4

    34.9

    37.0

    37.4

    Money and Credit (end of period)

    Broad money (percent change)

    6.1

    7.1

    21.3

    5.6

    10.3

    10.2

    Credit to private sector (percent change)

    8.6

    12.5

    13.9

    3.3

    12.4

    11.2

    Policy rate, end-of-period (percent)

    7.0

    8.75

    12.50

    …

    …

    …

    Balance of payments

    Current account balance (percent of GDP)

    –5.2

    –5.0

    –4.0

    –3.9

    –4.0

    –4.1

    Gross international reserves (in months of imports)

    4.7

    4.4

    3.8

    4.1

    4.1

    4.2

    Exchange rate

    REER (average percent change; positive = appreciation)

    –2.6

    2.2

    –8.3

    …

    …

    …

    Sources: Kenyan authorities; and IMF staff estimates and projections.

    1 Based on fiscal year (i.e., 2025 represents fiscal year 2024/25, covering July 2024–June 2025).

    IMF Communications Department
    MEDIA RELATIONS

    PRESS OFFICER: Pavis Devahasadin

    Phone: +1 202 623-7100Email: MEDIA@IMF.org

    @IMFSpokesperson

    https://www.imf.org/en/News/Articles/2024/10/30/pr-24398-kenya-imf-concludes-7th-and-8th-rev-under-the-eff-and-ecf-and-rev-under-rsf-arrangement

    MIL OSI

    MIL OSI Russia News –

    January 25, 2025
  • MIL-OSI Economics: Adesina and Banga lead the charge to end hunger in Africa at 2024 Borlaug Dialogue

    Source: African Development Bank Group
    In a powerful opening to the 2024 Norman E. Borlaug International Dialogue, the president of the African Development Bank Group Dr. Akinwumi Adesina and his counterpart at the World Bank Ajay Banga, stressed the need for more global action against hunger, a goal slipping further away due to the combined effects of conflict,…

    MIL OSI Economics –

    January 25, 2025
  • MIL-OSI Security: Bank Robber Sentenced to Three-and-a-Half Years in Prison

    Source: Office of United States Attorneys

    PHOENIX, Ariz. – Justin Eric Lindsay, 29, of Phoenix, was sentenced last week by United States District Judge David G. Campbell to 42 months in prison, followed by 36 months of supervised release. On June 27, 2024, Lindsay pleaded guilty to two counts of Bank Robbery.

    Between August 2023 and January 2024, Lindsay robbed six banks before he was arrested by agents from the Federal Bureau of Investigation. During two of the robberies, Lindsay falsely claimed he had a firearm.

    This case was part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. The Department of Justice reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorneys’ Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.

    The Federal Bureau of Investigation, with the assistance of Tempe Police Department, Mesa Police Department, and Task Force Officers from the Peoria Police Department and the Phoenix Police Department conducted the investigation in this case. The United States Attorney’s Office, District of Arizona, Phoenix, handled the prosecution.
     

    CASE NUMBER:                   CR-24-00147-PHX-DGC
    RELEASE NUMBER:           2024-148_Lindsay

    # # #

    For more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/
    Follow the U.S. Attorney’s Office, District of Arizona, on X @USAO_AZ for the latest news.

     

    MIL Security OSI –

    January 25, 2025
  • MIL-OSI United Kingdom: E3 foreign ministries call for the urgent renewal of Israeli-Palestinian correspondent banking services

    Source: United Kingdom – Executive Government & Departments 3

    Statement calling on Israel to urgently renew reciprocal banking arrangements to prevent economic collapse in the Occupied Palestinian Territories.

    The foreign ministries of France, Germany and the United Kingdom call for the urgent renewal of Israeli-Palestinian correspondent banking services for a period of at least one year. Failure to renew would completely suspend cross-border trade, which would be catastrophic for the Palestinian economy. This will endanger regional security and harm Palestinian and Israeli businesses alike.

    We note the significant steps completed in recent months to mitigate risks related to illicit financing, including the completion of a National Risk Assessment by the Palestinian Monetary Authority and agreement for a MENAFATF on-site evaluation to take place next year.  

    We urge the Government of Israel to renew the indemnifications without delay for a period of least one year, in line with their obligations under the Paris Protocol. We are committed to working with Israel and the Palestinian Authorities to continue countering the financing of terrorism while reiterating that a failure to renew indemnifications, or another temporary renewal, would be unacceptable and cause serious economic damage to both Israel and the West Bank.

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    Updates to this page

    Published 30 October 2024

    MIL OSI United Kingdom –

    January 25, 2025
  • MIL-OSI Economics: African Development Bank Approves a $75 Million Participation in Export Trading Group’s Sustainability Linked Loan for Core Value Chain Financing…

    Source: African Development Bank Group

    The African Development Bank Group has approved a $75 million financing package to support Export Trading Group (ETG), a Mauritius-based conglomerate with extensive operations across Africa. ETG boasts a diverse portfolio spanning agricultural inputs, logistics, merchandising and processing, supply chain optimization, digital transformation, and energy.

    This package includes a $65 million participation from the Bank’s own resources, along with $10 million in concessional co-financing from the Agri-Food Catalytic Financing Mechanism (ACFM) into ETGs Sustainable Linked Loan facility for financing its core value chain assets. The Agri-Food Catalytic Financing Mechanism is an internally managed Special Fund, capitalized by Canada’s Department of Foreign Affairs, Trade and Development, to build markets and mobilize finance for gender-oriented and underserved agri-SMEs in Africa.

    Through participation in the Sustainable Linked Loan facility, the financing will be deployed to ETG’s core value chains in 14 countries, namely Benin, Ghana, Ivory Coast, Senegal, Nigeria, Burkina Faso, Ethiopia, Kenya, Tanzania, Uganda, Malawi, Mozambique, Zimbabwe, and Zambia. This will support ETG’s processing and packaging facilities and warehouses and provide farmers with fertilizers and other agri-inputs. The Bank’s financing may be deployed to up to 28 African countries based on ETG’s emerging needs.

    The Sustainable Linked Loan facility establishes annual sustainability key performance indicators and targets focused on decarbonization, reforestation, zero deforestation, farmer extension services, and gender empowerment with inherent direct financial consequences for non-compliance.

    “The African Development Bank Group is thrilled to expand our work with Export Trade Group and support its commitment to strengthen women’s economic development in Africa. Access to finance and training in agriculture will contribute to food security and economic growth,” said Dr. Beth Dunford, Bank Vice President for Agriculture, Human and Social Development.

    ETG plans to engage 600,000 smallholder farmers by 2027, with a 25 percent target for women farmers. This includes training on sustainable farming and improved access to resources. The project is expected to boost exports from Bank regional member countries and enhance intra-regional trade, particularly within the Economic Community of West African States, Southern African Development Community, and East African Community regional economic blocks.

    The Bank’s investment in ETG capitalizes on the Group’s proven track record and resilience in agriculture, aiming to mobilize private sector financing into a critical yet underserved sector of the economy. ETG will manage the project, with oversight from the company’s Board of Directors and support from specialized departments within the Group.

    The project aligns with the Bank’s ‘High 5’ priorities, specifically “Feed Africa,” “Integrate Africa,” and “Improve the quality of life for the people of Africa,” as well as the Bank’s Ten-Year Strategy 2024-2033. It is expected to contribute to Africa’s agricultural transformation into a business-oriented and commercially viable sector, driving the continent’s food self-sufficiency.

    “By partnering with ETG, the African Development Bank continues to champion strategic enterprises that operate across multiple countries, furthering its mission to support agricultural development and improve the livelihoods of millions across the continent. The decision to continue funding ETG is just not a financial transaction. It is a strategic collaboration with a purpose – a mission to transform African agriculture and a commitment to optimize the influence of their investments, “said Richard Ofori-Mante, Director of the Agricultural Finance and Rural Development Department at the Bank.

    “By tying loan conditions to performance indicators related to sustainability, ETG is more likely to engage in activities that advance the Sustainable Development Goals. This alignment will drive better environmental, social, and governance outcomes. The transaction not only promotes sustainable practices within ETG’s operations but also influences its supply chain and partners, amplifying the impact on sustainable development,” Ofori-Mante added.

    MIL OSI Economics –

    January 25, 2025
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