Source: China State Council Information Office
China-made new energy vehicles await shipment to Europe in Xiamen, Fujian province. [Photo/Xinhua]
China does not approve of or accept the European Commission’s decision to impose extra tariffs on China-made electric vehicles, a spokesperson with the Ministry of Commerce said on Wednesday.
Source: Hong Kong Government special administrative region
LCQ9: Promoting digital nomadism
LCQ9: Promoting digital nomadism
********************************
Following is a question by Dr the Hon Johnny Ng and a written reply by the Secretary for Labour and Welfare, Mr Chris Sun, in the Legislative Council today (October 30): Question: It has been reported that digital nomadism (i.e. working remotely online while living abroad) has become a lifestyle with growing popularity in recent years. Some studies have estimated that the population of digital nomads worldwide would increase to 1 billion by 2035. There are views that hiring digital nomads is conducive to business operation by reducing employers’ costs and expenses, while the presence of digital nomads in the host communities will also contribute to local economic growth. In this connection, will the Government inform this Council: (1) whether the Government will or has estimate(d) and assess(ed) the economic benefits that can be brought to Hong Kong by implementing digital nomad policies to attract talents to work and live in Hong Kong; (2) as there are views pointing out that digital nomads can help expand the talent pool to a worldwide scale, and it is learnt that at present, about 60 countries and places across the globe have already introduced digital nomad visas (e.g. the digital nomad visa launched by Thailand this year has a validity of five years, permitting a stay of up to 180 days per visit, while the digital nomad visa introduced by Japan this year allows holders to bring along with them their family members), whether the Government will, by drawing reference from the relevant practices, issue digital nomad visas to overseas and Mainland talents, or even roll out related preferential policies (including temporary resident visas, accommodation allowance, family-friendly measures and tax incentives, etc) in order to attract specific types of digital nomads (e.g. talents related to Web 3.0, quantum computation and artificial intelligence), thereby attracting more talents to come to Hong Kong; if so, of the details of the plan and the timetable; if not, the reasons for that; and (3) whether the Government will, in the long run, consider launching an e-Residency programme to offer digital citizenship to foreigners, so as to attract more talents and enterprises from abroad to settle in Hong Kong? Reply: President, In consultation with the Financial Secretary’s Office (including the Office of the Government Economist and the Office for Attracting Strategic Enterprises), the Commerce and Economic Development Bureau and the Innovation, Technology and Industry Bureau, I give the reply on behalf of the Government as follows: “Digital nomads” are essentially similar to visitors, who can live in one place but at the same time work remotely under an employment outside such place. “Digital nomads” will return to their places of origin or move to other places after a certain period of time. In the case of Hong Kong, the Government has implemented a series of enhanced talent admission measures since the end of 2022 to entice global talents of diverse backgrounds and professions to settle and pursue development in Hong Kong. Talents will alleviate the post-pandemic manpower shortage in Hong Kong, fill local job vacancies and enrich the local talent pool for promoting economic development. As the objective of the Government’s talents policy is to alleviate manpower shortage, we hope that admitted talents can make Hong Kong their home, inject impetus and contribute to the development of Hong Kong. “Digital nomads” are mobile. Although they will spend on various aspects in daily living during their stay in Hong Kong, they are no different from ordinary visitors. They do not fit well under the Government’s talent attraction policy. The Government has no plan to introduce “digital nomad” visa arrangement under the talent admission regime. At present, “digital nomad” visa arrangement is implemented in a small number of regions only. With limited statistics on relevant economic activities available, the Government is not able to estimate the potential economic benefits brought by adopting similar practice in Hong Kong. The “e-Residency programme” allows freelance workers to obtain some of the rights or facilitation granted to the citizens of the issuing place, or they may live and work in the issuing place. Such an arrangement involves complex issues such as taxation, civil rights and obligations, etc. It is currently implemented in a small number of regions only. The Government has difficulty in assessing its benefit and has no plan to implement such arrangement neither at present.
Ends/Wednesday, October 30, 2024Issued at HKT 11:05
NNNN
Source: China State Council Information Office 3
China’s Ministry of Commerce (MOC) on Tuesday announced its decision to renew anti-dumping duties on ethanolamines imported from the United States, Saudi Arabia, Malaysia, and Thailand.
The duties were initially introduced in 2018 for a period of five years as such imports had caused substantial damage to China’s domestic industry.
Following the end of the term last year, the MOC launched investigations to review the anti-dumping at the request of the domestic industry.
The MOC said in a ruling that if the duties were terminated, the dumping practice and related damage would likely continue or reoccur.
The duties will be levied for another five years starting Wednesday.
Source: China State Council Information Office 3
China-made new energy vehicles await shipment to Europe in Xiamen, Fujian province. [Photo/Xinhua]
China does not approve of or accept the European Commission’s decision to impose extra tariffs on China-made electric vehicles, a spokesperson with the Ministry of Commerce said on Wednesday.
US Senate News:
Source: The White House
Via Teleconference
2:38 P.M. EDT
MODERATOR: Good afternoon, everyone. Thanks so much for joining today’s call. As a reminder, this call will be on background, attributable to senior administration officials, and it is embargoed until 5:00 p.m. Eastern today.
For your awareness, not for your reporting, on the call today we have [senior administration official], [senior administration official], [senior administration official], and [senior administration official].
We’ll follow up shortly after the call with embargoed materials as well, but I will turn it over to [senior administration officials] who will have a few words at the top, and then we’ll take your questions.
Over to you.
SENIOR ADMINISTRATION OFFICIAL: Thanks, Eduardo, and thanks to everybody for joining us today.
Since the earliest days of the administration, President Biden has said we are at an inflection point with respect to advanced technologies. And as he’s often said, we will see more technological change in the next 10 years than we saw in the last 50.
And that has motivated historic investments, mobilizing hundreds of billions of dollars in private investment to rebuild American manufacturing and innovation.
The flipside of that, of course, of promoting critical technologies is, of course, protecting them. And recognizing how transformative certain technologies can be, the President directed his national security team to ensure that where we have significant advantages, our world-leading technologies and know-how are not used against us to undermine our national security. That’s been the guiding principle for the Biden-Harris administration’s export control policies, as well as the Outbound Investment Program that we’re glad to announce is being finalized today.
As many of you know, we’ve been working on this approach to address certain outbound investments in sensitive technologies and critical sectors that could undermine American national security for some time. And, in particular, we’ve been focused on the exploitation of certain intangible benefits that often accompany U.S. outbound investments and that help companies succeed through, for example, enhancing their standing and prominence, providing certain types of assistance, introducing investment and talent networks, opening up market access, and enhancing access to additional financing.
The People’s Republic of China has a stated goal, as you know: to develop key sensitive technologies that will directly support the PRC’s military modernization and related activities, including weapons development, and it has exploited U.S. investments to develop domestic, military, and intelligence capabilities.
So, today, the Treasury Department will issue a Final Rule to implement President Biden’s Executive Order 14105, from August of 2023, which is entitled “Addressing United States Investments in Certain National Security Technologies and Products in Countries of Concern.”
The Final Rule provides the operative regulations and a detailed, explanatory discussion regarding its intent and application. And as directed in the President’s executive order, the Final Rule does prohibit U.S. persons from engaging in certain transactions involving a defined set of technologies and products that pose a particularly acute national security risk to the United States.
The Final Rule also requires U.S. persons to notify the Treasury Department of certain other transactions involving a defined set of technologies and products that may contribute to a threat to the national security of the United States.
Covered technologies fall into three categories: semiconductors and microelectronics, quantum information technologies, and artificial intelligence. This set of technologies, we believe, is core for the next generation of military, cybersecurity, surveillance, and intelligence applications, providing what we believe are force multiplier capabilities.
The United States already prohibits and restricts the export to countries of concern of many of the technologies and products covered by the Final Rule. This program complements the United States’ existing export control and inbound screening tools by preventing U.S. investment from advancing the development of these technologies and products in countries of concern.
The Treasury Department, as [senior administration official] will lay out, has used feedback through the notice and comment process to help design a carefully tailored approach. And we also want to commend Senators Casey and Cornyn, Representatives DeLauro, Fitzpatrick, and Pascrell, as well as Representatives Meeks and McCaul in particular, for their leadership on this issue.
The overwhelmingly bipartisan vote on Senators Casey and Cornyn’s Outbound Investment Transparency Act as an amendment to the Senate NDAA demonstrates the shared will of Congress and the administration to meaningfully regulate outbound investments.
So, with that, I’ll turn it over to [senior administration official] to provide more detail on the content of the Final Rule.
Over to you.
SENIOR ADMINISTRATION OFFICIAL: Thanks very much. As mentioned today, Treasury is issuing, at the direction of the President, a targeted and narrowly scoped regulation that implements a new program to address this threat to U.S. national security. The Final Rule has clear thresholds and definitions to implement the executive order, and provides detailed, explanatory discussion regarding its intent and application to assist investors and other stakeholders to help them navigate this new program.
The Final Rule does two things at its core, as previewed: First, it prohibits U.S. persons from engaging in certain transactions involving semiconductors, quantum, and artificial intelligence. And second, it requires U.S. persons to notify Treasury of certain other transactions involving semiconductors and artificial intelligence.
The rule explains in detail the scope of the program, definitions, processes, requirements, and penalties for non-compliance, among other things. Importantly, this rule has benefited from the input of a variety of stakeholders, industry experts, and allies and partners.
We had two rounds of formal comments on the rulemaking to implement the executive order, first with the August 2023 ANPRM that was issued alongside the ENO and on which we got 60 comments from stakeholders. Those comments were integral in developing the Notice of Proposed Rulemaking that we issued in June of this year and on which we received more than 40 additional comments, which further informed the development of the Final Rule.
Over two-plus years, Treasury, along with the Departments of State and Commerce, have led extensive engagements with stakeholders across the globe. These engagements and our deliberate decision to offer two rounds of public comment have helped us receive insightful feedback that has helped inform the Final Rule to ensure to choose our national security objectives while taking into account the need to be focused, targeted, and clear.
Now, I’ll briefly discuss a few key aspects of the rule.
First, as [senior administration official] suggested, the rule imposes requirements on U.S. persons. This includes prohibiting U.S. persons from engaging in certain transactions with what the rule identifies as covered foreign persons, and requires the U.S. persons to notify the Treasury Department about other transactions that involve covered foreign persons.
Second, the Final Rule focuses on specific categories of investment transactions where the target of the investment has a nexus to the PRC and activities involving sensitive technologies and products.
In terms of what transactions are covered, the Final Rule applies to, among other things, a U.S. person’s acquisition of an equity interest or contingent equity interest, certain debt financing, certain greenfield investments, or investments that could result in corporate expansion and joint ventures. This would include, for example, a U.S. investment firm taking an equity stake in an advanced semiconductor manufacturer in the PRC. It would also cover a U.S. company’s purchase of land in the PRC to develop a quantum computing research facility.
There are exceptions for certain types of transactions that are less likely to contribute to the national security threat we’re worried about.
For example, the Final Rule excepts or carves out certain investments by a U.S. person to publicly trade securities and certain investments made by a limited partner in a pooled investment fund, among others.
In light of our ongoing conversations with allies and partners on the importance of multilateral efforts in this area, the Final Rule also includes an exception for certain transactions involving a person of a country or territory outside the United States where the Secretary of the Treasury has determined that the country or territory is addressing national security concerns posed by outbound investment.
And third, in terms of the technologies and products in scope for the program, the Final Rule provides technical details on the subsets of semiconductors, quantum, and artificial intelligence that are relevant to the program.
For example, a U.S. person is prohibited from acquiring equity in a PRC entity that manufactures advanced semiconductors or that is developing an AI system designed exclusively or intended for a military end use. A U.S. person would be required to notify Treasury if they are acquiring equity in a PRC company that manufactures legacy semiconductors.
Other examples include direct equity investments by a company or private equity fund into any PRC company that is repurposing an AI model for penetration testing or automated vulnerability detection and exploitation, which would be covered under the rule as either notifiable or prohibited, depending on the design end use and computing power used to train an AI system.
In addition to direct investments, indirect investments through a parent of a PRC company that is using AI models to improve targeting, intelligence, reconnaissance, and surveillance, or autonomous weapons systems for military use would be prohibited, as would such indirect investments in a PRC company developing or scaling quantum computers or networks to undermine encryption systems. These technologies can be used for advanced code breaking, the development of next-generation military applications, or offensive cyber operations.
Additionally, in general, the rule is based on a U.S. person’s knowledge of the relevant facts, rendering a transaction to be covered under the rule. Enforcement and penalties are consistent with the International Emergency Economic Powers Act, or IEEPA, the authority by which the President issued the executive order.
The Final Rule takes effect on January 2nd, giving stakeholders time to organize internal infrastructure and processes to ensure compliance with the rule.
The lengthy preamble to the rule summarizes the response to the comments received, as well as provides an explanation of the changes since the proposed rule issued over the summer.
And let me make two additional and final points before concluding.
First, this program is calibrated to help ensure our actions can be supported multilaterally, which is a critical component to maximize its effectiveness and reduce backfill from other investors. The administration has been engaged in extensive conversations with allies and partners on the issue, and we are encouraged to see some allies and partners, including the European Commission and the United Kingdom, exploring the issue of outbound investment security in their own jurisdictions.
Second, cross-border investment flows have long contributed to U.S. economic vitality. This targeted action is focused on national security and scope to address specific risks posed by certain U.S. outbound investment, and it maintains our longstanding commitment to open investment.
Thanks. And back to you, Eduardo, for questions.
MODERATOR: Thank you. We now have time for a few questions. If you’d like to ask a question, please use the “Raise Your Hand” feature on Zoom, and we’ll come to you.
First up, we’ll go to Michael Martina.
Q Hi there. Appreciate you doing this. So, what you described sounds quite similar to the notice for proposed rulemaking earlier in the year. I’m wondering if you can detail any specific or key changes that you made to the original notice you said it was used to inform this Final Rule. So, are any changes from earlier?
And just an effort at clarification. You know, given the exemptions for publicly traded securities, is it the White House’s contention that China has not significantly exploited publicly traded security purchases by U.S. investors to enhance their military or intelligence capabilities? My understanding is that this is perfectly fine — you could trade public securities for Chinese defense companies under this; that’s totally within the rules. Is that correct? Thanks.
SENIOR ADMINISTRATION OFFICIAL: So, maybe I’ll take the first question, Eduardo. And then, [senior administration official], if you want to chime in on the second from a White House perspective.
So, I think while largely consistent with the NPRM in scope and structure, the Final Rule does contain some changes, including with respect to clarity of the rule and thinking forward to compliance.
So, for example, we’ve selected clear technical thresholds for notifiable and prohibited transactions involving AI systems based on the amount of compute power to train an AI system that is open in the NPRM; refine how the rule applies to U.S. persons with investment banking authority and non-U.S. entity, such that it clearly applies only to those who actually exercise authority, for example; and clarifying with respect to compliance and enforcement with the rule.
And so, there are a number of areas where we have honed and focused and sharpened the rule since then, and those are some examples.
SENIOR ADMINISTRATION OFFICIAL: Thanks for the question, Michael. So, I will say we do have existing authorities to address the threat you were discussing. So, for example, Treasury has authorities — the Chinese military industrial complex sanctions regulations that are intended to address U.S. persons from purchasing or selling publicly traded securities and companies that are involved in this sector, and there are others as well.
MODERATOR: Next up, we’ll go to the line of Anita Powell.
Q Thank you so much. As you guys are surely aware, Elon Musk is developing a data center in China to train the algorithm to work on self-driving cars. That’s a lot simpler than I think it really is. But anyway, is this the type of investment that might be restricted under this new rule? Can you just kind of flesh that out for us?
SENIOR ADMINISTRATION OFFICIAL: Sure. Happy to start.
Look, I don’t think we’re going to get into hypothetical scenarios, but just reiterate some of the points that I’ve said.
What the rule is really targeted on is capital and the intangibles that can flow from such American capital to go into the development of PRC-based — not just based, but PRC-based entities that are developing these advanced technologies. And so, that’s sort of the scope of the rule.
And one thing I will mention is that Treasury will provide some guidance and other documents during this interim period before the rule goes online. That’s certainly our intent to help flesh this out. But I think going back to the core tenets of the rule is the best way to answer that.
MODERATOR: Next up, we’ll go to the line of (inaudible).
Q Yeah, hi. Thanks for doing this and for taking my question. Could you talk a little bit more about the engagement with allies and partners in the process of finalizing this rule, specifically which allies specifically you engaged with and whether there are any allies who are going to create similar rules of their own? Thank you.
SENIOR ADMINISTRATION OFFICIAL: [Senior administration official], maybe you could start with engagements with allies that you’ve had, but then maybe, [senior administration official], if we could go to you, you could talk a little bit about the G7 as well. That might be helpful.
SENIOR ADMINISTRATION OFFICIAL: Yeah, sure. Thanks.
So, in terms of — just to sort of put a topper before going to [senior administration official], we’ve had a number of engagements with partners and allies, which have resulted in not only sort of technical exchanges about what we are doing and why we’re doing it, but also various statements. And [senior administration official] will allude to one of them with regard to the G7, but obviously the European Commission and the United Kingdom have made statements in support of these goals. And so, it’s an ongoing process and one that will continue.
SENIOR ADMINISTRATION OFFICIAL: Yeah, and just to add on to what [senior administration official] said, this is something that, you know, even from the White House level we engage with our closest allies and partners on. And [senior administration official] referenced, you know, a line in the G7 leaders’ statement from Apulia early this year that refers to, you know, recognizing that appropriate measures designed to address risk from outbound investments are important to complement our existing toolkit.
So, it’s a conversation that we’re frequently having with our key partners and allies.
MODERATOR: And we have time for one more. We’ll go to the line of Patrick Tucker.
Q Hey. Thanks. Patrick Tucker from Defense One.
So, when you say the rule prohibits people from acquiring equity in a PRC entity that manufactures semiconductors that might be used in autonomous weapons systems or that might be repurposed for AI penetration testing, is that based on an observation that there are U.S. firms that currently have investments in those areas of autonomous weaponry and penetration testing for China? Or are you making the rule now in anticipation that firms might begin to invest in that sort of thing? I’m trying to get a sense of the degree to which U.S. firms have exposure and have willingly made investments in these areas of the Chinese military.
SENIOR ADMINISTRATION OFFICIAL: So let me start, [senior administration official], and then perhaps, [senior administration official], pass it to you.
I think what we are worried about, which I would focus on, is the kinds of scenarios that we have outlined, which is supported by data. And one statistic that comes to mind — and I won’t get it exactly right, so I’d refer you to the Georgetown Center for — I think it’s Technology — that had a statistic that said something to the effect of: For a five-year period, I think between 2016 and 2020 or 2021, 17 percent of investment in Chinese artificial intelligence companies included U.S. participation, and of that, 91 percent was at the venture capital stage.
I think if you think about those sets of facts and scenarios, that’s the kind of situation that when it comes to certain artificial intelligence capable of impacting our national security, from military intelligence, cyber, other related perspectives, that’s what we’re concerned about.
SENIOR ADMINISTRATION OFFICIAL: Yeah, I would just add to that that part of the motivation, as we were looking at some case studies to inform the development of this executive order and the regulation, actually was focused on cybersecurity, where we had a number — we saw a number of VC investments directly into firms working on cybersecurity that ended up on the entity list for working with Chinese military or intelligence services.
MODERATOR: Thanks, everyone, for joining. That’s all the time we have for today. As a reminder, this call was on background, attributable to senior administration officials, and the contents of the call are embargoed until 5:00 p.m. Eastern.
We’ll follow up shortly with embargoed materials as well. but do reach out to us, to the NSC or Treasury, with any questions in the meantime. Thanks so much.
3:00 P.M. EDT
Source: Hong Kong Government special administrative region
​Following is a question by the Hon Shang Hailong and a reply by the Secretary for Innovation, Technology and Industry, Professor Sun Dong, in the Legislative Council today (October 30):
Question:
The Financial Secretary has indicated in the 2024-2025 Budget that the Government will set up a “Digital Corporate Identity” (CorpID) Platform to enable authentication of identity of enterprises using electronic government services or conducting online business transactions in a secure, convenient and efficient manner. The Government’s goal is to roll out the Platform progressively from end‑2026 onwards. However, there are views pointing out that notwithstanding the pressing demand of enterprises for CorpID, the Government’s progress in the relevant work appears to be slightly slow. In this connection, will the Government inform this Council:
(1) given that the Digital Policy Office has been established since July this year, whether the Office can give priority to the work on setting up the CorpID Platform, so that the target launch date of the Platform will be advanced to 2025;
(2) as there are views that the current utilisation rate of personal digital certificate is on the low side, and small and medium enterprises (SMEs) may also be less inclined to adopt CorpID in the future, of the Government’s plan in place to publicise CorpID’s functions, and whether it will consider providing incentives to promote more extensive use of CorpID by SMEs, thereby facilitating smart city development; and
(3) whether it will consider introducing new eligibility criteria for future funding schemes of enterprises, such as accepting applications only from SMEs using CorpID, so as to enhance their participation in CorpID?
Reply：
President,
Promoting the development of smart city and digital economy in Hong Kong is one of the development directions of the Hong Kong Innovation and Technology Development Blueprint. The Digital Policy Office (DPO) is expediting the development of relevant digital infrastructure, including the development of the “Digital Corporate Identity” (CorpID) Platform, to support digital and intelligent transformation.
My reply to the questions raised by the Hon Shang is as follows:
(1) The CorpID Platform provides various functions, including corporate identity authentication, digital signing, pre-filling of forms and storage of digital licences and permits, etc, which facilitate corporations to undergo corporate identity authentication and corporate signature verification in a secure, convenient and efficient manner when using e-government services or conducting online transactions, hence alleviating the current paper-based and complicated procedures.
The CorpID Platform is a brand new and complex large-scale digital infrastructure. The DPO must make adequate preparation and conduct comprehensive testing, including security risk assessment and audit, third party independent testing, as well as cybersecurity testing, etc, to ensure the security and reliability of the Platform. Since the Legislative Council approved of its funding in June this year, we have been pressing ahead with the project at full speed, including the collection of business requirements from stakeholders to ensure that the system design and functionalities meet the needs of different public and commercial application scenarios.
The DPO strives to invite tender within this year and award the contract for design and development of the system in the middle of next year, with a view to launching the CorpID Platform progressively from end-2026. On the premise of ensuring system security and stability, the DPO will explore the feasibility of compressing the timeline.
(2) and (3) The CorpID will offer users a corporate-based digital certificate. The Government has been driving the application of digital certificates. At present, digital certificates are being used in many domain areas including “iAM Smart”, “Government-to-Business” services (such as the Government Electronic Trading Services) and “Business-to-Business” services (such as financial services, secure email transmission), etc. With the growing number of citizens using “iAM Smart” and the launch of the CorpID Platform, the adoption of digital certificates will be further promoted.
The DPO plans to implement the following measures to attract and encourage corporations and government departments to use the CorpID:
in collaboration with the government departments that have business dealings with corporations, roll out several functions through connecting with the CorpID Platform. The DPO will also require all corporate-related e-government services to support the use of the CorpID within 18 months after its launch;
through a Sandbox Programme, the service providers interested in supporting the CorpID can conduct proof-of-concept testing and develop their applications to design application scenarios and solutions that better meet the market demands;
consider integrating the CorpID Platform with other corporate identity standards widely adopted in the industries for interoperability;
facilitate registration by enabling applicants to submit online applications through the CorpID Platform and create their CorpID once verified successfully, so that they can complete the application process while staying indoors; and
publicise and promote the convenience and main functions of the CorpID to the industry through diversified channels, including websites, social media and communications platforms, promotional videos, industry organisation activities, etc.
The above work will help government departments and corporations better understand the functions, advantages and applicability of the CorpID Platform. Various departments can also utilise the CorpID as a technical solution for identity authentication and digital signing in accordance with their own policies, individual project objectives, development needs and technical requirements, etc, to facilitate the implementation of various policy measures in order to enhance efficiency and benefit the public and businesses.
Source: Phillips
Reported third-quarter earnings of $346 million or $0.82 per share; adjusted earnings of $859 million or $2.04 per share
Returned $1.3 billion to shareholders through dividends and share repurchases
Achieved business transformation $1.4 billion run-rate savings target, including $1 per barrel Refining cost reduction
Progressed asset dispositions totaling $2.7 billion toward $3 billion target, including recently executed agreements
HOUSTON–(BUSINESS WIRE)– Phillips 66 (NYSE: PSX), a leading integrated downstream energy provider, announced third-quarter earnings.
“Our employees continue to execute our strategic priorities, deliver strong operating performance and leverage the benefits of our differentiated downstream portfolio,” said Mark Lashier, chairman and CEO of Phillips 66.
“We have achieved our cost reduction and Midstream synergy targets,” said Lashier. “In addition, we have significantly advanced our asset disposition program with recently announced transactions. Our commitment to operational excellence and disciplined capital allocation continues to create long-term shareholder value.”
Financial Results Summary ( in millions of dollars, except as indicated)
3Q 2024
2Q 2024
Earnings
$
346
1,015
Adjusted Earnings 1
859
984
Adjusted EBITDA 1
1,998
2,183
Earnings Per Share
Earnings Per Share – Diluted
0.82
2.38
Adjusted Earnings Per Share – Diluted 1
2.04
2.31
Cash Flow From Operations
1,132
2,097
Cash Flow From Operations, Excluding Working Capital 1
1,513
1,181
Capital Expenditures & Investments 2
358
367
Return of Capital to Shareholders
1,277
1,325
Share repurchases
800
840
Dividends paid
477
485
Cash
1,637
2,444
Debt
19,998
19,960
Debt-to-capital ratio
40
%
40
%
Net debt-to-capital ratio 1
38
%
36
%
1Represents a non-GAAP financial measure. Reconciliations of these non-GAAP financial measures to the most comparable GAAP financial measure are included within this release.
2Excludes acquisitions of $567 million in the third quarter of 2024, and purchases of government obligations of $1.1 billion in third-quarter of 2024.
Segment Financial and Operating Highlights (in millions of dollars, except as indicated)
3Q 2024
2Q 2024
Change
Earnings 1
$
346
1,015
(669
)
Midstream
644
767
(123
)
Chemicals
342
222
120
Refining
(108
)
302
(410
)
Marketing and Specialties
(22
)
415
(437
)
Renewable Fuels
(116
)
(55
)
(61
)
Corporate and Other
(327
)
(340
)
13
Income tax expense
(44
)
(291
)
247
Noncontrolling interests
(23
)
(5
)
(18
)
Adjusted Earnings 1,2
$
859
984
(125
)
Midstream
672
753
(81
)
Chemicals
342
222
120
Refining
(67
)
302
(369
)
Marketing and Specialties
583
415
168
Renewable Fuels
(116
)
(55
)
(61
)
Corporate and Other
(327
)
(340
)
13
Income tax expense
(205
)
(278
)
73
Noncontrolling interests
(23
)
(35
)
12
Adjusted EBITDA 2
$
1,998
2,183
(185
)
Midstream
892
971
(79
)
Chemicals
466
348
118
Refining
188
531
(343
)
Marketing and Specialties
656
484
172
Renewable Fuels
(92
)
(43
)
(49
)
Corporate and Other
(112
)
(108
)
(4
)
Operating Highlights
Midstream NGL Fractionated Volumes (MBD)
728
744
(16
)
Chemicals Global O&P Utilization
98
%
98
%
—
%
Refining
Turnaround Expense ($)
137
100
37
Realized Margin ($/BBL) 2
8.31
10.01
(1.70
)
Crude Capacity Utilization
94
%
98
%
(4
%)
Clean Product Yield
87
%
86
%
1
%
Renewable Fuels Produced (MBD)
44
31
13
1Segment reporting is pre-tax.
2Represents a non-GAAP financial measure. Reconciliations of these non-GAAP financial measures to the most comparable GAAP financial measure are included within this release.
Third-Quarter 2024 Financial Results
Reported earnings were $346 million for the third quarter of 2024 versus $1.0 billion in the second quarter. Third-quarter earnings included a legal accrual of $605 million in the Marketing and Specialties segment, costs related to the planned shutdown of the Los Angeles Refinery of $41 million in the Refining segment, and an impairment of $28 million in the Midstream segment. Second-quarter earnings included a gain on sale of investment of $238 million and an impairment of $224 million, both impacting the Midstream segment. Adjusted earnings for the third quarter were $859 million versus $984 million in the second quarter.
Midstream third-quarter 2024 adjusted pre-tax income decreased compared with the second quarter mainly due to seasonal maintenance costs and lower equity earnings, partially offset by higher export margins.
Chemicals reported pre-tax income increased mainly due to higher margins and lower costs.
Refining adjusted pre-tax loss was a decrease compared to the second quarter, primarily due to a decline in realized margins largely driven by lower market crack spreads.
Marketing and Specialties adjusted pre-tax income increased primarily due to higher margins.
Renewable Fuels reported pre-tax loss increased primarily due to lower realized margins, partially offset by higher volumes.
As of September 30, 2024, the company had $1.6 billion of cash and cash equivalents and $5.3 billion of committed capacity available under credit facilities.
Business Highlights and Strategic Priorities Progress
Distributed $12.5 billion through share repurchases and dividends since July 2022 and on pace to achieve the company’s $13 billion to $15 billion target by year-end.
Achieved $1.4 billion in run-rate business transformation savings, delivering on the company’s target ahead of schedule.
Expanded its Midstream NGL wellhead-to-market business with the acquisition of Pinnacle Midstream and approved a follow-on processing plant expansion in the Midland Basin expected to be completed in mid-year 2025.
Achieved target of over $400 million of run-rate synergies from the successful integration of DCP Midstream.
Received proceeds of $1.3 billion since 2022 toward the company’s $3 billion asset disposition target. In addition, the company recently agreed to sell its 49% interest in a Switzerland-based retail joint venture for $1.24 billion, and its interests in non-core Midstream assets in North Dakota.
Investor Webcast
Members of Phillips 66 executive management will host a webcast at noon ET to provide an update on the company’s strategic initiatives and discuss the company’s third-quarter performance. To access the webcast and view related presentation materials, go to phillips66.com/investors and click on “Events & Presentations.” For detailed supplemental information, go to phillips66.com/supplemental.
About Phillips 66
Phillips 66 (NYSE: PSX) is a leading integrated downstream energy provider that manufactures, transports and markets products that drive the global economy. The company’s portfolio includes Midstream, Chemicals, Refining, Marketing and Specialties, and Renewable Fuels businesses. Headquartered in Houston, Phillips 66 has employees around the globe who are committed to safely and reliably providing energy and improving lives while pursuing a lower-carbon future. For more information, visit phillips66.com or follow @Phillips66Co on LinkedIn.Use of Non-GAAP Financial Information —This news release includes the terms “adjusted earnings,” “adjusted pre-tax income (loss),” “adjusted EBITDA,” “adjusted earnings per share,” “refining realized margin per barrel,” “cash from operations, excluding working capital,” and “net debt-to-capital ratio.” These are non-GAAP financial measures that are included to help facilitate comparisons of operating performance across periods and to help facilitate comparisons with other companies in our industry. Where applicable, these measures exclude items that do not reflect the core operating results of our businesses in the current period or other adjustments to reflect how management analyzes results. Reconciliations of these non-GAAP financial measures to the most comparable GAAP financial measure are included within this release.
References in the release to earnings refer to net income attributable to Phillips 66. References to run-rate business transformation savings include cost savings and other benefits that will be captured in the sales and other operating revenues impacting gross margin; purchased crude oil and products costs impacting gross margin; operating expenses; selling, general and administrative expenses; and equity in earnings of affiliates lines on our consolidated statement of income when realized. Run-rate savings include run-rate sustaining capital savings. Run-rate sustaining capital savings include savings that will be captured in the capital expenditures and investments on our consolidated statement of cash flows when realized.
Basis of Presentation — Effective April 1, 2024, we changed the internal financial information reviewed by our chief executive officer to evaluate performance and allocate resources to our operating segments. This included changes in the composition of our operating segments, as well as measurement changes for certain activities between our operating segments. The primary effects of this realignment included establishment of a Renewable Fuels operating segment, which includes renewable fuels activities and assets historically reported in our Refining, Marketing and Specialties (M&S), and Midstream segments; change in method of allocating results for certain Gulf Coast distillate export activities from our M&S segment to our Refining segment; reclassification of certain crude oil and international clean products trading activities between our M&S segment and our Refining segment; and change in reporting of our 16% investment in NOVONIX from our Midstream segment to Corporate and Other. Accordingly, prior period results have been recast for comparability.
In the third quarter of 2024, we began presenting the line item “Capital expenditures and investments” on our consolidated statement of cash flows exclusive of acquisitions, net of cash acquired. Accordingly, prior period information has been reclassified for comparability.
Cautionary Statement for the Purposes of the “Safe Harbor” Provisions of the Private Securities Litigation Reform Act of 1995 —This news release contains forward-looking statements within the meaning of the federal securities laws relating to Phillips 66’s operations, strategy and performance. Words such as “anticipated,” “estimated,” “expected,” “planned,” “scheduled,” “targeted,” “believe,” “continue,” “intend,” “will,” “would,” “objective,” “goal,” “project,” “efforts,” “strategies” and similar expressions that convey the prospective nature of events or outcomes generally indicate forward-looking statements. However, the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements included in this news release are based on management’s expectations, estimates and projections as of the date they are made. These statements are not guarantees of future events or performance, and you should not unduly rely on them as they involve certain risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecast in such forward-looking statements. Factors that could cause actual results or events to differ materially from those described in the forward-looking statements include: changes in governmental policies or laws that relate to our operations, including regulations that seek to limit or restrict refining, marketing and midstream operations or regulate profits, pricing, or taxation of our products or feedstocks, or other regulations that restrict feedstock imports or product exports; our ability to timely obtain or maintain permits necessary for projects; fluctuations in NGL, crude oil, refined petroleum, renewable fuels and natural gas prices, and refining, marketing and petrochemical margins; the effects of any widespread public health crisis and its negative impact on commercial activity and demand for refined petroleum or renewable fuels products; changes to worldwide government policies relating to renewable fuels and greenhouse gas emissions that adversely affect programs including the renewable fuel standards program, low carbon fuel standards and tax credits for renewable fuels; potential liability from pending or future litigation; liability for remedial actions, including removal and reclamation obligations under existing or future environmental regulations; unexpected changes in costs for constructing, modifying or operating our facilities; our ability to successfully complete, or any material delay in the completion of, any asset disposition, acquisition, shutdown or conversion that we have announced or may pursue, including receipt of any necessary regulatory approvals or permits related thereto; unexpected difficulties in manufacturing, refining or transporting our products; the level and success of drilling and production volumes around our midstream assets; risks and uncertainties with respect to the actions of actual or potential competitive suppliers and transporters of refined petroleum products, renewable fuels or specialty products; lack of, or disruptions in, adequate and reliable transportation for our products; failure to complete construction of capital projects on time or within budget; our ability to comply with governmental regulations or make capital expenditures to maintain compliance with laws; limited access to capital or significantly higher cost of capital related to illiquidity or uncertainty in the domestic or international financial markets, which may also impact our ability to repurchase shares and declare and pay dividends; potential disruption of our operations due to accidents, weather events, including as a result of climate change, acts of terrorism or cyberattacks; general domestic and international economic and political developments, including armed hostilities (such as the Russia-Ukraine war), expropriation of assets, and other diplomatic developments; international monetary conditions and exchange controls; changes in estimates or projections used to assess fair value of intangible assets, goodwill and property and equipment and/or strategic decisions with respect to our asset portfolio that cause impairment charges; investments required, or reduced demand for products, as a result of environmental rules and regulations; changes in tax, environmental and other laws and regulations (including alternative energy mandates); political and societal concerns about climate change that could result in changes to our business or increase expenditures, including litigation-related expenses; the operation, financing and distribution decisions of equity affiliates we do not control; and other economic, business, competitive and/or regulatory factors affecting Phillips 66’s businesses generally as set forth in our filings with the Securities and Exchange Commission. Phillips 66 is under no obligation (and expressly disclaims any such obligation) to update or alter its forward-looking statements, whether as a result of new information, future events or otherwise.
Earnings
Millions of Dollars
2024
2023
3Q
2Q
Sep YTD
3Q
Sep YTD
Midstream
$
644
767
1,965
724
2,060
Chemicals
342
222
769
104
494
Refining
(108
)
302
410
1,712
4,481
Marketing and Specialties
(22
)
415
759
605
1,501
Renewable Fuels
(116
)
(55
)
(226
)
22
164
Corporate and Other
(327
)
(340
)
(989
)
(354
)
(992
)
Pre-Tax Income
413
1,311
2,688
2,813
7,708
Less: Income tax expense
44
291
538
670
1,754
Less: Noncontrolling interests
23
5
41
46
199
Phillips 66
$
346
1,015
2,109
2,097
5,755
Adjusted Earnings
Millions of Dollars
2024
2023
3Q
2Q
Sep YTD
3Q
Sep YTD
Midstream
$
672
753
2,038
581
1,915
Chemicals
342
222
769
104
494
Refining
(67
)
302
548
1,742
4,525
Marketing and Specialties
583
415
1,305
605
1,501
Renewable Fuels
(116
)
(55
)
(226
)
22
164
Corporate and Other
(327
)
(340
)
(989
)
(303
)
(812
)
Pre-Tax Income
1,087
1,297
3,445
2,751
7,787
Less: Income tax expense
205
278
709
660
1,768
Less: Noncontrolling interests
23
35
71
21
218
Phillips 66
$
859
984
2,665
2,070
5,801
Millions of Dollars
Except as Indicated
2024
2023
3Q
2Q
Sep YTD
3Q
Sep YTD
Reconciliation of Consolidated Earnings to Adjusted Earnings
Consolidated Earnings
$
346
1,015
2,109
2,097
5,755
Pre-tax adjustments:
Impairments 1
28
224
415
—
—
Net gain on asset dispositions
—
(238
)
(238
)
(101
)
(123
)
Change in inventory method for acquired business
—
—
—
(46
)
(46
)
Los Angeles Refinery shutdown-related costs 2
41
—
41
—
—
Legal accrual 3
605
—
605
30
30
Legal settlement
—
—
(66
)
—
—
Business transformation restructuring costs
—
—
—
51
127
Loss on early redemption of DCP debt
—
—
—
—
53
DCP integration restructuring costs
—
—
—
4
38
Tax impact of adjustments 4
(161
)
13
(171
)
10
(14
)
Noncontrolling interests
—
(30
)
(30
)
25
(19
)
Adjusted earnings
$
859
984
2,665
2,070
5,801
Earnings per share of common stock ( dollars )
$
0.82
2.38
4.94
4.69
12.61
Adjusted earnings per share of common stock ( dollars ) 5
$
2.04
2.31
6.25
4.63
12.71
Reconciliation of Segment Pre-Tax Income (Loss) to Adjusted Pre-Tax Income (Loss)
Midstream Pre-Tax Income
$
644
767
1,965
724
2,060
Pre-tax adjustments:
Impairments 1
28
224
311
—
—
Net gain on asset disposition
—
(238
)
(238
)
(101
)
(137
)
Change in inventory method for acquired business
—
—
—
(46
)
(46
)
DCP integration restructuring costs
—
—
—
4
38
Adjusted pre-tax income
$
672
753
2,038
581
1,915
Chemicals Pre-Tax Income
$
342
222
769
104
494
Pre-tax adjustments:
None
—
—
—
—
—
Adjusted pre-tax income
$
342
222
769
104
494
Refining Pre-Tax Income (Loss)
$
(108
)
302
410
1,712
4,481
Pre-tax adjustments:
Impairments 1
—
—
104
—
—
Los Angeles Refinery shutdown-related costs 2
41
—
41
—
—
Net loss on asset disposition
—
—
—
—
14
Legal accrual 3
—
—
—
30
30
Legal settlement
—
—
(7
)
—
—
Adjusted pre-tax income (loss)
$
(67
)
302
548
1,742
4,525
Marketing and Specialties Pre-Tax Income (Loss)
$
(22
)
415
759
605
1,501
Pre-tax adjustments:
Legal accrual 3
605
—
605
—
—
Legal settlement
—
—
(59
)
—
—
Adjusted pre-tax income
$
583
415
1,305
605
1,501
Renewable Fuels Pre-Tax Income (Loss)
$
(116
)
(55
)
(226
)
22
164
Pre-tax adjustments:
None
—
—
—
—
—
Adjusted pre-tax income (loss)
$
(116
)
(55
)
(226
)
22
164
Corporate and Other Pre-Tax Loss
$
(327
)
(340
)
(989
)
(354
)
(992
)
Pre-tax adjustments:
Business transformation restructuring costs
—
—
—
51
127
Loss on early redemption of DCP debt
—
—
—
—
53
Adjusted pre-tax loss
$
(327
)
(340
)
(989
)
(303
)
(812
)
1Impairments primarily related to certain gathering and processing assets in the Midstream segment, as well as certain crude oil processing and logistics assets in California, reported in the Refining segment.
2Shutdown-related costs recorded in the Refining segment include pre-tax charges for severance costs.
3Legal accrual primarily related to ongoing litigation.
4We generally tax effect taxable U.S.-based special items using a combined federal and state statutory income tax rate of approximately 24%. Taxable special items attributable to foreign locations likewise use a local statutory income tax rate. Nontaxable events reflect zero income tax. These events include, but are not limited to, most goodwill impairments, transactions legislatively exempt from income tax, transactions related to entities for which we have made an assertion that the undistributed earnings are permanently reinvested, or transactions occurring in jurisdictions with a valuation allowance.
5YTD 2024, Q3 2024, Q3 2023 are based on adjusted weighted-average diluted shares of 426,301 thousand, 419,827 thousand, and 447,255 thousand, respectively. Other periods are based on the same weighted-average diluted shares outstanding as that used in the GAAP diluted earnings per share calculation. Income allocated to participating securities, if applicable, in the adjusted earnings per share calculation is the same as that used in the GAAP diluted earnings per share calculation.
Millions of Dollars
Except as Indicated
2024
3Q
2Q
Reconciliation of Consolidated Net Income to Adjusted EBITDA
Net Income
$
369
1,020
Plus:
Income tax expense
44
291
Net interest expense
191
200
Depreciation and amortization
543
497
Phillips 66 EBITDA
$
1,147
2,008
Special Item Adjustments (pre-tax):
Impairments
28
224
Net gain on asset disposition
—
(238
)
Los Angeles Refinery shutdown-related costs
41
—
Legal accrual
605
—
Legal settlement
—
—
Total Special Item Adjustments (pre-tax)
674
(14
)
Change in Fair Value of NOVONIX Investment
—
7
Phillips 66 EBITDA, Adjusted for Special Items and Change in Fair Value of NOVONIX Investment
$
1,821
2,001
Other Adjustments (pre-tax):
Proportional share of selected equity affiliates income taxes
24
26
Proportional share of selected equity affiliates net interest
12
19
Proportional share of selected equity affiliates depreciation and amortization
188
195
Adjusted EBITDA attributable to noncontrolling interests
(47
)
(58
)
Phillips 66 Adjusted EBITDA
$
1,998
2,183
Reconciliation of Segment Income before Income Taxes to Adjusted EBITDA
Midstream Income before income taxes
$
644
767
Plus:
Depreciation and amortization
233
224
Midstream EBITDA
$
877
991
Special Item Adjustments (pre-tax):
Net gain on asset disposition
—
(238
)
Impairments
28
224
Midstream EBITDA, Adjusted for Special Items
$
905
977
Other Adjustments (pre-tax):
Proportional share of selected equity affiliates income taxes
5
5
Proportional share of selected equity affiliates net interest
3
10
Proportional share of selected equity affiliates depreciation and amortization
26
37
Adjusted EBITDA attributable to noncontrolling interests
(47
)
(58
)
Midstream Adjusted EBITDA
$
892
971
Chemicals Income before income taxes
$
342
222
Plus:
None
—
—
Chemicals EBITDA
$
342
222
Special Item Adjustments (pre-tax):
None
—
—
Chemicals EBITDA, Adjusted for Special Items
$
342
222
Other Adjustments (pre-tax):
Proportional share of selected equity affiliates income taxes
13
15
Proportional share of selected equity affiliates net interest
(2
)
—
Proportional share of selected equity affiliates depreciation and amortization
113
111
Chemicals Adjusted EBITDA
$
466
348
Refining Income (loss) before income taxes
$
(108
)
302
Plus:
Depreciation and amortization
230
204
Refining EBITDA
$
122
506
Special Item Adjustments (pre-tax):
Los Angeles Refinery shutdown-related costs
41
—
Refining EBITDA, Adjusted for Special Items
$
163
506
Other Adjustments (pre-tax):
Proportional share of selected equity affiliates income taxes
(1
)
1
Proportional share of selected equity affiliates net interest
(1
)
(2
)
Proportional share of selected equity affiliates depreciation and amortization
27
26
Refining Adjusted EBITDA
$
188
531
Marketing and Specialties Income (loss) before income taxes
$
(22
)
415
Plus:
Depreciation and amortization
32
32
Marketing and Specialties EBITDA
$
10
447
Special Item Adjustments (pre-tax):
Legal accrual
605
—
Marketing and Specialties EBITDA, Adjusted for Special Items
$
615
447
Other Adjustments (pre-tax):
Proportional share of selected equity affiliates income taxes
7
5
Proportional share of selected equity affiliates net interest
12
11
Proportional share of selected equity affiliates depreciation and amortization
22
21
Marketing and Specialties Adjusted EBITDA
$
656
484
Renewable Fuels Loss before income taxes
$
(116
)
(55
)
Plus:
Depreciation and amortization
24
12
Renewable Fuels EBITDA
$
(92
)
(43
)
Special Item Adjustments (pre-tax):
None
—
—
Renewable Fuels EBITDA, Adjusted for Special Items
$
(92
)
(43
)
Corporate and Other Loss before income taxes
$
(327
)
(340
)
Plus:
Net interest expense
191
200
Depreciation and amortization
24
25
Corporate and Other EBITDA
$
(112
)
(115
)
Special Item Adjustments (pre-tax):
None
—
—
Total Special Item Adjustments (pre-tax)
—
—
Change in Fair Value of NOVONIX Investment
—
7
Corporate EBITDA, Adjusted for Special Items and Change in Fair Value of NOVONIX Investment
$
(112
)
(108
)
Millions of Dollars
Except as Indicated
September 30, 2024
Debt-to-Capital Ratio
Total Debt
$
19,998
Total Equity
29,784
Debt-to-Capital Ratio
40
%
Total Cash
1,637
Net Debt-to-Capital Ratio
38
%
Millions of Dollars
September 30, 2024
Reconciliation of Net Cash Used in Operating Activities to Operating Cash Flow, Excluding Working Capital
Net Cash Used in Operating Activities
$
1,132
Less: Net Working Capital Changes
(381
)
Operating Cash Flow, Excluding Working Capital
$
1,513
Millions of Dollars
Except as Indicated
2024
3Q
2Q
Reconciliation of Refining Income (Loss) Before Income Taxes to Realized Refining Margins
Income (loss) before income taxes
$
(108
)
302
Plus:
Taxes other than income taxes
100
74
Depreciation, amortization and impairments
230
203
Selling, general and administrative expenses
60
51
Operating expenses
922
884
Equity in earnings of affiliates
12
(33
)
Other segment expense, net
(4
)
(1
)
Proportional share of refining gross margins contributed by equity affiliates
193
260
Special items:
None
—
—
Realized refining margins
$
1,405
1,740
Total processed inputs ( thousands of barrels )
145,440
151,296
Adjusted total processed inputs ( thousands of barrels )*
168,951
174,107
Income (loss) before income taxes ( dollars per barrel )**
$
(0.74
)
2.00
Realized refining margins ( dollars per barrel )***
$
8.31
10.01
*Adjusted total processed inputs include our proportional share of processed inputs of an equity affiliate.
**Income before income taxes divided by total processed inputs.
***Realized refining margins per barrel, as presented, are calculated using the underlying realized refining margin amounts, in dollars, divided by adjusted total processed inputs, in barrels. As such, recalculated per barrel amounts using the rounded margins and barrels presented may differ from the presented per barrel amounts.
Source: Phillips 66
Source: GlobeNewswire (MIL-OSI)
This news release constitutes a “designated news release” for the purposes of the Company’s prospectus supplement dated March 8, 2024, to its short form base shelf prospectus dated November 10, 2023.
TORONTO, Ontario and BROSSARD, Québec, Oct. 29, 2024 (GLOBE NEWSWIRE) — Bitfarms Ltd. (NASDAQ/TSX: BITF) (“Bitfarms” or the “Company”), a global leader in vertically integrated Bitcoin data center operations, today announced that it has nominated Andrew J. Chang for election to its Board of Directors (the “Board”) at the Special Meeting of shareholders to be held on November 20, 2024 at 4:00p.m. Eastern Time (the “Special Meeting”).
Bitfarms Special Meeting of Shareholders
Pursuant to the Settlement Agreement between the Company and Riot Platforms, Inc. dated September 23, 2024, at the Special Meeting, shareholders will be asked to approve an expansion of the Board from five members to six members, to elect an independent director nominated by the Board to serve as the sixth member of the Board, to ratify the Company’s shareholder rights plan adopted on July 24, 2024, and to conduct such other business as may properly come before the Special Meeting.
Shareholders and guests can access the virtual meeting using this link. Additional information regarding the Special Meeting, including how to vote, is available via the proxy materials disseminated to shareholders by Bitfarms and as filed on SEDAR+ at http://www.sedarplus.ca and on EDGAR at http://www.sec.gov/EDGAR.
Nomination of Andrew J. Chang to Bitfarms Board of Directors
Bitfarms’ Governance and Nominating Committee conducted a thorough director search process and held interviews with several qualified candidates, and, along with the Board, unanimously supports the nomination of Andrew J. Chang for election at the Special Meeting.
Mr. Chang is a 20-year veteran of the technology industry with experience as an investor, operating executive, entrepreneur, and advisor. He was a founding partner of Liberty City Ventures, a leading venture capital fund. Mr. Chang also served as Chief Operating Officer of Paxos, a blockchain infrastructure platform that has powered solutions for PayPal, Stripe, and more. At Paxos, he helped grow the team from 8 to 190 employees and launched the first regulated blockchain focused trust company and the first regulated stablecoin in the U.S. During that time, Paxos raised $500M in capital and its most recent valuation is $2.4 billion.
Before joining Paxos, Andrew served as a Lead Strategic Partner Development Manager at Google, working in business development for display ad products. Prior to that, he was the Chief Operating Officer of ConditionOne and an associate at TechStars (New York). He also has experience managing innovation in research, analytics and digital media at WPP PLC-owned Kantar Video and at 360i, a digital marketing agency.
Andrew earned his MBA from New York University’s Leonard N. Stern School of Business, where he was President of the student body, and a BS from Boston College.
Brian Howlett, Independent Chairman of the Board, said, “The Bitfarms Board is committed to strong corporate governance and recognizes that a diverse set of skills is required to effectively oversee the execution of the Company’s strategic initiatives. Andrew is an impressive technology industry veteran whose experience and knowledge is highly complementary to that of our current Board. We believe he will be instrumental as we execute our aggressive growth plan, and we look forward to leveraging his expertise to maximize value for Bitfarms shareholders.”
About Bitfarms Ltd.
Founded in 2017, Bitfarms is a global vertically integrated Bitcoin data center company that contributes its computational power to one or more mining pools from which it receives payment in Bitcoin. Bitfarms develops, owns, and operates vertically integrated data centers with in-house management and company-owned electrical engineering, installation service, and multiple onsite technical repair centers. The Company’s proprietary data analytics system delivers best-in-class operational performance and uptime.
Bitfarms currently has 12 operating Bitcoin data centers and two under development situated in four countries: Canada, the United States, Paraguay, and Argentina. Powered predominantly by environmentally friendly hydro-electric and long-term power contracts, Bitfarms is committed to using sustainable and often underutilized energy infrastructure.
To learn more about Bitfarms’ events, developments, and online communities:
www.bitfarms.com
https://www.facebook.com/bitfarms/
https://twitter.com/Bitfarms_io
https://www.instagram.com/bitfarms/
https://www.linkedin.com/company/bitfarms/
Forward-Looking Statements
This news release contains certain “forward-looking information” and “forward-looking statements” (collectively, “forward-looking information”) that are based on expectations, estimates and projections as at the date of this news release and are covered by safe harbors under Canadian and United States securities laws. The statements and information in this release regarding holding the Special Meeting and the timing thereof, and the matters to be put before the Company’s shareholders at the Special Meeting are forward-looking information.
Any statements that involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as “expects”, or “does not expect”, “is expected”, “anticipates” or “does not anticipate”, “plans”, “budget”, “scheduled”, “forecasts”, “estimates”, “prospects”, “believes” or “intends” or variations of such words and phrases or stating that certain actions, events or results “may” or “could”, “would”, “might” or “will” be taken to occur or be achieved) are not statements of historical fact and may be forward-looking information. This forward-looking information is based on assumptions and estimates of management of Bitfarms at the time they were made, and involves known and unknown risks, uncertainties and other factors which may cause the actual results, performance, or achievements of Bitfarms to be materially different from any future results, performance or achievements expressed or implied by such forward-looking information. Such factors include, among others, risks relating to: the construction and operation of new facilities may not occur as currently planned, or at all; expansion of existing facilities may not materialize as currently anticipated, or at all; new miners may not perform up to expectations; revenue may not increase as currently anticipated, or at all; the ongoing ability to successfully mine Bitcoin is not assured; failure of the equipment upgrades to be installed and operated as planned; the availability of additional power may not occur as currently planned, or at all; expansion may not materialize as currently anticipated, or at all; and the power purchase agreements and economics thereof may not be as advantageous as expected. For further information concerning these and other risks and uncertainties, refer to Bitfarms’ filings on www.sedarplus.ca (which are also available on the website of the U.S. Securities and Exchange Commission at www.sec.gov), including the MD&A for the year-ended December 31, 2023, filed on March 7, 2024 and the MD&A for the three and six months ended June 30, 2024 filed on August 8, 2024. Although Bitfarms has attempted to identify important factors that could cause actual results to differ materially from those expressed in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended, including factors that are currently unknown to or deemed immaterial by Bitfarms. There can be no assurance that such statements will prove to be accurate as actual results, and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on any forward-looking information. Bitfarms undertakes no obligation to revise or update any forward-looking information other than as required by law. Trading in the securities of the Company should be considered highly speculative. No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein. Neither the Toronto Stock Exchange, Nasdaq, or any other securities exchange or regulatory authority accepts responsibility for the adequacy or accuracy of this release.
Investor Relations Contact:
Bitfarms
Tracy Krumme
SVP, Head of IR & Corp. Comms.
+1 786-671-5638
tkrumme@bitfarms.com
Media Contact:
Québec: Tact
Louis-Martin Leclerc
+1 418-693-2425
lmleclerc@tactconseil.ca
Source: GlobeNewswire (MIL-OSI)
BELLEVUE, Wash., Oct. 29, 2024 (GLOBE NEWSWIRE) — SeekOut, the leading Talent Intelligence Platform, today shared details of its upcoming CHRO Council Workshop Series, a virtual event series designed to equip HR and talent leaders with practical strategies to succeed in today’s competitive business environment. The five-part webinar series, created in partnership with SeekOut’s recently established CHRO Council, will deliver expert guidance to help companies build and execute talent strategies that promote workforce agility and support organizational longevity.
Drawing on the expertise of the CHRO Council members, the series will provide a hands-on learning experience, combining 30 minutes of guided instruction using a customized worksheet with a 30-minute interactive Q&A session in each session. Participants will have the opportunity to engage directly with industry experts who bring decades of experience from leadership roles in prominent companies. At the conclusion of the series, attendees will receive a comprehensive digital workbook compiling all five worksheets and key takeaways from each session, serving as a valuable resource for ongoing talent strategy development.
The SeekOut CHRO Council Workshop Series schedule includes:
“Given the rapid changes in the talent landscape, it’s crucial for HR professionals to adapt and evolve their strategies,” said Bryce Winkelman, Chief Business and Revenue Officer at SeekOut. “Our CHRO Council Workshop Series is designed to provide actionable advice and insights that HR and talent leaders can immediately apply to today’s challenges and help their organizations prepare for the future.”
Registration for SeekOut’s CHRO Council Workshop Series is open now, with options to sign up for the full series or individual webinars. Each session is tailored to equip participants with the tools and knowledge needed to lead their organizations through transformation, elevate performance and thrive in a dynamic market.
To learn more and register, visit https://info.seekout.com/CHRO-council-workshop-series.html.
About SeekOut
SeekOut’s Talent Intelligence Platform helps thousands of organizations of all sizes and industries hire, grow and retain great talent. Founded in 2017 by a team of enterprise software veterans, SeekOut is backed by leading investors at Tiger Global Management, Madrona Venture Group, Mayfield, and Founders Circle Capital. SeekOut has two primary product offerings – Recruit, for identifying new talent, and Grow, for maximizing a company’s existing internal talent. Leading companies, including Peraton, Experian and Northrup Grumman, rely on SeekOut to unify their talent acquisition, talent management, and talent analytics in a single people-first platform. Learn more at www.seekout.com.
Source: Northern Ireland City of Armagh
Improvements will enhance pedestrian accessibility creating a safer environment for everyone.
A new road layout will be introduced to Downshire Bridge (The Cut) Banbridge as the £6m public realm scheme nears completion following a major investment. Changes to enhance pedestrian accessibility and the movement of traffic around the Downshire Bridge will take effect from 7pm on Sunday 17th November 2024.
Road resurfacing and new layout works will take place from 7pm on Saturday 16th November through to 7pm on Sunday 17th November. Overnight weekend works will be carried out to minimise disruption to the busy town centre.
The key changes coming into effect from Sunday 17th November 2024 will be:
Lord Mayor of Armagh City, Banbridge and Craigavon Borough, Councillor Sarah Duffy said:
“As public realm works near completion it is great to see the positive impact this significant investment has had to Banbridge Town Centre. With new and improved pavements and footpaths, feature lighting and street furniture this project has not only created a high-quality and better-connected streetscape, it has strongly focused on improving safety and accessibility for all users to create a safer environment for everyone.
“The remaining works will introduce changes surrounding the Downshire bridge with priority for pedestrians, as well as improving the junctions for vehicles and traffic flow across the bridge. I understand it will take time to adjust to the new layout and I encourage everyone to embrace the changes recommended to improve this area and make it safer for everyone.”
During the initial design stages of the public realm scheme, extensive consultations were undertaken with a range of user groups including the Chamber of Commerce, Section 75 groups, such as RNIB, Guide Dogs UK and the Older People’s Alliance. The Department for Infrastructure advised that the junction at The Cut should be improved to adhere to new guidance.
An audit was carried out by Inclusive Mobility and Transport Advisory Committee (IMTAC), which identified the junction as a particularly unfriendly environment for pedestrians.
Michael Larimor, from IMTAC, who completed the audit report on Banbridge commented:
“In our original report about the area around the bridge we described the layout as an unfriendly environment for most pedestrians but completely inaccessible for many disabled people. The new road layout goes a long way to addressing these issues.
“The simple change of road priority requiring users of the bridge slip roads to give way immediately makes pedestrians crossing at junctions safer. This coupled with two zebras providing pedestrians with priority crossing across Scarva Street and Rathfriland Street changes the nature of the bridge area completely, giving a much greater priority to pedestrians in the area. The improved sight lines and the reinstatement of kerbs, coupled with the changes in road priority makes the entire area safer and more accessible for disabled people in particular.”
New road layout signage will be in operation to make drivers and pedestrians aware of the changes and to remind them to approach with caution until users become familiar with the new road layout.
To find out more information about the public realm scheme and to view a video animation of the new road layout and changes coming into effect on Sunday 17th November 2024, please visit www.armaghbanbridgecraigavon.gov.uk/banbridgepublicrealm
Source: United States of America – Department of State (video statements)
Secretary of State Antony J. Blinken delivers remarks with Secretary of Commerce Gina Raimondo on the economic benefits of U.S. travel and tourism at the Department of State, on October 29, 2024.
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Under the leadership of the President and Secretary of State, the U.S. Department of State leads America’s foreign policy through diplomacy, advocacy, and assistance by advancing the interests of the American people, their safety and economic prosperity. On behalf of the American people we promote and demonstrate democratic values and advance a free, peaceful, and prosperous world.
The Secretary of State, appointed by the President with the advice and consent of the Senate, is the President’s chief foreign affairs adviser. The Secretary carries out the President’s foreign policies through the State Department, which includes the Foreign Service, Civil Service and U.S. Agency for International Development.
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Source: United States Navy
Kansas City Navy Week brings Sailors from across the fleet to the area to emphasize the importance of the Navy to Kansas City, the states of Missouri and Kansas, and the nation.
More than 50 Sailors will participate in education and community outreach events throughout the city.
Participating Navy organizations include Navy Band Great Lakes, USS Constitution, Naval Meteorology and Oceanography Command, Navy Talent Acquisition Group Mid-America, Maritime Expeditionary Security Squadron Two, Navy History and Heritage Command, The Strike Group, Fleet Outreach Ambassador Team (FLOAT), Bureau of Medicine and Surgery, Office of Small Business Programs, Office of Civilian Human Resources, Naval Reserve Center Kansas City, and Independence-class littoral combat ship USS Kansas City (LCS 22).
The Navy’s senior executive is Rear Adm. Larry Watkins, Vice Commander, U.S. Naval Forces Europe/Vice Commander, U.S. Naval Forces Africa. He commissioned through the University of Missouri-Columbia Naval Reserve Officer Training Corps program in December 1990, graduating with an economics degree. He is also a 2012 graduate of Webster University with a Master of Business Administration and completed Joint Professional Military Education curriculum at Army Command & General Staff College. During Kansas City Navy Week, he is participating in community engagements, and meeting with local organizations, higher education, local business, civic, and government leaders.
Navy Weeks are a series of outreach events coordinated by the Navy Office of Community Outreach designed to give Americans an opportunity to learn about the Navy, its people, and its importance to national security and prosperity. Since 2005, the Navy Week program has served as the Navy’s flagship outreach effort into areas of the country without a significant Navy presence, providing the public a firsthand look at why the Navy matters to cities like Kansas City.
“Sailors are the reason America’s Navy is the most powerful in the world,” said NAVCO’s director, Cmdr. Julie Holland. “We are thrilled to bring your Navy Warfighters to Kansas City. At Navy Weeks, Americans will connect with Sailors who have strong character, competence, and dedication to the mission, and who continue a nearly 250-year tradition of decisive power from seabed to cyberspace.”
Throughout the week, Sailors are participating in various community events across the area, including ceremonial celebrations at Harry S. Truman Museum, WWI Museum, and Negro League Baseball Museum; volunteering with the Kansas City Urban Youth Academy, Habitat for Humanity Kansas City, Bishop Sullivan’s Center, Happy Bottoms, and Thelma’s Kitchen; and engaging with students across multiple high schools. Residents will also enjoy free live music by Navy Band Great Lakes at venues throughout the week.
Kansas City Navy Week is the last of 15 Navy Weeks in 2024, which brings a variety of assets, equipment, and personnel to a single city for a weeklong series of engagements designed to bring America’s Navy closer to the people it protects. Each year, the program reaches more than 130 million people — about half the U.S. population.
Media organizations wishing to cover Kansas City Navy Week events should contact Ensign Lamar Badger at (901) 229-5709 or erick.l.badger.mil@us.navy.mil.
Source: GlobeNewswire (MIL-OSI)
San Diego, Calif., Oct. 29, 2024 (GLOBE NEWSWIRE) — California BanCorp (“us,” “we,” “our,” or the “Company”) (NASDAQ: BCAL), the holding company for California Bank of Commerce, N.A. (the “Bank”) announces its consolidated financial results for the third quarter of 2024.
The Company reported net loss of $16.5 million for the third quarter of 2024, or $0.59 diluted loss per share, compared to net income of $190 thousand, or $0.01 per diluted share in the second quarter of 2024, and $6.6 million, or $0.35 per diluted share in the third quarter of 2023.
“As we previously reported, the merger of Southern California Bancorp and California BanCorp closed on July 31, 2024, and I am pleased to announce we executed a successful core conversion on September 20, 2024,” said David Rainer, Executive Chairman of the Company and the Bank. “We are excited to have created a commercial banking franchise with a footprint that covers the best banking markets in both Northern and Southern California and that is based on our trusted brands and reputations. Our scalable business model is expected to bring cost savings and greater efficiency to our operations, while allowing us to offer complementary products and services to all our clients. We will continue to build on our history of service to our communities and remain dedicated to increasing shareholder value.”
“With the close of the merger and successful conversion behind us, we are now focused on the prudent growth of our franchise by offering the highest quality and level of customer service available to middle-market businesses in both Northern and Southern California,” said Steven Shelton, CEO of the Company and the Bank. “We are excited about our future and look forward to the traction we expect our combined banking franchise will realize in the coming quarters.”
Third Quarter 2024 Highlights
| ● | Merger closed on July 31, 2024, whereby California BanCorp (“CALB”) merged with and into Southern California Bancorp and California Bank of Commerce merged with and into Bank of Southern California, N.A. CALB had total loans of $1.43 billion, total assets of $1.91 billion, and total deposits of $1.64 billion. The combined holding company has assumed the California BanCorp name, and the combined bank has assumed the California Bank of Commerce, N.A. name. The merger created a bank holding company with approximately $4.25 billion in assets and 14 branches across California, with approximately 300 employees serving our communities. | |
| ● | Total aggregate consideration paid was approximately $216.6 million and resulted in approximately $74.7 million of preliminary goodwill subject to adjustment in accordance with ASC 805. | |
| ● | Net loss of $16.5 million or $0.59 diluted loss per share for the third quarter reflects the after-tax one-time initial provision for credit losses (“day one provision”) related to non-purchased credit deteriorated (“non-PCD”) loans and unfunded loan commitments of $15.0 million and merger related expenses of $10.6 million; adjusted net income (non-GAAP1) was $9.1 million or $0.33 per share for the third quarter. | |
| ● | Net interest margin of 4.43%, compared with 3.94% in the prior quarter; average total loan yield of 6.79% compared with 6.21% in the prior quarter. | |
| ● | Provision for credit losses of $23.0 million for the third quarter, of which $21.3 million was due to the day one provision for credit losses on non-PCD loans and unfunded loan commitments. |
1 Reconciliations of non–U.S. generally accepted accounting principles (“GAAP”) measures are set forth at the end of this press release.
| ● | Return on average assets of (1.82)%, compared with 0.03% in the prior quarter. | |
| ● | Return on average common equity of (15.28)%, compared with 0.26% in the prior quarter. | |
| ● | Efficiency ratio (non-GAAP1) of 98.9% compared with 85.7% in the prior quarter; excluding merger related expenses the efficiency ratio was 60.5%, compared with 83.5% in the prior quarter. | |
| ● | Tangible book value per common share (“TBV”) (non-GAAP1) of $11.28 at September 30, 2024, down $2.43 from $13.71 at June 30, 2024. | |
| ● | Total assets of $4.36 billion at September 30, 2024, compared with $2.29 billion at June 30, 2024. | |
| ● | Total loans, including loans held for sale of $3.23 billion at September 30, 2024, compared with $1.88 billion at June 30, 2024, largely due to the merger, with the fair value of the acquired loans totaling $1.36 billion. | |
| ● | Nonperforming assets to total assets ratio of 0.68% at September 30, 2024, compared with 0.20% at June 30, 2024, which included the fair value of $13.9 million in nonaccrual PCD loans in connection with the merger. | |
| ● | Allowance for credit losses (“ACL”) was 1.80% of total loans held for investment at September 30, 2024; allowance for loan losses (“ALL”) was 1.67% of total loans held for investment at September 30, 2024. | |
| ● | Total deposits of $3.74 billion at September 30, 2024, increased $1.81 billion or 93.2% compared with $1.94 billion at June 30, 2024, largely due to the $1.64 billion of deposits acquired in the merger. | |
| ● | Noninterest-bearing demand deposits of $1.37 billion at September 30, 2024, an increase of $701.7 million or 105.3%, of which $635.5 million was related to the merger; noninterest bearing deposits represented 36.6% of total deposits, compared with $666.6 million, or 34.4% of total deposits at June 30, 2024. | |
| ● | Cost of deposits was 2.09%, compared with 2.12% in the prior quarter. | |
| ● | Cost of funds was 2.19%, compared with 2.21% in the prior quarter. | |
| ● | The Company’s capital exceeds minimums required to be “well-capitalized,” the highest regulatory capital category. |
Third Quarter Operating Results
Net Loss
Net loss for the third quarter of 2024 was $16.5 million, or $0.59 loss per diluted share, compared with net income of $190 thousand, or $0.01 per diluted share in the second quarter of 2024. Our third quarter results were negatively impacted by a day one $15.0 million after-tax CECL-related provision for credit losses on non-PCD loans and unfunded loan commitments related to the merger, or $0.54 loss per diluted share, and $10.6 million of after-tax merger expenses, or $0.38 loss per diluted share. Excluding one-time CECL-related provision for credit losses on acquired loans and unfunded loan commitments, and merger related expenses, the Company would have reported net income (non-GAAP1) of $9.1 million, or $0.33 per diluted share, for the third quarter of 2024. Pre-tax, pre-provision income (non-GAAP1) for the third quarter was $436 thousand, a decrease of $2.7 million or 86.3% from the prior quarter.
Net Interest Income and Net Interest Margin
Net interest income for the third quarter of 2024 was $36.9 million, compared with $21.0 million in the prior quarter. The increase in net interest income was primarily due to a $22.3 million increase in total interest and dividend income, partially offset by a $6.3 million increase in total interest expense in the third quarter of 2024, as compared to the prior quarter. During the third quarter of 2024, loan interest income increased $18.5 million, of which $4.1 million was related to accretion income from the net purchase accounting discounts on acquired loans, total debt securities income increased $458 thousand, and interest and dividend income from other financial institutions increased $3.3 million. The increase in interest income was primarily driven by the mix of interest-earning assets added by the merger and the impact of the accretion and amortization of fair value marks. Average total interest-earning assets increased $1.17 billion, the result of a $900.7 million increase in average total loans, a $114.2 million increase in average deposits in other financial institutions, a $25.1 million increase in average total debt securities, a $124.1 million increase in average Fed funds sold/resale agreements and a $7.5 million increase in average restricted stock investments and other bank stock. The increase in interest expense for the third quarter of 2024 was primarily due to a $6.0 million increase in interest expense on interest-bearing deposits, the result of a $763.7 million increase in average interest-bearing deposits, coupled with a $34.3 million increase in average subordinated debt, partially offset by a 6 basis point decrease in average interest-bearing deposit costs, and a $378 thousand decrease in interest expense on Federal Home Loan Bank (“FHLB”) borrowings, the result of a $26.8 million decrease in average FHLB borrowings in the third quarter of 2024.
Net interest margin for the third quarter of 2024 was 4.43%, compared with 3.94% in the prior quarter. The increase was primarily related to a 52 basis point increase in the total interest-earning assets yield, coupled with a 2 basis point decrease in the cost of funds. The yield on total average earning assets in the third quarter of 2024 was 6.49%, compared with 5.97% in the prior quarter. The yield on average total loans in the third quarter of 2024 was 6.79%, an increase of 58 basis points from 6.21% in the prior quarter. Accretion income from the net purchase accounting discounts on acquired loans was $4.1 million and the amortization expense impact on interest expense was $283 thousand, which increased the net interest margin by 46 basis points in the third quarter of 2024. Accretion income from the net purchase accounting discounts on acquired loans was $4.1 million, which increased the yield on average total loans by 59 basis points in the third quarter of 2024.
Cost of funds for the third quarter of 2024 was 2.19%, a decrease of 2 basis points from 2.21% in the prior quarter. The decrease was primarily driven by a 6 basis point decrease in the cost of average interest-bearing deposits, and an increase in average noninterest-bearing deposits, partially offset by an increase of 187 basis points in the cost of total borrowings, which was driven primarily by the amortization expense of $373 thousand, or 281 basis points from the purchase accounting discounts on acquired subordinated debts. Average noninterest-bearing demand deposits increased $373.8 million to $1.03 billion and represented 33.6% of total average deposits for the third quarter of 2024, compared with $658.0 million and 34.1%, respectively, in the prior quarter; average interest-bearing deposits increased $763.7 million to $2.04 billion during the third quarter of 2024. The total cost of deposits in the third quarter of 2024 was 2.09%, a decrease of 3 basis points from 2.12% in the prior quarter. The cost of total interest-bearing deposits decreased primarily due to the Company’s deposit repricing strategy and paying off high cost brokered deposits in the third quarter of 2024.
Average total borrowings increased $7.6 million to $52.9 million for the third quarter of 2024, primarily due to an increase of $34.3 million in average subordinated debt from the $50.8 million in fair value of subordinated debt acquired in the merger, partially offset by a decrease of $26.8 million in average FHLB borrowings during the third quarter of 2024. The average cost of total borrowings was 7.71% for the third quarter of 2024, up from 5.84% in the prior quarter.
Provision for Credit Losses
The Company recorded a provision for credit losses of $23.0 million in the third quarter of 2024, compared to $2.9 million in the prior quarter. The increase was largely related to the merger, and the resulting one-time initial provision for credit losses on acquired non-PCD loans of $18.5 million and unfunded commitments of $2.7 million. Total net charge-offs were $1.2 million in the third quarter of 2024, which included $967 thousand from a construction loan and $135 thousand from an acquired consumer solar loan portfolio. The provision for credit losses in the third quarter of 2024 included a $3.3 million provision for unfunded loan commitments, of which $2.7 million was related to the one-time initial provision for credit losses on acquired unfunded loan commitments, and $511 thousand related to the increase in unfunded loan commitments during the third quarter of 2024, coupled with higher loss rates and average funding rates used to estimate the allowance for credit losses on unfunded commitments. Total unfunded loan commitments increased $662.4 million to $1.03 billion at September 30, 2024, including $574.3 million in unfunded loan commitment related to the merger, compared to $371.5 million in unfunded loan commitments at June 30, 2024. The provision for credit losses for loans held for investment in the third quarter of 2024 was $19.7 million, an increase of $16.7 million from $3.0 million in the prior quarter. The increase was driven primarily by the one-time initial provision for credit losses on acquired non-PCD loans and increases in legacy special mention loans and loans held for investment. Additionally, qualitative factors, coupled with changes in the portfolio mix and in net charge-offs, and in the reasonable and supportable forecast, primarily related to the economic outlook for California which were partially offset by decreases in legacy substandard accruing loans, were factors related to the increase in the provision for credit losses. The Company’s management continues to monitor macroeconomic variables related to increasing interest rates, inflation and the concerns of an economic downturn, and believes it has appropriately provisioned for the current environment.
Noninterest Income
The Company recorded noninterest income of $1.2 million in the third quarter of 2024, a decrease of $5 thousand compared to $1.2 million in the second quarter of 2024. There was no gain on SBA 7A loan sales in the second and third quarters of 2024. Noninterest income was impacted by the merger through increases in service charges and fees on deposit accounts, bank owned life insurance income, and servicing and related income on loans; offset by a $614 thousand valuation allowance on other real estate owned (“OREO”) due to a decline in the fair value of the underlying property in the third quarter of 2024.
Noninterest Expense
Total noninterest expense for the third quarter of 2024 was $37.7 million, an increase of $18.7 million from total noninterest expense of $19.0 million in the prior quarter, which was largely due to the increase in merger related expenses.
Salaries and employee benefits increased $6.6 million during the quarter to $15.4 million. The increase in salaries and employee benefits was primarily the result of the merger and included $1.4 million related to one-time costs associated with non-continuing directors, executives and employees. Merger and related expenses in connection with the merger increased $14.1 million to $14.6 million. These costs primarily included retention bonus, severance and change in control costs of $6.2 million, financial advisory fees of $2.3 million, information technology expenses of $4.5 million, insurance costs of $919 thousand and legal and other professional costs of $305 thousand. The increase in core deposit intangible amortization was primarily driven by $622 thousand related to the additional amortization from the core deposit intangible of $22.7 million acquired in the merger.
The Company sold other real estate owned and recognized a $4.8 million loss in the second quarter of 2024. There was no comparable transaction in the third quarter of 2024.
Efficiency ratio (non-GAAP1) for the third quarter of 2024 was 98.9%, compared to 85.7% in the prior quarter. Excluding the merger and related expenses of $14.6 million, the efficiency ratio (non-GAAP1) for the third quarter of 2024 would have been 60.5%.
Income Tax
In the third quarter of 2024, the Company’s income tax benefit was $6.1 million, compared with an $88 thousand income tax expense in the second quarter of 2024. The effective rate was 26.9% for the third quarter of 2024 and 31.7% for the second quarter of 2024. The decrease in the effective tax rate for the third quarter of 2024 was primarily attributable to the impact of the vesting and exercise of equity awards combined with changes in the Company’s stock price over time, as well as non-deductible merger-related expenses.
Balance Sheet
Assets
Total assets at September 30, 2024 were $4.36 billion, an increase of $2.07 billion or 90.2% from June 30, 2024. The increase in total assets from the prior quarter was primarily related to the $1.86 billion in fair value of total assets acquired in the merger, which included increases of $1.36 billion in loans held for investment, $42.6 million in debt securities, and $336.3 million in cash and cash equivalents. In addition, the Company recorded preliminary goodwill of $74.7 million related to the merger in the third quarter of 2024.
Loans
Total loans held for investment were $3.20 billion at September 30, 2024, an increase of $1.32 billion, compared to June 30, 2024, primarily the result of the $1.36 billion fair value of loans acquired in the merger. During the third quarter 2024, there were new originations of $70.0 million and net advances of $8.9 million, offset by payoffs of $64.9 million, and the transfer of a multifamily nonaccrual loan of $4.7 million to OREO and the partial charge-off of loans in the amount of $1.2 million. Total loans secured by real estate increased by $814.5 million, including $780.9 million acquired in the merger, construction and land development loans increased by $42.9 million, commercial real estate and other loans increased by $712.2 million, 1-4 family residential loans decreased by $4.8 million and multifamily loans increased by $64.2 million. Commercial and industrial loans increased by $482.3 million, and consumer loans increased by $25.3 million, largely due to a $25.2 million increase in consumer loans related to the merger. The Company had $33.7 million in loans held for sale at September 30, 2024, compared to $7.0 million at June 30, 2024.
Deposits
Total deposits at September 30, 2024 were $3.74 billion, an increase of $1.81 billion from June 30, 2024 due to the $1.64 billion in fair value of deposits related to the merger. Noninterest-bearing demand deposits at September 30, 2024, were $1.37 billion, including $635.5 million noninterest-bearing demand deposits related to the merger, or 36.6% of total deposits, compared with $666.6 million, or 34.4% of total deposits at June 30, 2024. At September 30, 2024, total interest-bearing deposits were $2.37 billion, compared to $1.27 billion at June 30, 2024. At September 30, 2024, total brokered time deposits were $222.6 million, including a $251.4 million increase of brokered time deposits related to the merger, compared to $103.4 million in brokered time deposits at June 30, 2024. The Company used excess cash acquired from the merger to pay off high cost callable and noncallable brokered time deposits totaling $131.9 million during the third quarter 2024. The Company also offers the Insured Cash Sweep (ICS) product, providing customers with FDIC insurance coverage at ICS network institutions. At September 30, 2024, ICS deposits were $699.6 million, or 18.7% of total deposits, compared to $239.8 million, or 12.4% of total deposits at June 30, 2024. Legacy CALB was also a participant in the Certificate of Deposit Account Registry Service (CDARS), and Reich & Tang Deposit Solutions (R&T) network, both of which provide reciprocal deposit placement services to fully qualified large customer deposits for FDIC insurance among other participating banks. At July 31, 2024, the Company acquired the fair value of $37.7 million in CDARS deposits and $306.6 million in R&T deposits.
Federal Home Loan Bank (“FHLB”) and Liquidity
The Company repaid all FHLB borrowings with liquidity primarily derived from the cash acquired in the merger during the third quarter of 2024. At September 30, 2024, the Company had no overnight FHLB borrowings, a $25.0 million decrease from June 30, 2024. There were no outstanding Federal Reserve Discount Window borrowings at September 30, 2024 or June 30, 2024.
At September 30, 2024, the Company had available borrowing capacity from the FHLB secured line of credit of approximately $663.6 million and available borrowing capacity from the Federal Reserve Discount Window of approximately $446.4 million. The Company also had available borrowing capacity from eight unsecured credit lines from correspondent banks of approximately $121.0 million at September 30, 2024, with no outstanding borrowings. Total available borrowing capacity was $1.23 billion at September 30, 2024. Additionally, the Company had unpledged liquid securities at fair value of approximately $159.3 million and cash and cash equivalents of $614.4 million at September 30, 2024.
In connection with the merger, the Company assumed subordinated borrowings of $55.0 million, with a fair value of $50.8 million. The subordinated borrowings include $20.0 million with a maturity date in September 2030 and $35.0 million with a maturity date in September 2031.
Asset Quality
Total non-performing assets increased to $29.8 million, or 0.68% of total assets at September 30, 2024, compared with $4.7 million, or 0.20% of total assets at June 30, 2024.
The increase in non-performing assets in the third quarter of 2024 was primarily attributable to downgrades of a construction loan and 1-4 family residential loan from one relationship totaling $12.7 million and a $13.9 million of nonaccrual PCD loans acquired in the merger. This increase was net of total charge-offs of $1.2 million, which included a partial charge-off of $967 thousand for a substandard nonaccrual construction loan collateralized by a stalled construction project in Los Angeles, California. Based on the Company’s internal analysis, which included a review of an updated appraisal, the estimated net collateral value was $9.7 million, which was $967 thousand lower than the subject loan’s net carrying value resulting in a partial charge-off in the third quarter of 2024. The Company expects to pursue the resolution of this matter. Non-performing assets in the third quarter of 2024 included OREO, net of valuation allowance, of $4.1 million related to a multifamily nonaccrual loan of $4.7 million that was transferred to OREO and the Company recorded a $614 thousand valuation allowance on OREO due to a decline in the fair value of the underlying property in the third quarter of 2024.
Total non-performing loans increased to $25.7 million, or 0.80% of total loans held for investment at September 30, 2024, compared with $4.7 million, or 0.25% of total loans at June 30, 2024. The increase from June 30, 2024 was due primarily to the aforementioned downgrades of a construction loan and 1-4 family residential loan from one relationship, nonaccrual PCD loans acquired in the merger and partial charge-offs of loans in the amount of $1.2 million in the third quarter of 2024.
Special mention loans increased by $65.6 million, including $41.0 million non-PCD loans and $10.1 million PCD loans, during the third quarter of 2024 to $93.4 million at September 30, 2024. The $14.5 million increase in the legacy special mention loans was due mostly to a $2.2 million increase in special mention commercial real estate loans and a $12.3 million increase in special mention commercial and industrial loans. Substandard loans increased by $81.2 million, including $2.3 million non-PCD loans, $71.3 million PCD loans, and $13.5 million nonaccrual PCD loans, during the third quarter of 2024 to $104.3 million at September 30, 2024. The $5.8 million decrease in the legacy substandard loans was due primarily to the transfer of a multifamily nonaccrual loan of $4.7 million to OREO and the partial charge-off of $967 thousand for the nonaccrual construction loan, partially offset by a downgrade to substandard of a commercial and industrial loan of $118 thousand during the third quarter of 2024.
The Company had $37 thousand in consumer solar loans that were over 90 days past due that were accruing interest at September 30, 2024, and no delinquencies at June 30, 2024.
There were $19.1 million in loan delinquencies (30-89 days past due, excluding nonaccrual loans) at September 30, 2024 and no delinquencies at June 30, 2024.
The allowance for credit losses, which is comprised of the allowance for loan losses (“ALL”) and reserve for unfunded loan commitments, totaled $57.6 million at September 30, 2024, compared to $24.6 million at June 30, 2024. The $33.0 million increase in the allowance included a $19.7 million provision for credit losses for the loan portfolio, of which $11.2 million related to the initial allowance for credit losses on acquired PCD loans, $21.3 million related to the initial provision for credit losses on acquired non-PCD loans and unfunded loan commitments, partially offset by total charge-offs of $1.2 million for the quarter ended September 30, 2024.
The ALL was $53.6 million, or 1.67% of total loans held for investment at September 30, 2024, compared with $23.8 million, or 1.27% at June 30, 2024.
Capital
Tangible book value (non-GAAP1) per common share at September 30, 2024, was $11.28, compared with $13.71 at June 30, 2024. In the third quarter of 2024, tangible book value was primarily impacted by the net loss for the third quarter, the impact of equity issued in connection with the merger, stock-based compensation expense, and a decrease in net of unrealized tax losses on available-for-sale debt securities. Other comprehensive losses related to unrealized losses, net of taxes, on available-for-sale debt securities decreased by $3.6 million to $2.9 million at September 30, 2024, from $6.5 million at June 30, 2024. The decrease in the unrealized losses, net of taxes, on available-for-sale debt securities was primarily attributable to factors other than credit related, including decreases in market interest rates driven by the Federal Reserve’s 50 basis point rate cut in September 2024. Tangible common equity (non-GAAP1) as a percentage of total tangible assets (non-GAAP1) at September 30, 2024, decreased to 8.58% from 11.28% in the prior quarter, and unrealized losses, net of taxes, on available-for-sale debt securities as a percentage of tangible common equity (non-GAAP1) at September 30, 2024 decreased to 0.8% from 2.6% in the prior quarter.
The Company’s preliminary capital exceeds minimums required to be “well-capitalized” at September 30, 2024.
ABOUT CALIFORNIA BANCORP
California BanCorp (NASDAQ: BCAL) is a registered bank holding company headquartered in San Diego, California. California Bank of Commerce, N.A., a national banking association chartered under the laws of the United States (the “Bank”) and regulated by the Office of Comptroller of the Currency, is a wholly owned subsidiary of California BanCorp. Established in 2001 and headquartered in San Diego, California, the Bank offers a range of financial products and services to individuals, professionals, and small to medium-sized businesses through its 14 branch offices and four loan production offices serving Northern and Southern California. The Bank’s solutions-driven, relationship-based approach to banking provides accessibility to decision makers and enhances value through strong partnerships with its clients. Additional information is available at www.bankcbc.com.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
In addition to historical information, this release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and other matters that are not historical facts. Examples of forward-looking statements include, among others, statements regarding expectations, plans or objectives for future operations, products or services, loan recoveries, projections, expectations regarding the adequacy of reserves for credit losses and statements about the benefits of the Company’s merger with CALB (the “Merger”), as well as forecasts relating to financial and operating results or other measures of economic performance. Forward-looking statements reflect management’s current view about future events and involve risks and uncertainties that may cause actual results to differ from those expressed in the forward-looking statement or historical results. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts and often include the words or phrases such as “aim,” “can,” “may,” “could,” “predict,” “should,” “will,” “would,” “believe,” “anticipate,” “estimate,” “expect,” “hope,” “intend,” “plan,” “potential,” “project,” “will likely result,” “continue,” “seek,” “shall,” “possible,” “projection,” “optimistic,” and “outlook,” and variations of these words and similar expressions.
Factors that could cause or contribute to results differing from those in or implied in the forward-looking statements include but are not limited to risk related to the Merger, including the risks that costs may be greater than anticipated, cost savings may be less than anticipated, and difficulties in retaining senior management, employees or customers, the impact of bank failures or other adverse developments at other banks on general investor sentiment regarding the stability and liquidity of banks, changes in real estate markets and valuations; the impact on financial markets from geopolitical conflicts; inflation, interest rate, market and monetary fluctuations and general economic conditions, either nationally or locally in the areas in which the Company conducts business; increases in competitive pressures among financial institutions and businesses offering similar products and services; general credit risks related to lending, including changes in the value of real estate or other collateral, the financial condition of borrowers, the effectiveness of our underwriting practices and the risk of fraud; higher than anticipated defaults in the Company’s loan portfolio; changes in management’s estimate of the adequacy of the allowance for credit losses or the factors the Company uses to determine the allowance for credit losses; changes in demand for loans and other products and services offered by the Company; the costs and outcomes of litigation; legislative or regulatory changes or changes in accounting principles, policies or guidelines and other risk factors discussed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission (“SEC”) and other documents the Company may file with the SEC from time to time.
Additional information regarding these and other risks and uncertainties to which our business and future financial performance are subject is contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, and other documents the Company files with the SEC from time to time.
Any forward-looking statement made in this release is based only on information currently available to management and speaks only as of the date on which it is made. The Company does not undertake, and specifically disclaims any obligation, to update any forward-looking statements to reflect occurrences or unanticipated events or circumstances after the date of such statements or to conform such forward-looking statements to actual results or to changes in its opinions or expectations, except as required by law.
California BanCorp and Subsidiary
Financial Highlights (Unaudited)
| At or for the Three Months Ended |
At or for the Nine Months Ended |
|||||||||||||||||||
| September 30, 2024 |
June 30, 2024 |
September 30, 2023 |
September 30, 2024 |
September 30, 2023 |
||||||||||||||||
| EARNINGS | ($ in thousands except share and per share data) | |||||||||||||||||||
| Net interest income | $ | 36,942 | $ | 21,007 | $ | 23,261 | $ | 78,443 | $ | 71,579 | ||||||||||
| Provision for (reversal of) credit losses | $ | 22,963 | $ | 2,893 | $ | (96 | ) | $ | 25,525 | $ | 91 | |||||||||
| Noninterest income | $ | 1,174 | $ | 1,169 | $ | 815 | $ | 3,756 | $ | 3,481 | ||||||||||
| Noninterest expense | $ | 37,680 | $ | 19,005 | $ | 14,781 | $ | 71,666 | $ | 44,407 | ||||||||||
| Income tax (benefit) expense | $ | (6,063 | ) | $ | 88 | $ | 2,835 | $ | (3,653 | ) | $ | 9,064 | ||||||||
| Net (loss) income | $ | (16,464 | ) | $ | 190 | $ | 6,556 | $ | (11,339 | ) | $ | 21,498 | ||||||||
| Pre-tax pre-provision income (1) | $ | 436 | $ | 3,171 | $ | 9,295 | $ | 10,533 | $ | 30,653 | ||||||||||
| Adjusted pre-tax pre-provision income (1) | $ | 15,041 | $ | 3,662 | $ | 9,295 | $ | 26,178 | $ | 30,653 | ||||||||||
| Diluted (loss) earnings per share | $ | (0.59 | ) | $ | 0.01 | $ | 0.35 | $ | (0.53 | ) | $ | 1.15 | ||||||||
| Shares outstanding at period end | 32,142,427 | 18,547,352 | 18,309,282 | 32,142,427 | 18,309,282 | |||||||||||||||
| PERFORMANCE RATIOS | ||||||||||||||||||||
| Return on average assets | (1.82 | )% | 0.03 | % | 1.12 | % | (0.55 | )% | 1.25 | % | ||||||||||
| Adjusted return on average assets (1) | 1.01 | % | 0.11 | % | 1.12 | % | 0.74 | % | 1.25 | % | ||||||||||
| Return on average common equity | (15.28 | )% | 0.26 | % | 9.38 | % | (4.48 | )% | 10.63 | % | ||||||||||
| Adjusted return on average common equity (1) | 8.44 | % | 0.82 | % | 9.38 | % | 6.00 | % | 10.63 | % | ||||||||||
| Yield on total loans | 6.79 | % | 6.21 | % | 5.97 | % | 6.40 | % | 5.89 | % | ||||||||||
| Yield on interest earning assets | 6.49 | % | 5.97 | % | 5.72 | % | 6.15 | % | 5.63 | % | ||||||||||
| Cost of deposits | 2.09 | % | 2.12 | % | 1.56 | % | 2.09 | % | 1.22 | % | ||||||||||
| Cost of funds | 2.19 | % | 2.21 | % | 1.62 | % | 2.19 | % | 1.30 | % | ||||||||||
| Net interest margin | 4.43 | % | 3.94 | % | 4.23 | % | 4.12 | % | 4.43 | % | ||||||||||
| Efficiency ratio (1) | 98.86 | % | 85.70 | % | 61.39 | % | 87.19 | % | 59.16 | % | ||||||||||
| Adjusted efficiency ratio (1) | 60.54 | % | 83.49 | % | 61.39 | % | 68.15 | % | 59.16 | % | ||||||||||
| As of | ||||||||||||
| September 30, 2024 |
June 30, 2024 |
December 31, 2023 |
||||||||||
| CAPITAL | ($ in thousands except share and per share data) | |||||||||||
| Tangible equity to tangible assets (1) | 8.58 | % | 11.28 | % | 10.73 | % | ||||||
| Book value (BV) per common share | $ | 15.50 | $ | 15.81 | $ | 15.69 | ||||||
| Tangible BV per common share (1) | $ | 11.28 | $ | 13.71 | $ | 13.56 | ||||||
| ASSET QUALITY | ||||||||||||
| Allowance for loan losses (ALL) | $ | 53,552 | $ | 23,788 | $ | 22,569 | ||||||
| Reserve for unfunded loan commitments | $ | 4,071 | $ | 819 | $ | 933 | ||||||
| Allowance for credit losses (ACL) | $ | 57,623 | $ | 24,607 | $ | 23,502 | ||||||
| Allowance for loan losses to nonperforming loans | 2.09 | x | 5.07 | x | 1.74 | x | ||||||
| ALL to total loans held for investment | 1.67 | % | 1.27 | % | 1.15 | % | ||||||
| ACL to total loans held for investment | 1.80 | % | 1.31 | % | 1.20 | % | ||||||
| 30-89 days past due, excluding nonaccrual loans | $ | 19,110 | $ | — | $ | 19 | ||||||
| Over 90 days past due, excluding nonaccrual loans | $ | 37 | $ | — | $ | — | ||||||
| Special mention loans | $ | 93,448 | $ | 27,861 | $ | 2,996 | ||||||
| Special mention loans to total loans held for investment | 2.92 | % | 1.48 | % | 0.15 | % | ||||||
| Substandard loans | $ | 104,298 | $ | 23,080 | $ | 19,502 | ||||||
| Substandard loans to total loans held for investment | 3.26 | % | 1.23 | % | 1.00 | % | ||||||
| Nonperforming loans | $ | 25,698 | $ | 4,696 | $ | 13,004 | ||||||
| Nonperforming loans total loans held for investment | 0.80 | % | 0.25 | % | 0.66 | % | ||||||
| Other real estate owned, net | $ | 4,083 | $ | — | $ | — | ||||||
| Nonperforming assets | $ | 29,781 | $ | 4,696 | $ | 13,004 | ||||||
| Nonperforming assets to total assets | 0.68 | % | 0.20 | % | 0.55 | % | ||||||
| END OF PERIOD BALANCES | ||||||||||||
| Total loans, including loans held for sale | $ | 3,233,418 | $ | 1,884,599 | $ | 1,964,791 | ||||||
| Total assets | $ | 4,362,767 | $ | 2,293,693 | $ | 2,360,252 | ||||||
| Deposits | $ | 3,740,915 | $ | 1,935,862 | $ | 1,943,556 | ||||||
| Loans to deposits | 86.4 | % | 97.4 | % | 101.1 | % | ||||||
| Shareholders’ equity | $ | 498,064 | $ | 293,219 | $ | 288,152 | ||||||
(1) Non-GAAP measure. See – GAAP to Non-GAAP reconciliation.
| At or for the Three Months Ended |
At or for the Nine Months Ended |
|||||||||||||||||||
| ALLOWANCE for CREDIT LOSSES | September 30, 2024 |
June 30, 2024 |
September 30, 2023 |
September 30, 2024 |
September 30, 2023 |
|||||||||||||||
| ($ in thousands) | ||||||||||||||||||||
| Allowance for loan losses | ||||||||||||||||||||
| Balance at beginning of period | $ | 23,788 | $ | 22,254 | $ | 22,502 | $ | 22,569 | $ | 17,099 | ||||||||||
| Adoption of ASU 2016-13 (1) | — | — | — | — | 5,027 | |||||||||||||||
| Initial Allowance for PCD loans | 11,216 | — | — | 11,216 | — | |||||||||||||||
| Provision for credit losses (2) | 19,711 | 2,990 | 202 | 22,387 | 600 | |||||||||||||||
| Charge-offs | (1,163 | ) | (1,456 | ) | — | (2,620 | ) | (36 | ) | |||||||||||
| Recoveries | — | — | 1 | — | 15 | |||||||||||||||
| Net (charge-offs) recoveries | (1,163 | ) | (1,456 | ) | 1 | (2,620 | ) | (21 | ) | |||||||||||
| Balance, end of period | $ | 53,552 | $ | 23,788 | $ | 22,705 | $ | 53,552 | $ | 22,705 | ||||||||||
| Reserve for unfunded loan commitments (3) | ||||||||||||||||||||
| Balance, beginning of period | $ | 819 | $ | 916 | $ | 1,538 | $ | 933 | $ | 1,310 | ||||||||||
| Adoption of ASU 2016-13 (1) | — | — | — | — | 439 | |||||||||||||||
| Provision for (reversal of) credit losses (4) | 3,252 | (97 | ) | (298 | ) | 3,138 | (509 | ) | ||||||||||||
| Balance, end of period | 4,071 | 819 | 1,240 | 4,071 | 1,240 | |||||||||||||||
| Allowance for credit losses | $ | 57,623 | $ | 24,607 | $ | 23,945 | $ | 57,623 | $ | 23,945 | ||||||||||
| ALL to total loans held for investment | 1.67 | % | 1.27 | % | 1.18 | % | 1.67 | % | 1.18 | % | ||||||||||
| ACL to total loans held for investment | 1.80 | % | 1.31 | % | 1.24 | % | 1.80 | % | 1.24 | % | ||||||||||
| Net (charge-offs) recoveries to average total loans | (0.17 | )% | (0.31 | )% | 0.00 | % | (0.16 | )% | 0.00 | % | ||||||||||
| (1 | ) | Represents the impact of adopting ASU 2016-13, Financial Instruments – Credit Losses on January 1, 2023. As a result of adopting ASU 2016-13, our methodology to compute our allowance for credit losses is based on a current expected credit loss methodology, rather than the previously applied incurred loss methodology. |
| (2 | ) | Includes $18.5 million for the three and nine months ended September 30, 2024 related to the initial provision for credit losses for non-PCD loans acquired in the merger with CALB. |
| (3 | ) | Included in “Accrued interest and other liabilities” on the consolidated balance sheet. |
| (4 | ) | Includes $2.7 million for the three and nine months ended September 30, 2024 related to the initial provision for credit losses on unfunded commitments acquired in the merger with CALB. |
California BanCorp and Subsidiary
Balance Sheets (Unaudited)
| September 30, 2024 |
June 30, 2024 |
December 31, 2023 |
||||||||||
| ASSETS | ($ in thousands) | |||||||||||
| Cash and due from banks | $ | 115,165 | $ | 29,153 | $ | 33,008 | ||||||
| Federal funds sold & interest-bearing balances | 499,258 | 75,580 | 53,785 | |||||||||
| Total cash and cash equivalents | 614,423 | 104,733 | 86,793 | |||||||||
| Debt securities available-for-sale, at fair value (amortized cost of $163,384, $132,862 and $136,366 at September 30, 2024, June 30, 2024 and December 31, 2023) | 159,330 | 123,653 | 130,035 | |||||||||
| Debt securities held-to-maturity, at cost (fair value of $49,487, $48,476 and $50,432 at September 30, 2024, June 30, 2024 and December 31, 2023) | 53,364 | 53,449 | 53,616 | |||||||||
| Loans held for sale | 33,704 | 6,982 | 7,349 | |||||||||
| Loans held for investment: | ||||||||||||
| Construction & land development | 247,934 | 205,072 | 243,521 | |||||||||
| 1-4 family residential | 152,540 | 157,323 | 143,903 | |||||||||
| Multifamily | 252,134 | 187,960 | 221,247 | |||||||||
| Other commercial real estate | 1,755,908 | 1,043,662 | 1,024,243 | |||||||||
| Commercial & industrial | 765,472 | 283,203 | 320,142 | |||||||||
| Other consumer | 25,726 | 397 | 4,386 | |||||||||
| Total loans held for investment | 3,199,714 | 1,877,617 | 1,957,442 | |||||||||
| Allowance for credit losses – loans | (53,552 | ) | (23,788 | ) | (22,569 | ) | ||||||
| Total loans held for investment, net | 3,146,162 | 1,853,829 | 1,934,873 | |||||||||
| Restricted stock at cost | 27,394 | 16,898 | 16,055 | |||||||||
| Premises and equipment | 13,996 | 12,741 | 13,270 | |||||||||
| Right of use asset | 15,310 | 8,298 | 9,291 | |||||||||
| Other real estate owned, net | 4,083 | — | — | |||||||||
| Goodwill | 112,515 | 37,803 | 37,803 | |||||||||
| Core deposit intangible | 23,031 | 1,065 | 1,195 | |||||||||
| Bank owned life insurance | 66,180 | 39,445 | 38,918 | |||||||||
| Deferred taxes, net | 45,644 | 11,080 | 11,137 | |||||||||
| Accrued interest and other assets | 47,631 | 23,717 | 19,917 | |||||||||
| Total assets | $ | 4,362,767 | $ | 2,293,693 | $ | 2,360,252 | ||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||
| Deposits: | ||||||||||||
| Noninterest-bearing demand | $ | 1,368,303 | $ | 666,606 | $ | 675,098 | ||||||
| Interest-bearing NOW accounts | 781,125 | 355,994 | 381,943 | |||||||||
| Money market and savings accounts | 1,149,268 | 660,808 | 636,685 | |||||||||
| Time deposits | 442,219 | 252,454 | 249,830 | |||||||||
| Total deposits | 3,740,915 | 1,935,862 | 1,943,556 | |||||||||
| Borrowings | 69,142 | 42,913 | 102,865 | |||||||||
| Operating lease liability | 19,211 | 10,931 | 12,117 | |||||||||
| Accrued interest and other liabilities | 35,435 | 10,768 | 13,562 | |||||||||
| Total liabilities | 3,864,703 | 2,000,474 | 2,072,100 | |||||||||
| Shareholders’ Equity: | ||||||||||||
| Common stock – 50,000,000 shares authorized, no par value; issued and outstanding 32,142,427, 18,547,352 and 18,369,115 at September 30, 2024, June 30, 2024 and December 31, 2023) | 441,684 | 224,006 | 222,036 | |||||||||
| Retained earnings | 59,236 | 75,700 | 70,575 | |||||||||
| Accumulated other comprehensive loss – net of taxes | (2,856 | ) | (6,487 | ) | (4,459 | ) | ||||||
| Total shareholders’ equity | 498,064 | 293,219 | 288,152 | |||||||||
| Total liabilities and shareholders’ equity | $ | 4,362,767 | $ | 2,293,693 | $ | 2,360,252 | ||||||
California BanCorp and Subsidiary
Income Statements – Quarterly and Year-to-Date (Unaudited)
| Three Months Ended | Nine Months Ended | |||||||||||||||||||
| September 30, 2024 |
June 30, 2024 |
September 30, 2023 |
September 30, 2024 |
September 30, 2023 |
||||||||||||||||
| ($ in thousands except share and per share data) | ||||||||||||||||||||
| INTEREST AND DIVIDEND INCOME | ||||||||||||||||||||
| Interest and fees on loans | $ | 47,528 | $ | 29,057 | $ | 28,977 | $ | 105,169 | $ | 83,983 | ||||||||||
| Interest on debt securities | 1,687 | 1,229 | 942 | 4,129 | 2,506 | |||||||||||||||
| Interest on tax-exempted debt securities | 306 | 306 | 359 | 918 | 1,302 | |||||||||||||||
| Interest and dividends from other institutions | 4,606 | 1,257 | 1,206 | 7,024 | 3,162 | |||||||||||||||
| Total interest and dividend income | 54,127 | 31,849 | 31,484 | 117,240 | 90,953 | |||||||||||||||
| INTEREST EXPENSE | ||||||||||||||||||||
| Interest on NOW, savings, and money market accounts | 11,073 | 7,039 | 5,922 | 24,882 | 13,555 | |||||||||||||||
| Interest on time deposits | 5,087 | 3,145 | 1,867 | 11,253 | 4,373 | |||||||||||||||
| Interest on borrowings | 1,025 | 658 | 434 | 2,662 | 1,446 | |||||||||||||||
| Total interest expense | 17,185 | 10,842 | 8,223 | 38,797 | 19,374 | |||||||||||||||
| Net interest income | 36,942 | 21,007 | 23,261 | 78,443 | 71,579 | |||||||||||||||
| Provision for (reversal of ) credit losses (1) | 22,963 | 2,893 | (96 | ) | 25,525 | 91 | ||||||||||||||
| Net interest income after provision for (reversal of) credit losses | 13,979 | 18,114 | 23,357 | 52,918 | 71,488 | |||||||||||||||
| NONINTEREST INCOME | ||||||||||||||||||||
| Service charges and fees on deposit accounts | 1,136 | 568 | 470 | 2,229 | 1,439 | |||||||||||||||
| Gain on sale of loans | 8 | — | (54 | ) | 423 | 831 | ||||||||||||||
| Bank owned life insurance income | 398 | 266 | 238 | 925 | 693 | |||||||||||||||
| Servicing and related income (expense) on loans | 82 | (5 | ) | 61 | 150 | 223 | ||||||||||||||
| Loss on sale of debt securities | — | — | — | — | 34 | |||||||||||||||
| Loss on sale of building and related fixed assets | — | (19 | ) | — | (19 | ) | — | |||||||||||||
| Other charges and fees | (450 | ) | 359 | 100 | 48 | 261 | ||||||||||||||
| Total noninterest income | 1,174 | 1,169 | 815 | 3,756 | 3,481 | |||||||||||||||
| NONINTEREST EXPENSE | ||||||||||||||||||||
| Salaries and employee benefits | 15,385 | 8,776 | 9,736 | 33,771 | 29,651 | |||||||||||||||
| Occupancy and equipment expenses | 2,031 | 1,445 | 1,579 | 4,928 | 4,553 | |||||||||||||||
| Data processing | 1,536 | 1,186 | 1,144 | 3,872 | 3,376 | |||||||||||||||
| Legal, audit and professional | 669 | 557 | 598 | 1,742 | 2,050 | |||||||||||||||
| Regulatory assessments | 544 | 347 | 369 | 1,278 | 1,188 | |||||||||||||||
| Director and shareholder expenses | 520 | 229 | 215 | 952 | 642 | |||||||||||||||
| Merger and related expenses | 14,605 | 491 | — | 15,645 | — | |||||||||||||||
| Core deposit intangible amortization | 687 | 65 | 128 | 817 | 309 | |||||||||||||||
| Other real estate owned expense | 3 | 4,935 | — | 5,026 | — | |||||||||||||||
| Other expense | 1,700 | 974 | 1,012 | 3,635 | 2,638 | |||||||||||||||
| Total noninterest expense | 37,680 | 19,005 | 14,781 | 71,666 | 44,407 | |||||||||||||||
| (Loss) income before income taxes | (22,527 | ) | 278 | 9,391 | (14,992 | ) | 30,562 | |||||||||||||
| Income tax (benefit) expense | (6,063 | ) | 88 | 2,835 | (3,653 | ) | 9,064 | |||||||||||||
| Net (loss) income | $ | (16,464 | ) | $ | 190 | $ | 6,556 | $ | (11,339 | ) | $ | 21,498 | ||||||||
| Net (loss) income per share – basic | $ | (0.59 | ) | $ | 0.01 | $ | 0.36 | $ | (0.53 | ) | $ | 1.18 | ||||||||
| Net (loss) income per share – diluted | $ | (0.59 | ) | $ | 0.01 | $ | 0.35 | $ | (0.53 | ) | $ | 1.15 | ||||||||
| Weighted average common shares-diluted | 27,705,844 | 18,799,513 | 18,672,132 | 21,579,175 | 18,632,890 | |||||||||||||||
| Pre-tax, pre-provision income (2) | $ | 436 | $ | 3,171 | $ | 9,295 | $ | 10,533 | $ | 30,653 | ||||||||||
(1) Included provision for (reversal of) unfunded loan commitments of $3.3 million, $(97) thousand and $(298) thousand for the three months ended September 30, 2024, June 30, 2024 and September 30, 2023, respectively, and $3.1 million and $(509) thousand for the nine months ended September 30, 2024 and 2023, respectively
(2) Non-GAAP measure. See – GAAP to Non-GAAP reconciliation.
California BanCorp and Subsidiary
Average Balance Sheets and Yield Analysis
(Unaudited)
| Three Months Ended | ||||||||||||||||||||||||||||||||||||
| September 30, 2024 | June 30, 2024 | September 30, 2023 | ||||||||||||||||||||||||||||||||||
| Average Balance | Income/ Expense |
Yield/ Cost |
Average Balance | Income/ Expense |
Yield/ Cost |
Average Balance | Income/ Expense |
Yield/ Cost |
||||||||||||||||||||||||||||
| Assets | ($ in thousands) | |||||||||||||||||||||||||||||||||||
| Interest-earning assets: | ||||||||||||||||||||||||||||||||||||
| Total loans | $ | 2,783,581 | $ | 47,528 | 6.79 | % | $ | 1,882,845 | $ | 29,057 | 6.21 | % | $ | 1,924,384 | $ | 28,977 | 5.97 | % | ||||||||||||||||||
| Taxable debt securities | 149,080 | 1,687 | 4.50 | % | 123,906 | 1,229 | 3.99 | % | 111,254 | 942 | 3.36 | % | ||||||||||||||||||||||||
| Tax-exempt debt securities (1) | 53,682 | 306 | 2.87 | % | 53,754 | 306 | 2.90 | % | 59,630 | 359 | 3.02 | % | ||||||||||||||||||||||||
| Deposits in other financial institutions | 161,616 | 2,215 | 5.45 | % | 47,417 | 638 | 5.41 | % | 50,367 | 681 | 5.36 | % | ||||||||||||||||||||||||
| Fed funds sold/resale agreements | 143,140 | 1,886 | 5.24 | % | 19,062 | 261 | 5.51 | % | 20,653 | 283 | 5.44 | % | ||||||||||||||||||||||||
| Restricted stock investments and other bank stock | 24,587 | 505 | 8.17 | % | 17,091 | 358 | 8.42 | % | 16,365 | 242 | 5.87 | % | ||||||||||||||||||||||||
| Total interest-earning assets | 3,315,686 | 54,127 | 6.49 | % | 2,144,075 | 31,849 | 5.97 | % | 2,182,653 | 31,484 | 5.72 | % | ||||||||||||||||||||||||
| Total noninterest-earning assets | 277,471 | 150,603 | 131,288 | |||||||||||||||||||||||||||||||||
| Total assets | $ | 3,593,157 | $ | 2,294,678 | $ | 2,313,941 | ||||||||||||||||||||||||||||||
| Liabilities and Shareholders’ Equity | ||||||||||||||||||||||||||||||||||||
| Interest-bearing liabilities: | ||||||||||||||||||||||||||||||||||||
| Interest-bearing NOW accounts | $ | 617,373 | $ | 2,681 | 1.73 | % | $ | 361,244 | $ | 2,134 | 2.38 | % | $ | 353,714 | $ | 1,706 | 1.91 | % | ||||||||||||||||||
| Money market and savings accounts | 999,322 | 8,392 | 3.34 | % | 653,244 | 4,905 | 3.02 | % | 675,609 | 4,216 | 2.48 | % | ||||||||||||||||||||||||
| Time deposits | 421,241 | 5,087 | 4.80 | % | 259,722 | 3,145 | 4.87 | % | 183,745 | 1,867 | 4.03 | % | ||||||||||||||||||||||||
| Total interest-bearing deposits | 2,037,936 | 16,160 | 3.15 | % | 1,274,210 | 10,184 | 3.21 | % | 1,213,068 | 7,789 | 2.55 | % | ||||||||||||||||||||||||
| Borrowings: | ||||||||||||||||||||||||||||||||||||
| FHLB advances | 611 | 9 | 5.86 | % | 27,391 | 387 | 5.68 | % | 11,731 | 163 | 5.51 | % | ||||||||||||||||||||||||
| Subordinated debt | 52,246 | 1,016 | 7.74 | % | 17,901 | 271 | 6.09 | % | 17,830 | 271 | 6.03 | % | ||||||||||||||||||||||||
| Total borrowings | 52,857 | 1,025 | 7.71 | % | 45,292 | 658 | 5.84 | % | 29,561 | 434 | 5.82 | % | ||||||||||||||||||||||||
| Total interest-bearing liabilities | 2,090,793 | 17,185 | 3.27 | % | 1,319,502 | 10,842 | 3.30 | % | 1,242,629 | 8,223 | 2.63 | % | ||||||||||||||||||||||||
| Noninterest-bearing liabilities: | ||||||||||||||||||||||||||||||||||||
| Noninterest-bearing deposits (2) | 1,031,844 | 658,001 | 768,148 | |||||||||||||||||||||||||||||||||
| Other liabilities | 41,962 | 23,054 | 25,722 | |||||||||||||||||||||||||||||||||
| Shareholders’ equity | 428,558 | 294,121 | 277,442 | |||||||||||||||||||||||||||||||||
| Total Liabilities and Shareholders’ Equity | $ | 3,593,157 | $ | 2,294,678 | $ | 2,313,941 | ||||||||||||||||||||||||||||||
| Net interest spread | 3.22 | % | 2.67 | % | 3.09 | % | ||||||||||||||||||||||||||||||
| Net interest income and margin | $ | 36,942 | 4.43 | % | $ | 21,007 | 3.94 | % | $ | 23,261 | 4.23 | % | ||||||||||||||||||||||||
| Cost of deposits | $ | 3,069,780 | $ | 16,160 | 2.09 | % | $ | 1,932,211 | $ | 10,184 | 2.12 | % | $ | 1,981,216 | $ | 7,789 | 1.56 | % | ||||||||||||||||||
| Cost of funds | $ | 3,122,637 | $ | 17,185 | 2.19 | % | $ | 1,977,503 | $ | 10,842 | 2.21 | % | $ | 2,010,777 | $ | 8,223 | 1.62 | % | ||||||||||||||||||
(1) Tax-exempt debt securities yields are presented on a tax equivalent basis using a 21% tax rate.
(2) Average noninterest-bearing deposits represent 33.61%, 34.05% and 38.77% of average total deposits for the three months ended September 30, 2024, June 30, 2024 and September 30, 2023, respectively.
California BanCorp and Subsidiary
Average Balance Sheets and Yield Analysis
(Unaudited)
| Nine Months Ended | ||||||||||||||||||||||||
| September 30, 2024 | September 30, 2023 | |||||||||||||||||||||||
| Average Balance | Income/ Expense |
Yield/ Cost |
Average Balance | Income/ Expense |
Yield/ Cost |
|||||||||||||||||||
| Assets | ($ in thousands) | |||||||||||||||||||||||
| Interest-earning assets: | ||||||||||||||||||||||||
| Total loans | $ | 2,194,059 | $ | 105,169 | 6.40 | % | $ | 1,906,327 | $ | 83,983 | 5.89 | % | ||||||||||||
| Taxable debt securities | 133,321 | 4,129 | 4.14 | % | 104,881 | 2,506 | 3.19 | % | ||||||||||||||||
| Tax-exempt debt securities (1) | 53,759 | 918 | 2.89 | % | 68,043 | 1,302 | 3.24 | % | ||||||||||||||||
| Deposits in other financial institutions | 87,966 | 3,569 | 5.42 | % | 43,629 | 1,675 | 5.13 | % | ||||||||||||||||
| Fed funds sold/resale agreements | 57,634 | 2,281 | 5.29 | % | 21,182 | 798 | 5.04 | % | ||||||||||||||||
| Restricted stock investments and other bank stock | 19,383 | 1,174 | 8.09 | % | 15,774 | 689 | 5.84 | % | ||||||||||||||||
| Total interest-earning assets | 2,546,122 | 117,240 | 6.15 | % | 2,159,836 | 90,953 | 5.63 | % | ||||||||||||||||
| Total noninterest-earning assets | 189,573 | 133,224 | ||||||||||||||||||||||
| Total assets | $ | 2,735,695 | $ | 2,293,060 | ||||||||||||||||||||
| Liabilities and Shareholders’ Equity | ||||||||||||||||||||||||
| Interest-bearing liabilities: | ||||||||||||||||||||||||
| Interest-bearing NOW accounts | $ | 446,759 | $ | 6,860 | 2.05 | % | $ | 290,326 | $ | 3,301 | 1.52 | % | ||||||||||||
| Money market and savings accounts | 767,916 | 18,022 | 3.13 | % | 674,452 | 10,254 | 2.03 | % | ||||||||||||||||
| Time deposits | 312,544 | 11,253 | 4.81 | % | 170,620 | 4,373 | 3.43 | % | ||||||||||||||||
| Total interest-bearing deposits | 1,527,219 | 36,135 | 3.16 | % | 1,135,398 | 17,928 | 2.11 | % | ||||||||||||||||
| Borrowings: | ||||||||||||||||||||||||
| FHLB advances | 26,105 | 1,103 | 5.64 | % | 16,282 | 632 | 5.19 | % | ||||||||||||||||
| Subordinated debt | 29,425 | 1,559 | 7.08 | % | 17,807 | 814 | 6.11 | % | ||||||||||||||||
| Total borrowings | 55,530 | 2,662 | 6.40 | % | 34,089 | 1,446 | 5.67 | % | ||||||||||||||||
| Total interest-bearing liabilities | 1,582,749 | 38,797 | 3.27 | % | 1,169,487 | 19,374 | 2.21 | % | ||||||||||||||||
| Noninterest-bearing liabilities: | ||||||||||||||||||||||||
| Noninterest-bearing deposits (2) | 784,609 | 829,082 | ||||||||||||||||||||||
| Other liabilities | 30,524 | 24,086 | ||||||||||||||||||||||
| Shareholders’ equity | 337,813 | 270,405 | ||||||||||||||||||||||
| Total Liabilities and Shareholders’ Equity | $ | 2,735,695 | $ | 2,293,060 | ||||||||||||||||||||
| Net interest spread | 2.88 | % | 3.42 | % | ||||||||||||||||||||
| Net interest income and margin | $ | 78,443 | 4.12 | % | $ | 71,579 | 4.43 | % | ||||||||||||||||
| Cost of deposits | $ | 2,311,828 | $ | 36,135 | 2.09 | % | $ | 1,964,480 | $ | 17,928 | 1.22 | % | ||||||||||||
| Cost of funds | $ | 2,367,358 | $ | 38,797 | 2.19 | % | $ | 1,998,569 | $ | 19,374 | 1.30 | % | ||||||||||||
(1) Tax-exempt debt securities yields are presented on a tax equivalent basis using a 21% tax rate.
(2) Average noninterest-bearing deposits represent 33.94%, and 42.20% of average total deposits for the nine months ended September 30, 2024 and September 30, 2023, respectively.
California BanCorp and Subsidiary
GAAP to Non-GAAP Reconciliation
(Unaudited)
The following tables present a reconciliation of non-GAAP financial measures to GAAP measures for: (1) adjusted net (loss) income, (2) efficiency ratio, (3) adjusted efficiency ratio, (4) pre-tax pre-provision income, (5) adjusted pre-tax pre-provision income, (6) average tangible common equity, (7) adjusted return on average assets, (8) adjusted return on average equity, (9) return on average tangible common equity, (10) adjusted return on average tangible common equity, (11) tangible common equity, (12) tangible assets, (13) tangible common equity to tangible asset ratio, and (14) tangible book value per share. We believe the presentation of certain non-GAAP financial measures provides useful information to assess our consolidated financial condition and consolidated results of operations and to assist investors in evaluating our financial results relative to our peers. These non-GAAP financial measures complement our GAAP reporting and are presented below to provide investors and others with information that we use to manage the business each period. Because not all companies use identical calculations, the presentation of these non-GAAP financial measures may not be comparable to other similarly titled measures used by other companies. These non-GAAP measures should be taken together with the corresponding GAAP measures and should not be considered a substitute of the GAAP measures.
| Three Months Ended | Nine Months Ended | |||||||||||||||||||
| September 30, 2024 |
June 30, 2024 |
September 30, 2023 |
September 30, 2024 |
September 30, 2023 |
||||||||||||||||
| ($ in thousands) | ||||||||||||||||||||
| Adjusted net income | ||||||||||||||||||||
| Net (loss) income | $ | (16,464 | ) | $ | 190 | $ | 6,556 | $ | (11,339 | ) | $ | 21,498 | ||||||||
| Add: After-tax Day1 provision for non PCD loans and unfunded loan commitments (1) | 14,978 | — | — | 14,978 | — | |||||||||||||||
| Add: After-tax merger and related expenses (1) | 10,576 | 412 | — | 11,535 | — | |||||||||||||||
| Adjusted net (loss) income (non-GAAP) | $ | 9,090 | $ | 602 | $ | 6,556 | $ | 15,174 | $ | 21,498 | ||||||||||
| Efficiency Ratio | ||||||||||||||||||||
| Noninterest expense | $ | 37,680 | $ | 19,005 | $ | 14,781 | $ | 71,666 | $ | 44,407 | ||||||||||
| Deduct: Merger and related expenses | 14,605 | 491 | — | 15,645 | — | |||||||||||||||
| Adjusted noninterest expense | 23,075 | 18,514 | 14,781 | 56,021 | 44,407 | |||||||||||||||
| Net interest income | 36,942 | 21,007 | 23,261 | 78,443 | 71,579 | |||||||||||||||
| Noninterest income | 1,174 | 1,169 | 815 | 3,756 | 3,481 | |||||||||||||||
| Total net interest income and noninterest income | $ | 38,116 | $ | 22,176 | $ | 24,076 | $ | 82,199 | $ | 75,060 | ||||||||||
| Efficiency ratio (non-GAAP) | 98.9 | % | 85.7 | % | 61.4 | % | 87.2 | % | 59.2 | % | ||||||||||
| Adjusted efficiency ratio (non-GAAP) | 60.5 | % | 83.5 | % | 61.4 | % | 68.2 | % | 59.2 | % | ||||||||||
| Pre-tax pre-provision income | ||||||||||||||||||||
| Net interest income | $ | 36,942 | $ | 21,007 | $ | 23,261 | $ | 78,443 | $ | 71,579 | ||||||||||
| Noninterest income | 1,174 | 1,169 | 815 | 3,756 | 3,481 | |||||||||||||||
| Total net interest income and noninterest income | 38,116 | 22,176 | 24,076 | 82,199 | 75,060 | |||||||||||||||
| Less: Noninterest expense | 37,680 | 19,005 | 14,781 | 71,666 | 44,407 | |||||||||||||||
| Pre-tax pre-provision income (non-GAAP) | 436 | 3,171 | 9,295 | 10,533 | 30,653 | |||||||||||||||
| Add: Merger and related expenses | 14,605 | 491 | — | 15,645 | — | |||||||||||||||
| Adjusted pre-tax pre-provision income (non-GAAP) | $ | 15,041 | $ | 3,662 | $ | 9,295 | $ | 26,178 | $ | 30,653 | ||||||||||
(1) After-tax merger and related expenses are presented using a 29.56% tax rate.
| Return on Average Assets, Equity, and Tangible Equity | ||||||||||||||||||||
| Net (loss) income | $ | (16,464 | ) | $ | 190 | $ | 6,556 | $ | (11,339 | ) | $ | 21,498 | ||||||||
| Adjusted net (loss) income (non-GAAP) | $ | 9,090 | $ | 602 | $ | 6,556 | $ | 15,174 | $ | 21,498 | ||||||||||
| Average assets | $ | 3,593,157 | $ | 2,294,678 | $ | 2,313,941 | $ | 2,735,695 | $ | 2,293,060 | ||||||||||
| Average shareholders’ equity | 428,558 | 294,121 | 277,442 | 337,813 | 270,405 | |||||||||||||||
| Less: Average intangible assets | 104,409 | 38,900 | 39,158 | 60,917 | 39,249 | |||||||||||||||
| Average tangible common equity (non-GAAP) | $ | 324,149 | $ | 255,221 | $ | 238,284 | $ | 276,896 | $ | 231,156 | ||||||||||
| Return on average assets | (1.82 | %) | 0.03 | % | 1.12 | % | (0.55 | %) | 1.25 | % | ||||||||||
| Adjusted return on average assets (non-GAAP) | 1.01 | % | 0.11 | % | 1.12 | % | 0.74 | % | 1.25 | % | ||||||||||
| Return on average equity | (15.28 | %) | 0.26 | % | 9.38 | % | (4.48 | %) | 10.63 | % | ||||||||||
| Adjusted return on average equity (non-GAAP) | 8.44 | % | 0.82 | % | 9.38 | % | 6.00 | % | 10.63 | % | ||||||||||
| Return on average tangible common equity (non-GAAP) | (20.21 | %) | 0.30 | % | 10.92 | % | (5.47 | %) | 12.43 | % | ||||||||||
| Adjusted return on average tangible common equity (non-GAAP) | 11.16 | % | 0.95 | % | 10.92 | % | 7.32 | % | 12.43 | % |
| September 30, 2024 |
December 31, 2023 |
|||||||
| ($ in thousands except share and per share data) | ||||||||
| Tangible Common Equity Ratio/Tangible Book Value Per Share | ||||||||
| Shareholders’ equity | $ | 498,064 | $ | 288,152 | ||||
| Less: Intangible assets | 135,546 | 38,998 | ||||||
| Tangible common equity (non-GAAP) | $ | 362,518 | $ | 249,154 | ||||
| Total assets | $ | 4,362,767 | $ | 2,360,252 | ||||
| Less: Intangible assets | 135,546 | 38,998 | ||||||
| Tangible assets (non-GAAP) | $ | 4,227,221 | $ | 2,321,254 | ||||
| Equity to asset ratio | 11.42 | % | 12.21 | % | ||||
| Tangible common equity to tangible asset ratio (non-GAAP) | 8.58 | % | 10.73 | % | ||||
| Book value per share | $ | 15.50 | $ | 15.69 | ||||
| Tangible book value per share (non-GAAP) | $ | 11.28 | $ | 13.56 | ||||
| Shares outstanding | 32,142,427 | 18,369,115 | ||||||
INVESTOR RELATIONS CONTACT
Kevin Mc Cabe
California Bank of Commerce, N.A.
kmccabe@bankcbc.com
818.637.7065
Source: GlobeNewswire (MIL-OSI)
New York, N.Y., Oct. 29, 2024 (GLOBE NEWSWIRE) — NANO Nuclear Energy Inc. (NASDAQ: NNE) (“NANO Nuclear” or “the Company”), a leading advanced nuclear energy and technology company focused on developing portable, clean energy solutions, today announced that its senior leadership will lead a presentation at the upcoming ThinkEquity Conference, held on October 30th, 2024, at the Mandarin Oriental Hotel in New York City.
“The ThinkEquity Conference is well-known and anticipated gathering of innovative companies,” said Jay Yu, Founder and Chairman of NANO Nuclear Energy. “We’re excited to lead an informative and engaging presentation and look forward to meaningful one-on-one discussions with fellow attendees.”
Figure 1 – NANO Nuclear Energy Inc. Will Present at The ThinkEquity Conference, to be held on October 30th, 2024, at the Mandarin Oriental Hotel in New York City.
The 2024 edition of the ThinkEquity Conference will showcase innovative companies across sectors such as alternative energy, biotechnology, AI & big data, and more. With over 750 attendees, the event will feature more than 75 company presentations and 650 one-on-one meetings with investors.
“It is a pleasure to be participating the ThinkEquity Conference this year,” said James Walker, Chief Executive Officer and Head of Reactor Development of NANO Nuclear Energy. “In addition to discussing the progress of our innovative technologies during the presentation, the event offers a valuable opportunity to engage personally with investors and innovators from other sectors.”
About NANO Nuclear Energy, Inc.
NANO Nuclear Energy Inc. (NASDAQ: NNE) is an advanced technology-driven nuclear energy company seeking to become a commercially focused, diversified, and vertically integrated company across four business lines: (i) cutting edge portable microreactor technology, (ii) nuclear fuel fabrication, (iii) nuclear fuel transportation and (iv) nuclear industry consulting services. NANO Nuclear believes it is the first portable nuclear microreactor company to be listed publicly in the U.S.
Led by a world-class nuclear engineering team, NANO Nuclear’s products in technical development are “ZEUS”, a solid core battery reactor, and “ODIN”, a low-pressure coolant reactor, each representing advanced developments in clean energy solutions that are portable, on-demand capable, advanced nuclear microreactors.
Advanced Fuel Transportation Inc. (AFT), a NANO Nuclear subsidiary, is led by former executives from the largest transportation company in the world aiming to build a North American transportation company that will provide commercial quantities of HALEU fuel to small modular reactors, microreactor companies, national laboratories, military, and DOE programs. Through NANO Nuclear, AFT is the exclusive licensee of a patented high-capacity HALEU fuel transportation basket developed by three major U.S. national nuclear laboratories and funded by the Department of Energy. Assuming development and commercialization, AFT is expected to form part of the only vertically integrated nuclear fuel business of its kind in North America.
HALEU Energy Fuel Inc. (HEF), a NANO Nuclear subsidiary, is focusing on the future development of a domestic source for a High-Assay, Low-Enriched Uranium (HALEU) fuel fabrication pipeline for NANO Nuclear’s own microreactors as well as the broader advanced nuclear reactor industry.
NANO Nuclear Space Inc. (NNS), a NANO Nuclear subsidiary, is exploring the potential commercial applications of NANO Nuclear’s developing micronuclear reactor technology in space. NNS is focusing on applications such as power systems for extraterrestrial projects and human sustaining environments, and potentially propulsion technology for long haul space missions. NNS’ initial focus will be on cis-lunar applications, referring to uses in the space region extending from Earth to the area surrounding the Moon’s surface.
For more corporate information please visit: https://NanoNuclearEnergy.com/
For further information, please contact:
Email: IR@NANONuclearEnergy.com
Business Tel: (212) 634-9206
PLEASE FOLLOW OUR SOCIAL MEDIA PAGES HERE:
NANO Nuclear Energy LINKEDIN
NANO Nuclear Energy YOUTUBE
NANO Nuclear Energy TWITTER
Cautionary Note Regarding Forward Looking Statements
This news release, the conference presentation described herein, and statements of NANO Nuclear’s management in connection with this news release and such presentation contain or may contain “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. In this context, forward-looking statements mean statements related to future events, which may impact our expected future business and financial performance, and often contain words such as “expects”, “anticipates”, “intends”, “plans”, “believes”, “potential”, “will”, “should”, “could”, “would” or “may” and other words of similar meaning. These forward-looking statements are based on information available to us as of the date of this news release and represent management’s current views and assumptions. Forward-looking statements are not guarantees of future performance, events or results and involve significant known and unknown risks, uncertainties and other factors, which may be beyond our control. For NANO Nuclear, particular risks and uncertainties that could cause our actual future results to differ materially from those expressed in our forward-looking statements include but are not limited to the following: (i) risks related to our U.S. Department of Energy (“DOE”) or related state nuclear fuel licensing submissions, (ii) risks related the development of new or advanced technology, including difficulties with design and testing, cost overruns, development of competitive technology, (iii) our ability to obtain contracts and funding to be able to continue operations, (iv) risks related to uncertainty regarding our ability to technologically develop and commercially deploy a competitive advanced nuclear reactor or other technology in the timelines we anticipate, if ever, (v) risks related to the impact of government regulation and policies including by the DOE and the U.S. Nuclear Regulatory Commission, including those associated with the recently enacted ADVANCE Act, and (vi) similar risks and uncertainties associated with the business of a start-up business operating a highly regulated industry. Readers are cautioned not to place undue reliance on these forward-looking statements, which apply only as of the date of this news release. These factors may not constitute all factors that could cause actual results to differ from those discussed in any forward-looking statement, and the NANO Nuclear therefore encourages investors to review other factors that may affect future results in its filings with the SEC, which are available for review at www.sec.gov and at https://ir.nanonuclearenergy.com/financial-information/sec-filings. Accordingly, forward-looking statements should not be relied upon as a predictor of actual results. We do not undertake to update our forward-looking statements to reflect events or circumstances that may arise after the date of this news release, except as required by law.
Attachment
Source: GlobeNewswire (MIL-OSI)
Hong Kong, China, Oct. 29, 2024 (GLOBE NEWSWIRE) — On October 23, 2024, Linklogis Inc. (09959.HK, “Linklogis”) released its business update for the third quarter of 2024. In the third quarter of 2024, the total transaction volume processed by the technology solutions of Linklogis reached RMB105 billion, representing an 18% year-over-year growth, with the quarterly transaction volume surpassing RMB100 billion for the first time, setting a new historical record. The company’s core growth driver, the Multi-tier Transfer Cloud, continued to excel, processing a total volume of supply chain assets of RMB47.7 billion, a year-over-year increase of 29%. Additionally, the ABS Cloud regained its growth momentum by launching new products, achieving an impressive 325% growth despite a challenging overall market environment.
Linklogis is dedicated to high-quality development, prioritizing the enhancement of efficiency and quality in its core business. Linklogis continues to diversify its customer base while strategically optimizing its business structure by reducing low-margin product lines. In the third quarter, Linklogis’ revenue and income from principal activities saw year-on-year growth, accompanied by a notable improvement in gross profit margin.
Focusing on Core Business Development, ABS Cloud Achieves 325% Growth Against Market Trends
In the third quarter of 2024, the total transaction volume processed by the technology solutions of Linklogis reached RMB105 billion, marking an 18% year-on-year increase. Within this, Anchor Cloud processed supply chain assets amounting to RMB64.4 billion, up 13% year-over-year, while FI Cloud handled supply chain assets totaling RMB34.6 billion, a 16% increase. Driven by a focused investment in its core business, the Multi-tier Transfer Cloud within the Anchor Cloud experienced robust growth, processing supply chain assets totaling RMB47.7 billion, a 29% rise year-over-year. Additionally, the ABS Cloud within the FI Cloud successfully launched new products to meet the increasing demand for diversified asset allocation in the current low-interest-rate environment. This initiative expanded services from upstream payable assets to downstream receivable assets, resulting in an impressive transaction volume of RMB22 billion for ABS Cloud in the third quarter, reflecting a remarkable 325% year-over-year growth and achieving success despite market challenges.
In the third quarter of 2024, Linklogis successfully won bids for the development of the supply chain finance service platform for Yangtze River Industry Investment Group and Genertec Universal Medical Group. Additionally, Linklogis has partnered with several large enterprises and financial institutions, including Shandong Binzhou Urban Construction Group, Huayuan Landport Capital Operation, Hubei Wanchuan State-owned Capital Investment and Operation Group, Changsha Broad Homes Industrial Group, Huaxia Bank, and China Bohai Bank, to collaborate in the supply chain finance technology sector and launch the first batch of multi-tier transfer businesses.
Linklogis accelerated its high-quality customer acquisition in the third quarter, adding 103 new customers and 184 partners, bringing the total number of customers to 959 and total partners to 2,270. This includes 1,917 anchor enterprises and 353 financial institutions. Notable new anchor enterprise customers include Wahaha Group, Jingye Group, Shanghai Electric Group, Yunnan Provincial Investment Holdings Group, and Yangtze River Pharmaceutical Group. Linklogis continues to expand and optimize its customer base, focusing on key industries such as infrastructure, construction, renewable energy, and public utilities, achieving a remarkable customer retention rate of 96%.
Acquisition of Bytter to Advance Treasury Development
According to the announcement on October 29, 2024, Linklogis has officially signed an equity acquisition agreement with the current controlling shareholder of Shenzhen Bytter Technology Co., Ltd. (“Bytter”) for the acquisition of 29.38% of its shares. Upon completion of the acquisition, Linklogis’s total shareholding will increase to 54.38%, making it the controlling shareholder of Bytter. The two companies will enhance their product offerings by integrating their core strengths in fund management and supply chain finance technology. Together, they aim to support state-owned enterprises as well as large and medium-sized private enterprises in building a world-class financial management platform. Linklogis will combine external mergers and acquisitions with internal growth to embark on a new chapter in the development of smart industry-finance treasury solutions.
Linklogis is dedicated to enhancing shareholder returns through active share repurchases. As of the end of the third quarter of 2024, the company has repurchased 142 million shares for approximately HK$280 million. Moving forward, Linklogis will continue to monitor market trends, seize growth opportunities, and focus on sustainable high-growth core businesses. Linklogis aims to maintain rapid customer acquisition while steadily advancing in technological innovation and service expansion, striving to create long-term value for both customers and investors.
Disclaimer: 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. Cryptocurrency mining can involve risk. There is potential for loss of funds. It is strongly recommended you practice due diligence, including consultation with a professional financial advisor, before investing in or trading cryptocurrency and securities.
Source: GlobeNewswire (MIL-OSI)
WOODS CROSS, Utah, Oct. 29, 2024 (GLOBE NEWSWIRE) — Sky Quarry Inc. (NASDAQ: SKYQ) (“Sky Quarry ” or the “Company”), an integrated energy solutions company committed to revolutionizing the waste asphalt shingle recycling industry, today announced two key appointments. Darryl Delwo, CPA, a seasoned finance and accounting executive, was previously named Chief Financial Officer effective August 20, 2024, and Cyla Apache has recently been promoted to Vice President of Finance. These appointments reflect Sky Quarry’s focus on strengthening its finance leadership as it advances its growth strategy as a publicly listed company on Nasdaq.
Darryl Delwo brings over 28 years of experience to the role and was promoted after serving as Vice President of Finance at Sky Quarry since 2020. Previously, Mr. Delwo served as Chief Financial Officer of Noralta Technologies Inc., an integrated SaaS provider primarily servicing the oil & gas market. Prior to that, Mr. Delwo was Controller and Acting CFO for the start-up company Sulvaris Inc., supporting the venture funding to recommence project construction. He has also served in Controller roles at Black Diamond Energy Services, Wholesale Sports, and Regus Canada. Mr. Delwo holds CPA and CMA designations in Canada, along with a Bachelor of Commerce in Accounting from Athabasca University.
Cyla Apache brings over six years of controllership experience. She is a motivated leader with a strong background in implementing software and developing efficient workflows. Additionally, Ms. Apache has extensive knowledge of tax law and demonstrates how an accounting department can drive revenue and profitability. She holds an MBA, an MS in Accounting, a CPA designation from the California State Board of Accountancy, and an Enrolled Agent designation from the IRS.
“After more than four years as VP of Finance, Mr. Delwo’s promotion to CFO is a natural step,” said David Sealock, CEO of Sky Quarry. “His 28 years of experience and proven leadership will be invaluable as we grow as a Nasdaq-listed company and advance our capital markets strategy. Alongside Ms. Apache’s promotion to Vice President of Finance, these leadership additions enhance our ability to drive operational excellence and execute our strategic and financial priorities, all with a focus on value-added growth and commitment to our shareholders.”
About Sky Quarry Inc.
Sky Quarry Inc. (NASDAQ: SKYQ) and its subsidiaries are, collectively, an oil production, refining, and a development-stage environmental remediation company formed to deploy technologies to facilitate the recycling of waste asphalt shingles and remediation of oil-saturated sands and soils. Our waste-to-energy mission is to repurpose and upcycle millions of tons of asphalt shingle waste, diverting them from landfills. By doing so, we can contribute to improved waste management, promote resource efficiency, conserve natural resources, and reduce environmental impact. For more information, please visit skyquarry.com.
Forward-Looking Statements
This press release may include ”forward-looking statements.” All statements pertaining to our future financial and/or operating results, future events, or future developments may constitute forward-looking statements. The statements may be identified by words such as “expect,” “look forward to,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “estimate,” “will,” “project,” or words of similar meaning. Such statements are based on the current expectations and certain assumptions of our management, of which many are beyond our control. These are subject to a number of risks, uncertainties, and factors, including but not limited to those described in our disclosures. Should one or more of these risks or uncertainties materialize or should underlying expectations not occur or assumptions prove incorrect, actual results, performance, or our achievements may (negatively or positively) vary materially from those described explicitly or implicitly in the relevant forward-looking statement. We neither intend, nor assume any obligation, to update or revise these forward-looking statements in light of developments which differ from those anticipated. You are urged to carefully review and consider any cautionary statements and the Company’s other disclosures, including the statements made under the heading “Risk Factors” and elsewhere in the offering statement filed with the SEC. Forward-looking statements speak only as of the date of the document in which they are contained.
Investor Relations
Chris Tyson
Executive Vice President
MZ Group – MZ North America
949-491-8235
SKYQ@mzgroup.us
www.mzgroup.us
Company Website
Source: GlobeNewswire (MIL-OSI)
PALM BEACH, Fla., Oct. 29, 2024 (GLOBE NEWSWIRE) — FN Media Group News Commentary – The global Carbon Dioxide Removal (CDR) Market has been growing in the past years and is expected to continue at a substantial pace for years to come. Growing awareness and concern about the impacts of climate change are driving governments, businesses, and individuals to seek effective solutions for mitigating carbon dioxide emissions. The CDR market benefits from this heightened awareness and the urgent need for sustainable practices. A report from Custom Marketing Insights said that the global Carbon Dioxide Removal (CDR) Market size is expected to record a CAGR of 14.8% from 2023 to 2032. In 2023, the market size is projected to reach a valuation of USD 610.9 Million. By 2032, the valuation is anticipated to reach USD 2,115.5 Million. The report said: “Stringent Regulatory Policies and Targets: Governments around the world are implementing and enhancing regulatory frameworks aimed at reducing greenhouse gas emissions. The imposition of carbon reduction targets and the integration of carbon pricing mechanisms create a favorable environment for the growth of the CDR market, as industries seek ways to comply with these regulations. Advancements in CDR Technologies: Ongoing research and development efforts are leading to technological advancements in carbon removal methods. Improved efficiency, scalability, and cost-effectiveness of CDR technologies contribute to their wider adoption and growth in the market. Increasing Corporate Sustainability Initiatives: Many companies are adopting sustainability goals and committing to achieving net-zero emissions. As part of their corporate social responsibility (CSR) initiatives, businesses are investing in CDR technologies to offset their carbon footprint, contributing to the overall growth of the market.” Active carbon companies in the markets this week include: BluSky Carbon Inc. (CSE: BSKY) (OTCQB: BSKCF), SLB (NYSE: SLB), DevvStream Holdings Inc. (OTCQB: DSTRF) (NEO: DESG), Base Carbon Inc. (OTCQX: BCBNF) (NEO: BCBN), LanzaTech Global, Inc. (NASDAQ: LNZA).
Custom Marketing Insights continued: “Rising Investments and Funding: The CDR market is witnessing increased investments from both public and private sectors. Governments, venture capital firms, and major corporations are allocating funds to support research, development, and implementation of carbon removal technologies, fostering market growth. Emergence of Carbon Offset Markets: The development of carbon offset markets, where entities can buy and sell carbon credits, provides financial incentives for the deployment of CDR technologies. This market dynamic encourages the adoption of carbon removal solutions as a means for businesses to offset their emissions and comply with regulatory requirements, thereby driving market growth.”
BluSky Carbon Inc. (CSE: BSKY) (OTCQB: BSKCF) Commences Biochar Production in Arkansas – BluSky Carbon Inc. (FWB: QE4 /WKN A401NM) (“BluSky” or the “Company”), an innovative entry into the carbon removal clean technology sector is very pleased to announce that it has commenced production of biochar at a dedicated facility in Arkansas. The event marks the official startup of initial biochar production aimed at servicing the recently announced $105 million, ten-year supply agreement (see Company news release dated Sept 24, 2024) (“Supply Agreement”).
A video showing the equipment start-up and providing some insights into the facility, the region, and BluSky’s strategic plan is available here.
The startup of the Vulcan Heavy system at this location represents the first of three units required to service the totality of the Supply Agreement. Once the other two units are procured and fully operational (see news release dated September 24, 2024), these machines are expected to produce a combined output of approximately 40,000 tons of biochar annually. It is also expected that production byproducts such as bio-oil and syngas may help reduce the Company’s overall production costs by providing some of the energy required to power the Vulcan systems, potentially along with surplus power capacity to contribute towards operating BluSky’s related carbon removal technologies (CDR) including its Medusa Carbon mineralization process and Kronos Direct Air Carbon Capture technology.
The inaugural production plant has been dedicated as “AR1“ and is located at 110 Industrial Park Drive in Warren, Arkansas. The facility consists of a multi-room 50,000 sq/ft enclosure located on an 8.54-acre property. Warren services an established sustainable timber industry with a strong presence in the town and surrounding area. Nearby softwood wood chip production (mostly yellow pine) serves as a nearly limitless source of clean biomass feedstock for the BluSky Vulcan Heavy pyrolysis systems.
BluSky CEO Will Hessert comments, “The facility is ideally suited for scalability. We have ample room for the three Vulcan Heavy units as required to service our initial regional contract, with additional room to double that production without the need to create more space. The property itself is large and well suited to handle industrial scale logistics and storage needs.” CONTINUED… Read this full press release and more news for BluSky Carbon at: https://bluskycarbon.com/news/
Other recent carbon developments in the markets of note include:
SLB (NYSE: SLB), formerly known as Schlumberger, recently announced it was aiming to accelerate the deployment of carbon capture technology through an investment in Norway’s Aker Carbon Capture. SLB said that it will pay about $380 million, or 4.12 billion Norwegian kroner, for an 80% stake in the pure-play carbon capture company. The deal is expected to close by the end of the second quarter.
Schlumberger rebranded as SLB in 2022 as part of the company’s growing focus on lower-carbon technologies. SLB is targeting $3 billion in revenue from its new energy business by the end of the decade. CEO Olivier Le Peuch told analysts during the company’s fourth-quarter earnings call that carbon capture and storage will be a leading contributor to that $3 billion target. SLB is participating in more than $400 million worth of tenders related to carbon capture and storage.
DevvStream Holdings Inc. (NEO: DESG) (OTCQB: DSTRF), a leading carbon credit project co-development and generation firm specializing in technology-based solutions, recently announced an agreement (the “Agreement”) to purchase 1.2 million carbon credits from the Ipixuna REDD+ Project (the “Project”), subject to final approval by the board of Focus Impact Acquisition Corp. (“Focus Impact”). In exchange for the credits, the vendor will receive newly authorized shares of common stock of the public company (“NewCo”) resulting from DevvStream’s previously announced business combination with Focus Impact (the “Business Combination”). Upon closing of the Business Combination-projected to occur on or before October 31, 2024-NewCo is expected to be named DevvStream Corp. and begin trading on the Nasdaq Stock Market LLC (“Nasdaq”) under the ticker symbol “DEVS.” The Company expects the carbon credit purchase Agreement to close in conjunction with and conditional upon the Business Combination and Nasdaq listing.
Base Carbon Inc. (NEO: BCBN) (OTCQX: BCBNF) with operations through its wholly-owned subsidiary, Base Carbon Capital Partners Corp. (together, with affiliates, “Base Carbon”, or the “Company”), recently announced that it has received a second transfer of 1,014,635 carbon credits from its Rwanda project, each designated with Verra’s Article 6 Authorized label.
Pursuant to the terms of the project agreement with the DelAgua Group, the project developer, and the letter of authorization issued by the Government of Rwanda (“LOA”) with respect to the project, the Company has received a transfer of 1,014,635 Article 6 Authorized labeled carbon credits. This volume is net of 23,060 carbon credits which have been retired to contribute towards global emission reductions and 115,300 carbon credits to be made available to the Government of Rwanda pursuant to the terms of the LOA. The Company now holds a total inventory of 1,712,193 carbon credits generated from the Rwanda project, all designated with Verra’s Article 6 Authorized label.
LanzaTech Global, Inc. (NASDAQ: LNZA), the carbon recycling company transforming waste carbon into sustainable fuels, chemicals, materials, and protein, has been awarded $3 million by the U.S. Department of Energy’s (DOE) Office of Fossil Energy and Carbon Management (FECM), as part of a broader $29 million investment program to advance its carbon management priorities. LanzaTech’s Project ADAPT (“Accelerating Decarbonization via Advanced Production Technologies”) was selected to address FECM’s priority of converting carbon dioxide (CO2) into environmentally responsible and economically valuable products…
…”We are thrilled to receive this support from the U.S. Department of Energy to progress our work around scaling the conversion of waste CO2 to make some of the world’s most needed chemicals,” said Dr. Jennifer Holmgren, CEO of LanzaTech. “CO2 is an essential feedstock of today and the future, and Project ADAPT leverages our expertise and existing operations to accelerate the commercialization of transformational carbon capture and utilization technologies that deliver cleaner and more sustainable energy and products.”
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Source: US GOIAM Union
IAM members from across Minnesota came together to actively engage with voters to make a difference in the upcoming election. Focusing on AFL-CIO-endorsed candidates who advocate for workers’ rights, union members and volunteers have been knocking on doors, phone banking, and connecting with community members, reminding them of the power of their vote and its impact on labor policies.
IAM District 77 members met with Congresswoman Betty McCollum, where she reaffirmed her commitment to workers’ rights and spoke on crucial issues impacting Minnesota’s workforce, such as fair wages, safe working conditions, and support for union organizing.
“Our collective action serves as a powerful reminder of what’s at stake and how crucial it is for voters to get involved,” said IAM District 77 Directing Business Representative Andrew Peltier, “When union members come together to support labor-friendly candidates, we are building a future where workers’ rights are valued and protected.”
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Source: GlobeNewswire (MIL-OSI)
SAN DIEGO, Oct. 29, 2024 (GLOBE NEWSWIRE) — LPL Financial LLC announced today that financial advisors Randy Petrilli, Matt Goodwin, Travis Whitaker and Jeff McWhorter of Goodwin Petrilli Financial have joined LPL Financial’s broker-dealer, RIA and custodial platforms. The advisors reported having approximately $205 million in advisory, brokerage and retirement plan assets*. They join LPL from Cambridge Investment Research.
Based in Fort Collins, Co., the firm was founded in 1992 by Harry Goodwin, Matt’s father, who retired last year after serving clients for more than three decades. The ensemble practice offers a comprehensive range of financial planning and investment management services to individuals, families and businesses throughout Northern Colorado.
“We have a strong local presence and have built our business through a solid referral network,” Goodwin said. “The team has a long history of working with educators in northern Colorado by helping them manage retirement assets and plan for retirement. Over the years, we’ve worked with multiple generations of clients who want to preserve their family legacies.”
As client expectations continue to rise, the team at Goodwin Petrilli Financial turned to LPL for the next chapter of their business.
“We were highly impressed by LPL’s technology, which allows us to provide more personalized and efficient services,” Petrilli said. “Our clients benefit by having one place where they can find all their account information, and we appreciate how programs work together in ClientWorks to manage our daily tasks — from meeting minutes to planning software. We are excited about LPL’s commitment to providing us with the resources and support we need to grow our business and deliver more value to clients.”
Scott Posner, LPL Executive Vice President, Business Development, said, “On behalf of the entire LPL community, I’d like to extend a warm welcome to Randy, Matt, Travis and Jeff. We are committed to delivering innovative technology, robust resources and strategic support to enable advisors to provide personalized advice and run thriving practices. We look forward to supporting the entire team at Goodwin Petrilli Financial for years to come.”
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Advisors, learn how LPL Financial can help take your business to the next level.
About LPL Financial
LPL Financial Holdings Inc. (Nasdaq: LPLA) was founded on the principle that LPL should work for advisors and institutions, and not the other way around. Today, LPL is a leader in the markets we serve, serving more than 23,000 financial advisors, including advisors at approximately 1,000 institutions and at approximately 580 registered investment advisor 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. Goodwin Petrilli Financial and LPL are separate entities.
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.
*Value approximated based on asset and holding details provided to LPL from end of year, 2023.
Media Contact:
Media.relations@LPLFinancial.com
(704) 996-1840
Tracking #649120
Source: GlobeNewswire (MIL-OSI)
WASHINGTON, Oct. 29, 2024 (GLOBE NEWSWIRE) — ibex (NASDAQ: IBEX), a leading global provider of business process outsourcing (BPO) and customer engagement technology solutions, today announced the launch of ibex Wave iX AI Virtual Agent, a sophisticated AI solution designed for seamless and scalable automated customer and brand interactions.
ibex Wave iX AI Virtual Agent provides AI-driven voice and text conversations that are customized to align with a brand’s persona and specific business needs. It offers human-like, infinitely scalable, and hyper-personalized customer experiences while integrating seamlessly with existing agent support systems to facilitate swift escalation and efficient resolution of more complex customer issues.
“ibex Wave iX AI Virtual Agent is more than a new AI solution, it is a transformative approach to the future of customer engagement,” said Bob Dechant, CEO of ibex. “ibex Wave iX AI Virtual Agent integrates the scalability and efficiency of AI with the necessary brand alignment, enabling businesses need to deliver exceptional, empathetic, and uniquely tailored customer experiences.”
ibex Wave iX AI Virtual Agent is a new groundbreaking AI-driven, digital-first customer experience solution within the ibex Wave iX solution suite, which comprises three strategic components—AgentAI, CustomerAI, and InsightsAI—and leverages cutting-edge Generative AI technology to deliver the next generation of AI and agent-assisted customer experience.
A significant advantage of ibex Wave iX AI Virtual Agent is its capacity for scalability on-demand. This flexibility enables businesses to dynamically adjust their customer service resources, ensuring optimal allocation during peak periods or unforeseen surges in demand. Coupled with the virtual agent’s empathetic and patient approach, this adaptability ensures that routine interactions are efficiently managed by ibex Wave iX AI Virtual Agent, allowing human customer service agents to concentrate of resolving more complex issues.
Seamless customer interactions
ibex Wave iX AI Virtual Agent also breaks down communication barriers by offering true omnichannel and multilanguage support. This capability ensures that businesses can effectively communicate with customers across any platform, in their preferred language, creating a seamless and inclusive experience.
While ibex Wave iX AI Virtual Agent is designed to handle a wide range of customer inquiries autonomously, it also features a smooth escalation process to human agents when necessary.
Businesses can easily customize ibex Wave iX AI Virtual Agent to match their unique brand personality. The platform allows for the creation of channel-specific personas, ensuring consistency across every customer interaction and enabling brands to achieve their desired impact, at scale.
Always getting smarter
ibex Wave iX AI Virtual Agent goes beyond simple query resolution. The platform is designed to understand multiple intents and complex tasks, learning and improving with each interaction. This sophisticated approach allows the virtual agent to gain a deep and accurate understanding of customer actions and patterns, enabling businesses to make rapid, informed choices that drive customer satisfaction and loyalty.
To ensure data security and regulatory compliance ibex has implemented strict governance measures in ibex Wave iX AI Virtual Agent.
For more information about ibex Wave iX AI Virtual Agent or to schedule a demo, please visit here.
About ibex
ibex delivers innovative business process outsourcing (BPO), smart digital marketing, online acquisition technology, and end-to-end customer engagement solutions to help companies acquire, engage and retain valuable customers. Today, ibex operates a global CX delivery center model consisting of approximately 30 operations facilities around the world, while deploying next generation technology to drive superior customer experiences for many of the world’s leading companies across retail, e-commerce, healthcare, fintech, utilities and logistics.
ibex leverages its diverse global team of over 30,000 employees together with industry-leading technology, including the AI-powered ibex Wave iX solutions suite, to manage nearly 175 million critical customer interactions, adding over $2.2B in lifetime customer revenue each year and driving a truly differentiated customer experience. To learn more, visit our website at ibex.co and connect with us on LinkedIn.
Media Contact:
Dan Burris
daniel.burris@ibex.co
A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/0c3b6ba9-0829-4dbc-96ea-4a56a032a004
Source: GlobeNewswire (MIL-OSI)
80% of respondents said they want the ability to pay for a medical bill in installments or as part of a payment plan
60% cannot afford to pay for an unexpected illness or injury in one lump sum
Additional Flywire research shows improving the patient payment experience can boost a hospital’s bottom line
BOSTON, Oct. 29, 2024 (GLOBE NEWSWIRE) — Flywire Corporation (Nasdaq: FLYW), a global payments enablement and software company, has released its new report, Is Paying for Healthcare Consumer Friendly Yet? examining the topic of healthcare affordability and accessibility among patients in the U.S. The research highlights a significant disconnect between patient expectations and current billing practices in U.S. healthcare, and uncovers opportunities for healthcare providers to both improve the patient payment experience and increase collections.
“Our research found that patients want medical statements that are easier to understand, the ability to pay bills securely online, and they want to pay in installments of longer than 12 months to better manage the high cost of healthcare,” said John Talaga, EVP and GM of Healthcare, Flywire. “By meeting these demands, hospitals and health systems can not only boost patient satisfaction but also protect the financial health of their organization, as we know that patients satisfied with the financial aspect of their care are more likely to pay their bill, return for service and refer their friends. Flywire helps providers engage patients at every stage of the financial journey, with easy to understand, affordable payment options – streamlining the collections process, while helping patients feel more in control of their medical expenses.”
Patients Are Stressed About High and Unexpected Medical Costs
With 89% of Americans concerned about rising medical costs, it’s no surprise that understanding bills has become a top priority for patients. 75% of those surveyed said medical bills are too complicated, up from 65% in 2021. Patients are also stressed about unexpected medical bills that may loom in the future: 60% of those surveyed said they cannot afford to pay for an unexpected illness or injury in one lump sum, which increased from 46% in 2021.
Patients also emphasized the need for bills to be clearer, with many expressing a desire for simplified, easy-to-read statements that outline charges and payment options more effectively. In fact, nearly everyone surveyed (95%) agreed that there needs to be a better way to simplify and pay for medical bills.
Patients want payment plans and financing options to help them afford medical bills
93% say it should be easier to pay their medical bills over time. Those with a child in the household are more likely to say they would want to pay in installments than those without a child in the household (84% vs. 79%).
81% said they would want to have the ability to pay for a medical expense over time – in installments or as part of a payment plan. Respondents cited both longer terms to pay and financing options as ways to make paying for medical bills more affordable, with 38% saying they would prefer to pay medical bills over 12 or 18 months, and 85% of respondents saying they wish they had consumer-friendly options, like buy-now, pay-later.
Patients weigh payment security in healthcare payment decisions
Security remains a top concern for American healthcare patients, with 67% of respondents worried about the potential for healthcare payment data breaches. This concern is exacerbated by the fact that 31% have already received notifications of a breach involving their healthcare or personal information, so it’s no surprise that 59% of patients are more concerned about payment security now than they were a few years ago.
7 ways Flywire solves patients’ biggest payment concerns and boost health systems’ bottom lines
Flywire’s solutions are designed to optimize the patient financial experience for health systems throughout the U.S., providing patients with a personalized pathway to pay off their balance that’s fully customized to meet every patient’s unique financial needs. And more data suggests that improving the payment experience is core to protecting the financial health of hospitals and health systems. A separate Total Economic Impact analysis showed that by using Flywire’s patient financial engagement platform, healthcare organizations increased revenue by 29% and reduced bad debt as a percentage of net revenue from 5.5% to 4%. Other Flywire clients have reported to reduce their cost per patient payment by 43%.
As one client put it:
“Implementing Flywire has been one of the best decisions we’ve made as an organization, because we have seen it in the feedback from our patients. We see, ‘Thank you for making the statements easy to understand,’ because patients weren’t understanding our statements. And ‘Thank you for having the option to go online and pay and be able to set up payment plans and make arrangements,’” said Sonya Turner, Senior Director Patient Accounting, Centra Healthcare
Additionally, Flywire helps healthcare systems:
1. Deliver more payment plan options with personalized payment plans that are tailored to patient financial capacity.
2. Extend collection terms beyond 12 months with non-recourse, integrated financing.
3. Provide a single platform for in-house and outsourced payment plans.
4. Provide a single portal to make payments by integrating with an EHR strategy for a single-sign on experience
5. Provide a secure way to pay online. Ensure compliance with regulatory and industry standards, such as HIPAA and PCI DSS v 4.0, and more.
6. Increase self-pay collection
7. Reduce time spent dealing with accounts receivable.
To view the complete report, please visit here
About Flywire
Flywire is a global payments enablement and software company. We combine our proprietary global payments network, next-gen payments platform and vertical-specific software to deliver the most important and complex payments for our clients and their customers.
Flywire leverages its vertical-specific software and payments technology to deeply embed within the existing A/R workflows for its clients across the education, healthcare and travel vertical markets, as well as in key B2B industries. Flywire also integrates with leading ERP systems, such as NetSuite, so organizations can optimize the payment experience for their customers while eliminating operational challenges.
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Source: Hong Kong Information Services
Secretary for Commerce & Economic Development Algernon Yau today briefed members of the Trade & Industry Advisory Board on major initiatives related to economic and trade developments in the 2024 Policy Address.
Mr Yau said that the Policy Address announced a series of initiatives, including a reduction of the duty rate for liquor, to create new impetus for Hong Kong’s economic development.
Currently, the import prices of about 85% of duty-paid liquor in Hong Kong stand at $200 or below, meaning that such products will not benefit from the duty reduction.
The commerce chief pointed out that this can avoid providing an incentive for citizens to increase liquor consumption as a result of the duty deduction, adding that the proposal has struck a balance between various policy considerations such as facilitating high-end liquor trade, maintaining healthy public finances and safeguarding public health.
Mr Yau also briefed the members on the proposal introduced in the Policy Address to build a high value-added supply chain service centre.
He noted that Invest Hong Kong and the Trade Development Council will set up a mechanism and enhance their interfaces for attracting Mainland enterprises to establish international or regional headquarters in Hong Kong for managing offshore trading and supply chains, and providing one-stop diversified professional advisory services for enterprises in Hong Kong looking to go global.
Mr Yau also highlighted that the Policy Address rolled out various support measures for small and medium-sized enterprises (SMEs), including relaunching the principal moratorium arrangement under the SME Financing Guarantee Scheme, as well as raising the maximum indemnity ratio of the Hong Kong Export Credit Insurance Corporation to 95%.
Separately, the Trade & Industry Department briefed the meeting attendees on the Second Agreement Concerning Amendment to the Mainland & Hong Kong Closer Economic Partnership Arrangement Agreement on Trade in Services (Amendment Agreement II).
Mr Yau said the series of measures will provide better support for SMEs while further promoting economic and trade developments, thereby enabling the steady advancement of Hong Kong’s economy.
Source: The Conversation – USA – By Shannon Van Zandt, Professor of Landscape Architecture and Urban Planning, Texas A&M University
In a pattern all too familiar to people affected by disasters, hurricanes Helene and Milton have disappeared from the headlines, just a few weeks after these disasters ravaged the Southeast. Although reporters have moved on, recovery is just beginning for people who were displaced.
According to government and private analysts, damages may exceed US$50 billion apiece for these two storms. The Red Cross estimates that over 7,200 homes were destroyed or severely damaged and that more than 1,200 people were living in shelters across the affected states as of late October 2024.
Staffers from the Federal Emergency Management Agency have been on the ground since before Helene and Milton hit, positioned to help as soon as the storms passed, along with state and local responders. But many people aren’t clear about how FEMA helps or what its responsibilities are.
This may be one reason why the agency has had to dispel rumors about its response to Helene in North Carolina, such as assertions that representatives were coming to seize damaged property.
We study the impacts of natural disasters and how communities recover. Here’s what FEMA does in zones battered by disasters like Helene and Milton:
FEMA works year-round helping communities prepare for disasters and training emergency management personnel to respond to these events. In the wake of declared federal disasters, it offers its Public Assistance and Individuals and Households programs.
Public Assistance Program funds are available to state and local governments and some nonprofits to help pay for things like removing debris, preventing further damage and restoring public infrastructure. Support from the Individuals and Households Program may include funds for temporary housing and for repairing or replacing primary residences, as well as provision of temporary housing units for people displaced from their homes.
FEMA launched a new form of flexible aid in March 2024 that provides quick cash payments of $750 per household for immediate needs, such as food, water, gasoline and emergency shelter. Contrary to rumors that have circulated in the wake of Helene, these payments are just a start, not the maximum support that FEMA offers.
Applicants have to file claims to receive further aid. These requests go through extensive review, such as inspections of home damage. FEMA then decides how much aid to provide, if any.
The agency will fund repairs intended to make the home safe to live in, but this work may not be enough to return the home to its pre-disaster state. Currently, the maximum FEMA aid for housing assistance is $42,500, plus an additional $42,500 for other disaster-related needs. For many, these amounts will be insufficient.
FEMA officials say the agency has enough funding to handle immediate response and recovery from both Helene and Milton. However,
until damage from both storms has been fully assessed, it is hard to know whether FEMA will need supplemental funds from Congress to support long-term recovery.
FEMA’s programs are intended to help with temporary housing and other needs that aren’t covered by insurance. Homeowners are expected to protect themselves against losing their dwellings by insuring their homes.
However, some natural disasters are not always covered by homeowners insurance. They include storm-driven flooding, earthquakes and wind damage from hurricanes and tornadoes.
In places that are vulnerable to these hazards, homeowners may have to seek separate coverage, either from private insurers or government-backed lenders of last resort. Households that don’t purchase special coverage, either because it costs too much or they don’t think they need it, will struggle to recover.
Another federal funding source for housing repair and replacement and other personal property losses is the Small Business Administration. But, unlike FEMA grants that don’t need to be repaid, the SBA only offers low-interest loans.
The main source of funding for long-term housing recovery is the U.S. Department of Housing and Urban Development’s Community Development Block Grant – Disaster Recovery grants. These funds must be approved by Congress following a disaster, so it can take months or years for funds to reach communities.
Awarding this money as block grants gives state and local governments more flexibility to meet the needs of affected communities. However, it also makes it easier to allocate the funds in ways that don’t address the housing needs of the people they are intended to help.
In recent years, we have seen many cases in which state or local officials have spent these funds inappropriately. For example, after Hurricane Katrina in 2005, Mississippi Governor Haley Barbour redirected most of his state’s HUD funds to economic development projects, including expanding the port of Gulfport, rather than rebuilding housing for storm survivors.
Fighting to direct funds to those who need them most often requires legal action, extending the wait for hard-hit communities that need it.
Disaster recovery programs often overlook renters, even though in many areas up to half of residents may rent their homes. Renters have little control over whether their homes are rebuilt at all, much less whether they will be allowed to return to them.
Our research has shown that owner-occupied housing generally recovers much more quickly than rental housing. Apartment buildings also face a more uncertain recovery than single-family homes.
Even after recent updates to its rules, FEMA still struggles to adequately meet the needs of the most vulnerable groups in society. This includes low-income and minority households, people with disabilities and those who are undocumented.
Poor households often live in homes that are in bad shape or that have gone through previous disasters without repair. In such cases, it can be hard for FEMA inspectors to determine how much damage was caused by the current disaster, which in turn can lead to claims being denied.
In south Texas, after hurricanes Dolly and Ike in 2008, thousands of low-income households’ claims were denied, leading to a class-action lawsuit that homeowners ultimately won. After Hurricane Maria devastated Puerto Rico in 2017, many homeowners were denied rebuilding aid because they couldn’t provide a title to prove ownership.
In response, FEMA created new rules in 2023 for demonstrating ownership. For example, FEMA has modified and expanded the types of documentation needed to prove ownership. The agency has also changed eligibility and assistance rules to make it easier to qualify for assistance.
Recent research suggests that, at least on the whole, FEMA’s Individual Assistance Program is not likely to underserve poor households. Nonetheless, as people across the Southeast take stock of losses from this year’s hurricanes, we believe it will be important to pay special attention to under-resourced households, whose needs may not be adequately addressed by federal programs.
Shannon Van Zandt receives funding from the U.S. Department of Housing & Urban Development and the National Institutes for Standards & Technology. She is a board member of Texas Housers, a non-profit that advocates for housing for low-income Texans.
Walter Gillis Peacock research has been funded by a number of agencies including the National Institute for Standards and Technology, the National Science Foundation, the National Oceanic and Atmospheric Administration, the Department of Homeland Security, and the U.S. Army Corps of Engineers.
– ref. Beyond bottled water and sandwiches: What FEMA is doing to get hurricane victims back into their homes – https://theconversation.com/beyond-bottled-water-and-sandwiches-what-fema-is-doing-to-get-hurricane-victims-back-into-their-homes-241176
Source: GlobeNewswire (MIL-OSI)
RENTON, Wash., Oct. 29, 2024 (GLOBE NEWSWIRE) — First Financial Northwest, Inc. (the “Company”) (NASDAQ GS: FFNW), the holding company for First Financial Northwest Bank (the “Bank”), today reported a net loss of $608,000, or $(0.07) per diluted share, for the quarter ended September 30, 2024, compared to net income of $1.6 million, or $0.17 per diluted share, for the quarter ended June 30, 2024, and net income of $1.5 million, or $0.16 per diluted share, for the quarter ended September 30, 2023. For the nine months ended September 30, 2024, the Company reported a net loss of $128,000, or $(0.01) per diluted share, compared to net income of $5.1 million, or $0.56 per diluted share, for the comparable period in 2023.
The net loss for the quarter was primarily the result of a $1.6 million provision for credit losses. Our allowance for credit losses (“ACL”) analysis determined that a provision for credit losses of $1.6 million was appropriate as of September 30, 2024. This provision mainly relates to two participation loans totaling $6.0 million, for which we are not the lead lender. These loans, secured by short-term rehabilitation and assisted living facilities, have been individually evaluated and classified as “substandard” since March 2022 due to a decline in demand for the services provided at such facilities post-COVID. While payments on the loans were current as of September 30, 2024, updated appraisals received during the quarter resulted in an increase in our ACL. The loan guarantors are under contract to sell another property, with the sale expected to close in the fourth quarter of 2024. Proceeds from this sale are expected to be applied to the two loans, which would improve our position. Additionally, the guarantors reported interest from a national real estate developer in purchasing one of the facilities, though no purchase agreement was entered into as of September 30, 2024. The ACL was also impacted by higher forecasted unemployment rates and increased construction and land development loan balances. Additionally, reserves for unfunded commitments increased by $75,000 due to increased construction lending activity during the quarter.
“While we recorded a provision for credit losses during the quarter ended September 30, 2024, our credit quality remained strong, with only $853,000 in nonaccrual loans relative to our $1.14 billion total loan portfolio. Our strong credit quality is directly related to our top-notch lending department employees who originate, document and underwrite these loans,” stated Joseph W. Kiley III, President and CEO.
“We also continue to work closely with Global Federal Credit Union (“Global”) to prepare for the closing of the pending transaction and to ensure a smooth transition for our customers and employees. I truly appreciate the efforts and patience of our employees, customers, and shareholders as we await the final required approval from the National Credit Union Administration before we can close the transaction,” concluded Kiley.
Highlights for the quarter ended September 30, 2024:
Deposits totaled $1.17 billion at September 30, 2024, compared to $1.09 billion at June 30, 2024, and $1.21 billion at September 30, 2023. The $79.2 million increase in deposits at September 30, 2024, compared to June 30, 2024, was due primarily to a $81.9 million increase in retail certificates of deposit and a $624,000 increase in noninterest-bearing demand deposits, partially offset by a $1.5 million, $1.4 million, $392,000, and $104,000 decline in interest-bearing demand deposits, money market deposits, savings and brokered deposits, respectively. The increased deposits were used to pay down our FHLB advances to $100.0 million at September 30, 2024, from $176.0 million at June 30, 2024.
Advances from the FHLB totaled $100.0 million at September 30, 2024, down from $176.0 million at June 30, 2024, and $125.0 million at September 30, 2023, as the increase in deposits during the current quarter allowed us to reduce our reliance on FHLB advances. At September 30, 2024, the $100.0 million in FHLB advances were tied to cash flow hedge agreements where the Bank pays a fixed rate and receives a variable rate in return to assist in the Bank’s interest rate risk management efforts. These cash flow hedge agreements had a weighted average remaining term of 30.8 months and a weighted average fixed interest rate of 1.93% as of September 30, 2024. The average cost of borrowings was 3.19% for the quarter ended September 30, 2024, compared to 2.64% for the quarter ended June 30, 2024, and 2.42% for the quarter ended September 30, 2023.
The following table presents a breakdown of our total deposits (unaudited):
| Sep 30, 2024 |
Jun 30, 2024 |
Sep 30, 2023 |
Three Month Change |
One Year Change |
||||||||||||
| Deposits: | (Dollars in thousands) | |||||||||||||||
| Noninterest-bearing demand | $ | 100,466 | $ | 99,842 | $ | 104,164 | $ | 624 | $ | (3,698 | ) | |||||
| Interest-bearing demand | 55,506 | 57,033 | 60,816 | (1,527 | ) | (5,310 | ) | |||||||||
| Savings | 17,031 | 17,423 | 18,844 | (392 | ) | (1,813 | ) | |||||||||
| Money market | 495,978 | 497,345 | 501,168 | (1,367 | ) | (5,190 | ) | |||||||||
| Certificates of deposit, retail | 447,474 | 365,527 | 349,446 | 81,947 | 98,028 | |||||||||||
| Brokered deposits | 50,900 | 51,004 | 175,972 | (104 | ) | (125,072 | ) | |||||||||
| Total deposits | $ | 1,167,355 | $ | 1,088,174 | $ | 1,210,410 | $ | 79,181 | $ | (43,055 | ) | |||||
The following tables present an analysis of total deposits by branch office (unaudited):
| September 30, 2024 | ||||||||||||||
| Noninterest-bearing demand | Interest-bearing demand | Savings | Money market |
Certificates of deposit, retail | Brokered deposits |
Total | ||||||||
| (Dollars in thousands) | ||||||||||||||
| King County | ||||||||||||||
| Renton | $ | 29,388 | $ | 14,153 | $ | 10,654 | $ | 305,836 | $ | 315,721 | $ | – | $ | 675,752 |
| Landing | 3,442 | 1,660 | 237 | 8,348 | 12,733 | – | 26,420 | |||||||
| Woodinville | 1,968 | 2,234 | 959 | 8,852 | 11,522 | – | 25,535 | |||||||
| Bothell | 2,965 | 1,151 | 401 | 1,536 | 5,918 | – | 11,971 | |||||||
| Crossroads | 14,770 | 2,039 | 107 | 31,665 | 18,136 | – | 66,717 | |||||||
| Kent | 5,417 | 10,502 | 44 | 16,053 | 8,562 | – | 40,578 | |||||||
| Kirkland | 10,967 | 1,890 | 206 | 11,243 | 2,240 | – | 26,546 | |||||||
| Issaquah | 1,186 | 294 | 18 | 2,547 | 6,580 | – | 10,625 | |||||||
| Total King County | 70,103 | 33,923 | 12,626 | 386,080 | 381,412 | – | 884,144 | |||||||
| Snohomish County | ||||||||||||||
| Mill Creek | 3,990 | 2,171 | 384 | 14,628 | 10,312 | – | 31,485 | |||||||
| Edmonds | 9,254 | 6,831 | 330 | 18,549 | 13,281 | – | 48,245 | |||||||
| Clearview | 5,587 | 5,242 | 1,462 | 21,206 | 12,251 | – | 45,748 | |||||||
| Lake Stevens | 3,970 | 4,282 | 1,244 | 23,257 | 15,571 | – | 48,324 | |||||||
| Smokey Point | 2,994 | 1,664 | 969 | 29,353 | 11,387 | – | 46,367 | |||||||
| Total Snohomish County | 25,795 | 20,190 | 4,389 | 106,993 | 62,802 | – | 220,169 | |||||||
| Pierce County | ||||||||||||||
| University Place | 2,940 | 53 | 4 | 1,848 | 1,458 | – | 6,303 | |||||||
| Gig Harbor | 1,628 | 1,340 | 12 | 1,057 | 1,802 | – | 5,839 | |||||||
| Total Pierce County | 4,568 | 1,393 | 16 | 2,905 | 3,260 | – | 12,142 | |||||||
| Brokered deposits | – | – | – | – | – | 50,900 | 50,900 | |||||||
| Total deposits | $ | 100,466 | $ | 55,506 | $ | 17,031 | $ | 495,978 | $ | 447,474 | $ | 50,900 | $ | 1,167,355 |
| June 30, 2024 | ||||||||||||||
| Noninterest-bearing demand | Interest-bearing demand | Savings | Money market |
Certificates of deposit, retail | Brokered deposits |
Total | ||||||||
| (Dollars in thousands) | ||||||||||||||
| King County | ||||||||||||||
| Renton | $ | 30,336 | $ | 14,380 | $ | 11,186 | $ | 306,176 | $ | 246,076 | $ | – | $ | 608,154 |
| Landing | 2,079 | 566 | 113 | 7,895 | 9,881 | – | 20,534 | |||||||
| Woodinville | 1,953 | 2,949 | 987 | 10,931 | 10,845 | – | 27,665 | |||||||
| Bothell | 3,336 | 847 | 398 | 1,595 | 6,055 | – | 12,231 | |||||||
| Crossroads | 13,585 | 2,858 | 28 | 25,599 | 17,748 | – | 59,818 | |||||||
| Kent | 7,729 | 8,142 | 42 | 14,525 | 7,448 | – | 37,886 | |||||||
| Kirkland | 8,326 | 1,789 | 210 | 15,007 | 1,752 | – | 27,084 | |||||||
| Issaquah | 1,287 | 232 | 22 | 3,971 | 6,202 | – | 11,714 | |||||||
| Total King County | 68,631 | 31,763 | 12,986 | 385,699 | 306,007 | – | 805,086 | |||||||
| Snohomish County | ||||||||||||||
| Mill Creek | 5,823 | 2,306 | 420 | 15,209 | 9,578 | – | 33,336 | |||||||
| Edmonds | 10,418 | 9,470 | 402 | 20,255 | 12,753 | – | 53,298 | |||||||
| Clearview | 4,810 | 4,888 | 1,444 | 18,695 | 9,504 | – | 39,341 | |||||||
| Lake Stevens | 4,111 | 4,445 | 1,171 | 22,618 | 14,090 | – | 46,435 | |||||||
| Smokey Point | 2,700 | 3,152 | 982 | 31,808 | 10,435 | – | 49,077 | |||||||
| Total Snohomish County | 27,862 | 24,261 | 4,419 | 108,585 | 56,360 | – | 221,487 | |||||||
| Pierce County | ||||||||||||||
| University Place | 2,385 | 41 | 2 | 1,819 | 1,503 | – | 5,750 | |||||||
| Gig Harbor | 964 | 968 | 16 | 1,242 | 1,657 | – | 4,847 | |||||||
| Total Pierce County | 3,349 | 1,009 | 18 | 3,061 | 3,160 | – | 10,597 | |||||||
| Brokered deposits | – | – | – | – | – | 51,004 | 51,004 | |||||||
| Total deposits | $ | 99,842 | $ | 57,033 | $ | 17,423 | $ | 497,345 | $ | 365,527 | $ | 51,004 | $ | 1,088,174 |
Net loans receivable totaled $1.13 billion at September 30, 2024, compared to $1.14 billion at June 30, 2024, and $1.17 billion at September 30, 2023. During the quarter ended September 30, 2024, loan repayments outpaced new loan fundings across all loan categories except construction and land development. The average balance of net loans receivable totaled $1.13 billion for the quarter ended September 30, 2024, compared to $1.14 billion for the quarter ended June 30, 2024, and $1.17 billion for the quarter ended September 30, 2023.
The ACL represented 1.42% of total loans receivable at September 30, 2024, compared to 1.29% at both June 30, 2024, and September 30, 2023.
Nonaccrual loans totaled $853,000 at September 30, 2024, compared to $4.7 million at June 30, 2024, and $201,000 at September 30, 2023. The decrease compared to the prior quarter was due primarily to the payoff of a $4.1 million commercial real estate loan that had been reported as nonaccrual as of June 30, 2024. The Bank did not incur any loss related to this credit. Additionally, there was no other real estate owned at September 30, 2024, June 30, 2024, or September 30, 2023.
Net interest income totaled $8.5 million for the quarter ended September 30, 2024, compared to $9.0 million for the quarter ended June 30, 2024, and $9.7 million for the quarter ended September 30, 2023.
Total interest income was $19.4 million for the quarter ended September 30, 2024, compared to $19.3 million for the quarter ended June 30, 2024, and $19.7 million for the quarter ended September 30, 2023. The increase in total interest income during the current quarter was primarily due to interest income on interest-earning deposits held with banks which increased to $863,000 in the quarter ended September 30, 2024, up 79.0% from $482,000 in the quarter ended June 30, 2024, partially offset by decreases in interest income on loans and investments of $147,000 or 0.9% and $142,000 or 7.5%, respectively. The decrease in total interest income during the current quarter compared to the comparable quarter in 2023, was primarily due to decreases in interest income on loans of $260,000 or 1.5% and on investments of $374,000 or 17.7%, partially offset by increases in interest income on interest-earning deposits held with banks and dividends on FHLB stock of $338,000 or 64.4% and $37,000 or 32.7%, respectively.
Yield on loans decreased to 5.86% during the recent quarter from 5.93% for the quarter ended June 30, 2024, and increased from 5.73% for the quarter ended September 30, 2023. During the June 30, 2024 quarter, the Bank modified over $130 million in loans under its agreement with Global, resulting in a $214,000 increase in net deferred loan fees and costs, which increased the loan yield. In the most recent quarter, these fees and costs decreased by $266,000. The yield on investment securities for the current quarter was 4.30%, down from 4.38% last quarter and up from 3.98% a year ago.
Total interest expense was $11.0 million for the quarter ended September 30, 2024, compared to $10.3 million for the quarter ended June 30, 2024, and $10.0 million for the quarter ended September 30, 2023. The increase from the quarters ended June 30, 2024 and September 30, 2023, was due to increases in funding costs. Interest expense on deposits increased $250,000 or 2.6% to $9.7 million, while interest expense on other borrowings increased $364,000 or 42.9% to $1.2 million during the current quarter, compared to the prior quarter. The increase in interest expense on deposits was primarily due to a $32.5 million increase in the average balances of certificates of deposit, partially offset by declines of $28.9 million and $10.7 million in the average balances of brokered deposits and money market deposits, respectively. In addition, the average cost of interest-bearing deposits was 3.80% for the quarter ended September 30, 2024, up from 3.71% for the quarter ended June 30, 2024. The increase in interest expense on other borrowings was due to a $22.4 million increase in the average balance of borrowings, coupled with a 55-basis point increase in the average cost of other borrowings to 3.19% during the quarter ended September 30, 2024, compared to the prior quarter. The increase in interest expense during the current quarter compared to the same quarter in 2023, was also due to increases in both the average balance and cost of outstanding borrowings, which increased by $26.1 million and 77 basis points, respectively.
Net interest margin was 2.46% for the quarter ended September 30, 2024, compared to 2.66% for the quarter ended June 30, 2024, and 2.69% for the quarter ended September 30, 2023. The decrease in the net interest margin for the quarter ended September 30, 2024, was due primarily to continued pressure on funding costs. The average yield on interest-earning assets decreased seven basis points to 5.66% during the quarter ended September 30, 2024, from 5.73% during the quarter ended June 30, 2024, and increased 20 basis points from 5.46% during the quarter ended September 30, 2023. The average cost of interest-bearing liabilities increased 13 basis points to 3.72% during the quarter, from 3.59% during the quarter ended June 30, 2024, and increased 48 basis points from 3.24% during the quarter ended September 30, 2023. The net interest margin for the month of September 2024 was 2.49%.
Noninterest income for the quarter ended September 30, 2024, totaled $677,000, up slightly from $673,000 for the quarter ended June 30, 2024, and unchanged from $677,000 for the quarter ended September 30, 2023. The increase compared to the quarter ended June 30, 2024, was primarily due to fluctuations related to our fintech focused venture capital investment more than offsetting the decreases in BOLI income, wealth management revenue and deposit and loan related fees in the quarter.
Noninterest expense totaled $8.5 million for the quarter ended September 30, 2024, compared to $7.9 million for the prior quarter, and $8.8 million for the same period in 2023. The increase from the June 30, 2024 quarter was primarily due to a $789,000 increase in salaries and employee benefits. This was because the June 2024 quarter included $939,000 in deferred loan costs related to loan modifications, which reduced salary and employee benefit expenses, compared to $117,000 in deferred loan costs in the quarter ended September 30, 2024. Partially offsetting this was a $411,000 refund from the defined benefit plan buyout following a final census review of remaining plan participants. Professional fees also declined by $164,000 in the current quarter, largely due to a $101,000 decline in transaction-related expenses and a $54,000 decline in legal fees. Compared to the September 30, 2023 quarter, the decline in noninterest expense was primarily due to a $412,000 decrease in salaries and employee benefits, a $51,000 decrease in marketing expenses, a $35,000 decline in regulatory assessments, and $10,000 in lower occupancy and equipment expense. These reductions were partially offset by higher data processing, other general and administrative expenses and professional fees.
First Financial Northwest, Inc. is the parent company of First Financial Northwest Bank; an FDIC insured Washington State-chartered commercial bank headquartered in Renton, Washington, serving the Puget Sound Region through 15 full-service banking offices. For additional information about us, please visit our website at ffnwb.com and click on the “Investor Relations” link at the bottom of the page.
Forward-looking statements:
When used in this press release and in other documents filed with or furnished to the Securities and Exchange Commission (the “SEC”), in press releases or other public stockholder communications, or in oral statements made with the approval of an authorized executive officer, the words or phrases “believe,” “will,” “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimate,” “project,” “plans,” or similar expressions are intended to identify “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not historical facts but instead represent management’s current expectations and forecasts regarding future events many of which are inherently uncertain and outside of our control. Forward-looking statements include statements with respect to our beliefs, plans, objectives, goals, expectations, assumptions and statements about, among other things, our pending transaction with Global Federal Credit Union (“Global”) whereby Global, pursuant to the definitive purchase and assumption agreement (the “P&A Agreement”), will acquire substantially all of the assets and assume substantially all of the liabilities of the Bank, expectations of the business environment in which we operate, projections of future performance or financial items, perceived opportunities in the market, potential future credit experience, and statements regarding our mission and vision. These forward-looking statements are based on current management expectations and may, therefore, involve risks and uncertainties. Actual results may differ, possibly materially from those currently expected or projected in these forward-looking statements made by, or on behalf of, us and could negatively affect our operating and stock performance. Factors that could cause our actual results to differ materially from those described in the forward-looking statements, include, but are not limited to, the following: the occurrence of any event, change or other circumstances that could give rise to the right of one or all of the parties to terminate the P&A Agreement; delays in completing the P&A Agreement; the failure to obtain necessary regulatory approvals or to satisfy any of the other conditions to the Global transaction, including the P&A Agreement, on a timely basis or at all; delays or other circumstances arising from the dissolution of the Bank and the Company following completion of the P&A Agreement; diversion of management’s attention from ongoing business operations and opportunities during the pending Global transaction; potential adverse reactions or changes to business or employee relationships, including those resulting from the announcement of the Global transaction; adverse impacts to economic conditions in our local market areas, other markets where the Company has lending relationships, 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 recession or slowed economic growth; changes in the interest rate environment, including increases or decreases in the Federal Reserve benchmark rate and duration at which such interest rate levels are maintained, which could adversely affect our revenues and expenses, the value of assets and obligations, and the availability and cost of capital and liquidity; the impact of inflation and the current and future monetary policies of the Federal Reserve in response thereto; the effects of any federal government shutdown; increased competitive pressures; legislative and regulatory changes; the impact of bank failures or adverse developments at other banks and related negative press about the banking industry in general on investor and depositor sentiment; 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 several of our critical processing functions; effects of critical accounting policies and judgments, including the use of estimates in determining the fair value of certain of our assets, which estimates may prove to be incorrect and result in significant declines in valuation; the effects of climate change, severe weather events, natural disasters, pandemics, epidemics and other public health crises, acts of war or terrorism, civil unrest and other external events on our business; and other factors described in the Company’s latest Annual Report on Form 10-K and Quarterly Reports on Form 10-Q and other reports filed with or furnished to the Securities and Exchange Commission – that are available on our website at www.ffnwb.com and on the SEC’s website at www.sec.gov.
Any of the forward-looking statements that we make in this Press Release and in the other public statements are based upon management’s beliefs and assumptions at the time they are made and may turn out to be wrong because of the inaccurate assumptions we might make, because of the factors illustrated above or because of other factors that we cannot foresee. Therefore, these factors should be considered in evaluating the forward-looking statements, and undue reliance should not be placed on such statements. We do not undertake and specifically disclaim any obligation to revise any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements.
For more information, contact:
Joseph W. Kiley III, President and Chief Executive Officer
Rich Jacobson, Executive Vice President and Chief Financial Officer
(425) 255-4400
| FIRST FINANCIAL NORTHWEST, INC. AND SUBSIDIARIES Consolidated Balance Sheets (Dollars in thousands) (Unaudited) |
|||||||||||||||||
| Assets | Sep 30, 2024 |
Jun 30, 2024 |
Sep 30, 2023 |
Three Month Change |
One Year Change |
||||||||||||
| Cash on hand and in banks | $ | 8,423 | $ | 10,811 | $ | 8,074 | (22.1 | )% | 4.3 | % | |||||||
| Interest-earning deposits with banks | 72,884 | 48,173 | 49,618 | 51.3 | 46.9 | ||||||||||||
| Investments available-for-sale, at fair value | 156,609 | 160,693 | 204,975 | (2.5 | ) | (23.6 | ) | ||||||||||
| Investments held-to-maturity, at amortized cost | 2,462 | 2,456 | 2,450 | 0.2 | 0.5 | ||||||||||||
| Loans receivable, net of allowance of $16,265, $14,796, and $15,306 respectively | 1,126,146 | 1,135,067 | 1,168,079 | (0.8 | ) | (3.6 | ) | ||||||||||
| Federal Home Loan Bank (“FHLB”) stock, at cost | 5,403 | 8,823 | 6,803 | (38.8 | ) | (20.6 | ) | ||||||||||
| Accrued interest receivable | 6,638 | 6,632 | 7,263 | 0.1 | (8.6 | ) | |||||||||||
| Deferred tax assets, net | 2,690 | 2,360 | 3,156 | 14.0 | (14.8 | ) | |||||||||||
| Premises and equipment, net | 18,584 | 19,007 | 19,921 | (2.2 | ) | (6.7 | ) | ||||||||||
| Bank owned life insurance (“BOLI”), net | 38,661 | 38,368 | 37,398 | 0.8 | 3.4 | ||||||||||||
| Prepaid expenses and other assets | 8,898 | 11,447 | 13,673 | (22.3 | ) | (34.9 | ) | ||||||||||
| Right of use asset (“ROU”), net | 2,473 | 2,670 | 2,818 | (7.4 | ) | (12.2 | ) | ||||||||||
| Goodwill | 889 | 889 | 889 | 0.0 | 0.0 | ||||||||||||
| Core deposit intangible, net | 326 | 357 | 451 | (8.7 | ) | (27.7 | ) | ||||||||||
| Total assets | $ | 1,451,086 | $ | 1,447,753 | $ | 1,525,568 | 0.2 | (4.9 | ) | ||||||||
| Liabilities and Stockholders’ Equity | |||||||||||||||||
| Deposits | |||||||||||||||||
| Noninterest-bearing deposits | $ | 100,466 | $ | 99,842 | $ | 104,164 | 0.6 | (3.6 | ) | ||||||||
| Interest-bearing deposits | 1,066,889 | 988,332 | 1,106,246 | 7.9 | (3.6 | ) | |||||||||||
| Total deposits | 1,167,355 | 1,088,174 | 1,210,410 | 7.3 | (3.6 | ) | |||||||||||
| Advances from the FHLB | 100,000 | 176,000 | 125,000 | (43.2 | ) | (20.0 | ) | ||||||||||
| Advance payments from borrowers for taxes and insurance | 5,211 | 2,764 | 4,760 | 88.5 | 9.5 | ||||||||||||
| Lease liability, net | 2,673 | 2,866 | 3,011 | (6.7 | ) | (11.2 | ) | ||||||||||
| Accrued interest payable | 294 | 1,117 | 2,646 | (73.7 | ) | (88.9 | ) | ||||||||||
| Other liabilities | 15,340 | 16,139 | 20,506 | (5.0 | ) | (25.2 | ) | ||||||||||
| Total liabilities | 1,290,873 | 1,287,060 | 1,366,333 | 0.3 | (5.5 | ) | |||||||||||
| Commitments and contingencies | |||||||||||||||||
| Stockholders’ Equity | |||||||||||||||||
| Preferred stock, $0.01 par value; authorized 10,000,000 shares; no shares issued or outstanding | – | – | – | n/a | n/a | ||||||||||||
| Common stock, $0.01 par value; authorized 90,000,000 shares; issued and outstanding | |||||||||||||||||
| 9,213,969 shares at September 30, 2024; 9,179,825 shares at June 30, 2024; and 9,179,510 shares at September 30, 2023 | 92 | 92 | 92 | 0.0 | 0.0 | ||||||||||||
| Additional paid-in capital | 72,916 | 72,953 | 72,926 | (0.1 | ) | (0.0 | ) | ||||||||||
| Retained earnings | 93,692 | 94,300 | 96,206 | (0.6 | ) | (2.6 | ) | ||||||||||
| Accumulated other comprehensive loss, net of tax | (6,487 | ) | (6,652 | ) | (9,989 | ) | (2.5 | ) | (35.1 | ) | |||||||
| Total stockholders’ equity | 160,213 | 160,693 | 159,235 | (0.3 | ) | 0.6 | |||||||||||
| Total liabilities and stockholders’ equity | $ | 1,451,086 | $ | 1,447,753 | $ | 1,525,568 | 0.2 | % | (4.9 | )% | |||||||
| FIRST FINANCIAL NORTHWEST, INC. AND SUBSIDIARIES Consolidated Income Statements (Dollars in thousands, except per share data) (Unaudited) |
|||||||||||||||||
| Quarter Ended | |||||||||||||||||
| Sep 30, 2024 |
Jun 30, 2024 |
Sep 30, 2023 |
Three Month Change |
One Year Change |
|||||||||||||
| Interest income | |||||||||||||||||
| Loans, including fees | $ | 16,658 | $ | 16,805 | $ | 16,918 | (0.9 | )% | (1.5 | )% | |||||||
| Investments | 1,744 | 1,886 | 2,118 | (7.5 | ) | (17.7 | ) | ||||||||||
| Interest-earning deposits with banks | 863 | 482 | 525 | 79.0 | 64.4 | ||||||||||||
| Dividends on FHLB Stock | 150 | 144 | 113 | 4.2 | 32.7 | ||||||||||||
| Total interest income | 19,415 | 19,317 | 19,674 | 0.5 | (1.3 | ) | |||||||||||
| Interest expense | |||||||||||||||||
| Deposits | 9,748 | 9,498 | 9,205 | 2.6 | 5.9 | ||||||||||||
| Other borrowings | 1,213 | 849 | 766 | 42.9 | 58.4 | ||||||||||||
| Total interest expense | 10,961 | 10,347 | 9,971 | 5.9 | 9.9 | ||||||||||||
| Net interest income | 8,454 | 8,970 | 9,703 | (5.8 | ) | (12.9 | ) | ||||||||||
| Provision (recapture of provision) for credit losses | 1,575 | (200 | ) | (300 | ) | (887.5 | ) | (625.0 | ) | ||||||||
| Net interest income after provision (recapture of provision) for credit losses | 6,879 | 9,170 | 10,003 | (25.0 | ) | (31.2 | ) | ||||||||||
| Noninterest income | |||||||||||||||||
| BOLI income | 295 | 310 | 244 | (4.8 | ) | 20.9 | |||||||||||
| Wealth management revenue | 42 | 54 | 53 | (22.2 | ) | (20.8 | ) | ||||||||||
| Deposit related fees | 236 | 240 | 247 | (1.7 | ) | (4.5 | ) | ||||||||||
| Loan related fees | 96 | 97 | 79 | (1.0 | ) | 21.5 | |||||||||||
| Other income (expense), net | 8 | (28 | ) | 54 | (128.6 | ) | (85.2 | ) | |||||||||
| Total noninterest income | 677 | 673 | 677 | 0.6 | 0.0 | ||||||||||||
| Noninterest expense | |||||||||||||||||
| Salaries and employee benefits | 4,606 | 3,817 | 5,018 | 20.7 | (8.2 | ) | |||||||||||
| Occupancy and equipment | 1,183 | 1,225 | 1,193 | (3.4 | ) | (0.8 | ) | ||||||||||
| Professional fees | 585 | 749 | 553 | (21.9 | ) | 5.8 | |||||||||||
| Data processing | 838 | 856 | 742 | (2.1 | ) | 12.9 | |||||||||||
| Regulatory assessments | 165 | 170 | 200 | (2.9 | ) | (17.5 | ) | ||||||||||
| Insurance and bond premiums | 113 | 118 | 111 | (4.2 | ) | 1.8 | |||||||||||
| Marketing | 46 | 47 | 97 | (2.1 | ) | (52.6 | ) | ||||||||||
| Other general and administrative | 952 | 959 | 856 | (0.7 | ) | 11.2 | |||||||||||
| Total noninterest expense | 8,488 | 7,941 | 8,770 | 6.9 | (3.2 | ) | |||||||||||
| (Loss) income before federal income tax (benefit) provision | (932 | ) | 1,902 | 1,910 | (149.0 | ) | (148.8 | ) | |||||||||
| Federal income tax (benefit) provision | (324 | ) | 347 | 409 | (193.4 | ) | (179.2 | ) | |||||||||
| Net (loss) income | $ | (608 | ) | $ | 1,555 | $ | 1,501 | (139.1 | )% | (140.5 | )% | ||||||
| Basic (loss) earnings per share | $ | (0.07 | ) | $ | 0.17 | $ | 0.16 | ||||||||||
| Diluted (loss) earnings per share | $ | (0.07 | ) | $ | 0.17 | $ | 0.16 | ||||||||||
| Weighted average number of common shares outstanding | 9,190,146 | 9,168,414 | 9,127,568 | ||||||||||||||
| Weighted average number of diluted shares outstanding | 9,190,146 | 9,235,446 | 9,150,059 | ||||||||||||||
The following table presents a breakdown of the loan portfolio (unaudited):
| September 30, 2024 | June 30, 2024 | September 30, 2023 | ||||||||||||||||||
| Amount | Percent | Amount | Percent | Amount | Percent | |||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||
| Commercial real estate: | ||||||||||||||||||||
| Residential: | ||||||||||||||||||||
| Multifamily | $ | 132,811 | 11.6 | % | $ | 134,302 | 11.7 | % | $ | 140,022 | 11.7 | % | ||||||||
| Total multifamily residential | 132,811 | 11.6 | 134,302 | 11.7 | 140,022 | 11.7 | ||||||||||||||
| Non-residential: | ||||||||||||||||||||
| Retail | 118,840 | 10.4 | 118,154 | 10.4 | 130,101 | 11.0 | ||||||||||||||
| Office | 73,778 | 6.5 | 74,032 | 6.4 | 72,773 | 6.1 | ||||||||||||||
| Hotel / motel | 54,716 | 4.8 | 55,018 | 4.8 | 63,954 | 5.4 | ||||||||||||||
| Storage | 32,443 | 2.8 | 32,636 | 2.8 | 33,229 | 2.8 | ||||||||||||||
| Mobile home park | 22,443 | 2.0 | 23,159 | 2.0 | 21,285 | 1.8 | ||||||||||||||
| Warehouse | 18,743 | 1.6 | 18,868 | 1.6 | 19,446 | 1.6 | ||||||||||||||
| Nursing Home | 11,407 | 1.0 | 11,474 | 1.0 | 11,676 | 1.0 | ||||||||||||||
| Other non-residential | 30,719 | 2.7 | 32,139 | 2.8 | 42,227 | 3.7 | ||||||||||||||
| Total non-residential | 363,089 | 31.8 | 365,480 | 31.8 | 394,691 | 33.4 | ||||||||||||||
| Construction/land: | ||||||||||||||||||||
| One-to-four family residential | 42,846 | 3.8 | 39,908 | 3.5 | 43,532 | 3.7 | ||||||||||||||
| Multifamily | 7,227 | 0.6 | 6,078 | 0.5 | 2,043 | 0.2 | ||||||||||||||
| Land development | 10,148 | 0.8 | 9,800 | 0.8 | 9,766 | 0.8 | ||||||||||||||
| Total construction/land | 60,221 | 5.2 | 55,786 | 4.8 | 55,341 | 4.7 | ||||||||||||||
| One-to-four family residential: | ||||||||||||||||||||
| Permanent owner occupied | 279,744 | 24.5 | 283,516 | 24.7 | 260,970 | 22.1 | ||||||||||||||
| Permanent non-owner occupied | 221,127 | 19.4 | 225,423 | 19.6 | 232,238 | 19.6 | ||||||||||||||
| Total one-to-four family residential | 500,871 | 43.9 | 508,939 | 44.3 | 493,208 | 41.7 | ||||||||||||||
| Business: | ||||||||||||||||||||
| Aircraft | – | 0.0 | – | 0.0 | 1,981 | 0.2 | ||||||||||||||
| Small Business Administration (“SBA”) | 1,745 | 0.2 | 1,763 | 0.2 | 1,810 | 0.3 | ||||||||||||||
| Paycheck Protection Plan (“PPP”) | 238 | 0.0 | 316 | 0.0 | 551 | 0.0 | ||||||||||||||
| Other business | 12,416 | 1.1 | 12,984 | 1.1 | 23,633 | 1.9 | ||||||||||||||
| Total business | 14,399 | 1.3 | 15,063 | 1.3 | 27,975 | 2.4 | ||||||||||||||
| Consumer: | ||||||||||||||||||||
| Classic, collectible and other auto | 58,085 | 5.1 | 56,758 | 4.9 | 59,955 | 5.1 | ||||||||||||||
| Other consumer | 12,935 | 1.1 | 13,535 | 1.2 | 12,193 | 1.0 | ||||||||||||||
| Total consumer | 71,020 | 6.2 | 70,293 | 6.1 | 72,148 | 6.1 | ||||||||||||||
| Total loans | 1,142,411 | 100.0 | % | 1,149,863 | 100.0 | % | 1,183,385 | 100.0 | % | |||||||||||
| Less: | ||||||||||||||||||||
| ACL | 16,265 | 14,796 | 15,306 | |||||||||||||||||
| Loans receivable, net | $ | 1,126,146 | $ | 1,135,067 | $ | 1,168,079 | ||||||||||||||
| Concentrations of credit: (1) | ||||||||||||||||||||
| Construction loans as % of total capital | 36.8 | % | 34.8 | % | 37.8 | % | ||||||||||||||
| Total non-owner occupied commercial real estate as % of total capital |
296.2 | % | 298.8 | % | 328.1 | % | ||||||||||||||
(1) Concentrations of credit percentages are for First Financial Northwest Bank only using classifications in accordance with FDIC regulatory guidelines.
| FIRST FINANCIAL NORTHWEST, INC. AND SUBSIDIARIES Key Financial Measures (Unaudited) |
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| At or For the Quarter Ended | |||||||||||||||||||
| Sep 30, | Jun 30, | Mar 31, | Dec 31, | Sep 30, | |||||||||||||||
| 2024 | 2024 | 2024 | 2023 | 2023 | |||||||||||||||
| (Dollars in thousands, except per share data) | |||||||||||||||||||
| Performance Ratios: (1) | |||||||||||||||||||
| Return on assets | (0.17 | )% | 0.43 | % | (0.29 | )% | 0.31 | % | 0.39 | % | |||||||||
| Return on equity | (1.50 | ) | 3.88 | (2.67 | ) | 2.97 | 3.71 | ||||||||||||
| Dividend payout ratio | 0.00 | 76.47 | (108.33 | ) | 100.00 | 79.26 | |||||||||||||
| Equity-to-assets ratio | 11.04 | 11.10 | 10.91 | 10.74 | 10.44 | ||||||||||||||
| Tangible equity ratio (2) | 10.97 | 11.02 | 10.83 | 10.66 | 10.36 | ||||||||||||||
| Net interest margin | 2.46 | 2.66 | 2.55 | 2.54 | 2.69 | ||||||||||||||
| Average interest-earning assets to average interest-bearing liabilities | 116.46 | 117.01 | 116.40 | 115.84 | 116.94 | ||||||||||||||
| Efficiency ratio | 92.96 | 82.35 | 116.97 | 85.17 | 84.49 | ||||||||||||||
| Noninterest expense as a percent of average total assets | 2.32 | 2.21 | 3.05 | 2.18 | 2.29 | ||||||||||||||
| Book value per common share | $ | 17.39 | $ | 17.51 | $ | 17.46 | $ | 17.61 | $ | 17.35 | |||||||||
| Tangible book value per share (2) | 17.26 | 17.37 | 17.32 | 17.47 | 17.20 | ||||||||||||||
| Capital Ratios: (3) | |||||||||||||||||||
| Tier 1 leverage ratio | 10.86 | % | 10.91 | % | 10.41 | % | 10.18 | % | 10.25 | % | |||||||||
| Common equity tier 1 capital ratio | 15.43 | 15.39 | 14.98 | 14.90 | 14.75 | ||||||||||||||
| Tier 1 capital ratio | 15.43 | 15.39 | 14.98 | 14.90 | 14.75 | ||||||||||||||
| Total capital ratio | 16.68 | 16.64 | 16.24 | 16.15 | 16.00 | ||||||||||||||
| Asset Quality Ratios: (4) | |||||||||||||||||||
| Nonaccrual loans as a percent of total loans | 0.07 | % | 0.41 | % | 0.02 | % | 0.02 | % | 0.02 | % | |||||||||
| Nonaccrual loans as a percent of total assets | 0.06 | 0.32 | 0.01 | 0.01 | 0.01 | ||||||||||||||
| ACL as a percent of total loans | 1.42 | 1.29 | 1.30 | 1.28 | 1.29 | ||||||||||||||
| Net charge-offs to average loans receivable, net | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | ||||||||||||||
| Allowance for Credit Losses: | |||||||||||||||||||
| ACL ‒ loans | |||||||||||||||||||
| Beginning balance | $ | 14,796 | $ | 14,996 | $ | 15,306 | $ | 15,306 | $ | 15,606 | |||||||||
| Provision (recapture of provision) for credit losses | 1,500 | (200 | ) | (300 | ) | – | (300 | ) | |||||||||||
| Charge-offs | (31 | ) | – | (10 | ) | – | – | ||||||||||||
| Recoveries | – | – | – | – | – | ||||||||||||||
| Ending balance | $ | 16,265 | $ | 14,796 | $ | 14,996 | $ | 15,306 | $ | 15,306 | |||||||||
| Allowance for unfunded commitments | |||||||||||||||||||
| Beginning balance | $ | 564 | $ | 564 | $ | 439 | $ | 439 | $ | 439 | |||||||||
| Provision for credit losses | 75 | – | 125 | – | – | ||||||||||||||
| Ending balance | $ | 639 | $ | 564 | $ | 564 | $ | 439 | $ | 439 | |||||||||
| Provision (recapture of provision) for credit losses | |||||||||||||||||||
| ACL – loans | $ | 1,500 | $ | (200 | ) | $ | (300 | ) | $ | – | $ | (300 | ) | ||||||
| Allowance for unfunded commitments | 75 | – | 125 | – | – | ||||||||||||||
| Total | $ | 1,575 | $ | (200 | ) | $ | (175 | ) | $ | – | $ | (300 | ) | ||||||
(1) Performance ratios are calculated on an annualized basis.
(2) Non-GAAP financial measures. Refer to Non-GAAP Financial Measures at the end of this press release for a reconciliation to the nearest GAAP equivalents.
(3) Capital ratios are for First Financial Northwest Bank only.
(4) Loans are reported net of undisbursed funds.
| FIRST FINANCIAL NORTHWEST, INC. AND SUBSIDIARIES Key Financial Measures (Unaudited) |
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| At or For the Quarter Ended | |||||||||||||||||||
| Sep 30, | Jun 30, | Mar 31, | Dec 31, | Sep 30, | |||||||||||||||
| 2024 | 2024 | 2024 | 2023 | 2023 | |||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||
| Yields and Costs: (1) | |||||||||||||||||||
| Yield on loans | 5.86 | % | 5.93 | % | 5.88 | % | 5.83 | % | 5.73 | % | |||||||||
| Yield on investments | 4.30 | 4.38 | 4.11 | 4.11 | 3.98 | ||||||||||||||
| Yield on interest-earning deposits | 5.27 | 5.25 | 5.28 | 5.32 | 5.18 | ||||||||||||||
| Yield on FHLB stock | 7.73 | 8.63 | 7.79 | 7.29 | 6.57 | ||||||||||||||
| Yield on interest-earning assets | 5.66 | % | 5.73 | % | 5.62 | % | 5.56 | % | 5.46 | % | |||||||||
| Cost of interest-bearing deposits | 3.80 | % | 3.71 | % | 3.69 | % | 3.62 | % | 3.33 | % | |||||||||
| Cost of borrowings | 3.19 | 2.64 | 2.65 | 2.40 | 2.42 | ||||||||||||||
| Cost of interest-bearing liabilities | 3.72 | % | 3.59 | % | 3.58 | % | 3.50 | % | 3.24 | % | |||||||||
| Cost of total deposits (2) | 3.47 | % | 3.38 | % | 3.38 | % | 3.31 | % | 3.03 | % | |||||||||
| Cost of funds (3) | 3.44 | % | 3.30 | % | 3.31 | % | 3.23 | % | 2.97 | % | |||||||||
| Average Balances: | |||||||||||||||||||
| Loans | $ | 1,131,473 | $ | 1,139,017 | $ | 1,160,156 | $ | 1,167,339 | $ | 1,171,483 | |||||||||
| Investments | 161,232 | 173,102 | 202,106 | 206,837 | 211,291 | ||||||||||||||
| Interest-earning deposits | 65,149 | 36,959 | 37,032 | 65,680 | 40,202 | ||||||||||||||
| FHLB stock | 7,719 | 6,714 | 6,554 | 6,584 | 6,820 | ||||||||||||||
| Total interest-earning assets | $ | 1,365,573 | $ | 1,355,792 | $ | 1,405,848 | $ | 1,446,440 | $ | 1,429,796 | |||||||||
| Interest-bearing deposits | $ | 1,021,041 | $ | 1,029,608 | $ | 1,082,168 | $ | 1,127,690 | $ | 1,097,324 | |||||||||
| Borrowings | 151,478 | 129,126 | 125,604 | 120,978 | 125,402 | ||||||||||||||
| Total interest-bearing liabilities | 1,172,519 | 1,158,734 | 1,207,772 | 1,248,668 | 1,222,726 | ||||||||||||||
| Noninterest-bearing deposits | 96,003 | 101,196 | 99,173 | 102,869 | 109,384 | ||||||||||||||
| Total deposits and borrowings | $ | 1,268,522 | $ | 1,259,930 | $ | 1,306,945 | $ | 1,351,537 | $ | 1,332,110 | |||||||||
| Average assets | $ | 1,453,431 | $ | 1,446,207 | $ | 1,495,753 | $ | 1,538,955 | $ | 1,522,224 | |||||||||
| Average stockholders’ equity | 161,569 | 161,057 | 161,823 | 159,659 | 160,299 | ||||||||||||||
(1) Yields and costs are annualized.
(2) Includes noninterest-bearing deposits.
(3) Includes total borrowings and deposits (including noninterest-bearing deposits).
Non-GAAP Financial Measures
In addition to financial results presented in accordance with generally accepted accounting principles (“GAAP”) utilized in the United States, this earnings release contains non-GAAP financial measures that include tangible equity, tangible assets, tangible book value per share, and the tangible equity-to-assets ratio. The Company believes that these non-GAAP financial measures and ratios as presented are useful for both investors and management to understand the effects of goodwill and core deposit intangible, net and provides an alternative view of the Company’s performance over time and in comparison to the Company’s competitors. Non-GAAP financial measures have limitations, are not required to be uniformly applied and are not audited. They should not be considered in isolation and are not a substitute for other measures in this earnings release that are presented in accordance with GAAP. These non-GAAP measures may not be comparable to similarly titled measures reported by other companies.
The following tables provide a reconciliation between the GAAP and non-GAAP measures:
| Quarter Ended | |||||||||||||||||||
| Sep 30, 2024 |
Jun 30, 2024 |
Mar 31, 2024 |
Dec 31, 2023 |
Sep 30, 2023 |
|||||||||||||||
| (Dollars in thousands, except per share data) | |||||||||||||||||||
| Tangible equity to tangible assets and tangible book value per share: | |||||||||||||||||||
| Total stockholders’ equity (GAAP) | $ | 160,213 | $ | 160,693 | $ | 160,183 | $ | 161,660 | $ | 159,235 | |||||||||
| Less: | |||||||||||||||||||
| Goodwill | 889 | 889 | 889 | 889 | 889 | ||||||||||||||
| Core deposit intangible, net | 326 | 357 | 388 | 419 | 451 | ||||||||||||||
| Tangible equity (Non-GAAP) | $ | 158,998 | $ | 159,447 | $ | 158,906 | $ | 160,352 | $ | 157,895 | |||||||||
| Total assets (GAAP) | $ | 1,451,086 | $ | 1,447,753 | $ | 1,468,350 | $ | 1,505,082 | $ | 1,525,568 | |||||||||
| Less: | |||||||||||||||||||
| Goodwill | 889 | 889 | 889 | 889 | 889 | ||||||||||||||
| Core deposit intangible, net | 326 | 357 | 388 | 419 | 451 | ||||||||||||||
| Tangible assets (Non-GAAP) | $ | 1,449,871 | $ | 1,446,507 | $ | 1,467,073 | $ | 1,503,774 | $ | 1,524,228 | |||||||||
| Common shares outstanding at period end | 9,213,969 | 9,179,825 | 9,174,425 | 9,179,510 | 9,179,510 | ||||||||||||||
| Equity-to-assets ratio (GAAP) | 11.04 | % | 11.10 | % | 10.91 | % | 10.74 | % | 10.44 | % | |||||||||
| Tangible equity-to-tangible assets ratio (Non-GAAP) | 10.97 | 11.02 | 10.83 | 10.66 | 10.36 | ||||||||||||||
| Book value per common share (GAAP) | $ | 17.39 | $ | 17.51 | $ | 17.46 | $ | 17.61 | $ | 17.35 | |||||||||
| Tangible book value per share (Non-GAAP) | 17.26 | 17.37 | 17.32 | 17.47 | 17.20 | ||||||||||||||
Source: GlobeNewswire (MIL-OSI)
MINNEAPOLIS, Oct. 29, 2024 (GLOBE NEWSWIRE) — Jamf (NASDAQ: JAMF), the standard in managing and securing Apple at work, today announced it has invested in LifeSaver Mobile, a leader in Distracted Driving Solutions, through its Jamf Ventures Investment Fund.
Announced in October 2022, Jamf Ventures strives to grow the Jamf and Apple ecosystem faster and more comprehensively than Jamf could do alone. The Fund facilitates Jamf partnerships with early-stage founders, entrepreneurs and innovators across the globe that focus on increasing security to further enhance the transformational power of Apple.
“We’re thrilled to be a Jamf Ventures portfolio company and are excited to continue working with Jamf to eliminate the distracted operation of vehicles caused by our constant addiction to mobile device usage,” said Ted Chen, Co-Founder and CEO of LifeSaver Mobile. “When we first integrated with Jamf back in 2019, we knew we had something special. Our business customers, who typically include fleet managers, safety managers and risk managers, are reporting improved employee compliance, drops in fleet insurance claims and less distracted driving incidents. Our software platform can be used in any use case involving human operation of vehicles like rail transportation, above and below the wing aviation, and forklift operation, and joining Jamf’s family of portfolio companies just makes us more excited about where we could go next.”
The road for Jamf and LifeSaver Mobile so far
In March of 2022, Jamf announced the LifeSaver Mobile integration, meant to maximize driver safety easily and without gizmos and gadgets that added more hardware to the vehicle.
The LifeSaver Mobile solution consists of a mobile application deployed to employees’ phones, with each app managed by a cloud-based fleet portal used by the company’s managers to administer the LifeSaver program. With Jamf, admins can streamline that deployment and prevent employees from deleting the app off of their devices, thus improving employee compliance. Further, LifeSaver gets an added layer of device restriction through real-time locking of iOS devices behind the wheel. The Jamf + LifeSaver Mobile integration prevents screen access, while still allowing phone calls and access to navigation, maximizing driver productivity.
Why move from integration to investment now?
According to the CDC, approximately 3,000 people die in accidents involving distracted driving each year. A significant percentage of these accidents are directly related to mobile device usage or texting while driving, and almost 40% of workplace-related fatalities result from transportation incidents.
With mobile device adoption growing in the transportation sector and states nationwide cracking down even harder on distracted driving, there’s no better time to take the wheel than now.
“Any time we see an opportunity for technology to make our lives safer, we immediately look for ways to help,” said Jake Mosey, VP of Business Development and Integrations at Jamf. “This investment into LifeSaver is a direct reflection of the hard work and mission-driven innovation Ted and his team have continued to produce. We couldn’t be more excited to work with them to achieve their mission of eliminating distracted driving through mobile solutions.”
The investment and ongoing partnership with LifeSaver demonstrate Jamf’s ongoing commitment to providing the deskless workforce with optimized and secure mobile devices that empower them to succeed at work. After all, nearly 80% of the world’s workforce – or 2.7 billion people – don’t sit at a desk.
Customers of the Jamf + LifeSaver integration can rest easy knowing the devices they’re deploying are keeping their employees safe, minimizing costs and empowering their workers to perform their jobs effectively, regardless of their whereabouts.
LifeSaver joins cloud platform provider SwiftConnect, leading communications platform for hospitality brands Monscierge, and leading browser security provider Conceal as a member of Jamf Ventures.
Learn more about Jamf and LifeSaver Mobile here and more about Jamf Ventures here.
About Jamf
Jamf’s purpose is to simplify work by helping organizations manage and secure an Apple experience that end users love and organizations trust. Jamf is the only company in the world that provides a complete management and security solution for an Apple-first environment that is enterprise secure, consumer simple and protects personal privacy. To learn more, visit www.jamf.com.
Media Contact:
Natali Brockett | media@jamf.com
Investor Contact:
Jennifer Gaumond | ir@jamf.com
Source: GlobeNewswire (MIL-OSI)
PORT ANGELES, Wash., Oct. 29, 2024 (GLOBE NEWSWIRE) —
CEO Commentary
“This was a quarter of mixed results. Progress on customer deposit gathering and the termination of the FDIC Consent Order was overshadowed by a quarterly loss driven by additional provisions primarily related to certain equity loans made to high net worth, accredited investors.
The teamwork and collaboration between Staff, Management and the Board to address the matters identified in the Consent Order is demonstrative of the qualifications, determination and capabilities of the First Fed team. We appreciate that the FDIC acknowledged the planning, monitoring and execution required to comply with the Order and validation that all of these matters were properly addressed. I am very proud of this accomplishment, and I would like to thank all of the many people within the bank who worked tirelessly to reach this achievement less than one year after the Order was issued.
Through an internal review of our loan portfolio and with consultation with our prudential regulators, it was determined that larger provisions were required in the second quarter of 2024. As a result, we decided it was appropriate to file a restated quarterly report on Form 10-Q for the quarter ended June 30, 2024, and identified a material weakness in the design of certain internal controls. The loans for which we increased reserves were originated between 2020 and 2023. More recent vintages of our loan portfolio are performing well as we have engaged in lending and partnerships that we have evaluated as having a relatively lower risk profile. The provision for credit losses after the amendment was $8.7 million in the second quarter of 2024.
Management and the Board of Directors take the reported material weakness very seriously. We have taken corrective action to address the basis for the restatement and are working to promptly remediate.
We also acknowledge the ongoing lawsuits filed by some of the Water Station equipment borrowers. We intend to vigorously defend against these claims, which we believe are meritless. We also intend to continue pursuing collection of all monies owed by the litigants using all available legal means.
Moving forward, the highly capable bankers at First Fed are focused on continuing to build relationships with small businesses and individuals in the communities we serve. We continue to pursue inroads in SBA, treasury, maritime lending, first and second mortgage lending and community banking. We are introducing products and services to meet our customers where they are and to enhance their overall experience with First Fed. We believe that focusing on these fundamentals of Community Banking will improve our results and our overall franchise value.”
— Matthew P. Deines, President and CEO, First Northwest Bancorp
| 2024 FINANCIAL RESULTS | 3Q 24 | 2Q 24 | 3Q 23 | 2024 YTD | 2023 YTD | |||||||||||||||
| OPERATING RESULTS (in millions) | ||||||||||||||||||||
| Net (loss) income | $ | (2.0 | ) | $ | (2.2 | ) | $ | 2.5 | $ | (3.8 | ) | $ | 7.8 | |||||||
| Pre-provision net interest income | 14.0 | 14.2 | 15.0 | 42.2 | 47.2 | |||||||||||||||
| Provision for credit losses | 3.1 | 8.7 | 0.4 | 12.8 | 0.2 | |||||||||||||||
| Noninterest expense | 15.8 | 15.6 | 14.4 | 45.8 | 44.5 | |||||||||||||||
| Total revenue, net of interest expense * | 15.8 | 21.6 | 17.9 | 53.5 | 54.2 | |||||||||||||||
| PER SHARE DATA | ||||||||||||||||||||
| Basic and diluted (loss) earnings | $ | (0.23 | ) | $ | (0.25 | ) | $ | 0.28 | $ | (0.43 | ) | $ | 0.87 | |||||||
| Book value | 17.17 | 16.81 | 16.20 | 17.17 | 16.20 | |||||||||||||||
| Tangible book value * | 17.00 | 16.64 | 16.03 | 17.00 | 16.03 | |||||||||||||||
| BALANCE SHEET (in millions) | ||||||||||||||||||||
| Total assets | $ | 2,255 | $ | 2,216 | $ | 2,154 | $ | 2,255 | $ | 2,154 | ||||||||||
| Total loans | 1,735 | 1,698 | 1,635 | 1,735 | 1,635 | |||||||||||||||
| Total deposits | 1,712 | 1,708 | 1,658 | 1,712 | 1,658 | |||||||||||||||
| Total shareholders’ equity | 161 | 159 | 156 | 161 | 156 | |||||||||||||||
| ASSET QUALITY | ||||||||||||||||||||
| Net charge-off ratio(1) | 0.10 | % | 1.70 | % | 0.30 | % | 0.67 | % | 0.10 | % | ||||||||||
| Nonperforming assets to total assets | 1.35 | 1.07 | 0.11 | 1.35 | 0.11 | |||||||||||||||
| Allowance for credit losses on loans | ||||||||||||||||||||
| to total loans | 1.27 | 1.14 | 1.04 | 1.27 | 1.04 | |||||||||||||||
| Nonaccrual loan coverage ratio | 72 | 82 | 714 | 72 | 714 | |||||||||||||||
| (1) Performance ratios are annualized, where appropriate. *See reconciliation of Non-GAAP Financial Measures later in this release. |
||||||||||||||||||||
| 2024 FINANCIAL RESULTS (Continued) | 3Q 24 | 2Q 24 | 3Q 23 | 2024 YTD | 2023 YTD | |||||||||||||||
| SELECTED RATIOS | ||||||||||||||||||||
| Return on average assets(1) | -0.36 | % | -0.40 | % | 0.46 | % | -0.23 | % | 0.50 | % | ||||||||||
| Return on average equity(1) | -4.91 | -5.47 | 6.17 | -3.14 | 6.50 | |||||||||||||||
| Return on average tangible common equity(1) * | -4.96 | -5.53 | 6.23 | -3.17 | 6.57 | |||||||||||||||
| Net interest margin | 2.70 | 2.76 | 2.97 | 2.74 | 3.22 | |||||||||||||||
| Efficiency ratio | 100.31 | 72.32 | 80.52 | 85.54 | 82.06 | |||||||||||||||
| Bank common equity tier 1 (CETI) ratio | 12.20 | 12.40 | 13.43 | 12.20 | 13.43 | |||||||||||||||
| Bank total risk-based capital ratio | 13.44 | 13.49 | 14.38 | 13.44 | 14.38 | |||||||||||||||
| (1) Performance ratios are annualized, where appropriate. *See reconciliation of Non-GAAP Financial Measures later in this release. |
||||||||||||||||||||
| 2024 Significant Items as of September 30, 2024 | |
| • | Year-to-date net loss of $3.8 million was primarily due to a provision for credit losses of $12.8 million as the collectability of a small number of loan relationships continued to deteriorate and additional reserves were taken on purchased loan pools. |
| • | First Fed Bank (“First Fed” or the “Bank”) balance sheet restructuring contributed to an improved year-to-date yield on earning assets by 16-basis points over the prior year end to 5.44%. |
| – Sale-leaseback transaction completed in the second quarter, resulting in a $7.9 million gain on sale of premises and equipment. | |
| – Sold $23.2 million of lower-yielding security investments which resulted in $2.1 million year-to-date loss on sale. | |
| – Purchased $53.3 million of higher-yielding security investments year-to-date. | |
| – Continued conversion of lower-yielding bank-owned life insurance (“BOLI”) with one conversion completed in the first quarter and an exchange in the third quarter. Two additional policy restructures expected to be completed by the end of the first quarter of 2025. | |
| • | Net interest margin decreased over the prior year end from 3.13% to 2.74%, impacted by the increase in deposit and borrowing costs outpacing increased yields on loans and investments. |
| • | Loan mix shifted away from construction and commercial real estate into commercial business, auto, multi-family real estate, one-to-four family and home equity compared to the prior year end. The weighted-average rate on new loans year-to-date was 8.5%. |
| • | Borrowings increased $14.1 million, or 4.4%, to $335.0 million at September 30, 2024, compared to $320.9 million at December 31, 2023. |
| • | Repurchased 214,132 shares during the first quarter, which closed out the October 2020 Stock Repurchase Plan. |
| • | Repurchased 98,156 shares during the third quarter under the new share repurchase plan approved in April 2024. |
| • | Year-to-date deposit growth of $34.7 million, or 2.0%, to $1.71 billion, with a $30.0 million shift from savings to money market accounts. Cost of total deposits increased over the prior year end from 1.66% to 2.49%. |
| • | Estimated insured deposits totaled $1.3 billion, or 77% of total deposits at September 30, 2024. Available liquidity to uninsured deposit coverage remained strong at 142% at September 30, 2024. |
| • | Classified loans increased to 2.71% of total loans at September 30, 2024, compared to 2.12% at December 31, 2023. |
| • | Nonperforming assets increased $11.7 million year-to-date mainly due to three commercial loan relationships included in commercial construction, commercial real estate and commercial business. |
| • | Completed a reduction-in-force impacting 9% of our workforce on July 24, 2024. This action, along with year-to-date headcount management through attrition, is expected to result in a reduction in current levels of compensation expense by approximately $820,000 per quarter starting in the fourth quarter of 2024. |
First Northwest Bancorp (Nasdaq: FNWB) (“First Northwest” or the “Company”) today reported a net loss of $2.0 million for the third quarter of 2024, compared to a net loss of $2.2 million for the second quarter of 2024 and net income of $2.5 million for the third quarter of 2023. Basic and diluted loss per share were $0.23 for the third quarter of 2024, compared to basic and diluted loss per share of $0.25 for the second quarter of 2024 and basic and diluted earnings per share of $0.28 for the third quarter of 2023. In the third quarter of 2024, the Company generated a return on average assets of -0.36%, a return on average equity of -4.91% and a return on average tangible common equity* of -4.96%. Loss before provision for income taxes was $3.2 million for the third quarter of 2024, compared to a loss before provision for income taxes of $2.8 million for the preceding quarter, a decrease of $417,000, or 15.1%, and decreased $6.3 million compared to income of $3.1 million for the third quarter of 2023.
The Bank recorded reserves on individually analyzed loans totaling $1.9 million due to the uncertain future cash flows from specific loan relationships in the third quarter of 2024. An additional credit loss on loans of $1.8 million was attributable to an increase in the reserve on pooled commercial business loans, with a reserve loss rate of 3.4% applied to that segment of the loan portfolio at period end. We believe the reserve on individually analyzed loans does not represent a universal decline in the collectability of all loans in the portfolio. We continue to work on resolution plans for all troubled borrowers. The provision for credit losses on loans had a significant negative impact on net income and was the only reason for the net loss recorded for the third quarter of 2024.
Steps taken to restructure the Bank’s balance sheet continue to have a positive impact. The fair value hedge on loans, tied to the compounded overnight index swap using the secured overnight financing rate index, established in the first quarter of 2024 added $946,000 to interest income year-to-date. The fair value hedge on loans reduces interest rate risk by reducing liability sensitivity while increasing interest income. We estimate that if rates remain unchanged, this hedge will add $1.3 million of annualized interest income in 2024. The estimated impact will be reduced if the Federal Reserve Board (“FRB”) implements additional rate cuts during the year. The Bank expects to maintain a positive carry on its derivative for up to 75-basis points of additional rate cuts.
The balance sheet restructure plan also includes the conversion of BOLI policies in order to reinvest in higher yielding products. The first $6.1 million policy earning 2.58% was surrendered during the first quarter and reinvested into a policy earning 5.18%. In the third quarter of 2024, a $1.3 million policy earning 3.18% was exchanged and reinvested into a policy earning 5.73%. The remaining surrender and exchange transactions are expected to be completed by the end of the first quarter of 2025.
Net Interest Income
Total interest income decreased $405,000 to $28.2 million for the third quarter of 2024, compared to $28.6 million in the previous quarter, and increased $2.4 million compared to $25.8 million in the third quarter of 2023. Interest income decreased in the third quarter of 2024 primarily due to interest reversals for loans placed on nonaccrual totaling $619,000. The interest adjustments were partially offset by higher yields on performing loans combined with increased loan volume. Interest and fees on loans increased year-over-year as the loan portfolio grew as a result of draws on new and existing lines of credit, originations of commercial real estate, commercial business and home equity loans, and auto and manufactured home loan purchases. Loan yields increased over the prior year due to higher rates on new originations as well as the repricing of variable and adjustable-rate loans tied to the Prime Rate or other indices.
Total interest expense decreased $190,000 to $14.2 million for the third quarter of 2024, compared to $14.4 million in the second quarter of 2024, and increased $3.3 million compared to $10.9 million in the third quarter of 2023. Interest expense for the three months ended September 30, 2024, was lower primarily due to lower rates on advances combined with decreased advance volumes. The decrease was partially offset by a 9-basis point increase in the cost of deposits to 2.56% for the quarter ended September 30, 2024, from 2.47% for the prior quarter as a result of customers continuing to shift deposit balances into higher earning products. The increase over the third quarter of 2023 was the result of a 71-basis point increase in the cost of deposits from 1.85% in the third quarter one year ago. A shift in the deposit mix from transaction and savings accounts to money market accounts and time deposits also added to the higher cost of deposits compared to the third quarter of 2023. Higher costs of brokered time deposits also contributed to additional deposit costs with a 57-basis point increase to 4.88% for the current quarter compared to 4.31% for the third quarter one year ago.
Net interest income before provision for credit losses for the third quarter of 2024 decreased $215,000, or 1.5%, to $14.0 million, compared to $14.2 million for the preceding quarter, and decreased $930,000, or 6.2%, from the third quarter one year ago. The impact of the September FRB rate cut will be reflected beginning with fourth quarter 2024 interest income and expenses.
The Company recorded a $3.1 million provision for credit losses on loans in the third quarter of 2024, primarily due to reserves taken individually analyzed loans and Current Expected Credit Loss model loss factor increases attributable to pooled commercial business and multi-family loans at quarter end. Credit loss provision increases were offset by decreases to the loss factors applied to consumer, commercial real estate and one-to-four family loans. Higher loss factors applied to unfunded commitments and a moderate increase in commitment balances also resulted in a provision for credit losses on unfunded commitments of $57,000 for the quarter. The total provision for credit loss recorded for the third quarter of 2024 was $3.1 million, compared to a credit loss provision of $8.7 million for the preceding quarter and a provision of $371,000 for the third quarter of 2023.
The net interest margin decreased to 2.70% for the third quarter of 2024, from 2.76% for the prior quarter, and decreased 27-basis points from 2.97% for the third quarter of 2023. The decrease over the linked quarter is primarily due to the accrued interest reversed on three nonperforming commercial loans during the three months ended September 30, 2024, partially offset by an increase in interest income earned on a higher volume of loans. Investment securities also had decreased volume due to regular payments and lower yields due to variable-rate securities compared to the preceding quarter. The Company reported reduced rates and declining volume of borrowings during the quarter which lowered costs; however, these savings were partially offset by an increase in cost due to a higher volume of retail customer deposits. The decrease in net interest margin from the same quarter one year ago is due to higher funding costs for deposits and borrowed funds. Organic loan production comprised 73% of new loan commitments for the third quarter with the remaining 27% added through purchases of higher-yielding loans from established third-party relationships. The Bank’s fair value hedging agreements on securities and loans added $188,000 and $395,000, respectively, to interest income for the third quarter of 2024.
The yield on average earning assets for the third quarter of 2024 decreased 11-basis points to 5.44% compared to 5.55% for the second quarter of 2024 and increased 30-basis points from 5.14% for the third quarter of 2023. The third quarter decrease is attributable to the accrued interest reversed on nonperforming loans, a lower yield and volume of investment securities and a decrease in the balance of Federal Home Loan Bank (“FHLB”) stock. The year-over-year increase in interest income was primarily due to higher average loan balances augmented by increases in yields on all earning assets, which were positively impacted by the higher rate environment.
The cost of average interest-bearing liabilities decreased 5-basis points to 3.23% for the third quarter of 2024, compared to 3.28% for the second quarter of 2024, and increased 63-basis points from 2.60% for the third quarter of 2023. Total cost of funds decreased to 2.82% for the third quarter of 2024 from 2.87% in the prior quarter and increased from 2.23% for the third quarter of 2023. Current quarter decreases were due to lower average balances and costs on borrowings. The Bank continues to offer higher rate specials on money market and CD accounts to attract and retain retail customer deposits. The average brokered CD balance decreased $5.5 million from the linked quarter with a 6-basis point decrease in the average rate paid on brokered funds.
The increase in cost of average interest-bearing liabilities over the same quarter last year was driven by higher rates paid on deposits and borrowings and higher average CD balances. The Company attracted and retained funding through the use of promotional products and a focus on digital account acquisition. The mix of retail deposit balances shifted from no or low-cost transaction and savings accounts towards higher cost term certificate and higher yield money market accounts. Retail CDs represented 29.3%, 26.8% and 27.6% of retail deposits at September 30, 2024, June 30, 2024 and September 30, 2023, respectively. Average interest-bearing deposit balances increased $44.8 million, or 3.2%, to $1.45 billion for the third quarter of 2024 compared to the second quarter of 2024 and increased $75.0 million, or 5.4%, compared to $1.38 billion for the third quarter of 2023.
| Selected Yields | 3Q 24 | 2Q 24 | 1Q 24 | 4Q 23 | 3Q 23 | |||||||||||||||
| Loan yield | 5.51 | % | 5.62 | % | 5.51 | % | 5.38 | % | 5.31 | % | ||||||||||
| Investment securities yield | 4.90 | 5.01 | 4.75 | 4.53 | 4.18 | |||||||||||||||
| Cost of interest-bearing deposits | 3.00 | 2.91 | 2.86 | 2.52 | 2.22 | |||||||||||||||
| Cost of total deposits | 2.56 | 2.47 | 2.43 | 2.12 | 1.85 | |||||||||||||||
| Cost of borrowed funds | 4.35 | 4.76 | 4.52 | 4.50 | 4.45 | |||||||||||||||
| Net interest spread | 2.21 | 2.27 | 2.28 | 2.40 | 2.54 | |||||||||||||||
| Net interest margin | 2.70 | 2.76 | 2.76 | 2.84 | 2.97 | |||||||||||||||
Noninterest Income
Noninterest income decreased to $1.8 million for the third quarter of 2024 compared to $7.4 million for the second quarter of 2024. Nonrecurring second quarter transactions included a sale-leaseback transaction which resulted in a gain on sale of premises and equipment of $7.9 million, partially offset by a $2.1 million loss on the sale of lower-yielding available-for-sale securities. Income from the gain on sale of loans in the third quarter of 2024 includes $51,000 from SBA loans, compared to $116,000 in the prior quarter. Write-downs on sold loan servicing rights mark-to-market valuation totaled $161,000 for the third quarter of 2024 compared to $103,000 in the prior quarter. Other noninterest income includes a valuation gain on partnership investments of $279,000 compared to a loss of $56,000 in the preceding quarter.
Noninterest income decreased 38.7% from $2.9 million in the same quarter one year ago. The third quarter of 2023 included $750,000 in credit enhancements reimbursed to the Company on Splash charge-offs recorded in other noninterest income. The quarter ended September 30, 2023, also included a $102,000 gain on sale of mortgage loans, compared to a $6,000 gain in the third quarter of 2024.
| Noninterest Income | ||||||||||||||||||||
| $ in thousands | 3Q 24 | 2Q 24 | 1Q 24 | 4Q 23 | 3Q 23 | |||||||||||||||
| Loan and deposit service fees | $ | 1,059 | $ | 1,076 | $ | 1,102 | 1,068 | $ | 1,068 | |||||||||||
| Sold loan servicing fees and servicing rights mark-to-market | 10 | 74 | 219 | 276 | 98 | |||||||||||||||
| Net gain on sale of loans | 58 | 150 | 52 | 33 | 171 | |||||||||||||||
| Net (loss) gain on sale of investment securities | — | (2,117 | ) | — | (5,397 | ) | — | |||||||||||||
| Net gain on sale of premises and equipment | — | 7,919 | — | — | — | |||||||||||||||
| Increase in cash surrender value of bank-owned life insurance | 315 | 293 | 243 | 260 | 252 | |||||||||||||||
| Other income | 337 | (48 | ) | 572 | 831 | 1,315 | ||||||||||||||
| Total noninterest income | $ | 1,779 | $ | 7,347 | $ | 2,188 | $ | (2,929 | ) | $ | 2,904 | |||||||||
Noninterest Expense
Noninterest expense totaled $15.9 million for the third quarter of 2024, compared to $15.6 million for the preceding quarter and $14.4 million for the third quarter a year ago. Increases were primarily due to one-time severance payouts of $704,000 during the three months ended September 30, 2024, partially offset by a decrease in occupancy due to the one-time tax assessment on the sale-leaseback of $359,000 paid in the previous quarter. Other expense increased this quarter primarily due to $161,000 of additional credit related expenses.
The increase in total noninterest expenses compared to the third quarter of 2023 is mainly due to current quarter one-time severance payouts of $704,000, additional payroll tax expense of $342,000 and additional medical benefit expense of $162,000. Payroll tax expense in the third quarter of 2023 included accretion of the employee retention credit (“ERC”) which reduced the expense by $293,000. In the fourth quarter of 2023, the Bank stopped the recognition of the ERC for the foreseeable future. Occupancy increased due to the additional rent of $416,000 from the previous quarter sale-leaseback transaction. Other increases compared to the third quarter of 2023 included $51,000 in stockholder communications, $103,000 of state taxes, $163,000 in FDIC insurance premiums, and $269,000 of additional credit related expenses. These increases were partially offset by lower legal fees of $204,000, consulting fees of $146,000 and advertising costs of $91,000. The Company continues to focus on controlling compensation expense and reducing advertising and other discretionary spending to improve earnings.
| Noninterest Expense | ||||||||||||||||||||
| $ in thousands | 3Q 24 | 2Q 24 | 1Q 24 | 4Q 23 | 3Q 23 | |||||||||||||||
| Compensation and benefits | $ | 8,582 | $ | 8,588 | $ | 8,128 | $ | 7,397 | $ | 7,795 | ||||||||||
| Data processing | 2,085 | 2,008 | 1,944 | 2,107 | 1,945 | |||||||||||||||
| Occupancy and equipment | 1,553 | 1,799 | 1,240 | 1,262 | 1,173 | |||||||||||||||
| Supplies, postage, and telephone | 360 | 317 | 293 | 351 | 292 | |||||||||||||||
| Regulatory assessments and state taxes | 548 | 457 | 513 | 376 | 446 | |||||||||||||||
| Advertising | 409 | 377 | 309 | 235 | 501 | |||||||||||||||
| Professional fees | 698 | 684 | 910 | 1,119 | 929 | |||||||||||||||
| FDIC insurance premium | 533 | 473 | 386 | 418 | 369 | |||||||||||||||
| Other expense | 1,080 | 906 | 580 | 3,725 | 926 | |||||||||||||||
| Total noninterest expense | $ | 15,848 | $ | 15,609 | $ | 14,303 | $ | 16,990 | $ | 14,376 | ||||||||||
| Efficiency ratio | 100.31 | % | 72.32 | % | 88.75 | % | 150.81 | % | 80.52 | % | ||||||||||
Investment Securities
Investment securities increased $4.2 million, or 1.4%, to $310.9 million at September 30, 2024, compared to $306.7 million three months earlier, and increased $1.5 million compared to $309.3 million at September 30, 2023. The market value of the portfolio increased $8.1 million during the third quarter of 2024 primarily due to the market rally in the second half the third quarter which drove the yield curve lower. At September 30, 2024, municipal bonds totaled $81.4 million and comprised the largest portion of the investment portfolio at 26.2%. Agency issued mortgage-backed securities (“MBS agency”) were the second largest segment, totaling $78.5 million, or 25.3%, of the portfolio at quarter end. Included in MBS non-agency were $29.6 million of commercial mortgage-backed securities (“CMBS”), of which 89.8% were in “A” tranches and the remaining 10.2% were in “B” tranches. Our largest exposure in the CMBS portfolio at September 30, 2024, was to long-term care facilities, which comprised 65.0%, or $19.2 million, of our private label CMBS securities. All of the CMBS bonds had credit enhancements ranging from 28.8% to 71.8%, with a weighted-average credit enhancement of 55.3%, that further reduced the risk of loss on these investments.
The estimated average life of the securities portfolio was approximately 7.4 years at September 30, 2024, 7.8 years at the prior quarter end and 7.7 years for the third quarter of 2023. The effective duration of the portfolio was approximately 3.9 years at September 30, 2024, compared to 4.3 years in the prior quarter and 4.9 years at the end of the third quarter of 2023. Our recent investment purchases have primarily been floating rate securities to take advantage of higher short-term rates above those offered on cash and to reduce our liability sensitivity.
| Investment Securities Available for Sale, at Fair Value | ||||||||||||||||||||
| $ in thousands | 3Q 24 | 2Q 24 | 1Q 24 | 4Q 23 | 3Q 23 | |||||||||||||||
| Municipal bonds | $ | 81,363 | $ | 78,825 | $ | 87,004 | $ | 87,761 | $ | 93,995 | ||||||||||
| U.S. Treasury notes | — | — | — | — | 2,377 | |||||||||||||||
| International agency issued bonds (Agency bonds) | — | — | — | — | 1,703 | |||||||||||||||
| U.S. government agency issued asset-backed securities (ABS agency) | 13,296 | 13,982 | 14,822 | 11,782 | — | |||||||||||||||
| Corporate issued asset-backed securities (ABS corporate) | 16,391 | 16,483 | 13,929 | 5,286 | — | |||||||||||||||
| Corporate issued debt securities (Corporate debt): | ||||||||||||||||||||
| Senior positions | 10,241 | 9,066 | 13,617 | 9,270 | 16,975 | |||||||||||||||
| Subordinated bank notes | 43,817 | 43,826 | 39,414 | 42,184 | 37,360 | |||||||||||||||
| U.S. Small Business Administration securities (SBA) | 9,317 | 9,772 | 7,911 | — | — | |||||||||||||||
| Mortgage-backed securities: | ||||||||||||||||||||
| U.S. government agency issued mortgage-backed securities (MBS agency) | 78,549 | 77,301 | 83,271 | 63,247 | 66,946 | |||||||||||||||
| Non-agency issued mortgage-backed securities (MBS non-agency) | 57,886 | 57,459 | 65,987 | 76,093 | 89,968 | |||||||||||||||
| Total securities available for sale, at fair value | $ | 310,860 | $ | 306,714 | $ | 325,955 | $ | 295,623 | $ | 309,324 | ||||||||||
Loans and Unfunded Loan Commitments
Net loans, excluding loans held for sale, increased $36.7 million, or 2.2%, to $1.71 billion at September 30, 2024, from $1.68 billion at June 30, 2024, and increased $96.4 million, or 6.0%, from $1.62 billion one year ago.
Commercial business loans increased $38.2 million, primarily attributable to a $29.0 million increase in our Northpointe Bank Mortgage Purchase Program participation, organic originations totaling $7.9 million and draws on existing lines of credit of $5.7 million which were partially offset by payments. One-to-four family loans increased $5.9 million during the third quarter of 2024 as a result of $14.2 million in residential construction loans that converted to permanent amortizing loans, partially offset by payoffs and scheduled payments. Home equity loans increased $4.3 million over the previous quarter due to organic home equity loan production of $5.5 million and draws on new and existing commitments of $4.6 million, partially offset by payoffs and scheduled payments. Multi-family loans increased $3.7 million during the current quarter. The increase was primarily the result of $9.2 million of construction loans converting into permanent amortizing loans, partially offset by payoffs and scheduled payments. Commercial real estate loans increased $497,000 during the third quarter of 2024 compared to the previous quarter as originations of $8.6 million were offset by payoffs and scheduled payments.
Construction loans decreased $11.6 million during the quarter, with $23.4 million converting into fully amortizing loans, partially offset by draws on new and existing loans. New single-family residence construction loan commitments totaled $4.1 million in the third quarter, compared to $2.7 million in the preceding quarter. Auto and other consumer loans decreased $4.4 million during the third quarter of 2024 as payoffs and scheduled payments were higher than $5.8 million of new auto loan purchases, a $4.3 million manufactured home loan pool and individual manufactured home loan purchases totaling $1.2 million.
The Company originated $3.4 million in residential mortgages during the third quarter of 2023 and sold $3.9 million, with an average gross margin on sale of mortgage loans of approximately 2.06%. This production compares to residential mortgage originations of $5.0 million in the preceding quarter with sales of $4.9 million, and an average gross margin of 2.05%. Single-family home inventory remained historically low and higher market rates on mortgage loans continued to limit saleable mortgage loan production through much of the third quarter.
| Loans by Collateral and Unfunded Commitments | ||||||||||||||||||||
| $ in thousands | 3Q 24 | 2Q 24 | 1Q 24 | 4Q 23 | 3Q 23 | |||||||||||||||
| One-to-four family construction | $ | 51,607 | $ | 49,440 | $ | 70,100 | $ | 60,211 | $ | 72,991 | ||||||||||
| All other construction and land | 45,166 | 58,346 | 55,286 | 69,484 | 71,092 | |||||||||||||||
| One-to-four family first mortgage | 469,053 | 434,840 | 436,543 | 426,159 | 409,207 | |||||||||||||||
| One-to-four family junior liens | 14,701 | 13,706 | 12,608 | 12,250 | 12,859 | |||||||||||||||
| One-to-four family revolving open-end | 48,459 | 44,803 | 45,536 | 42,479 | 38,413 | |||||||||||||||
| Commercial real estate, owner occupied: | ||||||||||||||||||||
| Health care | 29,407 | 29,678 | 29,946 | 22,523 | 22,677 | |||||||||||||||
| Office | 17,901 | 19,215 | 17,951 | 18,468 | 18,599 | |||||||||||||||
| Warehouse | 11,645 | 14,613 | 14,683 | 14,758 | 14,890 | |||||||||||||||
| Other | 64,535 | 56,292 | 55,063 | 61,304 | 57,414 | |||||||||||||||
| Commercial real estate, non-owner occupied: | ||||||||||||||||||||
| Office | 49,770 | 50,158 | 53,099 | 53,548 | 53,879 | |||||||||||||||
| Retail | 49,717 | 50,101 | 50,478 | 51,384 | 51,466 | |||||||||||||||
| Hospitality | 62,282 | 62,628 | 66,982 | 67,332 | 61,339 | |||||||||||||||
| Other | 82,573 | 84,428 | 93,040 | 94,822 | 96,083 | |||||||||||||||
| Multi-family residential | 354,118 | 350,382 | 339,907 | 333,428 | 325,338 | |||||||||||||||
| Commercial business loans | 86,904 | 79,055 | 90,781 | 76,920 | 75,068 | |||||||||||||||
| Commercial agriculture and fishing loans | 15,369 | 14,411 | 10,200 | 5,422 | 4,437 | |||||||||||||||
| State and political subdivision obligations | 404 | 405 | 405 | 405 | 439 | |||||||||||||||
| Consumer automobile loans | 144,036 | 151,121 | 139,524 | 132,877 | 134,695 | |||||||||||||||
| Consumer loans secured by other assets | 132,749 | 129,293 | 122,895 | 108,542 | 104,999 | |||||||||||||||
| Consumer loans unsecured | 4,411 | 5,209 | 6,415 | 7,712 | 9,093 | |||||||||||||||
| Total loans | $ | 1,734,807 | $ | 1,698,124 | $ | 1,711,442 | $ | 1,660,028 | $ | 1,634,978 | ||||||||||
| Unfunded commitments under lines of credit or existing loans | $ | 166,446 | $ | 155,005 | $ | 148,736 | $ | 149,631 | $ | 154,722 | ||||||||||
Deposits
Total deposits increased $3.4 million to $1.71 billion at September 30, 2024, compared to $1.71 billion at June 30, 2024, and increased $53.9 million, or 3.3%, compared to $1.66 billion one year ago. During the third quarter of 2024, total retail customer deposit balances increased $23.4 million and brokered deposit balances decreased $20.0 million. Compared to the preceding quarter, there were balance increases of $18.1 million in consumer time deposits, $17.7 million in business money market accounts, $7.9 million in consumer demand accounts and $7.7 million in business time deposits. These increases were partially offset by decreases in business demand accounts of $26.4 million, brokered time deposits of $20.0 million, consumer money market accounts of $7.4 million, business savings accounts of $6.5 million, consumer savings accounts of $5.3 million and public fund time deposits of $941,000, during the third quarter of 2024. Increases in time deposits and money market accounts were driven by customer behavior as they sought out higher rates. Overall, the current rate environment continues to contribute to greater competition for deposits with ongoing deposit rate specials offered to attract new funds.
The Company estimates that $401.0 million, or 23%, of total deposit balances were uninsured at September 30, 2024. Approximately $265.7 million, or 16%, of total deposits were uninsured business and consumer deposits with the remaining $135.3 million, or 8%, consisting of uninsured public funds at September 30, 2024. Uninsured public fund balances were fully collateralized. The Bank holds an FHLB standby letter of credit as part of our participation in the Washington Public Deposit Protection Commission program which covered $115.5 million of related deposit balances while the remaining $19.8 million of uninsured tribal accounts was fully covered through pledged securities at September 30, 2024.
As of September 30, 2024, consumer deposits made up 58% of total deposits with an average balance of $24,000 per account, business deposits made up 22% of total deposits with an average balance of $51,000 per account, public fund deposits made up 8% of total deposits with an average balance of $1.6 million per account and the remaining 12% of account balances are brokered time deposits. We have maintained the majority of our public fund relationships for over 10 years. Approximately 70% of our customer base is located in rural areas, with 18% in urban areas and the remaining 12% are brokered deposits as of September 30, 2024.
| Deposits | ||||||||||||||||||||
| $ in thousands | 3Q 24 | 2Q 24 | 1Q 24 | 4Q 23 | 3Q 23 | |||||||||||||||
| Noninterest-bearing demand deposits | $ | 252,999 | $ | 276,543 | $ | 252,083 | $ | 269,800 | $ | 280,475 | ||||||||||
| Interest-bearing demand deposits | 167,202 | 162,201 | 169,418 | 182,361 | 179,029 | |||||||||||||||
| Money market accounts | 433,307 | 423,047 | 362,205 | 372,706 | 374,269 | |||||||||||||||
| Savings accounts | 212,763 | 224,631 | 242,148 | 253,182 | 260,279 | |||||||||||||||
| Certificates of deposit, retail | 441,665 | 398,161 | 443,412 | 410,136 | 379,484 | |||||||||||||||
| Total retail deposits | 1,507,936 | 1,484,583 | 1,469,266 | 1,488,185 | 1,473,536 | |||||||||||||||
| Certificates of deposit, brokered | 203,705 | 223,705 | 207,626 | 169,577 | 179,586 | |||||||||||||||
| Total deposits | $ | 1,711,641 | $ | 1,708,288 | $ | 1,676,892 | $ | 1,657,762 | $ | 1,653,122 | ||||||||||
| Public fund and tribal deposits included in total deposits | $ | 139,729 | $ | 138,439 | $ | 132,652 | $ | 128,627 | $ | 130,974 | ||||||||||
| Total loans to total deposits | 101 | % | 99 | % | 102 | % | 100 | % | 99 | % | ||||||||||
| Deposit Mix | 3Q 24 | 2Q 24 | 1Q 24 | 4Q 23 | 3Q 23 | |||||||||||||||
| Noninterest-bearing demand deposits | 14.8 | % | 16.2 | % | 15.0 | % | 16.3 | % | 17.0 | % | ||||||||||
| Interest-bearing demand deposits | 9.8 | 9.5 | 10.1 | 11.0 | 10.8 | |||||||||||||||
| Money market accounts | 25.3 | 24.8 | 21.6 | 22.5 | 22.6 | |||||||||||||||
| Savings accounts | 12.4 | 13.1 | 14.4 | 15.3 | 15.7 | |||||||||||||||
| Certificates of deposit, retail | 25.8 | 23.3 | 26.5 | 24.7 | 23.0 | |||||||||||||||
| Certificates of deposit, brokered | 11.9 | 13.1 | 12.4 | 10.2 | 10.9 | |||||||||||||||
| Cost of Deposits for the Quarter Ended | 3Q 24 | 2Q 24 | 1Q 24 | 4Q 23 | 3Q 23 | |||||||||||||||
| Interest-bearing demand deposits | 0.45 | % | 0.47 | % | 0.45 | % | 0.45 | % | 0.46 | % | ||||||||||
| Money market accounts | 2.65 | 2.40 | 2.08 | 1.48 | 1.22 | |||||||||||||||
| Savings accounts | 1.64 | 1.62 | 1.63 | 1.54 | 1.42 | |||||||||||||||
| Certificates of deposit, retail | 4.16 | 4.10 | 4.13 | 3.92 | 3.52 | |||||||||||||||
| Certificates of deposit, brokered | 4.88 | 4.94 | 4.94 | 4.72 | 4.31 | |||||||||||||||
| Cost of total deposits | 2.56 | 2.47 | 2.43 | 2.12 | 1.85 | |||||||||||||||
Asset Quality
The allowance for credit losses on loans (“ACLL”) increased $2.6 million from $19.3 million at June 30, 2024, to $22.0 million at September 30, 2024. The ACLL as a percentage of total loans was 1.27% at September 30, 2024, increasing from 1.14% at June 30, 2024, and increasing from 1.04% one year earlier. The current quarter increase can be attributed to $1.9 million of additional reserves taken on individually evaluated commercial business loans due uncertainty in the collectability of these loans. The pooled loan reserve increased $1.2 million due to higher loss factors applied to commercial business and multi-family loans, partially offset by lower loss factors applied to one-to-four family, commercial real estate, home equity, auto and other consumer loans. Loss factors were revised based on the results of an annual loss driver analysis, in conjunction with other relevant factors, to update each segment’s sensitivity to qualitative factors used in the calculation of the pooled reserve at September 30, 2024.
Nonperforming loans totaled $30.4 million at September 30, 2024, an increase of $6.8 million from June 30, 2024, primarily attributable to a $5.6 million delinquent commercial real estate relationship and two commercial business loans with an aggregate total of $1.7 million placed on nonaccrual due to credit concerns. The percentage of the allowance for credit losses on loans to nonperforming loans decreased to 72% at September 30, 2024, from 82% at June 30, 2024, and from 714% at September 30, 2023. This ratio continues to decline as higher balances of real estate loans are included in nonperforming assets with no significant corresponding increase to the ACLL as these secured loans are considered adequately reserved for based on information currently available.
Classified loans increased $7.2 million to $46.9 million at September 30, 2024, due to the downgrade of one $6.4 million commercial real estate loan and ten commercial business loans totaling $5.6 million during the third quarter, partially offset by loan payoffs totaling $5.0 million. An $11.2 million construction loan relationship, which became a classified loan in the fourth quarter of 2022; an $8.1 million commercial construction loan relationship, which became classified in the previous quarter; and a $6.2 million commercial loan relationship, which became classified in the fourth quarter of 2023, account for 55% of the classified loan balance at September 30, 2024. The Bank has exercised legal remedies, including the appointment of a third-party receiver and foreclosure actions, to liquidate the underlying collateral to satisfy the real estate loans in two of these three collateral dependent relationships. The Bank is also closely monitoring certain equity program loans, with 14 loans totaling $5.9 million included in classified loans at September 30, 2024, and an additional nine loans totaling $3.1 million included in the special mention risk grading category.
| $ in thousands | 3Q 24 | 2Q 24 | 1Q 24 | 4Q 23 | 3Q 23 | |||||||||||||||
| Allowance for credit losses on loans to total loans | 1.27 | % | 1.14 | % | 1.05 | % | 1.05 | % | 1.04 | % | ||||||||||
| Allowance for credit losses on loans to nonaccrual loans | 72 | 82 | 92 | 94 | 714 | |||||||||||||||
| Nonaccrual loans to total loans | 1.75 | 1.39 | 1.14 | 1.12 | 0.15 | |||||||||||||||
| Net charge-off ratio (annualized) | 0.10 | 1.70 | 0.19 | 0.14 | 0.30 | |||||||||||||||
| Total nonaccrual loans | $ | 30,376 | $ | 23,631 | $ | 19,481 | $ | 18,644 | $ | 2,374 | ||||||||||
| Reserve for unfunded commitments | $ | 704 | $ | 647 | $ | 548 | $ | 817 | $ | 828 | ||||||||||
Capital
Total shareholders’ equity increased to $160.8 million at September 30, 2024, compared to $158.9 million three months earlier, due to an increase in the after-tax fair market values of the available-for-sale investment securities portfolio of $6.3 million, partially offset by a net loss of $2.0 million, a decrease in the after-tax fair market values of derivatives of $1.2 million, share repurchases totaling $1.0 million and dividends declared of $659,000.
Book value per common share was $17.17 at September 30, 2024, compared to $16.81 at June 30, 2024, and $16.20 at September 30, 2023. Tangible book value per common share* was $17.00 at September 30, 2024, compared to $16.64 at June 30, 2024, and $16.03 at September 30, 2023.
Capital levels for both the Company and its operating bank, First Fed, remain in excess of applicable regulatory requirements and the Bank was categorized as “well-capitalized” at September 30, 2024. Common Equity Tier 1 and Total Risk-Based Capital Ratios at September 30, 2024, were 12.2% and 13.4%, respectively.
| 3Q 24 | 2Q 24 | 1Q 24 | 4Q 23 | 3Q 23 | ||||||||||||||||
| Equity to total assets | 7.13 | % | 7.17 | % | 7.17 | % | 7.42 | % | 7.25 | % | ||||||||||
| Tangible common equity to tangible assets * | 7.06 | 7.10 | 7.10 | 7.35 | 7.17 | |||||||||||||||
| Capital ratios (First Fed Bank): | ||||||||||||||||||||
| Tier 1 leverage | 9.39 | 9.38 | 9.74 | 9.90 | 10.12 | |||||||||||||||
| Common equity Tier 1 capital | 12.20 | 12.40 | 12.56 | 13.12 | 13.43 | |||||||||||||||
| Tier 1 risk-based | 12.20 | 12.40 | 12.56 | 13.12 | 13.43 | |||||||||||||||
| Total risk-based | 13.44 | 13.49 | 13.57 | 14.11 | 14.38 | |||||||||||||||
Share Repurchase Program and Cash Dividend
First Northwest continued to return capital to our shareholders through cash dividends and share repurchases during the third quarter of 2024. We repurchased 98,156 shares of common stock under the Company’s April 2024 Stock Repurchase Plan (“Repurchase Plan”) at an average price of $10.19 per share for a total of $1.0 million during the quarter ended September 30, 2024, leaving 846,123 shares remaining under the plan. In addition, the Company paid cash dividends totaling $652,000 in the third quarter of 2024.
____________________
* See reconciliation of Non-GAAP Financial Measures later in this release.
Awards/Recognition
The Company received several accolades as a leader in the community in the last year.
| In September 2024, the First Fed team was recognized in the 2024 Best of Olympic Peninsula surveys, winning Best Bank and Best Lender in Clallam County; Best Bank and Best Financial Advisor in the West End; and Best Lender in Jefferson County. First Fed was also a finalist for Best Bank, Best Customer Service, Best Employer and Best Financial Advisor in Jefferson County; Best Customer Service, Best Employer and Best Financial Advisor in Clallam County; and Best Customer Service and Best Employer in the West End. | |
| In May 2024, First Fed, along with the First Fed Community Foundation, were honored to be ranked second on the Puget Sound Business Journal Midsize Corporate Philanthropists list. | |
| In October 2023, the First Fed team was honored to bring home the Gold for Best Bank in the Best of the Northwest survey hosted by Bellingham Alive for the second year in a row. | |
| In September 2023, the First Fed team was recognized in the 2023 Best of Olympic Peninsula surveys as a finalist for Best Employer in Kitsap County and Best Bank and Best Financial Institution in Bainbridge. | |
About the Company
First Northwest Bancorp (Nasdaq: FNWB) is a financial holding company engaged in investment activities including the business of its subsidiary, First Fed Bank. First Fed is a Pacific Northwest-based financial institution which has served its customers and communities since 1923. Currently First Fed has 16 locations in Washington state including 12 full-service branches. First Fed’s business and operating strategy is focused on building sustainable earnings by delivering a full array of financial products and services for individuals, small businesses, non-profit organizations and commercial customers. In 2022, First Northwest made an investment in The Meriwether Group, LLC, a boutique investment banking and accelerator firm. Additionally, First Northwest focuses on strategic partnerships to provide modern financial services such as digital payments and marketplace lending. First Northwest Bancorp was incorporated in 2012 and completed its initial public offering in 2015 under the ticker symbol FNWB. The Company is headquartered in Port Angeles, Washington.
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 we operate, projections of future performance, perceived opportunities in the market, potential future credit experience, including our ability to collect, the outcome of litigation and statements regarding our mission and vision, and include, but are not limited to, statements about our plans, objectives, expectations and intentions that are not historical facts, and other statements often identified by words such as “believes,” “expects,” “anticipates,” “estimates,” or similar expressions. These forward-looking statements are based upon current management beliefs and expectations and may, therefore, involve risks and uncertainties, many of which are beyond our control. Our 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 of factors including, but not limited to: increased competitive pressures; changes in the interest rate environment; the credit risks of lending activities; pressures on liquidity, including as a result of withdrawals of deposits or declines in the value of our investment portfolio; changes in general economic conditions and conditions within the securities markets; legislative and regulatory changes; the risk of inaccuracies in the reporting of our financial condition as a result of the material weakness in our internal controls; and other factors described in the Company’s latest Annual Report on Form 10-K under the section entitled “Risk Factors,” and other filings with the Securities and Exchange Commission (“SEC”),which are available on our website at www.ourfirstfed.com and on the SEC’s website at www.sec.gov.
Any of the forward-looking statements that we make in this press release and in the other public statements we make may turn out to be incorrect because of the inaccurate assumptions we might make, because of the factors illustrated above or because of other factors that we cannot foresee. Because of these and other uncertainties, our actual future results may be materially different from those expressed or implied in any forward-looking statements made by or on our behalf and the Company’s operating and stock price performance may be negatively affected. Therefore, these factors should be considered in evaluating the forward-looking statements, and undue reliance should not be placed on such statements. We do not undertake and specifically disclaim any obligation to revise any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements. These risks could cause our actual results for 2024 and beyond to differ materially from those expressed in any forward-looking statements by, or on behalf of, us and could negatively affect the Company’s operations and stock price performance.
For More Information Contact:
Matthew P. Deines, President and Chief Executive Officer
Geri Bullard, EVP, Chief Financial Officer and Chief Operating Officer
IRGroup@ourfirstfed.com
360-457-0461
FIRST NORTHWEST BANCORP AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except share data) (Unaudited)
| September 30, 2024 | June 30, 2024 | September 30, 2023 | Three Month Change | One Year Change | ||||||||||||||||
| ASSETS | ||||||||||||||||||||
| Cash and due from banks | $ | 17,953 | $ | 19,184 | $ | 20,609 | -6.4 | % | -12.9 | % | ||||||||||
| Interest-earning deposits in banks | 64,769 | 63,995 | 63,277 | 1.2 | 2.4 | |||||||||||||||
| Investment securities available for sale, at fair value | 310,860 | 306,714 | 309,324 | 1.4 | 0.5 | |||||||||||||||
| Loans held for sale | 378 | 1,086 | 689 | -65.2 | -45.1 | |||||||||||||||
| Loans receivable (net of allowance for credit losses on loans $21,970, $19,343, and $16,945) | 1,714,416 | 1,677,764 | 1,618,033 | 2.2 | 6.0 | |||||||||||||||
| Federal Home Loan Bank (FHLB) stock, at cost | 14,435 | 13,086 | 12,621 | 10.3 | 14.4 | |||||||||||||||
| Accrued interest receivable | 8,939 | 9,466 | 8,093 | -5.6 | 10.5 | |||||||||||||||
| Premises and equipment, net | 10,436 | 10,714 | 17,954 | -2.6 | -41.9 | |||||||||||||||
| Servicing rights on sold loans, at fair value | 3,584 | 3,740 | 3,729 | -4.2 | -3.9 | |||||||||||||||
| Bank-owned life insurance, net | 41,429 | 41,113 | 40,318 | 0.8 | 2.8 | |||||||||||||||
| Equity and partnership investments | 14,912 | 15,085 | 14,623 | -1.1 | 2.0 | |||||||||||||||
| Goodwill and other intangible assets, net | 1,083 | 1,084 | 1,087 | -0.1 | -0.4 | |||||||||||||||
| Deferred tax asset, net | 10,802 | 12,216 | 16,611 | -11.6 | -35.0 | |||||||||||||||
| Prepaid expenses and other assets | 41,490 | 40,715 | 26,577 | 1.9 | 56.1 | |||||||||||||||
| Total assets | $ | 2,255,486 | $ | 2,215,962 | $ | 2,153,545 | 1.8 | % | 4.7 | % | ||||||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||||||||||
| Deposits | $ | 1,711,641 | $ | 1,708,288 | $ | 1,657,762 | 0.2 | % | 3.3 | % | ||||||||||
| Borrowings | 334,994 | 302,575 | 300,416 | 10.7 | 11.5 | |||||||||||||||
| Accrued interest payable | 2,153 | 3,143 | 2,276 | -31.5 | -5.4 | |||||||||||||||
| Accrued expenses and other liabilities | 43,424 | 41,771 | 34,651 | 4.0 | 25.3 | |||||||||||||||
| Advances from borrowers for taxes and insurance | 2,485 | 1,304 | 2,375 | 90.6 | 4.6 | |||||||||||||||
| Total liabilities | 2,094,697 | 2,057,081 | 1,997,480 | 1.8 | 4.9 | |||||||||||||||
| Shareholders’ Equity | ||||||||||||||||||||
| Preferred stock, $0.01 par value, authorized 5,000,000 shares, no shares issued or outstanding | — | — | — | n/a | n/a | |||||||||||||||
| Common stock, $0.01 par value, authorized 75,000,000 shares; issued and outstanding 9,365,979 at September 30, 2024; issued and outstanding 9,453,247 at June 30, 2024; and issued and outstanding 9,630,735 at September 30, 2023 | 94 | 94 | 96 | 0.0 | -2.1 | |||||||||||||||
| Additional paid-in capital | 93,218 | 93,985 | 95,658 | -0.8 | -2.6 | |||||||||||||||
| Retained earnings | 100,660 | 103,322 | 113,579 | -2.6 | -11.4 | |||||||||||||||
| Accumulated other comprehensive loss, net of tax | (26,424 | ) | (31,597 | ) | (45,850 | ) | 16.4 | 42.4 | ||||||||||||
| Unearned employee stock ownership plan (ESOP) shares | (6,759 | ) | (6,923 | ) | (7,418 | ) | 2.4 | 8.9 | ||||||||||||
| Total shareholders’ equity | 160,789 | 158,881 | 156,065 | 1.2 | 3.0 | |||||||||||||||
| Total liabilities and shareholders’ equity | $ | 2,255,486 | $ | 2,215,962 | $ | 2,153,545 | 1.8 | % | 4.7 | % | ||||||||||
FIRST NORTHWEST BANCORP AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share data) (Unaudited)
| Quarter Ended | ||||||||||||||||||||
| September 30, 2024 | June 30, 2024 | September 30, 2023 | Three Month Change | One Year Change | ||||||||||||||||
| INTEREST INCOME | ||||||||||||||||||||
| Interest and fees on loans receivable | $ | 23,536 | $ | 23,733 | $ | 21,728 | -0.8 | % | 8.3 | % | ||||||||||
| Interest on investment securities | 3,786 | 3,949 | 3,368 | -4.1 | 12.4 | |||||||||||||||
| Interest on deposits in banks | 582 | 571 | 524 | 1.9 | 11.1 | |||||||||||||||
| FHLB dividends | 302 | 358 | 214 | -15.6 | 41.1 | |||||||||||||||
| Total interest income | 28,206 | 28,611 | 25,834 | -1.4 | 9.2 | |||||||||||||||
| INTEREST EXPENSE | ||||||||||||||||||||
| Deposits | 10,960 | 10,180 | 7,699 | 7.7 | 42.4 | |||||||||||||||
| Borrowings | 3,226 | 4,196 | 3,185 | -23.1 | 1.3 | |||||||||||||||
| Total interest expense | 14,186 | 14,376 | 10,884 | -1.3 | 30.3 | |||||||||||||||
| Net interest income | 14,020 | 14,235 | 14,950 | -1.5 | -6.2 | |||||||||||||||
| PROVISION FOR CREDIT LOSSES | ||||||||||||||||||||
| Provision for credit losses on loans | 3,077 | 8,640 | 880 | -64.4 | 249.7 | |||||||||||||||
| Provision for (recapture of) credit losses on unfunded commitments | 57 | 99 | (509 | ) | -42.4 | 111.2 | ||||||||||||||
| Provision for credit losses | 3,134 | 8,739 | 371 | -64.1 | 744.7 | |||||||||||||||
| Net interest income after provision for credit losses | 10,886 | 5,496 | 14,579 | 98.1 | -25.3 | |||||||||||||||
| NONINTEREST INCOME | ||||||||||||||||||||
| Loan and deposit service fees | 1,059 | 1,076 | 1,068 | -1.6 | -0.8 | |||||||||||||||
| Sold loan servicing fees and servicing rights mark-to-market | 10 | 74 | 98 | -86.5 | -89.8 | |||||||||||||||
| Net gain on sale of loans | 58 | 150 | 171 | -61.3 | -66.1 | |||||||||||||||
| Net loss on sale of investment securities | — | (2,117 | ) | — | 100.0 | n/a | ||||||||||||||
| Net gain on sale of premises and equipment | — | 7,919 | — | -100.0 | n/a | |||||||||||||||
| Increase in cash surrender value of bank-owned life insurance | 315 | 293 | 252 | 7.5 | 25.0 | |||||||||||||||
| Other income | 337 | (48 | ) | 1,315 | 802.1 | -74.4 | ||||||||||||||
| Total noninterest income | 1,779 | 7,347 | 2,904 | -75.8 | -38.7 | |||||||||||||||
| NONINTEREST EXPENSE | ||||||||||||||||||||
| Compensation and benefits | 8,582 | 8,588 | 7,795 | -0.1 | 10.1 | |||||||||||||||
| Data processing | 2,085 | 2,008 | 1,945 | 3.8 | 7.2 | |||||||||||||||
| Occupancy and equipment | 1,553 | 1,799 | 1,173 | -13.7 | 32.4 | |||||||||||||||
| Supplies, postage, and telephone | 360 | 317 | 292 | 13.6 | 23.3 | |||||||||||||||
| Regulatory assessments and state taxes | 548 | 457 | 446 | 19.9 | 22.9 | |||||||||||||||
| Advertising | 409 | 377 | 501 | 8.5 | -18.4 | |||||||||||||||
| Professional fees | 698 | 684 | 929 | 2.0 | -24.9 | |||||||||||||||
| FDIC insurance premium | 533 | 473 | 369 | 12.7 | 44.4 | |||||||||||||||
| Other expense | 1,080 | 906 | 926 | 19.2 | 16.6 | |||||||||||||||
| Total noninterest expense | 15,848 | 15,609 | 14,376 | 1.5 | 10.2 | |||||||||||||||
| (Loss) income before (benefit) provision for income taxes | (3,183 | ) | (2,766 | ) | 3,107 | -15.1 | -202.4 | |||||||||||||
| (Benefit) provision for income taxes | (1,203 | ) | (547 | ) | 603 | -119.9 | -299.5 | |||||||||||||
| Net (loss) income | $ | (1,980 | ) | $ | (2,219 | ) | $ | 2,504 | 10.8 | % | -179.1 | % | ||||||||
| Basic and diluted (loss) earnings per common share | $ | (0.23 | ) | $ | (0.25 | ) | $ | 0.28 | 8.0 | % | -182.1 | % | ||||||||
FIRST NORTHWEST BANCORP AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share data) (Unaudited)
| Nine Months Ended September 30, | Percent | |||||||||||
| 2024 | 2023 | Change | ||||||||||
| INTEREST INCOME | ||||||||||||
| Interest and fees on loans receivable | $ | 70,036 | $ | 62,531 | 12.0 | % | ||||||
| Interest on investment securities | 11,367 | 9,886 | 15.0 | |||||||||
| Interest on deposits in banks | 1,798 | 1,545 | 16.4 | |||||||||
| FHLB dividends | 942 | 628 | 50.0 | |||||||||
| Total interest income | 84,143 | 74,590 | 12.8 | |||||||||
| INTEREST EXPENSE | ||||||||||||
| Deposits | 31,252 | 18,261 | 71.1 | |||||||||
| Borrowings | 10,708 | 9,092 | 17.8 | |||||||||
| Total interest expense | 41,960 | 27,353 | 53.4 | |||||||||
| Net interest income | 42,183 | 47,237 | -10.7 | |||||||||
| PROVISION FOR CREDIT LOSSES | ||||||||||||
| Provision for credit losses on loans | 12,956 | 1,195 | 984.2 | |||||||||
| (Recapture of) provision for credit losses on unfunded commitments | (113 | ) | (1,024 | ) | 89.0 | |||||||
| Provision for credit losses | 12,843 | 171 | 7,410.5 | |||||||||
| Net interest income after provision for credit losses | 29,340 | 47,066 | -37.7 | |||||||||
| NONINTEREST INCOME | ||||||||||||
| Loan and deposit service fees | 3,237 | 3,273 | -1.1 | |||||||||
| Sold loan servicing fees and servicing rights mark-to-market | 303 | 400 | -24.3 | |||||||||
| Net gain on sale of loans | 260 | 405 | -35.8 | |||||||||
| Net loss on sale of investment securities | (2,117 | ) | — | 100.0 | ||||||||
| Net gain on sale of premises and equipment | 7,919 | — | 100.0 | |||||||||
| Increase in cash surrender value of bank-owned life insurance | 851 | 668 | 27.4 | |||||||||
| Other income | 861 | 2,203 | -60.9 | |||||||||
| Total noninterest income | 11,314 | 6,949 | 62.8 | |||||||||
| NONINTEREST EXPENSE | ||||||||||||
| Compensation and benefits | 25,298 | 23,812 | 6.2 | |||||||||
| Data processing | 6,037 | 6,063 | -0.4 | |||||||||
| Occupancy and equipment | 4,592 | 3,596 | 27.7 | |||||||||
| Supplies, postage, and telephone | 970 | 1,082 | -10.4 | |||||||||
| Regulatory assessments and state taxes | 1,518 | 1,259 | 20.6 | |||||||||
| Advertising | 1,095 | 2,471 | -55.7 | |||||||||
| Professional fees | 2,292 | 2,619 | -12.5 | |||||||||
| FDIC insurance premium | 1,392 | 939 | 48.2 | |||||||||
| Other | 2,566 | 2,623 | -2.2 | |||||||||
| Total noninterest expense | 45,760 | 44,464 | 2.9 | |||||||||
| (Loss) income before (benefit) provision for income taxes | (5,106 | ) | 9,551 | -153.5 | ||||||||
| (Benefit) provision for income taxes | (1,303 | ) | 1,903 | -168.5 | ||||||||
| Net (loss) income | (3,803 | ) | 7,648 | -149.7 | ||||||||
| Net loss attributable to noncontrolling interest in Quin Ventures, Inc. | — | 160 | -100.0 | |||||||||
| Net (loss) income attributable to parent | $ | (3,803 | ) | $ | 7,808 | -148.7 | % | |||||
| Basic and diluted (loss) earnings per common share | $ | (0.43 | ) | $ | 0.87 | -149.4 | % | |||||
FIRST NORTHWEST BANCORP AND SUBSIDIARY
Selected Financial Ratios and Other Data
(Dollars in thousands, except per share data) (Unaudited)
| As of or For the Quarter Ended | ||||||||||||||||||||
| September 30, 2024 | June 30, 2024 | March 31, 2024 | December 31, 2023 | September 30, 2023 | ||||||||||||||||
| Performance ratios:(1) | ||||||||||||||||||||
| Return on average assets | -0.36 | % | -0.40 | % | 0.07 | % | -1.03 | % | 0.46 | % | ||||||||||
| Return on average equity | -4.91 | -5.47 | 0.98 | -14.05 | 6.17 | |||||||||||||||
| Average interest rate spread | 2.21 | 2.27 | 2.28 | 2.40 | 2.54 | |||||||||||||||
| Net interest margin(2) | 2.70 | 2.76 | 2.76 | 2.84 | 2.97 | |||||||||||||||
| Efficiency ratio(3) | 100.3 | 72.3 | 88.8 | 150.8 | 80.5 | |||||||||||||||
| Equity to total assets | 7.13 | 7.17 | 7.17 | 7.42 | 7.25 | |||||||||||||||
| Average interest-earning assets to average interest-bearing liabilities | 118.0 | 117.6 | 118.3 | 118.2 | 120.0 | |||||||||||||||
| Book value per common share | $ | 17.17 | $ | 16.81 | $ | 17.00 | $ | 16.99 | $ | 16.20 | ||||||||||
| Tangible performance ratios:(1) | ||||||||||||||||||||
| Tangible common equity to tangible assets(4) | 7.06 | % | 7.10 | % | 7.10 | % | 7.35 | % | 7.17 | % | ||||||||||
| Return on average tangible common equity(4) | -4.96 | -5.53 | 0.99 | -14.20 | 6.23 | |||||||||||||||
| Tangible book value per common share(4) | $ | 17.00 | $ | 16.64 | $ | 16.83 | $ | 16.83 | $ | 16.03 | ||||||||||
| Asset quality ratios: | ||||||||||||||||||||
| Nonperforming assets to total assets at end of period(5) | 1.35 | % | 1.07 | % | 0.87 | % | 0.85 | % | 0.11 | % | ||||||||||
| Nonaccrual loans to total loans(6) | 1.75 | 1.39 | 1.14 | 1.12 | 0.15 | |||||||||||||||
| Allowance for credit losses on loans to nonaccrual loans(6) | 72.33 | 81.85 | 92.18 | 93.92 | 713.77 | |||||||||||||||
| Allowance for credit losses on loans to total loans | 1.27 | 1.14 | 1.05 | 1.05 | 1.04 | |||||||||||||||
| Annualized net charge-offs to average outstanding loans | 0.10 | 1.70 | 0.19 | 0.14 | 0.30 | |||||||||||||||
| Capital ratios (First Fed Bank): | ||||||||||||||||||||
| Tier 1 leverage | 9.4 | % | 9.4 | % | 9.7 | % | 9.9 | % | 10.1 | % | ||||||||||
| Common equity Tier 1 capital | 12.2 | 12.4 | 12.6 | 13.1 | 13.4 | |||||||||||||||
| Tier 1 risk-based | 12.2 | 12.4 | 12.6 | 13.1 | 13.4 | |||||||||||||||
| Total risk-based | 13.4 | 13.5 | 13.6 | 14.1 | 14.4 | |||||||||||||||
| Other Information: | ||||||||||||||||||||
| Average total assets | $ | 2,209,333 | $ | 2,219,370 | $ | 2,166,187 | $ | 2,127,655 | $ | 2,139,734 | ||||||||||
| Average total loans | 1,718,402 | 1,717,830 | 1,678,656 | 1,645,418 | 1,641,206 | |||||||||||||||
| Average interest-earning assets | 2,061,970 | 2,072,280 | 2,027,821 | 1,980,226 | 1,994,251 | |||||||||||||||
| Average noninterest-bearing deposits | 252,911 | 251,442 | 249,283 | 259,845 | 276,294 | |||||||||||||||
| Average interest-bearing deposits | 1,452,817 | 1,408,018 | 1,422,116 | 1,379,059 | 1,377,734 | |||||||||||||||
| Average interest-bearing liabilities | 1,747,649 | 1,762,858 | 1,714,474 | 1,675,044 | 1,661,996 | |||||||||||||||
| Average equity | 160,479 | 163,079 | 161,867 | 155,971 | 160,994 | |||||||||||||||
| Average common shares — basic | 8,756,765 | 8,783,086 | 8,876,236 | 8,928,620 | 8,906,526 | |||||||||||||||
| Average common shares — diluted | 8,756,765 | 8,783,086 | 8,907,184 | 8,968,828 | 8,934,882 | |||||||||||||||
| Tangible assets(4) | 2,253,914 | 2,214,361 | 2,238,446 | 2,200,230 | 2,151,849 | |||||||||||||||
| Tangible common equity(4) | 159,217 | 157,280 | 158,932 | 161,773 | 154,369 | |||||||||||||||
| (1) | Performance ratios are annualized, where appropriate. |
| (2) | Net interest income divided by average interest-earning assets. |
| (3) | Total noninterest expense as a percentage of net interest income and total other noninterest income. |
| (4) | See reconciliation of Non-GAAP Financial Measures later in this release. |
| (5) | Nonperforming assets consists of nonperforming loans (which include nonaccruing loans and accruing loans more than 90 days past due), real estate owned and repossessed assets. |
| (6) | Nonperforming loans consists of nonaccruing loans and accruing loans more than 90 days past due. |
FIRST NORTHWEST BANCORP AND SUBSIDIARY
Selected Financial Ratios and Other Data
(Dollars in thousands, except per share data) (Unaudited)
| As of or For the Nine Months Ended September 30, | ||||||||
| 2024 | 2023 | |||||||
| Performance ratios:(1) | ||||||||
| Return on average assets | -0.23 | % | 0.50 | % | ||||
| Return on average equity | -3.14 | 6.50 | ||||||
| Average interest rate spread | 2.25 | 2.83 | ||||||
| Net interest margin(2) | 2.74 | 3.22 | ||||||
| Efficiency ratio(3) | 85.54 | 82.06 | ||||||
| Equity to total assets | 7.13 | 7.25 | ||||||
| Average interest-earning assets to average interest-bearing liabilities | 117.9 | 121.0 | ||||||
| Book value per common share | $ | 17.17 | $ | 16.20 | ||||
| Tangible performance ratios:(1) | ||||||||
| Tangible common equity to tangible assets(4) | 7.06 | % | 7.17 | % | ||||
| Return on average tangible common equity(4) | -3.17 | 6.57 | ||||||
| Tangible book value per common share(4) | $ | 17.00 | $ | 16.03 | ||||
| Asset quality ratios: | ||||||||
| Nonperforming assets to total assets at end of period(5) | 1.35 | % | 0.11 | % | ||||
| Nonaccrual loans to total loans(6) | 1.75 | 0.15 | ||||||
| Allowance for credit losses on loans to nonaccrual loans(6) | 72.33 | 713.77 | ||||||
| Allowance for credit losses on loans to total loans | 1.27 | 1.04 | ||||||
| Annualized net charge-offs to average outstanding loans | 0.67 | 0.10 | ||||||
| Capital ratios (First Fed Bank): | ||||||||
| Tier 1 leverage | 9.4 | % | 10.1 | % | ||||
| Common equity Tier 1 capital | 12.2 | 13.4 | ||||||
| Tier 1 risk-based | 12.2 | 13.4 | ||||||
| Total risk-based | 13.4 | 14.4 | ||||||
| Other Information: | ||||||||
| Average total assets | $ | 2,198,337 | $ | 2,102,980 | ||||
| Average total loans | 1,705,088 | 1,698,394 | ||||||
| Average interest-earning assets | 2,054,052 | 1,959,946 | ||||||
| Average noninterest-bearing deposits | 251,218 | 284,282 | ||||||
| Average interest-bearing deposits | 1,427,743 | 1,333,696 | ||||||
| Average interest-bearing liabilities | 1,741,683 | 1,619,763 | ||||||
| Average equity | 161,803 | 160,573 | ||||||
| Average common shares — basic | 8,805,124 | 8,910,391 | ||||||
| Average common shares — diluted | 8,805,124 | 8,930,404 | ||||||
| Tangible assets(4) | 2,253,914 | 2,151,849 | ||||||
| Tangible common equity(4) | 159,217 | 154,369 | ||||||
| (1) | Performance ratios are annualized, where appropriate. |
| (2) | Net interest income divided by average interest-earning assets. |
| (3) | Total noninterest expense as a percentage of net interest income and total other noninterest income. |
| (4) | See reconciliation of Non-GAAP Financial Measures later in this release. |
| (5) | Nonperforming assets consists of nonperforming loans (which include nonaccruing loans and accruing loans more than 90 days past due), real estate owned and repossessed assets. |
| (6) | Nonperforming loans consists of nonaccruing loans and accruing loans more than 90 days past due. |
FIRST NORTHWEST BANCORP AND SUBSIDIARY
ADDITIONAL INFORMATION
(Dollars in thousands) (Unaudited)
| September 30, 2024 | June 30, 2024 | September 30, 2023 | Three Month Change | One Year Change | ||||||||||||||||
| (In thousands) | ||||||||||||||||||||
| Real Estate: | ||||||||||||||||||||
| One-to-four family | $ | 395,792 | $ | 389,934 | $ | 369,950 | $ | 5,858 | $ | 25,842 | ||||||||||
| Multi-family | 353,813 | 350,076 | 325,496 | 3,737 | 28,317 | |||||||||||||||
| Commercial real estate | 376,008 | 375,511 | 381,508 | 497 | (5,500 | ) | ||||||||||||||
| Construction and land | 95,709 | 107,273 | 143,434 | (11,564 | ) | (47,725 | ) | |||||||||||||
| Total real estate loans | 1,221,322 | 1,222,794 | 1,220,388 | (1,472 | ) | 934 | ||||||||||||||
| Consumer: | ||||||||||||||||||||
| Home equity | 76,960 | 72,613 | 64,424 | 4,347 | 12,536 | |||||||||||||||
| Auto and other consumer | 281,198 | 285,623 | 248,786 | (4,425 | ) | 32,412 | ||||||||||||||
| Total consumer loans | 358,158 | 358,236 | 313,210 | (78 | ) | 44,948 | ||||||||||||||
| Commercial business | 155,327 | 117,094 | 101,380 | 38,233 | 53,947 | |||||||||||||||
| Total loans receivable | 1,734,807 | 1,698,124 | 1,634,978 | 36,683 | 99,829 | |||||||||||||||
| Less: | ||||||||||||||||||||
| Derivative basis adjustment | (1,579 | ) | 1,017 | — | (2,596 | ) | (1,579 | ) | ||||||||||||
| Allowance for credit losses on loans | 21,970 | 19,343 | 16,945 | 2,627 | 5,025 | |||||||||||||||
| Total loans receivable, net | $ | 1,714,416 | $ | 1,677,764 | $ | 1,618,033 | $ | 36,652 | $ | 96,383 | ||||||||||
Selected loan detail:
| September 30, 2024 | June 30, 2024 | September 30, 2023 | Three Month Change | One Year Change | ||||||||||||||||
| (In thousands) | ||||||||||||||||||||
| Construction and land loans breakout | ||||||||||||||||||||
| 1-4 Family construction | $ | 43,125 | $ | 56,514 | $ | 63,371 | $ | (13,389 | ) | $ | (20,246 | ) | ||||||||
| Multifamily construction | 29,109 | 43,341 | 54,318 | (14,232 | ) | (25,209 | ) | |||||||||||||
| Nonresidential construction | 17,500 | 1,015 | 18,746 | 16,485 | (1,246 | ) | ||||||||||||||
| Land and development | 5,975 | 6,403 | 6,999 | (428 | ) | (1,024 | ) | |||||||||||||
| Total construction and land loans | $ | 95,709 | $ | 107,273 | $ | 143,434 | $ | (11,564 | ) | $ | (47,725 | ) | ||||||||
| Auto and other consumer loans breakout | ||||||||||||||||||||
| Triad Manufactured Home loans | $ | 129,600 | $ | 125,906 | $ | 101,339 | $ | 3,694 | $ | 28,261 | ||||||||||
| Woodside auto loans | 126,129 | 131,151 | 124,833 | (5,022 | ) | 1,296 | ||||||||||||||
| First Help auto loans | 15,971 | 17,427 | 5,079 | (1,456 | ) | 10,892 | ||||||||||||||
| Other auto loans | 2,064 | 2,690 | 5,022 | (626 | ) | (2,958 | ) | |||||||||||||
| Other consumer loans | 7,434 | 8,449 | 12,513 | (1,015 | ) | (5,079 | ) | |||||||||||||
| Total auto and other consumer loans | $ | 281,198 | $ | 285,623 | $ | 248,786 | $ | (4,425 | ) | $ | 32,412 | |||||||||
| Commercial business loans breakout | ||||||||||||||||||||
| PPP loans | $ | – | $ | 5 | $ | 45 | $ | (5 | ) | $ | (45 | ) | ||||||||
| Northpointe Bank MPP | 38,155 | 9,150 | 162 | 29,005 | 37,993 | |||||||||||||||
| Secured lines of credit | 37,686 | 28,862 | 35,833 | 8,824 | 1,853 | |||||||||||||||
| Unsecured lines of credit | 1,571 | 1,133 | 919 | 438 | 652 | |||||||||||||||
| SBA loans | 7,219 | 7,146 | 9,149 | 73 | (1,930 | ) | ||||||||||||||
| Other commercial business loans | 70,696 | 70,798 | 55,272 | (102 | ) | 15,424 | ||||||||||||||
| Total commercial business loans | $ | 155,327 | $ | 117,094 | $ | 101,380 | $ | 38,233 | $ | 53,947 | ||||||||||
FIRST NORTHWEST BANCORP AND SUBSIDIARY
ADDITIONAL INFORMATION
(Dollars in thousands) (Unaudited)
Non-GAAP Financial Measures
This press release contains financial measures that are not in conformity with generally accepted accounting principles in the United States of America (“GAAP”). Non-GAAP measures are presented where management believes the information will help investors understand the Company’s results of operations or financial position and assess trends. Where non-GAAP financial measures are used, the comparable GAAP financial measure is also provided. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, and are not necessarily comparable to non-GAAP performance measures that may be presented by other companies. Other banking companies may use names similar to those the Company uses for the non-GAAP financial measures the Company discloses, but may calculate them differently. Investors should understand how the Company and other companies each calculate their non-GAAP financial measures when making comparisons. Reconciliations of the GAAP and non-GAAP measures are presented below.
Calculation of Total Revenue:
| September 30, 2024 | June 30, 2024 | March 31, 2024 | December 31, 2023 | September 30, 2023 | ||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||
| Net interest income | $ | 14,020 | $ | 14,235 | $ | 13,928 | $ | 14,195 | $ | 14,950 | ||||||||||
| Noninterest income | 1,779 | 7,347 | 2,188 | (2,929 | ) | 2,904 | ||||||||||||||
| Total revenue, net of interest expense(1) | $ | 15,799 | $ | 21,582 | $ | 16,116 | $ | 11,266 | $ | 17,854 | ||||||||||
| (1) We believe this non-GAAP metric provides an important measure with which to analyze and evaluate income available for noninterest expenses. | ||||||||||||||||||||
Calculations Based on Tangible Common Equity:
| September 30, 2024 | June 30, 2024 | March 31, 2024 | December 31, 2023 | September 30, 2023 | ||||||||||||||||
| (Dollars in thousands, except per share data) | ||||||||||||||||||||
| Total shareholders’ equity | $ | 160,789 | $ | 158,881 | $ | 160,506 | $ | 163,340 | $ | 156,065 | ||||||||||
| Less: Goodwill and other intangible assets | 1,083 | 1,084 | 1,085 | 1,086 | 1,087 | |||||||||||||||
| Disallowed non-mortgage loan servicing rights | 489 | 517 | 489 | 481 | 609 | |||||||||||||||
| Total tangible common equity | $ | 159,217 | $ | 157,280 | $ | 158,932 | $ | 161,773 | $ | 154,369 | ||||||||||
| Total assets | $ | 2,255,486 | $ | 2,215,962 | $ | 2,240,020 | $ | 2,201,797 | $ | 2,153,545 | ||||||||||
| Less: Goodwill and other intangible assets | 1,083 | 1,084 | 1,085 | 1,086 | 1,087 | |||||||||||||||
| Disallowed non-mortgage loan servicing rights | 489 | 517 | 489 | 481 | 609 | |||||||||||||||
| Total tangible assets | $ | 2,253,914 | $ | 2,214,361 | $ | 2,238,446 | $ | 2,200,230 | $ | 2,151,849 | ||||||||||
| Average shareholders’ equity | $ | 160,479 | $ | 163,079 | $ | 161,867 | $ | 155,971 | $ | 160,994 | ||||||||||
| Less: Average goodwill and other intangible assets | 1,084 | 1,085 | 1,085 | 1,086 | 1,087 | |||||||||||||||
| Average disallowed non-mortgage loan servicing rights | 517 | 489 | 481 | 608 | 557 | |||||||||||||||
| Total average tangible common equity | $ | 158,878 | $ | 161,505 | $ | 160,301 | $ | 154,277 | $ | 159,350 | ||||||||||
| Net (loss) income | $ | (1,980 | ) | $ | (2,219 | ) | $ | 396 | $ | (5,522 | ) | $ | 2,504 | |||||||
| Common shares outstanding | 9,365,979 | 9,453,247 | 9,442,796 | 9,611,876 | 9,630,735 | |||||||||||||||
| GAAP Ratios: | ||||||||||||||||||||
| Equity to total assets | 7.13 | % | 7.17 | % | 7.17 | % | 7.42 | % | 7.25 | % | ||||||||||
| Return on average equity | -4.91 | % | -5.47 | % | 0.98 | % | -14.05 | % | 6.17 | % | ||||||||||
| Book value per common share | $ | 17.17 | $ | 16.81 | $ | 17.00 | $ | 16.99 | $ | 16.20 | ||||||||||
| Non-GAAP Ratios: | ||||||||||||||||||||
| Tangible common equity to tangible assets(1) | 7.06 | % | 7.10 | % | 7.10 | % | 7.35 | % | 7.17 | % | ||||||||||
| Return on average tangible common equity(1) | -4.96 | % | -5.53 | % | 0.99 | % | -14.20 | % | 6.23 | % | ||||||||||
| Tangible book value per common share(1) | $ | 17.00 | $ | 16.64 | $ | 16.83 | $ | 16.83 | $ | 16.03 | ||||||||||
| (1) We believe these non-GAAP metrics provide an important measure with which to analyze and evaluate financial condition and capital strength. In addition, we believe that use of tangible equity and tangible assets improves the comparability to other institutions that have not engaged in acquisitions that resulted in recorded goodwill and other intangibles. | ||||||||||||||||||||
FIRST NORTHWEST BANCORP AND SUBSIDIARY
ADDITIONAL INFORMATION
(Dollars in thousands) (Unaudited)
| September 30, 2024 | September 30, 2023 | |||||||
| (Dollars in thousands, except per share data) | ||||||||
| Total shareholders’ equity | $ | 160,789 | $ | 156,065 | ||||
| Less: Goodwill and other intangible assets | 1,083 | 1,087 | ||||||
| Disallowed non-mortgage loan servicing rights | 489 | 609 | ||||||
| Total tangible common equity | $ | 159,217 | $ | 154,369 | ||||
| Total assets | $ | 2,255,486 | $ | 2,153,545 | ||||
| Less: Goodwill and other intangible assets | 1,083 | 1,087 | ||||||
| Disallowed non-mortgage loan servicing rights | 489 | 609 | ||||||
| Total tangible assets | $ | 2,253,914 | $ | 2,151,849 | ||||
| Average shareholders’ equity | $ | 161,803 | $ | 160,573 | ||||
| Less: Average goodwill and other intangible assets | 1,085 | 1,088 | ||||||
| Average disallowed non-mortgage loan servicing rights | 496 | 690 | ||||||
| Total average tangible common equity | $ | 160,222 | $ | 158,795 | ||||
| Net (loss) income | $ | (3,803 | ) | $ | 7,808 | |||
| Common shares outstanding | 9,365,979 | 9,630,735 | ||||||
| GAAP Ratios: | ||||||||
| Equity to total assets | 7.13 | % | 7.25 | % | ||||
| Return on average equity | -3.14 | % | 6.50 | % | ||||
| Book value per common share | $ | 17.17 | $ | 16.20 | ||||
| Non-GAAP Ratios: | ||||||||
| Tangible common equity to tangible assets(1) | 7.06 | % | 7.17 | % | ||||
| Return on average tangible common equity(1) | -3.17 | % | 6.57 | % | ||||
| Tangible book value per common share(1) | $ | 17.00 | $ | 16.03 | ||||
| (1) We believe these non-GAAP metrics provide an important measure with which to analyze and evaluate financial condition and capital strength. In addition, we believe that use of tangible equity and tangible assets improves the comparability to other institutions that have not engaged in acquisitions that resulted in recorded goodwill and other intangibles. | ||||||||
Images accompanying this announcement are available at
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https://www.globenewswire.com/NewsRoom/AttachmentNg/4a433c9b-6823-47f3-8843-0d8138f89182
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Source: GlobeNewswire (MIL-OSI)
HELENA, Mont., Oct. 29, 2024 (GLOBE NEWSWIRE) — Eagle Bancorp Montana, Inc. (NASDAQ: EBMT), (the “Company,” “Eagle”), the holding company of Opportunity Bank of Montana (the “Bank”), today reported net income of $2.7 million, or $0.34 per diluted share, in the third quarter of 2024, compared to $1.7 million, or $0.22 per diluted share, in the preceding quarter, and $2.6 million, or $0.34 per diluted share, in the third quarter of 2023. In the first nine months of 2024, net income was $6.3 million, or $0.81 per diluted share, compared to $7.9 million, or $1.01 per diluted share, in the first nine months of 2023.
Eagle’s board of directors declared a quarterly cash dividend of $0.1425 per share on October 17, 2024. The dividend will be payable December 6, 2024, to shareholders of record November 15, 2024. The current dividend represents an annualized yield of 3.49% based on recent market prices.
“We produced improved top and bottom line operating results during the third quarter of 2024, with net interest income and noninterest income both increasing compared to the second quarter of 2024,” said Laura F. Clark, President and CEO. “As in previous quarters, we continued to remain selective on the loans we added during the quarter, while adhering to disciplined loan pricing. The result was tempered loan growth during the third quarter of 1.1%, and 4.0% year-over-year. Total deposits increased 2.0% during the quarter over the linked quarter, as we continue to maintain our attractive deposit mix. With our strong deposit franchise, pristine credit quality, and ample capital levels, we are well positioned for growth throughout the remainder of the year and into 2025.”
Third Quarter 2024 Highlights (at or for the three-month period ended September 30, 2024, except where noted):
| September 30, 2024 | |||||||
| (Dollars in thousands) | Borrowings Outstanding | Remaining Borrowing Capacity | |||||
| Federal Home Loan Bank advances | $ | 219,167 | $ | 219,365 | |||
| Federal Reserve Bank discount window | – | 28,734 | |||||
| Correspondent bank lines of credit | – | 100,000 | |||||
| Total | $ | 219,167 | $ | 348,099 | |||
Balance Sheet Results
Eagle’s total assets increased 4.0% to $2.15 billion at September 30, 2024, compared to $2.06 billion a year ago, and increased 2.2% compared to $2.10 billion three months earlier. The investment securities portfolio totaled $307.0 million at September 30, 2024, compared to $308.8 million a year ago, and $306.9 million at June 30, 2024.
Eagle originated $58.0 million in new residential mortgages during the quarter and sold $51.0 million in residential mortgages, with an average gross margin on sale of mortgage loans of approximately 3.31%. This production compares to residential mortgage originations of $60.6 million in the preceding quarter with sales of $53.2 million and an average gross margin on sale of mortgage loans of approximately 3.01%. Mortgage volumes remain low as rates have continued to be elevated relative to rates on existing mortgages.
Total loans increased $58.9 million, or 4.0%, compared to a year ago, and $17.2 million, or 1.1%, from three months earlier. Commercial real estate loans increased 5.2% to $644.0 million at September 30, 2024, compared to $612.0 million a year earlier. Commercial real estate loans were comprised of 69.3% non-owner occupied and 30.7% owner occupied at September 30, 2024. Agricultural and farmland loans increased 5.8% to $290.0 million at September 30, 2024, compared to $274.1 million a year earlier. Residential mortgage loans increased 6.7% to $156.8 million, compared to $146.9 million a year earlier. Commercial loans increased 10.2% to $143.2 million, compared to $130.0 million a year ago. Commercial construction and development loans decreased 17.3% to $125.3 million, compared to $151.6 million a year ago. Home equity loans increased 12.5% to $93.6 million, residential construction loans increased 8.5% to $52.2 million, and consumer loans decreased 1.3% to $29.4 million, compared to a year ago.
“Our deposit mix continued to shift towards higher yielding deposits due to the higher interest rate environment. However, we anticipate deposit rates will continue to stabilize or improve following the recent Fed rate cuts,” said Miranda Spaulding, CFO.
Total deposits increased to $1.65 billion at September 30, 2024, compared to $1.62 billion at September 30, 2023, and at June 30, 2024. Noninterest-bearing checking accounts represented 25.4%, interest-bearing checking accounts represented 12.7%, savings accounts represented 12.9%, money market accounts comprised 21.3% and time certificates of deposit made up 27.7% of the total deposit portfolio at September 30, 2024. Time certificates of deposit include $22.1 million in brokered certificates at September 30, 2024, compared to $40.0 million at September 30, 2023, and $26.2 million at June 30, 2024. The average cost of total deposits was 1.76% in the third quarter of 2024, compared to 1.70% in the preceding quarter and 1.28% in the third quarter of 2023. The estimated amount of uninsured deposits was approximately $307.0 million, or 18% of total deposits, at September 30, 2024, compared to $284.0 million, or 17% of total deposits, at June 30, 2024.
Shareholders’ equity was $177.7 million at September 30, 2024, compared to $157.3 million a year earlier and $170.2 million three months earlier. Book value per share increased to $22.17 at September 30, 2024, compared to $19.69 a year earlier and $21.23 three months earlier. Tangible book value per share, a non-GAAP financial measure calculated by dividing shareholders’ equity, less goodwill and core deposit intangible, by common shares outstanding, was $17.23 at September 30, 2024, compared to $14.55 a year earlier and $16.25 three months earlier.
Operating Results
“Our core NIM declined slightly during the third quarter, compared to the preceding quarter, due to relatively flat yields on interest earning assets and cost of funds expansion,” said Clark. “We anticipate continued stabilization and eventual improvement in our cost of funds as we continue through this rate cycle.”
Eagle’s NIM was 3.34% in the third quarter of 2024, a seven basis point contraction compared to 3.41% in both the preceding quarter and the third quarter a year ago. The interest accretion on acquired loans totaled $167,000 and resulted in a three basis-point increase in the NIM during the third quarter of 2024, compared to $304,000 and a seven basis-point increase in the NIM during the preceding quarter. Funding costs for the third quarter of 2024 were 2.89%, compared to 2.78% in the second quarter of 2024 and 2.37% in the third quarter of 2023. Average yields on interest earning assets for the third quarter of 2024 increased to 5.66%, compared to 5.64% in the second quarter of 2024 and 5.27% in the third quarter a year ago. For the first nine months of 2024, the NIM was 3.36% compared to 3.57% for the first nine months of 2023.
Net interest income, before the provision for credit losses, increased to $15.8 million in the third quarter of 2024, compared to $15.6 million in both the second quarter of 2024, and in the third quarter of 2023. Year-to-date, net interest income decreased 1.3% to $46.6 million, compared to $47.3 million in the same period one year earlier.
Revenues for the third quarter of 2024 increased 4.4% to $20.8 million, compared to $19.9 million in the preceding quarter and decreased 3.9% compared to $21.6 million in the third quarter a year ago. In the first nine months of 2024, revenues were $59.9 million, compared to $64.2 million in the first nine months of 2023. The decrease compared to the first nine months a year ago was largely due to lower volumes in mortgage banking activity.
Total noninterest income increased 16.7% to $5.0 million in the third quarter of 2024, compared to $4.3 million in the preceding quarter, and decreased 17.4% compared to $6.0 million in the third quarter a year ago. The increase from the preceding quarter was largely due to income from bank owned life insurance of $724,000. Net mortgage banking income, the largest component of noninterest income, totaled $2.6 million in the third quarter of 2024, compared to $2.4 million in the preceding quarter and $4.3 million in the third quarter a year ago. This decrease compared to the third quarter a year ago was largely driven by a decline in net gain on sale of mortgage loans. This was impacted by lower mortgage loan volumes. In the first nine months of 2024, noninterest income decreased 21.9% to $13.2 million, compared to $16.9 million in the first nine months of 2023. Net mortgage banking income decreased 36.0% to $7.2 million in the first nine months of 2024, compared to $11.3 million in the first nine months of 2023. These decreases were driven by a decline in net gain on sale of mortgage loans.
Third quarter noninterest expense was $17.3 million, which was unchanged compared to the preceding quarter and a 3.4% decrease compared to $17.9 million in the third quarter a year ago. Lower salaries and employee benefits contributed to the decrease compared to the year ago quarter. In the first nine months of 2024, noninterest expense decreased 3.0% to $51.6 million, compared to $53.2 million in the first nine months of 2023.
For the third quarter of 2024, the Company recorded income tax expense of $529,000. This compared to income tax expense of $444,000 in the preceding quarter and $524,000 in the third quarter of 2023. The effective tax rate for the third quarter of 2024 was 16.3%, compared to 16.6% for the third quarter of 2023. The year-to-date effective tax rate was 17.5% for 2024 compared to 19.5% for the same period in 2023.
Credit Quality
During the third quarter of 2024, Eagle recorded a provision for credit losses of $277,000. This compared to a $412,000 provision for credit losses in the preceding quarter and $588,000 in the third quarter a year ago. The allowance for credit losses represented 356.7% of nonperforming loans at September 30, 2024, compared to 330.8% three months earlier and 209.3% a year earlier. Nonperforming loans were $4.8 million at September 30, 2024, $5.1 million at June 30, 2024, and $7.8 million a year earlier.
Net loan charge-offs totaled $17,000 in the third quarter of 2024, compared to net loan charge-offs of $2,000 in the preceding quarter and net loan charge-offs of $108,000 in the third quarter a year ago. The allowance for credit losses was $17.1 million, or 1.12% of total loans, at September 30, 2024, compared to $16.8 million, or 1.11% of total loans, at June 30, 2024, and $16.2 million, or 1.10% of total loans, a year ago.
Capital Management
The ratio of tangible common shareholders’ equity (shareholders’ equity, less goodwill and core deposit intangible) to tangible assets (total assets, less goodwill and core deposit intangible) was 6.56% at September 30, 2024, from 5.75% a year ago and 6.33% three months earlier. As of September 30, 2024, the Bank’s regulatory capital was in excess of all applicable regulatory requirements and is deemed well capitalized. The Bank’s Tier 1 capital to adjusted total average assets was 9.87% as of September 30, 2024.
About the Company
Eagle Bancorp Montana, Inc. is a bank holding company headquartered in Helena, Montana, and is the holding company of Opportunity Bank of Montana, a community bank established in 1922 that serves consumers and small businesses in Montana through 29 banking offices. Additional information is available on the Bank’s website at www.opportunitybank.com. The shares of Eagle Bancorp Montana, Inc. are traded on the NASDAQ Global Market under the symbol “EBMT.”
Forward Looking Statements
This release may contain certain “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, and may be identified by the use of such words as “believe,” “will” “expect,” “anticipate,” “should,” “planned,” “estimated,” and “potential.” These forward-looking statements include, but are not limited to statements of our goals, intentions and expectations; statements regarding our business plans, prospects, mergers, growth and operating strategies; statements regarding the asset quality of our loan and investment portfolios; and estimates of our risks and future costs and benefits. These forward-looking statements are based on current beliefs and expectations of our management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. These factors include, but are not limited to, changes in laws or government regulations or policies affecting financial institutions, including changes in regulatory fees and capital requirements; general economic conditions and political events, either nationally or in our market areas, that are worse than expected including the ability of the U.S. Congress to increase the U.S. statutory debt limit, as needed, as well as the impact of the 2024 U.S. presidential election; the emergence or continuation of widespread health emergencies or pandemics including the magnitude and duration of the COVID-19 pandemic, including but not limited to vaccine efficacy and immunization rates, new variants, steps taken by governmental and other authorities to contain, mitigate and combat the pandemic, adverse effects on our employees, customers and third-party service providers, the increase in cyberattacks in the current work-from-home environment, the ultimate extent of the impacts on our business, financial position, results of operations, liquidity and prospects, continued deterioration in general business and economic conditions could adversely affect our revenues and the values of our assets and liabilities, lead to a tightening of credit and increase stock price volatility, and potential impairment charges; the impact of volatility in the U.S. banking industry, including the associated impact of any regulatory changes or other mitigation efforts taken by governmental agencies in response thereto; the possibility that future credit losses may be higher than currently expected due to changes in economic assumptions, customer behavior, adverse developments with respect to U.S. economic conditions and other uncertainties, including the impact of supply chain disruptions, inflationary pressures and labor shortages on economic conditions and our business; an inability to access capital markets or maintain deposits or borrowing costs; competition among banks, financial holding companies and other traditional and non-traditional financial service providers; loan demand or residential and commercial real estate values in Montana; the concentration of our business in Montana; our ability to continue to increase and manage our commercial real estate, commercial business and agricultural loans; the costs and effects of legal, compliance and regulatory actions, changes and developments, including the initiation and resolution of legal proceedings (including any securities, bank operations, consumer or employee litigation); inflation and changes in the interest rate environment that reduce our margins or reduce the fair value of financial instruments; adverse changes in the securities markets that lead to impairment in the value of our investment securities and goodwill; other economic, governmental, competitive, regulatory and technological factors that may affect our operations; our ability to implement new technologies and maintain secure and reliable technology systems including those that involve the Bank’s third-party vendors and service providers; cyber incidents, or theft or loss of Company or customer data or money; our ability to appropriately address social, environmental, and sustainability concerns that may arise from our business activities; the effect of our recent or future acquisitions, including the failure to achieve expected revenue growth and/or expense savings, the failure to effectively integrate their operations, the outcome of any legal proceedings and the diversion of management time on issues related to the integration.
Because of these and other uncertainties, our actual future results may be materially different from the results indicated by these forward-looking statements. All information set forth in this press release is current as of the date of this release and the company undertakes no duty or obligation to update this information.
Use of Non-GAAP Financial Measures
In addition to results presented in accordance with generally accepted accounting principles utilized in the United States, or GAAP, the Financial Ratios and Other Data contains non-GAAP financial measures. Non-GAAP financial measures include: 1) core efficiency ratio, 2) tangible book value per share and 3) tangible common equity to tangible assets. The Company uses these non-GAAP financial measures to provide meaningful supplemental information regarding the Company’s operational performance and performance trends, and to enhance investors’ overall understanding of such financial performance. In particular, the use of tangible book value per share and tangible common equity to tangible assets is prevalent among banking regulators, investors and analysts.
The numerator for the core efficiency ratio is calculated by subtracting acquisition costs and intangible asset amortization from noninterest expense. Tangible assets and tangible common shareholders’ equity are calculated by excluding intangible assets from assets and shareholders’ equity, respectively. For these financial measures, our intangible assets consist of goodwill and core deposit intangible. Tangible book value per share is calculated by dividing tangible common shareholders’ equity by the number of common shares outstanding. We believe that this measure is consistent with the capital treatment by our bank regulatory agencies, which exclude intangible assets from the calculation of risk-based capital ratios and present this measure to facilitate the comparison of the quality and composition of our capital over time and in comparison, to our competitors.
Non-GAAP financial measures have inherent limitations, are not required to be uniformly applied, and are not audited. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies’ non-GAAP financial measures having the same or similar names. Further, the non-GAAP financial measure of tangible book value per share should not be considered in isolation or as a substitute for book value per share or total shareholders’ equity determined in accordance with GAAP, and may not be comparable to a similarly titled measure reported by other companies. Reconciliation of the GAAP and non-GAAP financial measures are presented below.
| Balance Sheet | ||||||||||||||
| (Dollars in thousands, except per share data) | (Unaudited) | |||||||||||||
| September 30, | June 30, | September 30, | ||||||||||||
| 2024 | 2024 | 2023 | ||||||||||||
| Assets: | ||||||||||||||
| Cash and due from banks | $ | 22,954 | $ | 22,361 | $ | 19,743 | ||||||||
| Interest bearing deposits in banks | 19,035 | 1,401 | 1,040 | |||||||||||
| Federal funds sold | 200 | – | – | |||||||||||
| Total cash and cash equivalents | 42,189 | 23,762 | 20,783 | |||||||||||
| Securities available-for-sale, at fair value | 306,982 | 306,869 | 308,786 | |||||||||||
| Federal Home Loan Bank (“FHLB”) stock | 11,218 | 10,136 | 10,438 | |||||||||||
| Federal Reserve Bank (“FRB”) stock | 4,131 | 4,131 | 4,131 | |||||||||||
| Mortgage loans held-for-sale, at fair value | 13,429 | 10,518 | 17,880 | |||||||||||
| Loans: | ||||||||||||||
| Real estate loans: | ||||||||||||||
| Residential 1-4 family | 156,811 | 157,053 | 146,938 | |||||||||||
| Residential 1-4 family construction | 52,217 | 50,228 | 48,135 | |||||||||||
| Commercial real estate | 644,019 | 627,326 | 611,963 | |||||||||||
| Commercial construction and development | 125,323 | 137,427 | 151,614 | |||||||||||
| Farmland | 145,356 | 142,353 | 143,789 | |||||||||||
| Other loans: | ||||||||||||||
| Home equity | 93,646 | 93,213 | 83,221 | |||||||||||
| Consumer | 29,445 | 29,118 | 29,832 | |||||||||||
| Commercial | 143,190 | 143,641 | 129,952 | |||||||||||
| Agricultural | 144,645 | 137,134 | 130,329 | |||||||||||
| Total loans | 1,534,652 | 1,517,493 | 1,475,773 | |||||||||||
| Allowance for credit losses | (17,130 | ) | (16,830 | ) | (16,230 | ) | ||||||||
| Net loans | 1,517,522 | 1,500,663 | 1,459,543 | |||||||||||
| Accrued interest and dividends receivable | 14,844 | 13,195 | 13,657 | |||||||||||
| Mortgage servicing rights, net | 15,443 | 15,614 | 15,738 | |||||||||||
| Assets held-for-sale, at cost | 257 | 257 | – | |||||||||||
| Premises and equipment, net | 100,297 | 98,397 | 92,979 | |||||||||||
| Cash surrender value of life insurance, net | 52,852 | 48,529 | 47,647 | |||||||||||
| Goodwill | 34,740 | 34,740 | 34,740 | |||||||||||
| Core deposit intangible, net | 4,834 | 5,168 | 6,264 | |||||||||||
| Other assets | 26,375 | 26,976 | 30,478 | |||||||||||
| Total assets | $ | 2,145,113 | $ | 2,098,955 | $ | 2,063,064 | ||||||||
| Liabilities: | ||||||||||||||
| Deposit accounts: | ||||||||||||||
| Noninterest bearing | $ | 419,760 | $ | 400,113 | $ | 435,655 | ||||||||
| Interest bearing | 1,230,752 | 1,218,752 | 1,179,823 | |||||||||||
| Total deposits | 1,650,512 | 1,618,865 | 1,615,478 | |||||||||||
| Accrued expenses and other liabilities | 38,593 | 35,804 | 31,597 | |||||||||||
| FHLB advances and other borrowings | 219,167 | 215,050 | 199,757 | |||||||||||
| Other long-term debt, net | 59,111 | 59,074 | 58,962 | |||||||||||
| Total liabilities | 1,967,383 | 1,928,793 | 1,905,794 | |||||||||||
| Shareholders’ Equity: | ||||||||||||||
| Preferred stock (par value $0.01 per share; 1,000,000 shares | ||||||||||||||
| authorized; no shares issued or outstanding) | – | – | – | |||||||||||
| Common stock (par value $0.01; 20,000,000 shares authorized; | ||||||||||||||
| 8,507,429 shares issued; 8,016,784, 8,016,784 and 7,988,132 | ||||||||||||||
| shares outstanding at September 30, 2024, June 30, 2024 and | ||||||||||||||
| September 30, 2023, respectively | 85 | 85 | 85 | |||||||||||
| Additional paid-in capital | 109,040 | 108,962 | 109,422 | |||||||||||
| Unallocated common stock held by Employee Stock Ownership Plan | (4,154 | ) | (4,297 | ) | (4,727 | ) | ||||||||
| Treasury stock, at cost (490,645, 490,645 and 519,297 shares at | ||||||||||||||
| September 30, 2024, June 30, 2024 and September 30, 2023, respectively) | (11,124 | ) | (11,124 | ) | (11,574 | ) | ||||||||
| Retained earnings | 98,979 | 97,413 | 94,979 | |||||||||||
| Accumulated other comprehensive loss, net of tax | (15,096 | ) | (20,877 | ) | (30,915 | ) | ||||||||
| Total shareholders’ equity | 177,730 | 170,162 | 157,270 | |||||||||||
| Total liabilities and shareholders’ equity | $ | 2,145,113 | $ | 2,098,955 | $ | 2,063,064 | ||||||||
| Income Statement | (Unaudited) | (Unaudited) | ||||||||||||||||
| (Dollars in thousands, except per share data) | Three Months Ended | Nine Months Ended | ||||||||||||||||
| September 30, | June 30, | September 30, | September 30, | |||||||||||||||
| 2024 | 2024 | 2023 | 2024 | 2023 | ||||||||||||||
| Interest and dividend income: | ||||||||||||||||||
| Interest and fees on loans | $ | 23,802 | $ | 22,782 | $ | 21,068 | $ | 68,526 | $ | 57,942 | ||||||||
| Securities available-for-sale | 2,598 | 2,631 | 2,794 | 7,953 | 8,586 | |||||||||||||
| FRB and FHLB dividends | 266 | 264 | 212 | 777 | 480 | |||||||||||||
| Other interest income | 94 | 145 | 20 | 268 | 66 | |||||||||||||
| Total interest and dividend income | 26,760 | 25,822 | 24,094 | 77,524 | 67,074 | |||||||||||||
| Interest expense: | ||||||||||||||||||
| Interest expense on deposits | 7,190 | 6,884 | 5,152 | 20,622 | 11,767 | |||||||||||||
| FHLB advances and other borrowings | 3,084 | 2,625 | 2,672 | 8,206 | 5,993 | |||||||||||||
| Other long-term debt | 684 | 681 | 683 | 2,048 | 2,035 | |||||||||||||
| Total interest expense | 10,958 | 10,190 | 8,507 | 30,876 | 19,795 | |||||||||||||
| Net interest income | 15,802 | 15,632 | 15,587 | 46,648 | 47,279 | |||||||||||||
| Provision for credit losses | 277 | 412 | 588 | 554 | 1,186 | |||||||||||||
| Net interest income after provision for credit losses | 15,525 | 15,220 | 14,999 | 46,094 | 46,093 | |||||||||||||
| Noninterest income: | ||||||||||||||||||
| Service charges on deposit accounts | 430 | 428 | 447 | 1,258 | 1,313 | |||||||||||||
| Mortgage banking, net | 2,602 | 2,417 | 4,338 | 7,196 | 11,252 | |||||||||||||
| Interchange and ATM fees | 662 | 640 | 643 | 1,865 | 1,861 | |||||||||||||
| Appreciation in cash surrender value of life insurance | 1,038 | 320 | 382 | 1,646 | 1,165 | |||||||||||||
| Net loss on sale of available-for-sale securities | – | – | – | – | (222 | ) | ||||||||||||
| Other noninterest income | 251 | 464 | 225 | 1,239 | 1,541 | |||||||||||||
| Total noninterest income | 4,983 | 4,269 | 6,035 | 13,204 | 16,910 | |||||||||||||
| Noninterest expense: | ||||||||||||||||||
| Salaries and employee benefits | 9,894 | 10,273 | 10,837 | 29,885 | 31,614 | |||||||||||||
| Occupancy and equipment expense | 2,134 | 2,104 | 1,956 | 6,337 | 6,100 | |||||||||||||
| Data processing | 1,587 | 1,382 | 1,486 | 4,494 | 4,270 | |||||||||||||
| Advertising | 277 | 316 | 340 | 846 | 930 | |||||||||||||
| Amortization | 337 | 348 | 386 | 1,054 | 1,201 | |||||||||||||
| Loan costs | 385 | 412 | 517 | 1,195 | 1,426 | |||||||||||||
| FDIC insurance premiums | 295 | 284 | 301 | 878 | 862 | |||||||||||||
| Professional and examination fees | 438 | 423 | 408 | 1,345 | 1,484 | |||||||||||||
| Other noninterest expense | 1,923 | 1,765 | 1,644 | 5,576 | 5,311 | |||||||||||||
| Total noninterest expense | 17,270 | 17,307 | 17,875 | 51,610 | 53,198 | |||||||||||||
| Income before provision for income taxes | 3,238 | 2,182 | 3,159 | 7,688 | 9,805 | |||||||||||||
| Provision for income taxes | 529 | 444 | 524 | 1,343 | 1,913 | |||||||||||||
| Net income | $ | 2,709 | $ | 1,738 | $ | 2,635 | $ | 6,345 | $ | 7,892 | ||||||||
| Basic earnings per common share | $ | 0.35 | $ | 0.22 | $ | 0.34 | $ | 0.81 | $ | 1.01 | ||||||||
| Diluted earnings per common share | $ | 0.34 | $ | 0.22 | $ | 0.34 | $ | 0.81 | $ | 1.01 | ||||||||
| Basic weighted average shares outstanding | 7,836,921 | 7,830,925 | 7,784,279 | 7,830,947 | 7,787,987 | |||||||||||||
| Diluted weighted average shares outstanding | 7,860,138 | 7,845,272 | 7,791,966 | 7,848,196 | 7,792,593 | |||||||||||||
| ADDITIONAL FINANCIAL INFORMATION | (Unaudited) | ||||||||||
| (Dollars in thousands, except per share data) | Three or Nine Months Ended | ||||||||||
| September 30, | June 30, | September 30, | |||||||||
| 2024 | 2024 | 2023 | |||||||||
| Mortgage Banking Activity (For the quarter): | |||||||||||
| Net gain on sale of mortgage loans | $ | 1,691 | $ | 1,600 | $ | 3,591 | |||||
| Net change in fair value of loans held-for-sale and derivatives | 159 | 12 | (71 | ) | |||||||
| Mortgage servicing income, net | 752 | 805 | 818 | ||||||||
| Mortgage banking, net | $ | 2,602 | $ | 2,417 | $ | 4,338 | |||||
| Mortgage Banking Activity (Year-to-date): | |||||||||||
| Net gain on sale of mortgage loans | $ | 4,705 | $ | 8,551 | |||||||
| Net change in fair value of loans held-for-sale and derivatives | (2 | ) | 234 | ||||||||
| Mortgage servicing income, net | 2,493 | 2,467 | |||||||||
| Mortgage banking, net | $ | 7,196 | $ | 11,252 | |||||||
| Performance Ratios (For the quarter): | |||||||||||
| Return on average assets | 0.51 | % | 0.33 | % | 0.51 | % | |||||
| Return on average equity | 6.56 | % | 4.30 | % | 6.63 | % | |||||
| Yield on average interest earning assets | 5.66 | % | 5.64 | % | 5.27 | % | |||||
| Cost of funds | 2.89 | % | 2.78 | % | 2.37 | % | |||||
| Net interest margin | 3.34 | % | 3.41 | % | 3.41 | % | |||||
| Core efficiency ratio* | 81.47 | % | 85.22 | % | 80.89 | % | |||||
| Performance Ratios (Year-to-date): | |||||||||||
| Return on average assets | 0.41 | % | 0.53 | % | |||||||
| Return on average equity | 5.19 | % | 6.54 | % | |||||||
| Yield on average interest earning assets | 5.59 | % | 5.07 | % | |||||||
| Cost of funds | 2.78 | % | 1.94 | % | |||||||
| Net interest margin | 3.36 | % | 3.57 | % | |||||||
| Core efficiency ratio* | 84.47 | % | 81.01 | % | |||||||
| * The core efficiency ratio is a non-GAAP ratio that is calculated by dividing non-interest expense, exclusive of acquisition | |||||||||||
| costs and intangible asset amortization, by the sum of net interest income and non-interest income. | |||||||||||
| ADDITIONAL FINANCIAL INFORMATION | |||||||||||
| (Dollars in thousands, except per share data) | |||||||||||
| (Unaudited) | |||||||||||
| Asset Quality Ratios and Data: | As of or for the Three Months Ended | ||||||||||
| September 30, | June 30, | September 30, | |||||||||
| 2024 | 2024 | 2023 | |||||||||
| Nonaccrual loans | $ | 3,859 | $ | 4,012 | $ | 7,753 | |||||
| Loans 90 days past due and still accruing | 944 | 1,076 | – | ||||||||
| Total nonperforming loans | 4,803 | 5,088 | 7,753 | ||||||||
| Other real estate owned and other repossessed assets | 4 | 4 | – | ||||||||
| Total nonperforming assets | $ | 4,807 | $ | 5,092 | $ | 7,753 | |||||
| Nonperforming loans / portfolio loans | 0.31 | % | 0.34 | % | 0.53 | % | |||||
| Nonperforming assets / assets | 0.22 | % | 0.24 | % | 0.38 | % | |||||
| Allowance for credit losses / portfolio loans | 1.12 | % | 1.11 | % | 1.10 | % | |||||
| Allowance for credit losses/ nonperforming loans | 356.65 | % | 330.78 | % | 209.34 | % | |||||
| Gross loan charge-offs for the quarter | $ | 22 | $ | 12 | $ | 122 | |||||
| Gross loan recoveries for the quarter | $ | 5 | $ | 10 | $ | 14 | |||||
| Net loan charge-offs for the quarter | $ | 17 | $ | 2 | $ | 108 | |||||
| September 30, | June 30, | September 30, | |||||||||
| 2024 | 2024 | 2023 | |||||||||
| Capital Data (At quarter end): | |||||||||||
| Common shareholders’ equity (book value) per share | $ | 22.17 | $ | 21.23 | $ | 19.69 | |||||
| Tangible book value per share** | $ | 17.23 | $ | 16.25 | $ | 14.55 | |||||
| Shares outstanding | 8,016,784 | 8,016,784 | 7,988,132 | ||||||||
| Tangible common equity to tangible assets*** | 6.56 | % | 6.33 | % | 5.75 | % | |||||
| Other Information: | |||||||||||
| Average investment securities for the quarter | $ | 305,730 | $ | 306,207 | $ | 319,308 | |||||
| Average investment securities year-to-date | $ | 308,688 | $ | 310,168 | $ | 335,898 | |||||
| Average loans for the quarter **** | $ | 1,547,246 | $ | 1,513,313 | $ | 1,476,584 | |||||
| Average loans year-to-date **** | $ | 1,519,951 | $ | 1,506,303 | $ | 1,417,291 | |||||
| Average earning assets for the quarter | $ | 1,874,669 | $ | 1,837,418 | $ | 1,812,610 | |||||
| Average earning assets year-to-date | $ | 1,847,468 | $ | 1,833,867 | $ | 1,768,361 | |||||
| Average total assets for the quarter | $ | 2,116,839 | $ | 2,077,448 | $ | 2,052,443 | |||||
| Average total assets year-to-date | $ | 2,086,951 | $ | 2,072,013 | $ | 1,999,864 | |||||
| Average deposits for the quarter | $ | 1,622,254 | $ | 1,625,882 | $ | 1,602,770 | |||||
| Average deposits year-to-date | $ | 1,624,936 | $ | 1,625,826 | $ | 1,596,201 | |||||
| Average equity for the quarter | $ | 165,162 | $ | 161,533 | $ | 158,933 | |||||
| Average equity year-to-date | $ | 163,106 | $ | 162,084 | $ | 160,917 | |||||
| ** The tangible book value per share is a non-GAAP ratio that is calculated by dividing shareholders’ equity, | |||||||||||
| less goodwill and core deposit intangible, by common shares outstanding. | |||||||||||
| *** The tangible common equity to tangible assets is a non-GAAP ratio that is calculated by dividing shareholders’ | |||||||||||
| equity, less goodwill and core deposit intangible, by total assets, less goodwill and core deposit intangible. | |||||||||||
| **** Includes loans held for sale | |||||||||||
| Reconciliation of Non-GAAP Financial Measures | |||||||||||||||||||||
| Core Efficiency Ratio | (Unaudited) | (Unaudited) | |||||||||||||||||||
| (Dollars in thousands) | Three Months Ended | Nine Months Ended | |||||||||||||||||||
| September 30, | June 30, | September 30, | September 30, | ||||||||||||||||||
| 2024 | 2024 | 2023 | 2024 | 2023 | |||||||||||||||||
| Calculation of Core Efficiency Ratio: | |||||||||||||||||||||
| Noninterest expense | $ | 17,270 | $ | 17,307 | $ | 17,875 | $ | 51,610 | $ | 53,198 | |||||||||||
| Intangible asset amortization | (337 | ) | (348 | ) | (386 | ) | (1,054 | ) | (1,201 | ) | |||||||||||
| Core efficiency ratio numerator | 16,933 | 16,959 | 17,489 | 50,556 | 51,997 | ||||||||||||||||
| Net interest income | 15,802 | 15,632 | 15,587 | 46,648 | 47,279 | ||||||||||||||||
| Noninterest income | 4,983 | 4,269 | 6,035 | 13,204 | 16,910 | ||||||||||||||||
| Core efficiency ratio denominator | 20,785 | 19,901 | 21,622 | 59,852 | 64,189 | ||||||||||||||||
| Core efficiency ratio (non-GAAP) | 81.47 | % | 85.22 | % | 80.89 | % | 84.47 | % | 81.01 | % | |||||||||||
| Tangible Book Value and Tangible Assets | (Unaudited) | |||||||||||||
| (Dollars in thousands, except per share data) | September 30, | June 30, | September 30, | |||||||||||
| 2024 | 2024 | 2023 | ||||||||||||
| Tangible Book Value: | ||||||||||||||
| Shareholders’ equity | $ | 177,730 | $ | 170,162 | $ | 157,270 | ||||||||
| Goodwill and core deposit intangible, net | (39,574 | ) | (39,908 | ) | (41,004 | ) | ||||||||
| Tangible common shareholders’ equity (non-GAAP) | $ | 138,156 | $ | 130,254 | $ | 116,266 | ||||||||
| Common shares outstanding at end of period | 8,016,784 | 8,016,784 | 7,988,132 | |||||||||||
| Common shareholders’ equity (book value) per share (GAAP) | $ | 22.17 | $ | 21.23 | $ | 19.69 | ||||||||
| Tangible common shareholders’ equity (tangible book value) | ||||||||||||||
| per share (non-GAAP) | $ | 17.23 | $ | 16.25 | $ | 14.55 | ||||||||
| Tangible Assets: | ||||||||||||||
| Total assets | $ | 2,145,113 | $ | 2,098,955 | $ | 2,063,064 | ||||||||
| Goodwill and core deposit intangible, net | (39,574 | ) | (39,908 | ) | (41,004 | ) | ||||||||
| Tangible assets (non-GAAP) | $ | 2,105,539 | $ | 2,059,047 | $ | 2,022,060 | ||||||||
| Tangible common shareholders’ equity to tangible assets | ||||||||||||||
| (non-GAAP) | 6.56 | % | 6.33 | % | 5.75 | % | ||||||||
| Contacts: | Laura F. Clark, President and CEO |
| (406) 457-4007 | |
| Miranda J. Spaulding, SVP and CFO | |
| (406) 441-5010 |
Source: GlobeNewswire (MIL-OSI)
AUSTIN, Texas, Oct. 29, 2024 (GLOBE NEWSWIRE) — AutoScheduler.AI, an innovative Warehouse Orchestration Platform and WMS accelerator, announces that Ian Johnston has joined the company as the Vice President of Customer Success. He will replace Stephen Zujkowski, who is retiring. Ian has over a decade of experience in supply chain operations, logistics management, and strategic leadership. He will use his expertise to help AutoScheduler’s customers gain value and success from deploying AutoScheduler solutions. He will be the face of success for all AutoScheduler’s customers, ensuring the talented implementation team continues delivering exceptional services and fostering true partnerships.
“As a leader within Amazon, Ian has demonstrated a deep understanding of operational planning and championed many technology implementations that enabled transformative changes within numerous operations,” says Keith Moore, CEO of AutoScheduler.AI. “His rich and diverse experience in leading and supporting innovation and a keen understanding of driving customer excellence make him a perfect fit for this pivotal role at AutoScheduler.AI.”
“I am looking forward to setting new benchmarks for excellence in customer success with the best project delivery experiences, clear communications, and robust customer relationships, enabling AutoScheduler.AI to be the market leader in warehouse orchestration,” says Ian Johnston, Vice President, Customer Success, AutoScheduler.AI. “I am dedicated to driving value for clients through our innovative solutions and aligning AutoScheduler’s capabilities with customer needs.”
As Vice President of Customer Success, Ian oversees the strategy, execution, and management of all aspects of customer deployment and satisfaction. He will ensure that customers derive maximum value from AutoScheduler, leading to improved fulfillment, better labor utilization, and lower costs. As the leader in the Customer Success organization, he will drive measurable positive business outcomes, customer satisfaction, retention, and expansion across the customer base.
Before joining AutoScheduler.AI, Ian served as Director of Supply Chain at Amazon, overseeing North America’s largest heavy bulky logistics network, which included managing demand forecasting, capacity management, and product development for the U.S. and Canada. Ian’s leadership contributed to significant advancements in operational efficiency, including the development of several novel planning products that enhanced forecast accuracy and capacity flexibility, reducing Amazon’s cost to serve and improving delivery speeds. Prior to Amazon, Ian served as a Marine Infantry Officer, where he led combat operations in Afghanistan and deterrence operations in Southeast Asia. He later served at the White House, supporting two administrations and several high-profile events.
Ian holds an MBA from the University of Virginia’s Darden School of Business, a BA in Political Science with a minor in Spanish from The Citadel, and is actively pursuing a Master of Science in Real Estate at the University of San Diego.
About AutoScheduler.AI
AutoScheduler.AI orchestrates warehouse activities directly on top of your WMS, optimizing operations for peak performance. Developed alongside industry leaders like P&G and successfully deployed at prominent companies such as Pepsi, General Mills, and Unilever, our AI and Machine Learning platform seamlessly integrates with your existing systems. Focused on labor planning, inventory workflow, human-robotics interaction, and space utilization, we streamline operations, reducing travel and inventory handling while maximizing OTIF rates and labor efficiency. With prescriptive analytics driving insights, our clients harness the power to enhance efficiencies and generate value across their supply chains. Reach out to us at info@autoscheduler.ai for more information.
Contact:
Becky Boyd
MediaFirst PR
Becky@MediaFirst.Net
Cell: (404) 421-8497
A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/199e4f06-1419-40e1-8665-b27f4eb199cd
Source: GlobeNewswire (MIL-OSI)
CHICAGO, Oct. 29, 2024 (GLOBE NEWSWIRE) — Zero Hash, the leading crypto and stablecoin infrastructure platform, today announced its partnership with Coinstar®, LLC, a global financial services leader, to embed crypto payments capabilities within CINQ by Coinstar™, a new digital wallet designed to expand how consumers use and manage their finances. This collaboration allows up to 9,500 of Coinstar’s 17,000+ network of kiosks across the U.S. to facilitate cash-to-crypto transactions.
Through a partnership with Zero Hash, CINQ by Coinstar has launched with the initial ability to purchase cryptocurrency and stablecoins with cash at more than 9,500 Coinstar kiosks across the U.S., or through the CINQ by Coinstar mobile app. Users of the CINQ by Coinstar app, powered by Zero Hash, can seamlessly move in, out and between cash, stablecoins and crypto. A broader range of digital payment services for the CINQ by Coinstar wallet are expected to follow in 2025 as recently announced by Coinstar.
The overarching objective of the partnership is to provide a seamless mechanism of dollar digitalization to the large percentage of underbanked and underserved households within the United States. Specifically:
“Zero Hash is delighted to partner with Coinstar, a household brand in money transformation for more than 30 years. Its vast network of self-serve kiosks and mobile apps will help further expand access to the underbanked and immigrants looking to remit funds. Upwards of 50% of remittances are cash-based and the multiple “hops” in remittance often mean these transfers incur high fees. Linking this cash infrastructure to the “network of networks” which is crypto and stablecoins, provides a key unlock for cheaper and quicker remittances for example,” said Edward Woodford, CEO and Founder at Zero Hash. “ CINQ by Coinstar has been able to seamlessly embed our regulatory compliant infrastructure to support new ways for cash-preferred customers to move safely and seamlessly between fiat and crypto use cases.”
Powered by Zero Hash’s identity verification service, every customer is validated before cash can be entered into the kiosk for crypto, stablecoin and fiat transactions. Additional controls include Documentary Verification and Liveness Verification before certain services may be enabled. Users can buy over 25 crypto and stablecoin assets with paper currency at Coinstar kiosks in major grocery stores across North America as well as through the CINQ by Coinstar mobile app. Users can also connect multiple bank accounts, with Zero Hash’s platform facilitating USD deposits via ACH, allowing users to hold balances in cash or crypto and easily manage their financial needs.
“Zero Hash has been an incredible partner in helping us extend our trusted services into the digital world,” said Kevin McColly, CEO of Coinstar. “Their secure and industry leading crypto and stablecoin infrastructure has allowed us to seamlessly bridge the gap between cash and cryptocurrency, making it easier for our customers to access and manage their finances.”
There are two ways to get started buying cryptocurrency through Zero Hash at Coinstar kiosks:
To learn more about CINQ by Coinstar and follow along for additional product innovations, visit www.cinqwallet.com, or to find a CINQ by Coinstar enabled kiosk, visit our kiosk finder here.1
1: The CINQ by Coinstar wallet is available in all 50 states. However, Zero Hash enabled Kiosks are not currently available in all states, including the state of New York. Transactional limits may also apply.
About Zero Hash
Zero Hash is the leading crypto and stablecoin infrastructure provider that seamlessly connects fiat, crypto and stablecoins in one platform, enabling a better way to move and transfer money and value globally.
Through its embeddable infrastructure, start-ups, enterprises and Fortune 500 companies build a diverse range of use cases: cross-border payments, commerce, trading, remittance, payroll, tokenization, wallets and on and off-ramps.
Zero Hash Holdings is backed by investors, including Point72 Ventures, Bain Capital Ventures, and NYCA.
Zero Hash LLC is a FinCen-registered Money Service Business and a regulated Money Transmitter that can operate in 51 US jurisdictions. Zero Hash LLC and Zero Hash Liquidity Services LLC are licensed to engage in virtual currency business activity by the New York State Department of Financial Services. In Canada, Zero Hash LLC is registered as a Money Service Business with FINTRAC.
Zero Hash Australia Pty Ltd. is registered with AUSTRAC as a Digital Currency Exchange Provider, with DCE registered provider number DCE100804170-001. This registration enables Zero Hash to offer its crypto services in Australia. Zero Hash Australia Pty Ltd. is registered on the New Zealand register of financial service providers, with Financial Service Provider (FSP) number FSP1004503. A FSP in New Zealand is a registration and does not mean that Zero Hash Australia Pty Ltd. is licensed by a New Zealand regulator to provide crypto services. Zero Hash Australia Pty Ltd.’s registration on the New Zealand register of financial service providers does not mean that Zero Hash Australia is subject to active regulation or oversight by a New Zealand regulator. Zero Hash Europe B.V. is registered as a Virtual Asset Services Provider (VASP) registration by the Dutch Central Bank (Relation number: R193684). Zero Hash Europe Sp. Zoo is registered as a VASP by the Tax Administration Chamber of Poland in Katowice (Registration number RDWW – 1212).
Connect with Zero Hash
Website | Twitter | LinkedIn | Medium
Zero Hash Contact
Shaun O’keeffe
(855) 744-7333
Zero Hash Disclosures
Zero Hash services and product offerings, including the availability of kiosk services, may not be available in all jurisdictions. Zero Hash accounts are not subject to FDIC or SIPC protections, or any such equivalent protections that may exist outside of the US. Zero Hash’s technical support and enablement of any asset is not an endorsement of such asset and is not a recommendation to buy, sell, or hold any crypto asset. The value of any cryptocurrency, including digital assets pegged to fiat currency, commodities, or any other asset, may go to zero. Zero Hash is not registered with the SEC or FINRA. Zero Hash does not provide any securities services and is not a custodian of securities, including security tokens, on behalf of customers.
About Coinstar, LLC
Coinstar® is a global leader in money transformation and the largest physical self-serve financial network with a digital wallet, CINQ by Coinstar. Through its digital wallet, mobile app and network of 24,000 kiosks in North America and Europe, Coinstar offers a wide range of financial services which enable users to transform their physical currency. Its reliable payment solutions offer one-stop shopping experiences at convenient kiosk locations including coin conversion to cash, NO FEE eGift cards and charitable donations as well as account transfer services powered by our bank partners. Users can also move money and transact more seamlessly in the digital world through CINQ by Coinstar with the ability to buy, sell and transfer cryptocurrencies in its initial rollout. For brand advertisers, Coinstar offers adPlanet™ Retail Media Group, which enables lead generation on the interactive kiosk screen and a digital out of home network that delivers advertising via high-definition screens on top of Coinstar kiosks at select retail and grocery locations. For more information on Coinstar, visit www.coinstar.com.
Source: GlobeNewswire (MIL-OSI)
DALLAS, Oct. 29, 2024 (GLOBE NEWSWIRE) — MEF, a global consortium of network, cloud, security, and technology providers driving enterprise digital transformation, today announced significant advancements in its MEF 3.0 Secure Access Service Edge (SASE) Certification Program. Technology providers Fortinet and Versa have achieved full SASE certification, while service providers AT&T, BT, Colt, Comcast Business, Console Connect, Liberty Latin America, Lumen, Orange Business, TPG, and Verizon have also earned full SASE certification. Additionally, technology providers Broadcom Inc. and Palo Alto Networks, and service provider Sparkle, are expected to achieve full SASE certification shortly. Organizations that achieve SASE certification through MEF’s rigorous independent program receive a rating on product effectiveness and are listed in MEF’s registry of certified companies. SASE certification is now available to all MEF members.
“As cyber threats continue to escalate in complexity and frequency, enterprises need absolute confidence in their security solutions,” said Nan Chen, Chief Executive Officer, MEF. “MEF’s independent SASE certification program provides that assurance, enabling organizations to choose validated solutions that protect their digital assets and support their transformation initiatives.”
Validated Security for the Enterprise
MEF’s comprehensive certification program addresses today’s critical cybersecurity threats through rigorous testing of SASE, which includes Software-Defined Wide Area Network (SD-WAN), Security Service Edge (SSE), and Zero Trust (ZT) capabilities. The program is delivered in partnership with CyberRatings.org (CRO), a world-class testing laboratory that ensures transparency and confidence in cybersecurity solutions.
Technology providers must successfully complete all three certification modules to achieve full SASE certification. Service providers can achieve certification by integrating MEF-certified technology solutions, ensuring enterprise customers can trust the security and performance of their provider’s ecosystem.
“Building secure, high-performing networks is critical to enterprise success,” said Pascal Menezes, Chief Technology Officer, MEF. “By achieving SASE certification, technology and service providers are proving their commitment to delivering reliable, scalable, and secure solutions.”
Setting the Standard for Network Security
The certification program validates compliance with MEF standards, including MEF SD-WAN (MEF 70.1) and industry-first standards for SASE (MEF 117) and Zero Trust (MEF 118). Certified solutions receive detailed ratings displayed in MEF’s certification registry, enabling enterprises to make informed decisions about their security investments.
As SASE becomes central to Network-as-a-Service (NaaS) offerings, certified solutions give enterprises confidence in the cybersecurity embedded within their network environments. To help organizations navigate this landscape, MEF recently released its “State of the Industry Report: SASE – Validating Cyber Defense in an Era of Unprecedented Threats.“
More information about MEF’s SASE certification program can be found here.
SASE certifications and advancements will be featured at MEF’s Global Network-as-a-Service Event (GNE) from Oct 28–30, 2024, in Dallas, Texas. Visit gne.mef.net.
About MEF
MEF is a global consortium of service, cloud, cybersecurity, and technology providers collaborating to accelerate enterprise digital transformation. It delivers standards-based frameworks, services, technologies, APIs, and certification programs to enable Network-as-a-Service (NaaS) across an automated ecosystem. MEF is the defining authority for certified Lifecycle Service Orchestration (LSO) business and operational APIs and Carrier Ethernet, SASE, SD-WAN, Zero Trust, and Security Service Edge (SSE) technologies and services. MEF’s Global NaaS Event (GNE) convenes industry leaders building, delivering and consuming the next generation of NaaS solutions. For more information about MEF, visit MEF.net and follow us on LinkedIn, Twitter and YouTube.
Media Contact:
Melissa Power
MEF
pr@mef.net
Here’s what certified organizations have to say about the importance of certification.
“It’s a tough environment for businesses: they’re facing wider attack surfaces and increasingly sophisticated threats, so it’s no surprise that many are looking to bolster their SD-WAN services with SASE’s advanced security features. MEF’s rigorous certification program gives businesses the peace of mind that comes from knowing their service providers meet the highest industry standards. At Colt, we’re very proud of our MEF 3.0 SASE Certification—it recognizes our ongoing commitment to delivering industry-leading customer experience while supporting our customers to improve their security posture.” – Tyler Hemmen, Vice President Enterprise Products and Solutions, Colt Technology Services
“At Comcast Business, we are proud to be among the first to receive MEF 3.0 Secure Access Service Edge (SASE) Certification. This achievement highlights our dedication to providing advanced technology solutions that address the evolving needs of our customers. SASE-based services offer businesses a unified approach to security and network access, ensuring that their data is protected, and their operations remain seamless, regardless of location.” – Bob Victor, Senior Vice President of Customer Solutions, Comcast Business
“At Console Connect, we’re thrilled to announce we’ve achieved MEF 3.0 SASE Certification, placing us among the first global NaaS providers to receive this certification. This validates our commitment to delivering secure and high-performance data-movement solutions to enterprises in over 100 countries. By leveraging SD-WAN, SSE, and Zero Trust, we offer enhanced security and operational efficiency for all enterprise data-movement needs. This certification isn’t just a win for Console Connect, it’s a step forward for the entire industry in defining and delivering enterprise-grade SASE solutions.” – Paul Gampe, Chief Technology Officer, Console Connect, MEF Board of Directors
“Fortinet’s Unified SASE solution aligns perfectly with our founding principle of converging networking and security to help our customers reduce complexity, improve security, and centralize management. We’re proud to achieve the highest rating possible— a AAA rating— on the MEF 3.0 SASE Certification, which includes testing across SD-WAN, SSE, and Zero Trust. This recognition adds to our growing list of third-party validations and underscores our commitment to providing reliable, scalable, and innovative solutions for our customers.” – John Maddison, Chief Marketing Officer, Fortinet
“Lumen is excited to reinforce our leadership within the MEF community by being among the first to achieve certification under the MEF 3.0 Secure Access Service Edge (SASE) standard. For customers leveraging Lumen’s Private Connectivity Fabric as their trusted multi-cloud interconnect, the ability to integrate robust, policy-driven overlay networks is a crucial value-added service that ensures enterprise-class security for diverse customer workloads.” – Carole Gridley, Senior Vice President of Product, Lumen
“Delivering secure, scalable, and high-performance services to meet the digital infrastructure needs of enterprises is at the heart of everything we do at Orange Business. Achieving MEF 3.0 SASE Certification underscores our dedication to providing trusted and robust services that simplify network and security integration for our global customers. This certification validates our ability to deliver the total experience that is a priority for businesses today, especially given the dynamic cybersecurity landscape.” – Usman Javaid, Chief Products and Marketing Officer, Orange Business
“MEF’s SASE certification testing is a game-changer for the industry, providing a rigorous, standardized framework to validate the security and performance of converged network solutions. This certification not only strengthens customer confidence but also ensures that vendors like Palo Alto Networks are meeting the highest benchmarks for Secure Access Service Edge technologies. By participating in MEF’s testing, we are positioning Palo Alto Networks as a leader in delivering trusted, high-quality solutions that drive innovation and reliability.” – Samaresh Nair, Director of Product Management, Palo Alto Networks
“TPG Telecom is always committed to ensuring our network, design, and products meet the latest industry standards. Achieving the MEF 3.0 SD-WAN Certification enhances our operational efficiency, boosts our skills, and gives our customers added confidence in our expertise. This is a testament to our dedication to delivering high-quality, future-proof SD-WAN solutions to meet the dynamic needs of TPG Telecom’s customers.” – Marco Chan, General Manager of Technology, Enterprise, Government and Wholesale, TPG Telecom
“We are delighted to be one of the first companies to achieve an AAA rating and full MEF certification for our SD-WAN, SSE, and ZTNA solutions. With global demand for SASE accelerating, real-world testing is essential for identifying the right products and technology as opposed to relying on vendor claims or qualitative analysis. The MEF 3.0 SASE Certification program delivers the concrete results and data to help organizations make informed decisions.” – Kelly Ahuja, Chief Executive Officer, Versa