Emissions Trading – Page 20

MIL-OSI: Roper Technologies announces first quarter financial results

Source: GlobeNewswire (MIL-OSI)

SARASOTA, Fla., April 28, 2025 (GLOBE NEWSWIRE) — Roper Technologies, Inc. (Nasdaq: ROP) reported financial results for the first quarter ended March 31, 2025.

First quarter 2025 highlights

Revenue increased 12% to $1.88 billion; acquisition contribution was +8% and organic revenue was +5%
GAAP net earnings decreased 13% to $331 million; adjusted net earnings increased 9% to $517 million
Adjusted EBITDA increased 9% to $740 million
Operating cash flow decreased 1% to $529 million; trailing-twelve-months adjusted operating cash flow increased 12% to $2.39 billion
GAAP DEPS decreased 14% to $3.06; adjusted DEPS increased 8% to $4.78

“Roper had a strong start to 2025 and our enterprise continues to execute at a high level,” said Neil Hunn, Roper’s President and CEO. “Our total revenue growth of 12% was driven by an 8% acquisition contribution and 5% organic growth. Importantly, our trailing-twelve-months free cash flow grew 12% with a 31% free cash flow margin. Last week, we completed the acquisition of CentralReach, a leading provider of cloud-native software enabling the workflow and administration of Applied Behavior Analysis therapy. CentralReach is a terrific business that not only meets each of our historical acquisition criteria but also meets our higher growth and higher return expectations.”

“Despite an uncertain macroeconomic backdrop, we are increasing our full year outlook. This is underpinned by resilient demand for our mission critical solutions and our expanding recurring revenue base. Additionally, we are well positioned to continue executing our disciplined and process-driven capital deployment strategy, fueled by our significant M&A firepower and a large pipeline of attractive acquisition opportunities. Roper’s durable cash flow compounding model has historically performed well through economic and market cycles, and we expect our resilience will again be demonstrated in the current environment,” concluded Mr. Hunn.

Increasing 2025 guidance

Roper now expects full year 2025 adjusted DEPS of $19.80 – $20.05, compared to previous guidance of $19.75 – $20.00. The Company increased its full year total revenue growth outlook to ~12%, compared to a previous outlook of 10%+, and continues to expect organic revenue growth of +6 – 7%.

For the second quarter of 2025, the Company expects adjusted DEPS of $4.80 – $4.84.

Roper’s guidance includes the impact of the previously announced acquisition of CentralReach, which closed on April 23, 2025. The Company’s guidance excludes the impact of unannounced future acquisitions or divestitures.

Conference call to be held at 8:00 AM (ET) today

A conference call to discuss these results has been scheduled for 8:00 AM ET on Monday, April 28, 2025. The call can be accessed via webcast or by dialing +1 800-836-8184 (US/Canada) or +1 646-357-8785, using conference call ID 07867. Webcast information and conference call materials will be made available in the Investors section of Roper’s website (www.ropertech.com) prior to the start of the call. The webcast can also be accessed directly by using the following URL https://event.webcast. Telephonic replays will be available for up to two weeks and can be accessed by dialing +1 646-517-4150 with access code 07867#.

Use of non-GAAP financial information

The Company supplements its consolidated financial statements presented on a GAAP basis with certain non-GAAP financial information to provide investors with greater insight, increase transparency and allow for a more comprehensive understanding of the information used by management in its financial and operational decision-making. Reconciliation of non-GAAP measures to their most directly comparable GAAP measures are included in the accompanying financial schedules or tables. The non-GAAP financial measures disclosed by the Company should not be considered a substitute for, or superior to, financial measures prepared in accordance with GAAP, and the financial results prepared in accordance with GAAP and reconciliations from these results should be carefully evaluated.

Minority interest

Following the sale of a majority stake in its industrial businesses to CD&R, Roper holds a minority interest in Indicor. The fair value of Roper’s equity investment in Indicor is updated on a quarterly basis and reported as “equity investments (gain) loss, net.” Roper makes non-GAAP adjustments for the impacts associated with this investment.

Table 1: Revenue and adjusted EBITDA reconciliation ($M)
	Q1 2024			Q1 2025				V %
GAAP revenue	$	1,681		$	1,883			12	%

Components of revenue growth
Organic								5	%
Acquisitions								8	%
Foreign exchange								—	%
Revenue growth								12	%

Adjusted EBITDA reconciliation
GAAP net earnings	$	382		$	331
Taxes		102			87
Interest expense		53			63
Depreciation		9			9
Amortization		185			204
EBITDA	$	731		$	694			(5)%

Transaction-related expenses for completed acquisitions		2			1
Financial impacts associated with the minority investments in Indicor & Certinia		(57	)		44		^A
Adjusted EBITDA	$	676		$	740			9	%
Adjusted EBITDA margin		40.2	%		39.3	%		(90 bps)

Table 2: Adjusted net earnings reconciliation ($M)
	Q1 2024			Q1 2025			V %
GAAP net earnings	$	382		$	331		(13)%
Transaction-related expenses for completed acquisitions		1			1
Financial impacts associated with the minority investments in Indicor & Certinia		(48	)		32	^A
Amortization of acquisition-related intangible assets		141			154	^B
Adjusted net earnings ^C	$	476		$	517		9	%

Table 3: Adjusted DEPS reconciliation
	Q1 2024			Q1 2025			V %
GAAP DEPS	$	3.54		$	3.06		(14)%
Transaction-related expenses for completed acquisitions		0.01			0.01
Financial impacts associated with the minority investments in Indicor & Certinia		(0.45	)		0.29	^A
Amortization of acquisition-related intangible assets		1.31			1.42	^B
Adjusted DEPS^C	$	4.41		$	4.78		8	%

Table 4: Adjusted cash flow reconciliation ($M) (from continuing operations)
	Q1 2024			Q1 2025			V %	TTM 2024			TTM 2025			V %
Operating cash flow	$	531		$	529		(1)%	$	2,104		$	2,390		14	%
Taxes paid in period related to divestiture		—			—				32			—
Adjusted operating cash flow	$	531		$	529		(1)%	$	2,136		$	2,390		12	%
Capital expenditures		(9	)		(10	)			(68	)		(66	)
Capitalized software expenditures		(10	)		(12	)			(40	)		(48	)
Adjusted free cash flow	$	513		$	507		(1)%	$	2,029		$	2,276		12	%

Table 5: Forecasted adjusted DEPS reconciliation
	Q2 2025				FY 2025
	Low end		High end		Low end		High end
GAAP DEPS ^D	$	3.33	$	3.37	$	13.72	$	13.97
YTD transaction-related expenses for completed acquisitions		—		—		0.01		0.01
YTD financial impacts associated with the minority investment in Indicor ^A		—		—		0.29		0.29
Amortization of acquisition-related intangible assets ^B		1.47		1.47		5.78		5.78
Adjusted DEPS ^C	$	4.80	$	4.84	$	19.80	$	20.05

Footnotes:

A.	Adjustments related to the financial impacts associated with the minority investment in Indicor as shown below ($M, except per share data). Forecasted results do not include any potential impacts associated with our minority investment in Indicor, as these potential impacts cannot be reasonably predicted. These impacts will be excluded from all non-GAAP results in future periods.

		Q1 2025A		Q2 2025E		FY 2025E		YTD 2025A
	Pretax	$	44	TBD		TBD		$	44
	After-tax	$	32	TBD		TBD		$	32
	Per share	$	0.29	TBD		TBD		$	0.29

B.	Actual results and forecast of estimated amortization of acquisition-related intangible assets as shown below ($M, except per share data).

		Q1 2025A		Q2 2025E		FY 2025E
	Pretax	$	194	$	202	$	795
	After-tax	$	154	$	160	$	628
	Per share	$	1.42	$	1.47	$	5.78

C.	All actual and forecasted non-GAAP adjustments are taxed at 21% with the exception of the financial impacts associated with minority investments.

D.	Forecasted GAAP DEPS do not include any potential impacts associated with our minority investment in Indicor. These impacts will be excluded from all non-GAAP results in future periods.

Note: Numbers may not foot due to rounding.

About Roper Technologies

Roper Technologies is a constituent of the Nasdaq 100, S&P 500, and Fortune 1000. Roper has a proven, long-term track record of compounding cash flow and shareholder value. The Company operates market leading businesses that design and develop vertical software and technology enabled products for a variety of defensible niche markets. Roper utilizes a disciplined, analytical, and process-driven approach to redeploy its excess capital toward high-quality acquisitions. Additional information about Roper is available on the Company’s website at www.ropertech.com.

Contact information:
Investor Relations
941-556-2601
investor-relations@ropertech.com

The information provided in this press release contains forward-looking statements within the meaning of the federal securities laws. These forward-looking statements may include, among others, statements regarding operating results, the success of our internal operating plans, and the prospects for newly acquired businesses to be integrated and contribute to future growth, profit and cash flow expectations. Forward-looking statements may be indicated by words or phrases such as “anticipate,” “estimate,” “plans,” “expects,” “projects,” “should,” “will,” “believes,” “intends” and similar words and phrases. These statements reflect management’s current beliefs and are not guarantees of future performance. They involve risks and uncertainties that could cause actual results to differ materially from those contained in any forward-looking statement. Such risks and uncertainties include our ability to identify and complete acquisitions consistent with our business strategies, integrate acquisitions that have been completed, realize expected benefits and synergies from, and manage other risks associated with, acquired businesses, including obtaining any required regulatory approvals with respect thereto. We also face other general risks, including our ability to realize cost savings from our operating initiatives, general economic conditions and the conditions of the specific markets in which we operate, including risks related to labor shortages and rising interest rates, changes in foreign exchange rates, risks related to changing U.S. and foreign trade policies, including increased trade restrictions or tariffs, risks associated with our international operations, cybersecurity and data privacy risks, including litigation resulting therefrom, risks related to political instability, armed hostilities, incidents of terrorism, public health crises (such as the COVID-19 pandemic) or natural disasters, increased product liability and insurance costs, increased warranty exposure, future competition, changes in the supply of, or price for, parts and components, including as a result of inflation and potential supply chain constraints, environmental compliance costs and liabilities, risks and cost associated with litigation, potential write-offs of our substantial intangible assets, and risks associated with obtaining governmental approvals and maintaining regulatory compliance for new and existing products. Important risks may be discussed in current and subsequent filings with the SEC. You should not place undue reliance on any forward-looking statements. These statements speak only as of the date they are made, and we undertake no obligation to update publicly any of them in light of new information or future events.

# # #

Roper Technologies, Inc.
Condensed Consolidated Balance Sheets (unaudited)
(Amounts in millions)

	March 31, 2025			December 31, 2024
ASSETS:

Cash and cash equivalents	$	372.8		$	188.2
Accounts receivable, net		813.3			885.1
Inventories, net		125.5			120.8
Income taxes receivable		20.3			25.6
Unbilled receivables		135.7			127.3
Prepaid expenses and other current assets		237.0			195.7
Total current assets		1,704.6			1,542.7

Property, plant and equipment, net		150.0			149.7
Goodwill		19,408.2			19,312.9
Other intangible assets, net		8,916.9			9,059.6
Deferred taxes		54.7			54.1
Equity investment		728.2			772.3
Other assets		456.2			443.4
Total assets	$	31,418.8		$	31,334.7

LIABILITIES AND STOCKHOLDERS’ EQUITY:

Accounts payable	$	152.8		$	148.1
Accrued compensation		179.1			289.0
Deferred revenue		1,667.9			1,737.4
Other accrued liabilities		544.5			546.2
Income taxes payable		144.3			68.4
Current portion of long-term debt, net		999.4			1,043.1
Total current liabilities		3,688.0			3,832.2

Long-term debt, net of current portion		6,457.0			6,579.9
Deferred taxes		1,611.6			1,630.6
Other liabilities		438.6			424.4
Total liabilities		12,195.2			12,467.1

Common stock		1.1			1.1
Additional paid-in capital		3,108.7			3,014.6
Retained earnings		16,276.9			16,034.9
Accumulated other comprehensive loss		(146.8	)		(166.5	)
Treasury stock		(16.3	)		(16.5	)
Total stockholders’ equity		19,223.6			18,867.6
Total liabilities and stockholders’ equity	$	31,418.8		$	31,334.7

Roper Technologies, Inc.
Condensed Consolidated Statements of Earnings (unaudited)
(Amounts in millions, except per share data)

	Three months ended March 31,
		2025		2024
Net revenues	$	1,882.8	$	1,680.7
Cost of sales		589.1		499.7
Gross profit		1,293.7		1,181.0

Selling, general and administrative expenses		767.9		699.7
Income from operations		525.8		481.3

Interest expense, net		62.9		53.2
Equity investments (gain) loss, net		44.4		(57.0	)
Other expense, net		0.5		1.2

Earnings before income taxes		418.0		483.9

Income taxes		86.9		101.9

Net earnings	$	331.1	$	382.0

Net earnings per share:
Basic	$	3.08	$	3.57
Diluted	$	3.06	$	3.54

Weighted average common shares outstanding:
Basic		107.4		107.0
Diluted		108.2		107.9

Roper Technologies, Inc.
Selected Segment Financial Data (unaudited)
(Amounts in millions; percentages of net revenues)

	Three months ended March 31,
	2025				2024
	Amount		%		Amount		%
Net revenues:
Application Software	$	1,068.2			$	895.2
Network Software		375.9				370.8
Technology Enabled Products		438.7				414.7
Total	$	1,882.8			$	1,680.7


Gross profit:
Application Software	$	720.8	67.5	%	$	625.7	69.9	%
Network Software		315.6	84.0	%		316.3	85.3	%
Technology Enabled Products		257.3	58.7	%		239.0	57.6	%
Total	$	1,293.7	68.7	%	$	1,181.0	70.3	%


*Operating profit:**
Application Software	$	276.8	25.9	%	$	239.6	26.8	%
Network Software		166.7	44.3	%		167.0	45.0	%
Technology Enabled Products		153.6	35.0	%		136.2	32.8	%
Total	$	597.1	31.7	%	$	542.8	32.3	%


* Segment operating profit is before unallocated corporate general and administrative expenses and enterprise-wide stock-based compensation. These expenses were $71.3 and $61.5 for the three months ended March 31, 2025 and 2024, respectively.

Roper Technologies, Inc.
Condensed Consolidated Statements of Cash Flows (unaudited)
(Amounts in millions)
	Three months ended March 31,
		2025			2024
Cash flows from operating activities:
Net earnings	$	331.1		$	382.0
Adjustments to reconcile net earnings to cash flows from operating activities:
Depreciation and amortization of property, plant and equipment		9.1			9.2
Amortization of intangible assets		204.0			185.0
Amortization of deferred financing costs		2.8			2.2
Non-cash stock compensation		38.8			33.6
Equity investments (gain) loss, net		44.4			(57.0	)
Income tax provision		86.9			101.9
Changes in operating assets and liabilities, net of acquired businesses:
Accounts receivable		74.4			79.4
Unbilled receivables		(7.6	)		(12.2	)
Inventories		(4.1	)		(7.9	)
Prepaid expenses and other current assets		(41.3	)		(26.8	)
Accounts payable		2.9			0.3
Other accrued liabilities		(107.4	)		(69.3	)
Deferred revenue		(70.6	)		(70.5	)
Cash income taxes paid		(29.1	)		(19.0	)
Other, net		(5.6	)		0.6
Cash provided by operating activities		528.7			531.5

Cash flows used in investing activities:
Acquisitions of businesses, net of cash acquired		(124.9	)		(1,858.7	)
Capital expenditures		(9.5	)		(9.3	)
Capitalized software expenditures		(12.4	)		(9.6	)
Other		—			(1.0	)
Cash used in investing activities		(146.8	)		(1,878.6	)

Cash flows from (used in) financing activities:
Borrowings (payments) under revolving line of credit, net		(125.0	)		1,390.0
Cash dividends to stockholders		(88.6	)		(80.5	)
Proceeds from stock-based compensation, net		42.7			21.7
Treasury stock sales		7.2			5.8
Other, net		(44.1	)		(0.1	)
Cash provided by (used in) financing activities		(207.8	)		1,336.9

Effect of exchange rate changes on cash		10.5			(5.7	)

Net increase (decrease) in cash and cash equivalents		184.6			(15.9	)

Cash and cash equivalents, beginning of period		188.2			214.3

Cash and cash equivalents, end of period	$	372.8		$	198.4

The MIL Network –

April 28, 2025

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

Source: GlobeNewswire (MIL-OSI)

Net Income of $1.86 million in the March 2025 Quarter, Up 113% from the Sequential Quarter and Up 24% from the Comparable Quarter Last Year

Net Interest Margin of 3.02% in the March 2025 Quarter, Up 11 Basis Points from the Sequential Quarter and 28 Basis Points from the Comparable Quarter Last Year

Loans Held for Investment of $1.06 Billion at March 31, 2025, Up 1% from June 30, 2024

Total Deposits of $901.3 Million at March 31, 2025, Up 2% from June 30, 2024

Non-Performing Assets to Total Assets Ratio of 0.11% at March 31, 2025, Down from 0.20% at June 30, 2024

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

The Company reported net income of $1.86 million, or $0.28 per diluted share (on 6.73 million average diluted shares outstanding), for the quarter ended March 31, 2025, up 24 percent from net income of $1.50 million, or $0.22 per diluted share (on 6.94 million average diluted shares outstanding), in the comparable period a year ago. The increase was due primarily to a $653,000 increase in net interest income and a $391,000 recovery of credit losses (in contrast to a $124,000 provision for credit losses in the comparable period a year ago), partly offset by a $688,000 increase in non-interest expense (primarily attributable to higher salaries and employee benefits and other operating expenses).

“The operating environment for Provident has improved over the course of this fiscal year. Our net interest margin has improved each quarter subsequent to June 30, 2024, loan and deposit balances have grown for two consecutive quarters, borrowings have declined for two consecutive quarters, and credit quality remains strong,” stated Donavon P. Ternes, President and Chief Executive Officer of the Company. “We remain active in our stock repurchase plan and continue to maintain our quarterly cash dividend at a consistent level,” concluded Ternes.

Return on average assets was 0.59 percent for the third quarter of fiscal 2025, compared to 0.28 percent in the second quarter of fiscal 2025 and 0.47 percent for the third quarter of fiscal 2024. Return on average stockholders’ equity for the third quarter of fiscal 2025 was 5.71 percent, compared to 2.66 percent for the second quarter of fiscal 2025 and 4.57 percent for the third quarter of fiscal 2024.

On a sequential quarter basis, the $1.86 million net income for the third quarter of fiscal 2025 reflects a 113 percent increase from $872,000 in the second quarter of fiscal 2025. The increase was primarily attributable to a $391,000 recovery of credit losses (in contrast to a $586,000 provision for credit losses in the prior sequential quarter), and a $453,000 increase in net interest income (primarily due to a higher net interest margin). Diluted earnings per share for the third quarter of fiscal 2025 were $0.28 per share, up 115 percent from $0.13 per share in the second quarter of fiscal 2025.

For the nine months ended March 31, 2025, net income decreased $769,000, or 14 percent, to $4.63 million from $5.40 million in the comparable period in fiscal 2024. Diluted earnings per share for the nine months ended March 31, 2025 decreased 12 percent to $0.68 per share (on 6.80 million average diluted shares outstanding) from $0.77 per share (on 6.98 million average diluted shares outstanding) for the comparable nine-month period last year. The decrease was primarily attributable to a $1.81 million increase in non-interest expense (primarily due to an increase in salaries and employee benefits, premises and occupancy, equipment and other operating expenses), partly offset by a $451,000 higher recovery of credit losses, a $177,000 increase in non-interest income and a $115,000 increase in net interest income.

In the third quarter of fiscal 2025, net interest income increased $653,000 or eight percent to $9.21 million from $8.56 million for the same quarter last year. The increase in net interest income was due to a higher net interest margin, partly offset by a lower average balance of interest-earning assets. The net interest margin for the third quarter of fiscal 2025 increased 28 basis points to 3.02 percent from 2.74 percent in the same quarter last year. The increase in net interest margin was due to increased yields on interest-earning assets outpacing increased funding costs. The average yield on interest-earning assets increased 32 basis points to 4.73 percent in the third quarter of fiscal 2025 from 4.41 percent in the same quarter last year. In contrast, our average funding costs increased by five basis points to 1.91 percent in the third quarter of fiscal 2025 from 1.86 percent in the same quarter last year. The average balance of interest-earning assets decreased two percent to $1.22 billion in the third quarter of fiscal 2025 from $1.25 billion in the same quarter last year, primarily due to decreases in the average balance of investment securities and loans receivable, partly offset by an increase in interest-earning deposits.

Interest income on loans receivable increased $685,000, or five percent, to $13.37 million in the third quarter of fiscal 2025 from $12.68 million in the same quarter of fiscal 2024. The increase was due to a higher average loan yield, partly offset by a lower average loan balance. The average yield on loans receivable increased 32 basis points to 5.06 percent in the third quarter of fiscal 2025 from 4.74 percent in the same quarter last year. Adjustable-rate loans of approximately $130.9 million repriced downward in the third quarter of fiscal 2025 by approximately four basis points, from a weighted average rate of 7.56 percent to 7.52 percent. However, the overall increase in average yield was driven by an upward repricing of adjustable mortgage loans during the last 12 months. The average balance of loans receivable decreased $14.6 million, or one percent, to $1.06 billion in the third quarter of fiscal 2025 from $1.07 billion in the same quarter last year. Total loans originated for investment in the third quarter of fiscal 2025 were $27.9 million, up 53 percent from $18.2 million in the same quarter last year, while loan principal payments received in the third quarter of fiscal 2025 were $23.0 million, down 19 percent from $28.5 million in the same quarter last year.

Interest income from investment securities decreased $58,000, or 11 percent, to $459,000 in the third quarter of fiscal 2025 from $517,000 for the same quarter of fiscal 2024. This decrease was attributable to a lower average balance, partly offset by a higher average yield. The average balance of investment securities decreased $23.0 million, or 16 percent, to $118.4 million in the third quarter of fiscal 2025 from $141.4 million in the same quarter last year. The decrease in the average balance was due to scheduled principal payments and prepayments of investment securities. The average yield on investment securities increased nine basis points to 1.55 percent in the third quarter of fiscal 2025 from 1.46 percent for the same quarter last year. The increase in the average yield was primarily attributable to a lower premium amortization during the current quarter in comparison to the same quarter last year ($86,000 vs. $124,000) due to lower total principal repayments ($5.3 million vs. $5.7 million) and, to a lesser extent, the upward repricing of adjustable-rate mortgage-backed securities.

In the third quarter of fiscal 2025, the Bank received $213,000 in cash dividends from the Federal Home Loan Bank (“FHLB”) – San Francisco stock and other equity investments, up one percent from $210,000 in the same quarter last year, resulting in an average yield of 8.30 percent in the third quarter of fiscal 2025 compared to 8.84 percent in the same quarter last year. The average balance of FHLB – San Francisco stock and other equity investments in the third quarter of fiscal 2025 was $10.3 million, up from $9.5 million in the same quarter of fiscal 2024.

Interest income from interest-earning deposits, primarily cash deposited at the Federal Reserve Bank (“FRB”) of San Francisco, was $389,000 in the third quarter of fiscal 2025, down $8,000 or two percent from $397,000 in the same quarter of fiscal 2024. The decrease was due to a lower average yield, partly offset by a higher average balance. The average yield earned on interest-earning deposits in the third quarter of fiscal 2025 was 4.42 percent, down 98 basis points from 5.40 percent in the same quarter last year. The decrease in the average yield was due to a lower average interest rate on the FRB’s reserve balances resulting from decreases in the targeted federal funds rate during the comparable periods. The average balance of the Company’s interest-earning deposits increased $6.1 million, or 21 percent, to $35.2 million in the third quarter of fiscal 2025 from $29.1 million in the same quarter last year.

Interest expense on deposits for the third quarter of fiscal 2025 was $2.75 million, an increase of $71,000 or three percent from $2.68 million for the same period last year. The increase was attributable to higher rates paid on deposits, partly offset by a lower average balance. The average cost of deposits was 1.26 percent in the third quarter of fiscal 2025, up eight basis points from 1.18 percent in the same quarter last year, primarily due to a greater proportion of time deposits, including brokered certificates of deposit which carry higher interest rates. The average balance of deposits decreased $25.8 million, or three percent, to $885.0 million in the third quarter of fiscal 2025 from $910.8 million in the same quarter last year.

Transaction account balances, or “core deposits,” decreased $23.1 million, or four percent, to $591.4 million at March 31, 2025 from $614.5 million at June 30, 2024, while time deposits increased $36.0 million, or 13 percent, to $309.9 million at March 31, 2025 from $273.9 million at June 30, 2024. As of March 31, 2025, brokered certificates of deposit (which amounts are reflected in time deposits above) totaled $129.8 million, down $2.0 million or two percent from $131.8 million at June 30, 2024. The weighted average cost of brokered certificates of deposit was 4.34 percent and 5.18 percent (including broker fees) at March 31, 2025 and June 30, 2024, respectively.

Interest expense on borrowings, consisting of FHLB advances, for the third quarter of fiscal 2025 decreased $102,000, or four percent, to $2.47 million from $2.57 million for the same period last year. The decrease was primarily the result of a lower average cost and, to a lesser extent, a lower average balance. The average cost of borrowings decreased 11 basis points to 4.52 percent in the third quarter of fiscal 2025 from 4.63 percent in the same quarter last year. The average balance of borrowings decreased $1.8 million, or one percent, to $221.8 million in the third quarter of fiscal 2025 from $223.6 million in the same quarter last year.

At March 31, 2025, the Bank had approximately $269.8 million of remaining borrowing capacity at the FHLB. Additionally, the Bank has a remaining borrowing facility of approximately $151.0 million with the FRB of San Francisco and an unused unsecured federal funds borrowing facility of $50.0 million with its correspondent bank. The total available borrowing capacity across all sources totaled approximately $470.8 million at March 31, 2025.

During the third quarter of fiscal 2025, the Company recorded a recovery of credit losses totaling $391,000, which included a $12,000 recovery related to unfunded loan commitment reserves. This compares to a $124,000 provision for credit losses in the same quarter last year and a $586,000 provision in the second quarter of fiscal 2025 (sequential quarter). The recovery of credit losses recorded in the third quarter of fiscal 2025 was primarily attributable to improved qualitative factors related to single-family residential collateral, partly offset by a lengthening of the average loan life due to lower estimated loan prepayments as of March 31, 2025, compared to December 31, 2024.

Non-performing assets, comprised solely of non-accrual loans secured by properties located in California, decreased $1.2 million or 46 percent to $1.4 million, which represented 0.11 percent of total assets at March 31, 2025, compared to $2.6 million, which represented 0.20 percent of total assets at June 30, 2024. At March 31, 2025, non-performing loans were comprised of seven single-family loans and one multi-family loan, while at June 30, 2024, non-performing loans were comprised of 10 single-family loans. At both dates, the Bank had no real estate owned and no loans 90 days or more past due that were still accruing interest. Additionally, there were no loan charge-offs during the quarters ended March 31, 2025 and 2024.

The January 2025 wildfires in Los Angeles, California did not have a material impact on the Company’s operations or the Bank’s customers. The Bank’s branches and facilities remained operational throughout the wildfire events, and there were no significant disruptions to customer services or business activities. Additionally, the Bank did not have any significant credit exposure or financial impact attributable to the wildfires.

Classified assets were $6.8 million at March 31, 2025, consisting of $1.7 million of loans in the special mention category and $5.1 million of loans in the substandard category. Classified assets at June 30, 2024 were $5.8 million, consisting of $1.1 million of loans in the special mention category and $4.7 million of loans in the substandard category.

The allowance for credit losses on loans held for investment was $6.6 million, or 0.62 percent of gross loans held for investment, at March 31, 2025, down from $7.1 million, or 0.67 percent of gross loans held for investment, at June 30, 2024. The decrease in the allowance for credit losses was due primarily to improved qualitative factors related to single-family residential collateral, partially offset by an increase in the estimated average life of the loan portfolio, reflecting lower loan prepayment expectations as of March 31, 2025. Management believes, based on currently available information, the allowance for credit losses is sufficient to absorb expected losses inherent in loans held for investment at March 31, 2025.

Non-interest income increased by $59,000, or seven percent, to $907,000 in the third quarter of fiscal 2025 from $848,000 in the same period last year, due primarily to a $43,000 increase in loan servicing and other fees and a $55,000 increase in other fees (primarily attributable to an increase in the unrealized gain on other equity investments). These increases were partly offset by decreases of $26,000 and $13,000 in card and processing fees and deposit account fees, respectively, primarily due to lower transaction volumes and reduced customer activity. On a sequential quarter basis, non-interest income increased $63,000, or seven percent, primarily due to an increase in loan servicing and other fees.

Non-interest expense increased $688,000, or 10 percent, to $7.86 million in the third quarter of fiscal 2025 from $7.17 million for the same quarter last year, primarily due to a $236,000 increase in salaries and employee benefits expenses and a $235,000 increase in other operating expenses. The higher salaries and employee benefits expenses was primarily due to higher compensation expenses, a higher accrual adjustment for the supplemental executive retirement plan expense, higher group insurance expenses and higher equity incentive expenses, partly offset by a decrease in retirement plan benefit expenses. The increase in other operating expenses was primarily attributable to a $239,000 litigation settlement expense. On a sequential quarter basis, non-interest expense increased $62,000, or one percent as compared to $7.79 million in the second quarter of fiscal 2025, due primarily to the litigation settlement expense, partly offset by decreases in salaries and employee benefits expenses, premises and occupancy expenses and professional expenses.

The Company’s efficiency ratio, defined as non-interest expense divided by the sum of net interest income and non-interest income, in the third quarter of fiscal 2025 was 77.64 percent, a slight increase from 76.20 percent in the same quarter last year but an improvement from 81.15 percent in the second quarter of fiscal 2025 (sequential quarter). The increase in the efficiency ratio during the current quarter in comparison to the comparable quarter last year was due to higher non-interest expense relative to total net interest income plus non-interest income.

The Company’s provision for income taxes was $797,000 for the third quarter of fiscal 2025, up 29 percent from $620,000 in the same quarter last year and up 126 percent from $352,000 for the second quarter of fiscal 2025 (sequential quarter). The increase during the current quarter compared to both the sequential quarter and same quarter last year was due to an increase in pre-tax income. The effective tax rate in the third quarter of fiscal 2025 was 30.0 percent as compared to 29.3 percent in the same quarter last year and 28.8 percent for the second quarter of fiscal 2025 (sequential quarter).

The Company repurchased 51,869 shares of its common stock at an average cost of $15.30 per share during the quarter ended March 31, 2025. As of March 31, 2025, a total of 293,132 shares remained available for future purchase under the Company’s current repurchase program.

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

The Company will host a conference call for institutional investors and bank analysts on Tuesday, April 29, 2025 at 9:00 a.m. (Pacific) to discuss its financial results. The conference call can be accessed by dialing 1-800-715-9871 and referencing Conference ID number 7361828. An audio replay of the conference call will be available through Tuesday, May 6, 2025 by dialing 1-800-770-2030 and referencing Conference ID number 7361828.

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

Safe-Harbor Statement

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

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

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


Contacts:	Donavon P. Ternes	Haryanto L. Sunarto
	President and	Interim Chief Financial Officer
	Chief Executive Officer	(951) 686-6060

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

	March 31,			December 31,			September 30,			June 30,			March 31,
	2025			2024			2024			2024			2024
Assets
Cash and cash equivalents	$	50,915		$	45,539		$	48,193		$	51,376		$	51,731
Investment securities – held to maturity, at cost with no allowance for credit losses		113,617			118,888			124,268			130,051			135,971
Investment securities – available for sale, at fair value		1,681			1,750			1,809			1,849			1,935
Loans held for investment, net of allowance for credit losses of $6,577, $6,956, $6,329, $7,065 and $7,108, respectively; includes $1,032, $1,016, $1,082, $1,047 and $1,054 of loans held at fair value, respectively		1,058,980			1,053,603			1,048,633			1,052,979			1,065,761
Accrued interest receivable		4,263			4,167			4,287			4,287			4,249
FHLB – San Francisco stock and other equity investments, includes $721, $650, $565, $540 and $0 of other equity investments at fair value, respectively		10,289			10,218			10,133			10,108			9,505
Premises and equipment, net		9,388			9,474			9,615			9,313			9,637
Prepaid expenses and other assets		11,047			11,327			10,442			12,237			11,258
Total assets	$	1,260,180		$	1,254,966		$	1,257,380		$	1,272,200		$	1,290,047

Liabilities and Stockholders’ Equity
Liabilities:
Noninterest-bearing deposits	$	89,103		$	85,399		$	86,458		$	95,627		$	91,708
Interest-bearing deposits		812,216			782,116			777,406			792,721			816,414
Total deposits		901,319			867,515			863,864			888,348			908,122

Borrowings		215,580			245,500			249,500			238,500			235,000
Accounts payable, accrued interest and other liabilities		14,406			13,321			14,410			15,411			17,419
Total liabilities		1,131,305			1,126,336			1,127,774			1,142,259			1,160,541

Stockholders’ equity:
Preferred stock, $.01 par value (2,000,000 shares authorized; none issued and outstanding)		—			—			—			—			—
Common stock, $.01 par value; (40,000,000 shares authorized; 18,229,615, 18,229,615, 18,229,615, 18,229,615 and 18,229,615 shares issued respectively; 6,653,822, 6,705,691, 6,769,247, 6,847,821 and 6,896,297 shares outstanding, respectively)		183			183			183			183			183
Additional paid-in capital		99,096			98,747			98,711			98,532			99,591
Retained earnings		211,701			210,779			210,853			209,914			208,923
Treasury stock at cost (11,573,793, 11,523,924, 11,460,368, 11,381,794, and 11,333,318 shares, respectively)		(182,121	)		(181,094	)		(180,155	)		(178,685	)		(179,183	)
Accumulated other comprehensive income (loss), net of tax		16			15			14			(3	)		(8	)
Total stockholders’ equity		128,875			128,630			129,606			129,941			129,506
Total liabilities and stockholders’ equity	$	1,260,180		$	1,254,966		$	1,257,380		$	1,272,200		$	1,290,047

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

	For the Quarter Ended					Nine Months Ended
	March 31,					March 31,
	2025			2024		2025			2024
Interest income:
Loans receivable, net	$	13,368		$	12,683	$	39,441		$	37,368
Investment securities		459			517		1,412			1,565
FHLB – San Francisco stock and other equity investments		213			210		636			586
Interest-earning deposits		389			397		1,036			1,295
Total interest income		14,429			13,807		42,525			40,814

Interest expense:
Checking and money market deposits		46			90		150			219
Savings deposits		127			97		356			208
Time deposits		2,573			2,488		7,738			6,406
Borrowings		2,471			2,573		7,694			7,509
Total interest expense		5,217			5,248		15,938			14,342

Net interest income		9,212			8,559		26,587			26,472
(Recovery of) provision for credit losses		(391	)		124		(502	)		(51	)
Net interest income, after (recovery of) provision for credit losses		9,603			8,435		27,089			26,523

Non-interest income:
Loan servicing and other fees		135			92		299			195
Deposit account fees		276			289		856			876
Card and processing fees		291			317		911			1,003
Other		205			150		585			400
Total non-interest income		907			848		2,651			2,474

Non-interest expense:
Salaries and employee benefits		4,776			4,540		14,235			13,223
Premises and occupancy		880			835		2,748			2,641
Equipment		417			329		1,139			962
Professional		386			321		1,224			1,203
Sales and marketing		181			167		541			516
Deposit insurance premiums and regulatory assessments		195			190		568			596
Other		1,021			786		2,718			2,227
Total non-interest expense		7,856			7,168		23,173			21,368
Income before income taxes		2,654			2,115		6,567			7,629
Provision for income taxes		797			620		1,938			2,231
Net income	$	1,857		$	1,495	$	4,629		$	5,398

Basic earnings per share	$	0.28		$	0.22	$	0.69		$	0.77
Diluted earnings per share	$	0.28		$	0.22	$	0.68		$	0.77
Cash dividends per share	$	0.14		$	0.14	$	0.42		$	0.42

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

	For the Quarter Ended
	March 31,			December 31,		September 30,			June 30,			March 31,
	2025			2024		2024			2024			2024
Interest income:
Loans receivable, net	$	13,368		$	13,050	$	13,023		$	12,826		$	12,683
Investment securities		459			471		482			504			517
FHLB – San Francisco stock and other equity investments		213			213		210			207			210
Interest-earning deposits		389			287		360			379			397
Total interest income		14,429			14,021		14,075			13,916			13,807

Interest expense:
Checking and money market deposits		46			51		53			71			90
Savings deposits		127			117		112			105			97
Time deposits		2,573			2,506		2,659			2,657			2,488
Borrowings		2,471			2,588		2,635			2,632			2,573
Total interest expense		5,217			5,262		5,459			5,465			5,248

Net interest income		9,212			8,759		8,616			8,451			8,559
(Recovery of) provision for credit losses		(391	)		586		(697	)		(12	)		124
Net interest income, after (recovery of) provision for credit losses		9,603			8,173		9,313			8,463			8,435

Non-interest income:
Loan servicing and other fees		135			60		104			142			92
Deposit account fees		276			282		298			278			289
Card and processing fees		291			300		320			381			317
Other		205			203		177			666			150
Total non-interest income		907			845		899			1,467			848

Non-interest expense:
Salaries and employee benefits		4,776			4,826		4,633			4,419			4,540
Premises and occupancy		880			917		951			945			835
Equipment		417			379		343			347			329
Professional		386			412		426			327			321
Sales and marketing		181			187		173			193			167
Deposit insurance premiums and regulatory assessments		195			190		183			184			190
Other		1,021			883		814			757			786
Total non-interest expense		7,856			7,794		7,523			7,172			7,168
Income before income taxes		2,654			1,224		2,689			2,758			2,115
Provision for income taxes		797			352		789			805			620
Net income	$	1,857		$	872	$	1,900		$	1,953		$	1,495

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

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

	As of and For the
	Quarter Ended						Nine Months Ended
	March 31,						March 31,
	2025			2024			2025			2024
SELECTED FINANCIAL RATIOS:
Return on average assets		0.59	%		0.47	%		0.50	%		0.56	%
Return on average stockholders’ equity		5.71	%		4.57	%		4.72	%		5.51	%
Stockholders’ equity to total assets		10.23	%		10.04	%		10.23	%		10.04	%
Net interest spread		2.82	%		2.55	%		2.74	%		2.64	%
Net interest margin		3.02	%		2.74	%		2.92	%		2.80	%
Efficiency ratio		77.64	%		76.20	%		79.26	%		73.82	%
Average interest-earning assets to average interest-bearing liabilities		110.25	%		110.28	%		110.38	%		110.24	%

SELECTED FINANCIAL DATA:
Basic earnings per share	$	0.28		$	0.22		$	0.69		$	0.77
Diluted earnings per share	$	0.28		$	0.22		$	0.68		$	0.77
Book value per share	$	19.37		$	18.78		$	19.37		$	18.78
Shares used for basic EPS computation		6,679,808			6,919,397			6,753,060			6,968,353
Shares used for diluted EPS computation		6,732,794			6,935,053			6,796,743			6,981,223
Total shares issued and outstanding		6,653,822			6,896,297			6,653,822			6,896,297

LOANS ORIGINATED FOR INVESTMENT:
Mortgage loans:
Single-family	$	22,163		$	8,946		$	74,195		$	30,058
Multi-family		4,087			5,865			15,772			17,586
Commercial real estate		1,135			2,172			2,760			8,047
Commercial business loans		500			1,250			550			1,250
Total loans originated for investment	$	27,885		$	18,233		$	93,277		$	56,941

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

	As of and For the
	Quarter			Quarter			Quarter			Quarter			Quarter
	Ended			Ended			Ended			Ended			Ended
	03/31/25			12/31/24			09/30/24			06/30/24			03/31/24
SELECTED FINANCIAL RATIOS:
Return on average assets		0.59	%		0.28	%		0.61	%		0.62	%		0.47	%
Return on average stockholders’ equity		5.71	%		2.66	%		5.78	%		5.96	%		4.57	%
Stockholders’ equity to total assets		10.23	%		10.25	%		10.31	%		10.21	%		10.04	%
Net interest spread		2.82	%		2.74	%		2.66	%		2.54	%		2.55	%
Net interest margin		3.02	%		2.91	%		2.84	%		2.74	%		2.74	%
Efficiency ratio		77.64	%		81.15	%		79.06	%		72.31	%		76.20	%
Average interest-earning assets to average interest-bearing liabilities		110.25	%		110.52	%		110.34	%		110.40	%		110.28	%

SELECTED FINANCIAL DATA:
Basic earnings per share	$	0.28		$	0.13		$	0.28		$	0.28		$	0.22
Diluted earnings per share	$	0.28		$	0.13		$	0.28		$	0.28		$	0.22
Book value per share	$	19.37		$	19.18		$	19.15		$	18.98		$	18.78
Average shares used for basic EPS		6,679,808			6,744,653			6,833,125			6,867,521			6,919,397
Average shares used for diluted EPS		6,732,794			6,792,759			6,863,083			6,893,813			6,935,053
Total shares issued and outstanding		6,653,822			6,705,691			6,769,247			6,847,821			6,896,297

LOANS ORIGINATED FOR INVESTMENT:
Mortgage loans:
Single-family	$	22,163		$	29,583		$	22,449		$	10,862		$	8,946
Multi-family		4,087			6,495			5,190			4,526			5,865
Commercial real estate		1,135			365			1,260			1,710			2,172
Construction		—			—			—			1,480			—
Commercial business loans		500			—			50			—			1,250
Total loans originated for investment	$	27,885		$	36,443		$	28,949		$	18,578		$	18,233

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

	As of			As of			As of			As of			As of
	03/31/25			12/31/24			09/30/24			06/30/24			03/31/24
ASSET QUALITY RATIOS AND DELINQUENT LOANS:
Recourse reserve for loans sold	$	23		$	23		$	23		$	26		$	31
Allowance for credit losses on loans held for investment	$	6,577		$	6,956		$	6,329		$	7,065		$	7,108
Non-performing loans to loans held for investment, net		0.13	%		0.24	%		0.20	%		0.25	%		0.21	%
Non-performing assets to total assets		0.11	%		0.20	%		0.17	%		0.20	%		0.17	%
Allowance for credit losses on loans to gross loans held for investment		0.62	%		0.66	%		0.61	%		0.67	%		0.67	%
Net loan charge-offs (recoveries) to average loans receivable (annualized)		—	%		—	%		—	%		—	%		—	%
Non-performing loans	$	1,395		$	2,530		$	2,106		$	2,596		$	2,246
Loans 30 to 89 days delinquent	$	199		$	3		$	2		$	1		$	388


	Quarter			Quarter		Quarter			Quarter			Quarter
	Ended			Ended		Ended			Ended			Ended
	03/31/25			12/31/24		09/30/24			06/30/24			03/31/24
(Recovery) recourse provision for loans sold	$	—		$	—	$	(3	)	$	(5	)	$	—
(Recovery of) provision for credit losses	$	(391	)	$	586	$	(697	)	$	(12	)	$	124
Net loan charge-offs (recoveries)	$	—		$	—	$	—		$	—		$	—


	As of		As of		As of		As of		As of
	03/31/2025		12/31/2024		09/30/2024		06/30/2024		03/31/2024
REGULATORY CAPITAL RATIOS (BANK):
Tier 1 leverage ratio	9.85	%	9.81	%	9.63	%	10.02	%	9.70	%
Common equity tier 1 capital ratio	19.01	%	18.60	%	18.36	%	19.29	%	18.77	%
Tier 1 risk-based capital ratio	19.01	%	18.60	%	18.36	%	19.29	%	18.77	%
Total risk-based capital ratio	20.03	%	19.67	%	19.35	%	20.38	%	19.85	%


	As of March 31,
	2025				2024
	Balance		Rate⁽¹⁾		Balance		Rate⁽¹⁾
INVESTMENT SECURITIES:
Held to maturity (at cost):
U.S. SBA securities	$	328	4.85	%	$	458	5.85	%
U.S. government sponsored enterprise MBS		109,718	1.60			131,711	1.54
U.S. government sponsored enterprise CMO		3,571	2.13			3,802	2.16
Total investment securities held to maturity	$	113,617	1.62	%	$	135,971	1.57	%

Available for sale (at fair value):
U.S. government agency MBS	$	1,119	4.72	%	$	1,274	3.72	%
U.S. government sponsored enterprise MBS		482	6.91			570	6.05
Private issue CMO		80	6.10			91	4.96
Total investment securities available for sale	$	1,681	5.41	%	$	1,935	4.46	%
Total investment securities	$	115,298	1.68	%	$	137,906	1.61	%

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

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

	As of March 31,
	2025					2024
	Balance			Rate⁽¹⁾		Balance			Rate⁽¹⁾
LOANS HELD FOR INVESTMENT:
Mortgage loans:
Single-family (1 to 4 units)	$	545,377		4.66	%	$	517,039		4.39	%
Multi-family (5 or more units)		429,547		5.47			457,401		5.14
Commercial real estate		75,349		6.63			83,136		6.36
Construction		837		11.00			2,745		8.81
Other		89		5.25			99		5.25
Commercial business loans		4,255		9.52			2,835		9.79
Consumer loans		52		17.50			60		18.50
Total loans held for investment		1,055,506		5.15	%		1,063,315		4.89	%

Advance payments of escrows		519					371
Deferred loan costs, net		9,532					9,183
Allowance for credit losses on loans		(6,577	)				(7,108	)
Total loans held for investment, net	$	1,058,980				$	1,065,761
Purchased loans serviced by others included above	$	1,721		5.72	%	$	1,999		5.80	%

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


	As of March 31,
	2025				2024
	Balance		Rate⁽¹⁾		Balance		Rate⁽¹⁾
DEPOSITS:
Checking accounts – noninterest-bearing	$	89,103	—	%	$	91,708	—	%
Checking accounts – interest-bearing		248,392	0.04			275,920	0.04
Savings accounts		232,308	0.24			247,847	0.17
Money market accounts		21,640	0.16			26,715	0.41
Time deposits		309,876	3.57			265,932	3.89
Total deposits⁽²⁾⁽³⁾	$	901,319	1.30	%	$	908,122	1.21	%

Brokered CDs included in time deposits above	$	129,770	4.34	%	$	130,900	5.19	%

BORROWINGS:
Overnight	$	20,000	4.65	%	$	—	—	%
Three months or less		22,500	4.17			59,500	5.28
Over three to six months		5,000	5.33			33,000	5.34
Over six months to one year		108,000	4.65			70,000	4.51
Over one year to two years		45,000	4.66			42,500	4.62
Over two years to three years		80	4.50			15,000	4.87
Over three years to four years		15,000	4.41			—	—
Over four years to five years		—	—			15,000	4.41
Over five years		—	—			—	—
Total borrowings⁽⁴⁾	$	215,580	4.60	%	$	235,000	4.86	%

⁽¹⁾Weighted-average rate paid on all instruments included in the balance of the respective line item.
⁽²⁾Includes uninsured deposits of approximately $162.2 million (of which, $57.1 million are collateralized) and $136.4 million (of which, $9.2 million are collateralized) at March 31, 2025 and 2024, respectively.
⁽³⁾The average balance of deposit accounts was approximately $37 thousand and $34 thousand at March 31, 2025 and 2024, respectively.
⁽⁴⁾The Bank had approximately $269.8 million and $269.2 million of remaining borrowing capacity at the FHLB – San Francisco, approximately $151.0 million and $172.7 million of borrowing capacity at the FRB of San Francisco and $50.0 million and $50.0 million of borrowing capacity with its correspondent bank at March 31, 2025 and 2024, respectively.

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

	For the Quarter Ended					For the Quarter Ended
	March 31, 2025					March 31, 2024
	Balance		Rate⁽¹⁾			Balance		Rate⁽¹⁾
SELECTED AVERAGE BALANCE SHEETS:

Loans receivable, net	$	1,056,441		5.06	%	$	1,071,004	4.74	%
Investment securities		118,431		1.55			141,390	1.46
FHLB – San Francisco stock and other equity investments		10,268		8.30			9,505	8.84
Interest-earning deposits		35,182		4.42			29,099	5.40
Total interest-earning assets	$	1,220,322		4.73	%	$	1,250,998	4.41	%
Total assets	$	1,251,168				$	1,281,975

Deposits⁽²⁾	$	885,032		1.26	%	$	910,781	1.18	%
Borrowings		221,787		4.52			223,632	4.63
Total interest-bearing liabilities⁽²⁾	$	1,106,819		1.91	%	$	1,134,413	1.86	%
Total stockholders’ equity	$	130,081				$	130,906

⁽¹⁾Weighted-average yield earned or rate paid on all instruments included in the balance of the respective line item.
⁽²⁾Includes the average balance of noninterest-bearing checking accounts of $88.4 million and $91.0 million during the quarters ended March 31, 2025 and 2024, respectively. The average balance of uninsured deposits of $131.2 million and $139.0 million in the quarters ended March 31, 2025 and 2024, respectively.


	Nine Months Ended					Nine Months Ended
	March 31, 2025					March 31, 2024
	Balance		Rate⁽¹⁾			Balance		Rate⁽¹⁾
SELECTED AVERAGE BALANCE SHEETS:

Loans receivable, net	$	1,050,748		5.00	%	$	1,072,741	4.64	%
Investment securities		123,983		1.52			147,445	1.42
FHLB – San Francisco stock and other equity investments		10,186		8.33			9,505	8.22
Interest-earning deposits		28,404		4.79			31,538	5.38
Total interest-earning assets	$	1,213,321		4.67	%	$	1,261,229	4.31	%
Total assets	$	1,243,635				$	1,291,902

Deposits⁽²⁾	$	876,176		1.25	%	$	921,905	0.99	%
Borrowings		223,087		4.59			222,206	4.50
Total interest-bearing liabilities⁽²⁾	$	1,099,263		1.93	%	$	1,144,111	1.67	%
Total stockholders’ equity	$	130,911				$	130,686

⁽¹⁾Weighted-average yield earned or rate paid on all instruments included in the balance of the respective line item.
⁽²⁾Includes the average balance of noninterest-bearing checking accounts of $88.4 million and $98.9 million during the nine months ended March 31, 2025 and 2024, respectively. The average balance of uninsured deposits of $127.5 million and $139.1 million in the nine months ended March 31, 2025 and 2024, respectively.

ASSET QUALITY:


	As of		As of		As of		As of		As of
	03/31/25		12/31/24		09/30/24		06/30/24		03/31/24
Loans on non-accrual status
Mortgage loans:
Single-family	$	925	$	2,530	$	2,106	$	2,596	$	2,246
Multi-family		470		—		—		—		—
Total		1,395		2,530		2,106		2,596		2,246

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

Total non-performing loans ⁽¹⁾		1,395		2,530		2,106		2,596		2,246

Real estate owned, net		—		—		—		—		—
Total non-performing assets	$	1,395	$	2,530	$	2,106	$	2,596	$	2,246

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

The MIL Network –

April 28, 2025

MIL-OSI New Zealand: Women’s Refuge receives funding boost

Source: New Zealand Government

Minister for Mental Health Matt Doocey is pleased to announce today that the Women’s Refuge is the latest recipient of the Government’s Mental Health and Addiction Innovation Fund.
“Women’s Refuge do incredibly important work in our communities. They provide a safe space for women and children experiencing family violence, some of whom may be experiencing mental health and addiction challenges. I am delighted that the organisation will receive funding from the Government to help deliver mental health and addiction support to those in need,” Mr Doocey says.
“I am pleased the funding announced today will support 250 advocates based within the 41 Women’s Refuges across New Zealand with mental health and addiction training, advisory support from clinical specialists and strengthen referral pathways so clients can access local mental health and addiction services more efficiently.
“The feedback I often hear about mental health services is that it is too hard to navigate and know where to go in a time of need. This funding will enable Women’s Refuge to upskill their staff on mental health and addiction as well as improve connections with local services and referral pathways and join up the system to make it more accessible to those in need.
“Over the past five years, Women’s Refuge has supported an average of 15,000 clients per year. This funding will strengthen the workforce and improve referral pathways for those women and children who are accessing Women’s Refuge services.
“Initiatives like this is exactly what the Innovation Fund was designed for, and this support will only grow as we move into the second round of funding.”
The Women’s Refuge will receive $540,000 from the Government across two years, which will be matched by the Women’s Refuge to make a total of $1,080,000 over a two-year period.
In round one of the Innovation Fund the Government have so far supported MATES in Construction, The Mental Health Foundation, YouthLine, Wellington City Mission, Rotorua Youth One Stop Shop and the Sir John Kirwan Foundation.
“I am committed to doing everything possible to bring down mental health and addiction wait times in New Zealand. Partnering with organisations such as Women’s Refuge through the Innovation Fund to deliver innovative projects and initiatives supports the Government’s priority focus of increasing access to mental health and addiction support for Kiwis,” Mr Doocey says.
Note to editors:
A future procurement opportunity for round two of the Fund was released on the Government Electronic Tender site (GETS) last week and a Request for Proposal is scheduled to be released in May 2025.

MIL OSI New Zealand News –

April 28, 2025

MIL-OSI USA: Ciscomani Hosts Second Annual Veteran Servant Leader Award Ceremony

Source: United States House of Representatives – Congressman Juan Ciscomani (Arizona)

“Their continued contributions to our community embody what it means to be a servant leader and make southern Arizona, and our nation, stronger.”

TUCSON, AZ – U.S. Congressman Juan Ciscomani on Thursday hosted the second annual Veteran Servant Leader Award Ceremony, honoring 31 local veterans who served in the Army, Marine Corps, Navy, and Air Force.

This award recognizes veterans from Cochise, Graham, Greenlee, Pinal, and Pima Counties for their continued service to our communities after they leave the Armed Forces. Each winner will receive a Veteran Servant Leader Award certificate and a challenge coin from the Congressman. Those who served in Vietnam will receive a special pin in addition to the other awards. You can watch opening remarks here.

“Our veterans embody the highest ideals of courage and patriotism,” said Ciscomani. “I had the pleasure of hosting the second annual Veteran Servant Leader Award Ceremony to recognize their remarkable leadership, dedication, and service, even after their time in uniform. It is one of my highest honors to be able to recognize their efforts in front of their families and loved ones. Their continued contributions to our community embody what it means to be a servant leader and make southern Arizona, and our nation, stronger.”

Ciscomani represents nearly 80,000 veterans and serves on the House Veterans’ Affairs Committee. Through casework, Ciscomani and his team have returned $3.65 million to veterans, including $1.25 million since January. This is money that was owed to veteran-constituents but was stuck in the bureaucracy of a federal agency, such as the Department of Veterans Affairs, the IRS, Social Security, and more.

In the 119th Congress, he introduced 3 pieces of veterans-focused legislation, with one of these bills already passing the House of Representatives unanimously.

The Prioritizing Veterans’ Survivor Act (H.R. 1228) would move the Office of Survivors Assistance (OSA) back within the Office of the VA Secretary to ensure that families of fallen veterans are able to receive the benefits and support they deserve.
- This bill passed the House of Representatives unanimously on April 9, 2025. 
The Coordinating Care for Senior Veterans and Wounded Warriors Act (H.R. 668) would improve healthcare coordination and management for veterans over the age of 65 who qualify for benefits from both the VA and Medicare.
The Veterans Education and Technical Skills (VETS) Opportunity Act (H.R. 1458) would expand veterans’ access to educational opportunities for high-demand skilled trade and vocational programs, whether they are in-person or partially online.

###

MIL OSI USA News –

April 26, 2025

MIL-OSI: Park National Corporation reports financial results for first quarter 2025

Source: GlobeNewswire (MIL-OSI)

NEWARK, Ohio, April 25, 2025 (GLOBE NEWSWIRE) — Park National Corporation (Park) (NYSE American: PRK) today reported financial results for the first quarter of 2025. Park’s board of directors declared a quarterly cash dividend of $1.07 per common share, payable on June 10, 2025, to common shareholders of record as of May 16, 2025.

“Our first quarter performance reflects our commitment to providing consistent financial support and a measure of predictability in dynamic market conditions,” said Park Chairman and CEO David Trautman. “In a world buffeted by extremes, our greatest opportunity to serve more is through continuing to build authentic relationships and showing up as a steady, reliable partner.”

Park’s net income for the first quarter of 2025 was $42.2 million, a 19.8 percent increase from $35.2 million for the first quarter of 2024. First quarter 2025 net income per diluted common share was $2.60, compared to $2.17 for the first quarter of 2024. Park’s total loans increased 0.9 percent (3.5 percent annualized) during the first quarter of 2025. Park’s reported period end deposits increased 0.7 percent (2.9 percent annualized) during the first quarter of 2025, with an increase of 2.3 percent (9.5 percent annualized), including deposits that Park moved off balance sheet as of March 31, 2025. The combination of solid loan growth and steady deposits continue to contribute to Park’s success in 2025.

“Our bankers’ ability to serve others well is reflected in our first quarter results,” said Park President Matthew Miller. “We’re deeply grateful for the trust our communities, customers and neighbors place in us every day. We look forward to growing these and new relationships, consistently delivering on our promises and expanding our impact.”

Headquartered in Newark, Ohio, Park National Corporation has $9.9 billion in total assets (as of March 31, 2025). Park’s banking operations are conducted through its subsidiary, The Park National Bank. Other Park subsidiaries are Scope Leasing, Inc. (d.b.a. Scope Aircraft Finance), Guardian Financial Services Company (d.b.a. Guardian Finance Company), Park Investments, Inc. and SE Property Holdings, LLC.

Complete financial tables are listed below.

Category: Earnings

SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

Park cautions that any forward-looking statements contained in this news release or made by management of Park are provided to assist in the understanding of anticipated future financial performance. Forward-looking statements provide current expectations or forecasts of future events and are not guarantees of future performance. The forward-looking statements are based on management’s expectations and are subject to a number of risks and uncertainties, including those described in Park’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024, as updated by our filings with the SEC. Although management believes that the expectations reflected in such forward-looking statements are reasonable, actual results may differ materially from those expressed or implied in such statements.

Risks and uncertainties that could cause actual results to differ include, without limitation: (1) the ability to execute our business plan successfully and manage strategic initiatives; (2) the impact of current and future economic and financial market conditions, including unemployment rates, inflation, interest rates, supply-demand imbalances, and geopolitical matters; (3) factors impacting the performance of our loan portfolio, including real estate values, financial health of borrowers, and loan concentrations; (4) the effects of monetary and fiscal policies, including interest rates, money supply, and inflation; (5) changes in federal, state, or local tax laws; (6) the impact of changes in governmental policy and regulatory requirements on our operations; (7) changes in consumer spending, borrowing, and saving habits; (8) changes in the performance and creditworthiness of customers, suppliers, and counterparties; (9) increased credit risk and higher credit losses due to loan concentrations; (10) volatility in mortgage banking income due to interest rates and demand; (11) adequacy of our internal controls and risk management programs; (12) competitive pressures among financial services organizations; (13) uncertainty regarding changes in banking regulations and other regulatory requirements; (14) our ability to meet heightened supervisory requirements and expectations; (15) the impact of changes in accounting policies and practices on our financial condition; (16) the reliability and accuracy of assumptions and estimates used in applying critical accounting estimates; (17) the potential for higher future credit losses due to changes in economic assumptions; (18) the ability to anticipate and respond to technological changes and our reliance on third-party vendors; (19) operational issues related to and capital spending necessitated by the implementation of information technology systems on which we are highly dependent; (20) the ability to secure confidential information and deliver products and services through computer systems and telecommunications networks; (21) the impact of security breaches or failures in operational systems; (22) the impact of geopolitical instability and trade policies on our operations including the imposition of tariffs and retaliatory tariffs; (23) the impact of changes in credit ratings of government debt and financial stability of sovereign governments; (24) the effect of stock market price fluctuations on our asset and wealth management businesses; (25) litigation and regulatory compliance exposure; (26) availability of earnings and excess capital for dividend declarations; (27) the impact of fraud, scams, and schemes on our business; (28) the impact of natural disasters, pandemics, and other emergencies on our operations; (29) potential deterioration of the economy due to financial, political, or other shocks; (30) impact of healthcare laws and potential changes on our costs and operations; (31) the ability to grow deposits and maintain adequate deposit levels, including by mitigating the effect of unexpected deposit outflows on our financial condition; and (32) other risk factors related to the banking industry.

Park does not undertake, and specifically disclaims any obligation, to publicly release the results of any revisions that may be made to update any forward-looking statement to reflect the events or circumstances after the date on which the forward-looking statement was made, or reflect the occurrence of unanticipated events, except to the extent required by law.

PARK NATIONAL CORPORATION
Financial Highlights
As of or for the three months ended March 31, 2025, December 31, 2024 and March 31, 2024

		2025			2024			2024		Percent change vs.
*(in thousands, except common share and per common share data and ratios)*	1st QTR			4th QTR			1st QTR			4Q ’24			1Q ’24
INCOME STATEMENT:
Net interest income	$	104,377		$	103,445		$	95,623		0.9		%	9.2		%
Provision for credit losses		756			3,935			2,180		(80.8	)	%	(65.3	)	%
Other income		25,746			31,064			26,200		(17.1	)	%	(1.7	)	%
Other expense		78,164			83,241			77,228		(6.1	)	%	1.2		%
Income before income taxes	$	51,203		$	47,333		$	42,415		8.2		%	20.7		%
Income taxes		9,046			8,703			7,211		3.9		%	25.4		%
Net income	$	42,157		$	38,630		$	35,204		9.1		%	19.8		%

MARKET DATA:
Earnings per common share – basic (a)	$	2.61		$	2.39		$	2.18		9.2		%	19.7		%
Earnings per common share – diluted (a)		2.60			2.37			2.17		9.7		%	19.8		%
Quarterly cash dividend declared per common share		1.07			1.06			1.06		0.9		%	0.9		%
Special cash dividend declared per common share		—			0.50			—		N.M.			N.M.
Book value per common share at period end		79.00			76.98			71.95		2.6		%	9.8		%
Market price per common share at period end		151.40			171.43			135.85		(11.7	)	%	11.4		%
Market capitalization at period end		2,451,370			2,770,134			2,199,556		(11.5	)	%	11.4		%

Weighted average common shares – basic (b)		16,159,342			16,156,827			16,116,842		—		%	0.3		%
Weighted average common shares – diluted (b)		16,238,701			16,283,701			16,191,065		(0.3	)	%	0.3		%
Common shares outstanding at period end		16,191,347			16,158,982			16,149,523		0.2		%	0.3		%

PERFORMANCE RATIOS: (annualized)
Return on average assets (a)(b)		1.70	%		1.54	%		1.44	%	10.4		%	18.1		%
Return on average shareholders’ equity (a)(b)		13.46	%		12.32	%		12.23	%	9.3		%	10.1		%
Yield on loans		6.26	%		6.21	%		5.99	%	0.8		%	4.5		%
Yield on investment securities		3.25	%		3.46	%		3.90	%	(6.1	)	%	(16.7	)	%
Yield on money market instruments		4.46	%		4.75	%		5.48	%	(6.1	)	%	(18.6	)	%
Yield on interest earning assets		5.85	%		5.82	%		5.66	%	0.5		%	3.4		%
Cost of interest bearing deposits		1.76	%		1.90	%		1.94	%	(7.4	)	%	(9.3	)	%
Cost of borrowings		3.94	%		3.86	%		4.25	%	2.1		%	(7.3	)	%
Cost of paying interest bearing liabilities		1.86	%		1.99	%		2.08	%	(6.5	)	%	(10.6	)	%
Net interest margin (g)		4.62	%		4.51	%		4.28	%	2.4		%	7.9		%
Efficiency ratio (g)		59.79	%		61.60	%		63.07	%	(2.9	)	%	(5.2	)	%

OTHER DATA (NON-GAAP) AND BALANCE SHEET INFORMATION:
Tangible book value per common share (d)	$	68.94		$	66.89		$	61.80		3.1		%	11.6		%
Average interest earning assets		9,210,385			9,176,540			9,048,204		0.4		%	1.8		%
Pre-tax, pre-provision net income (j)		51,959			51,268			44,595		1.3		%	16.5		%

Note: Explanations for footnotes (a) – (k) are included at the end of the financial tables in the “Financial Reconciliations” section.

PARK NATIONAL CORPORATION
Financial Highlights (continued)
As of or for the three months ended March 31, 2025, December 31, 2024 and March 31, 2024

										Percent change vs.
*(in thousands, except ratios)*	March 31, 2025			December 31, 2024			March 31, 2024			4Q ’24			1Q ’24
BALANCE SHEET:
Investment securities	$	1,042,163		$	1,100,861		$	1,339,747		(5.3	)	%	(22.2	)	%
Loans		7,883,735			7,817,128			7,525,005		0.9		%	4.8		%
Allowance for credit losses		88,130			87,966			85,084		0.2		%	3.6		%
Goodwill and other intangible assets		162,758			163,032			163,927		(0.2	)	%	(0.7	)	%
Other real estate owned (OREO)		119			938			1,674		(87.3	)	%	(92.9	)	%
Total assets		9,886,612			9,805,350			9,881,077		0.8		%	0.1		%
Total deposits		8,201,695			8,143,526			8,306,032		0.7		%	(1.3	)	%
Borrowings		270,757			280,083			295,130		(3.3	)	%	(8.3	)	%
Total shareholders’ equity		1,279,042			1,243,848			1,161,979		2.8		%	10.1		%
Tangible equity (d)		1,116,284			1,080,816			998,052		3.3		%	11.8		%
Total nonperforming loans		63,148			69,932			71,759		(9.7	)	%	(12.0	)	%
Total nonperforming assets		63,267			70,870			73,433		(10.7	)	%	(13.8	)	%

ASSET QUALITY RATIOS:
Loans as a % of period end total assets		79.74	%		79.72	%		76.16	%	—		%	4.7		%
Total nonperforming loans as a % of period end loans		0.80	%		0.89	%		0.95	%	(10.1	)	%	(15.8	)	%
Total nonperforming assets as a % of period end loans + OREO + other nonperforming assets		0.80	%		0.91	%		0.98	%	(12.1	)	%	(18.4	)	%
Allowance for credit losses as a % of period end loans		1.12	%		1.13	%		1.13	%	(0.9	)	%	(0.9	)	%
Net loan charge-offs	$	592		$	3,206		$	841		(81.5	)	%	(29.6	)	%
Annualized net loan charge-offs as a % of average loans (b)		0.03	%		0.16	%		0.05	%	(81.3	)	%	(40.0	)	%

CAPITAL & LIQUIDITY:
Total shareholders’ equity / Period end total assets		12.94	%		12.69	%		11.76	%	2.0		%	10.0		%
Tangible equity (d) / Tangible assets (f)		11.48	%		11.21	%		10.27	%	2.4		%	11.8		%
Average shareholders’ equity / Average assets (b)		12.64	%		12.47	%		11.74	%	1.4		%	7.7		%
Average shareholders’ equity / Average loans (b)		16.22	%		16.08	%		15.48	%	0.9		%	4.8		%
Average loans / Average deposits (b)		93.56	%		93.00	%		91.11	%	0.6		%	2.7		%

Note: Explanations for footnotes (a) – (k) are included at the end of the financial tables in the “Financial Reconciliations” section.

PARK NATIONAL CORPORATION
Consolidated Statements of Income

		Three Months Ended
		March 31
*(in thousands, except share and per share data)*		2025		2024

Interest income:
Interest and fees on loans		$	120,648	$	111,211
Interest on debt securities:
Taxable			7,130		11,899
Tax-exempt			1,269		1,410
Other interest income			3,153		2,120
Total interest income			132,200		126,640

Interest expense:
Interest on deposits:
Demand and savings deposits			18,436		19,855
Time deposits			6,770		7,338
Interest on borrowings			2,617		3,824
Total interest expense			27,823		31,017

Net interest income			104,377		95,623

Provision for credit losses			756		2,180

Net interest income after provision for credit losses			103,621		93,443

Other income			25,746		26,200

Other expense			78,164		77,228

Income before income taxes			51,203		42,415

Income taxes			9,046		7,211

Net income		$	42,157	$	35,204

Per common share:
Net income – basic		$	2.61	$	2.18
Net income – diluted		$	2.60	$	2.17

Weighted average common shares – basic			16,159,342		16,116,842
Weighted average common shares – diluted			16,238,701		16,191,065

Cash dividends declared:
	Quarterly dividend	$	1.07	$	1.06

PARK NATIONAL CORPORATION
Consolidated Balance Sheets

*(in thousands, except share data)*	March 31, 2025			December 31, 2024

Assets

Cash and due from banks	$	154,536		$	122,363
Money market instruments		83,078			38,203
Investment securities		1,042,163			1,100,861
Loans		7,883,735			7,817,128
Allowance for credit losses		(88,130	)		(87,966	)
Loans, net		7,795,605			7,729,162
Bank premises and equipment, net		66,327			69,522
Goodwill and other intangible assets		162,758			163,032
Other real estate owned		119			938
Other assets		582,026			581,269
Total assets	$	9,886,612		$	9,805,350

Liabilities and Shareholders’ Equity

Deposits:
Noninterest bearing	$	2,637,577		$	2,612,708
Interest bearing		5,564,118			5,530,818
Total deposits		8,201,695			8,143,526
Borrowings		270,757			280,083
Other liabilities		135,118			137,893
Total liabilities	$	8,607,570		$	8,561,502


Shareholders’ Equity:
Preferred shares (200,000 shares authorized; no shares outstanding at March 31, 2025 and December 31, 2024)	$	—		$	—
Common shares (No par value; 20,000,000 shares authorized; 17,623,104 shares issued at March 31, 2025 and December 31, 2024)		459,529			463,706
Accumulated other comprehensive loss, net of taxes		(34,659	)		(46,175	)
Retained earnings		1,002,110			977,599
Treasury shares (1,431,757 shares at March 31, 2025 and 1,464,122 shares at December 31, 2024)		(147,938	)		(151,282	)
Total shareholders’ equity	$	1,279,042		$	1,243,848
Total liabilities and shareholders’ equity	$	9,886,612		$	9,805,350


PARK NATIONAL CORPORATION
Consolidated Average Balance Sheets

	Three Months Ended
	March 31
*(in thousands)*		2025			2024

Assets

Cash and due from banks	$	127,229		$	143,714
Money market instruments		287,016			155,511
Investment securities		1,069,620			1,368,527
Loans		7,833,234			7,482,650
Allowance for credit losses		(88,825	)		(84,067	)
Loans, net		7,744,409			7,398,583
Bank premises and equipment, net		68,992			74,919
Goodwill and other intangible assets		162,938			164,137
Other real estate owned		918			1,088
Other assets		584,485			556,899
Total assets	$	10,045,607		$	9,863,378


Liabilities and Shareholders’ Equity

Deposits:
Noninterest bearing	$	2,578,838		$	2,569,030
Interest bearing		5,793,915			5,644,088
Total deposits		8,372,753			8,213,118
Borrowings		269,254			361,703
Other liabilities		133,341			130,373
Total liabilities	$	8,775,348		$	8,705,194

Shareholders’ Equity:
Preferred shares	$	—		$	—
Common shares		464,046			463,518
Accumulated other comprehensive loss, net of taxes		(39,942	)		(67,343	)
Retained earnings		997,399			917,645
Treasury shares		(151,244	)		(155,636	)
Total shareholders’ equity	$	1,270,259		$	1,158,184
Total liabilities and shareholders’ equity	$	10,045,607		$	9,863,378

PARK NATIONAL CORPORATION
Consolidated Statements of Income – Linked Quarters

	2025		2024		2024		2024		2024
*(in thousands, except per share data)*	1st QTR		4th QTR		3rd QTR		2nd QTR		1st QTR

Interest income:
Interest and fees on loans	$	120,648	$	120,870	$	120,203	$	115,318	$	111,211
Interest on debt securities:
Taxable		7,130		8,641		10,228		10,950		11,899
Tax-exempt		1,269		1,351		1,381		1,382		1,410
Other interest income		3,153		2,751		1,996		1,254		2,120
Total interest income		132,200		133,613		133,808		128,904		126,640

Interest expense:
Interest on deposits:
Demand and savings deposits		18,436		19,802		22,762		20,370		19,855
Time deposits		6,770		7,658		7,073		7,525		7,338
Interest on borrowings		2,617		2,708		2,859		3,172		3,824
Total interest expense		27,823		30,168		32,694		31,067		31,017

Net interest income		104,377		103,445		101,114		97,837		95,623

Provision for credit losses		756		3,935		5,315		3,113		2,180

Net interest income after provision for credit losses		103,621		99,510		95,799		94,724		93,443

Other income		25,746		31,064		36,530		28,794		26,200

Other expense		78,164		83,241		85,681		75,189		77,228

Income before income taxes		51,203		47,333		46,648		48,329		42,415

Income taxes		9,046		8,703		8,431		8,960		7,211

Net income	$	42,157	$	38,630	$	38,217	$	39,369	$	35,204

Per common share:
Net income – basic	$	2.61	$	2.39	$	2.37	$	2.44	$	2.18
Net income – diluted	$	2.60	$	2.37	$	2.35	$	2.42	$	2.17

PARK NATIONAL CORPORATION
Detail of other income and other expense – Linked Quarters

		2025			2024			2024		2024			2024
(in thousands)	1st QTR			4th QTR			3rd QTR		2nd QTR			1st QTR

Other income:
Income from fiduciary activities	$	10,994		$	11,122		$	10,615	$	10,728		$	10,024
Service charges on deposit accounts		2,407			2,319			2,362		2,214			2,106
Other service income		2,936			3,277			3,036		2,906			2,524
Debit card fee income		6,089			6,511			6,539		6,580			6,243
Bank owned life insurance income		1,512			1,519			2,057		1,565			2,629
ATM fees		335			415			471		458			496
Pension settlement gain		—			365			5,783		—			—
(Loss) gain on the sale of OREO, net		(229	)		(74	)		2		(7	)		121
Loss on sale of debt securities, net		—			(128	)		—		—			(398	)
(Loss) gain on equity securities, net		(862	)		1,852			1,557		358			(687	)
Other components of net periodic benefit income		2,344			2,651			2,204		2,204			2,204
Miscellaneous		220			1,235			1,904		1,788			938
Total other income	$	25,746		$	31,064		$	36,530	$	28,794		$	26,200

Other expense:
Salaries	$	36,216		$	37,254		$	38,370	$	35,954		$	35,733
Employee benefits		10,516			10,129			10,162		9,873			11,560
Occupancy expense		3,519			2,929			3,731		2,975			3,181
Furniture and equipment expense		2,301			2,375			2,571		2,454			2,583
Data processing fees		10,529			10,450			11,764		9,542			8,808
Professional fees and services		7,307			10,465			7,842		6,022			6,817
Marketing		1,528			1,949			1,464		1,164			1,741
Insurance		1,686			1,600			1,640		1,777			1,718
Communication		1,202			1,104			955		1,002			1,036
State tax expense		1,186			1,145			1,116		1,129			1,110
Amortization of intangible assets		274			288			287		320			320
Foundation contributions		—			—			2,000		—			—
Miscellaneous		1,900			3,553			3,779		2,977			2,621
Total other expense	$	78,164		$	83,241		$	85,681	$	75,189		$	77,228

PARK NATIONAL CORPORATION
Asset Quality Information

				Year ended December 31,
*(in thousands, except ratios)*	March 31, 2025				2024			2023			2022			2021			2020

Allowance for credit losses:
Allowance for credit losses, beginning of period	$	87,966		$	83,745		$	85,379		$	83,197		$	85,675		$	56,679
Cumulative change in accounting principle; adoption of ASU 2022-02 in 2023 and ASU 2016-13 in 2021					—			383			—			6,090			—
Charge-offs		3,605			18,334			10,863			9,133			5,093			10,304
Recoveries		3,013			8,012			5,942			6,758			8,441			27,246
Net charge-offs (recoveries)		592			10,322			4,921			2,375			(3,348	)		(16,942	)
Provision for (recovery of) credit losses		756			14,543			2,904			4,557			(11,916	)		12,054
Allowance for credit losses, end of period	$	88,130		$	87,966		$	83,745		$	85,379		$	83,197		$	85,675

General reserve trends:
Allowance for credit losses, end of period	$	88,130		$	87,966		$	83,745		$	85,379		$	83,197		$	85,675
Allowance on accruing purchased credit deteriorated (“PCD”) loans (purchased credit impaired (“PCI”) loans for years 2020 and prior)		—			—			—			—			—			167
Allowance on purchased loans excluded from collectively evaluated loans (for years 2020 and prior)	N.A.			N.A.			N.A.			N.A.			N.A.				678
Specific reserves on individually evaluated loans – accrual		—			—			—			—			42			44
Specific reserves on individually evaluated loans – nonaccrual		1,044			1,299			4,983			3,566			1,574			5,390
General reserves on collectively evaluated loans	$	87,086		$	86,667		$	78,762		$	81,813		$	81,581		$	79,396

Total loans	$	7,883,735		$	7,817,128		$	7,476,221		$	7,141,891		$	6,871,122		$	7,177,785
Accruing PCD loans (PCI loans for years 2020 and prior)		2,139			2,174			2,835			4,653			7,149			11,153
Purchased loans excluded from collectively evaluated loans (for years 2020 and prior)	N.A.			N.A.			N.A.			N.A.			N.A.				360,056
Individually evaluated loans – accrual (k)		13,935			15,290			—			11,477			17,517			8,756
Individually evaluated loans – nonaccrual		47,718			53,149			45,215			66,864			56,985			99,651
Collectively evaluated loans	$	7,819,943		$	7,746,515		$	7,428,171		$	7,058,897		$	6,789,471		$	6,698,169

Asset Quality Ratios:
Net charge-offs (recoveries) as a % of average loans		0.03	%		0.14	%		0.07	%		0.03	%		(0.05)	%		(0.24)	%
Allowance for credit losses as a % of period end loans		1.12	%		1.13	%		1.12	%		1.20	%		1.21	%		1.19	%
General reserve as a % of collectively evaluated loans		1.11	%		1.12	%		1.06	%		1.16	%		1.20	%		1.19	%

Nonperforming assets:
Nonaccrual loans	$	61,929		$	68,178		$	60,259		$	79,696		$	72,722		$	117,368
Accruing troubled debt restructurings (for years 2022 and prior) (k)	N.A.			N.A.			N.A.				20,134			28,323			20,788
Loans past due 90 days or more		1,219			1,754			859			1,281			1,607			1,458
Total nonperforming loans	$	63,148		$	69,932		$	61,118		$	101,111		$	102,652		$	139,614
Other real estate owned		119			938			983			1,354			775			1,431
Other nonperforming assets		—			—			—			—			2,750			3,164
Total nonperforming assets	$	63,267		$	70,870		$	62,101		$	102,465		$	106,177		$	144,209
Percentage of nonaccrual loans to period end loans		0.79	%		0.87	%		0.81	%		1.12	%		1.06	%		1.64	%
Percentage of nonperforming loans to period end loans		0.80	%		0.89	%		0.82	%		1.42	%		1.49	%		1.95	%
Percentage of nonperforming assets to period end loans		0.80	%		0.91	%		0.83	%		1.43	%		1.55	%		2.01	%
Percentage of nonperforming assets to period end total assets		0.64	%		0.72	%		0.63	%		1.04	%		1.11	%		1.55	%

Note: Explanations for footnotes (a) – (k) are included at the end of the financial tables in the “Financial Reconciliations” section.

PARK NATIONAL CORPORATION
Asset Quality Information (continued)

			Year ended December 31,
(in thousands, except ratios)	March 31, 2025		2024		2023		2022		2021		2020

New nonaccrual loan information:
Nonaccrual loans, beginning of period	$	68,178	$	60,259	$	79,696	$	72,722	$	117,368	$	90,080
New nonaccrual loans		14,767		65,535		48,280		64,918		38,478		103,386
Resolved nonaccrual loans		21,016		57,616		67,717		57,944		83,124		76,098
Nonaccrual loans, end of period	$	61,929	$	68,178	$	60,259	$	79,696	$	72,722	$	117,368

Individually evaluated nonaccrual commercial loan portfolio information (period end):
Unpaid principal balance	$	51,134	$	58,158	$	47,564	$	68,639	$	57,609	$	100,306
Prior charge-offs		3,416		5,009		2,349		1,775		624		655
Remaining principal balance		47,718		53,149		45,215		66,864		56,985		99,651
Specific reserves		1,044		1,299		4,983		3,566		1,574		5,390
Book value, after specific reserves	$	46,674	$	51,850	$	40,232	$	63,298	$	55,411	$	94,261

Note: Explanations for footnotes (a) – (k) are included at the end of the financial tables in the “Financial Reconciliations” section.

PARK NATIONAL CORPORATION
Financial Reconciliations
NON-GAAP RECONCILIATIONS
	THREE MONTHS ENDED
*(in thousands, except share and per share data)*	March 31, 2025			December 31, 2024			March 31, 2024
Net interest income	$	104,377		$	103,445		$	95,623
less purchase accounting accretion related to NewDominion and Carolina Alliance acquisitions		175			250			352
less interest income on former Vision Bank relationships		1,019			38			2
Net interest income – adjusted	$	103,183		$	103,157		$	95,269

Provision for credit losses	$	756		$	3,935		$	2,180
less recoveries on former Vision Bank relationships		(1,097	)		—			(953	)
Provision for credit losses – adjusted	$	1,853		$	3,935		$	3,133

Other income	$	25,746		$	31,064		$	26,200
less loss on sale of debt securities, net		—			(128	)		(398	)
less pension settlement gain		—			365			—
less impact of strategic initiatives		(914	)		117			(155	)
less Vision related (loss) gain on the sale of OREO, net		(229	)		—			121
less other service income related to former Vision Bank relationships		3			299			7
Other income – adjusted	$	26,886		$	30,411		$	26,625

Other expense	$	78,164		$	83,241		$	77,228
less core deposit intangible amortization related to NewDominion and Carolina Alliance acquisitions		274			288			320
less building demolition costs		—			44			65
less direct expenses related to collection of payments on former Vision Bank loan relationships		276			215			—
Other expense – adjusted	$	77,614		$	82,694		$	76,843

Tax effect of adjustments to net income identified above (i)	$	(126	)	$	(83	)	$	(104	)

Net income – reported	$	42,157		$	38,630		$	35,204
Net income – adjusted (h)	$	41,682		$	38,319		$	34,811

Diluted earnings per common share	$	2.60		$	2.37		$	2.17
Diluted earnings per common share, adjusted (h)	$	2.57		$	2.35		$	2.15

Annualized return on average assets (a)(b)		1.70	%		1.54	%		1.44	%
Annualized return on average assets, adjusted (a)(b)(h)		1.68	%		1.52	%		1.42	%

Annualized return on average tangible assets (a)(b)(e)		1.73	%		1.56	%		1.46	%
Annualized return on average tangible assets, adjusted (a)(b)(e)(h)		1.71	%		1.55	%		1.44	%

Annualized return on average shareholders’ equity (a)(b)		13.46	%		12.32	%		12.23	%
Annualized return on average shareholders’ equity, adjusted (a)(b)(h)		13.31	%		12.22	%		12.09	%

Annualized return on average tangible equity (a)(b)(c)		15.44	%		14.17	%		14.24	%
Annualized return on average tangible equity, adjusted (a)(b)(c)(h)		15.27	%		14.06	%		14.08	%

Efficiency ratio (g)		59.79	%		61.60	%		63.07	%
Efficiency ratio, adjusted (g)(h)		59.39	%		61.63	%		62.72	%

Annualized net interest margin (g)		4.62	%		4.51	%		4.28	%
Annualized net interest margin, adjusted (g)(h)		4.57	%		4.50	%		4.26	%
Note: Explanations for footnotes (a) – (k) are included at the end of the financial tables in the “Financial Reconciliations” section.

PARK NATIONAL CORPORATION
Financial Reconciliations (continued)

(a) Reported measure uses net income
(b) Averages are for the three months ended March 31, 2025, December 31, 2024, and March 31, 2024, as appropriate
(c) Net income for each period divided by average tangible equity during the period. Average tangible equity equals average shareholders’ equity during the applicable period less average goodwill and other intangible assets during the applicable period.

RECONCILIATION OF AVERAGE SHAREHOLDERS’ EQUITY TO AVERAGE TANGIBLE EQUITY:
	THREE MONTHS ENDED
	March 31, 2025		December 31, 2024		March 31, 2024
AVERAGE SHAREHOLDERS’ EQUITY	$	1,270,259	$	1,247,680	$	1,158,184
Less: Average goodwill and other intangible assets		162,938		163,221		164,137
AVERAGE TANGIBLE EQUITY	$	1,107,321	$	1,084,459	$	994,047

(d) Tangible equity divided by common shares outstanding at period end. Tangible equity equals total shareholders’ equity less goodwill and other intangible assets, in each case at the end of the period.

RECONCILIATION OF TOTAL SHAREHOLDERS’ EQUITY TO TANGIBLE EQUITY:
	March 31, 2025		December 31, 2024		March 31, 2024
TOTAL SHAREHOLDERS’ EQUITY	$	1,279,042	$	1,243,848	$	1,161,979
Less: Goodwill and other intangible assets		162,758		163,032		163,927
TANGIBLE EQUITY	$	1,116,284	$	1,080,816	$	998,052

(e) Net income for each period divided by average tangible assets during the period. Average tangible assets equal average assets less average goodwill and other intangible assets, in each case during the applicable period.

RECONCILIATION OF AVERAGE ASSETS TO AVERAGE TANGIBLE ASSETS
	THREE MONTHS ENDED
	March 31, 2025		December 31, 2024		March 31, 2024
AVERAGE ASSETS	$	10,045,607	$	10,008,328	$	9,863,378
Less: Average goodwill and other intangible assets		162,938		163,221		164,137
AVERAGE TANGIBLE ASSETS	$	9,882,669	$	9,845,107	$	9,699,241

(f) Tangible equity divided by tangible assets. Tangible assets equal total assets less goodwill and other intangible assets, in each case at the end of the period.

RECONCILIATION OF TOTAL ASSETS TO TANGIBLE ASSETS:
	March 31, 2025		December 31, 2024		March 31, 2024
TOTAL ASSETS	$	9,886,612	$	9,805,350	$	9,881,077
Less: Goodwill and other intangible assets		162,758		163,032		163,927
TANGIBLE ASSETS	$	9,723,854	$	9,642,318	$	9,717,150

(g) Efficiency ratio is calculated by dividing total other expense by the sum of fully taxable equivalent net interest income and other income. Fully taxable equivalent net interest income reconciliation is shown assuming a 21% corporate federal income tax rate. Additionally, net interest margin is calculated on a fully taxable equivalent basis by dividing fully taxable equivalent net interest income by average interest earning assets, in each case during the applicable period.

RECONCILIATION OF FULLY TAXABLE EQUIVALENT NET INTEREST INCOME TO NET INTEREST INCOME
	THREE MONTHS ENDED
	March 31, 2025		December 31, 2024		March 31, 2024
Interest income	$	132,200	$	133,613	$	126,640
Fully taxable equivalent adjustment		607		617		616
Fully taxable equivalent interest income	$	132,807	$	134,230	$	127,256
Interest expense		27,823		30,168		31,017
Fully taxable equivalent net interest income	$	104,984	$	104,062	$	96,239

(h) Adjustments to net income for each period presented are detailed in the non-GAAP reconciliations of net interest income, provision for credit losses, other income, other expense and tax effect of adjustments to net income.
(i) The tax effect of adjustments to net income was calculated assuming a 21% corporate federal income tax rate.
(j) Pre-tax, pre-provision (“PTPP”) net income is calculated as net income, plus income taxes, plus the provision for credit losses, in each case during the applicable period. PTPP net income is a common industry metric utilized in capital analysis and review. PTPP is used to assess the operating performance of Park while excluding the impact of the provision for credit losses.

RECONCILIATION OF PRE-TAX, PRE-PROVISION NET INCOME
	THREE MONTHS ENDED
	March 31, 2025		December 31, 2024		March 31, 2024
Net income	$	42,157	$	38,630	$	35,204
Plus: Income taxes		9,046		8,703		7,211
Plus: Provision for credit losses		756		3,935		2,180
Pre-tax, pre-provision net income	$	51,959	$	51,268	$	44,595

(k) Effective January 1, 2023, Park adopted Accounting Standards Update (“ASU”) 2022-02. Among other things, this ASU eliminated the concept of troubled debt restructurings (“TDRs”). As a result of the adoption of this ASU and elimination of the concept of TDRs, total nonperforming loans (“NPLs”) and total nonperforming assets (“NPAs”) each decreased by $20.1 million effective January 1, 2023. Additionally, as a result of the adoption of this ASU, accruing individually evaluated loans decreased by $11.5 million effective January 1, 2023.

The MIL Network –

April 26, 2025

MIL-OSI: Penns Woods Bancorp, Inc. Reports First Quarter 2025 Earnings

Source: GlobeNewswire (MIL-OSI)

WILLIAMSPORT, Pa., April 25, 2025 (GLOBE NEWSWIRE) — Penns Woods Bancorp, Inc. (NASDAQ: PWOD)

Penns Woods Bancorp, Inc. achieved net income of $7.4 million for the three months ended March 31, 2025, resulting in basic earnings per share of $0.97 and diluted earnings per share of $0.95.

Highlights

Net income, as reported under generally accepted accounting principles (GAAP), for the three months ended March 31, 2025 was $7.4 million, compared $3.8 million for the same period of 2024. Results for the three months ended March 31, 2025 compared to 2024 were impacted by an increase in net interest income of $2.4 million, as the net interest margin expanded. The three month period ended March 31, 2025 has been impacted by after-tax merger related expenses of $948,000 resulting from the announced acquisition of the company by Northwest Bancshares, Inc. The disposal of assets related to two former branch properties resulted in a one time after-tax loss of $261,000 for the three month period ended March 31, 2024.
The allowance for credit losses was impacted for the three months ended March 31, 2025 by a negative provision for credit losses of $3.0 million, compared to a provision for credit losses of $138,000 for the 2024 period. The recognition of a negative provision for credit losses for the 2025 period was due primarily to a recovery on a commercial loan of $1.3 million. The recovery, coupled with a decline in the historical loss rates over the look back period, reduced the probability of default and loss given default applied to the loan portfolio when determining the level of the allowance for credit losses.
Basic and diluted earnings per share for the three months ended March 31, 2025 were $0.97 and $0.95, respectively. This compares to basic and diluted earnings per share of $0.51 for the three month period ended March 31, 2024.
Annualized return on average assets was 1.31% for the three months ended March 31, 2025, compared to 0.69% for the corresponding period of 2024.
Annualized return on average equity was 14.76% for the three months ended March 31, 2025, compared to 8.03% for the corresponding period of 2024.

Net Income

Net income from core operations (“core earnings”), which is a non-GAAP measure of net income excluding net securities gains or losses and merger expenses, was $8.1 million for the three months ended March 31, 2025 compared to $3.8 million for the same period of 2024. Core earnings per share (non-GAAP) for the three months ended March 31, 2025 were basic $1.06 and diluted $1.04. Basic and diluted core earnings per share for the same period of 2024 were $0.51. Annualized core return on average assets and core return on average equity (non-GAAP) were 1.43% and 16.15%, respectively, for the three months ended March 31, 2025, compared to 0.69% and 8.09% for the corresponding period of 2024. A reconciliation of the non-GAAP financial measures of core earnings, core return on assets, core return on equity, core earnings per share and tangible book value per share to the comparable GAAP financial measures is included at the end of this press release.

Net Interest Margin

The net interest margin for the three months ended March 31, 2025 was 3.13% compared to 2.69% for the corresponding period of 2024. The increase in the net interest margin for the three month period was driven by an increase in the rate collected on interest-earning assets of 38 basis points (“bps”). The overall market conditions over the periods resulted in increases to the yield on the earnings asset portfolio and a decrease in the rate paid on interest-bearing deposits. Driving the increase in the yield and interest income on the earning assets portfolio was the repricing of legacy assets, portfolio growth, and the recognition of $223,000 in interest from a recovery on a commercial loan. The average loan portfolio balance increased $41.8 million for the three month period ended March 31, 2025 compared to the same period of 2024 as the average yield on the portfolio increased 40 bps, resulting in an increase in taxable equivalent interest income of $2.2 million for the period. The three month period ended March 31, 2025 was impacted by an increase of 30 bps in the yield earned on the securities portfolio as legacy securities matured, which offset the impact of a decrease in average securities balance of $15.0 million. Short-term borrowings decreased leading to a decrease of $949,000 in expense for the three month period ended March 31, 2025 compared to the same period of 2024. The rate paid on interest-bearing deposits increased 4 bps, or $781,000, in expense for the three month period ended March 31, 2025 compared to the corresponding period of 2024 due to the rate environment, an increase in competition for deposits, increased utilization of brokered deposits, and a migration of deposit balances from core deposits to higher rate time deposits. The average balance of time deposits increased $99.9 million from the three month period ended March 31, 2024 to 2025 as the rate paid on the funds decreased 9 bps. In addition, brokered deposits have been utilized to assist with funding the loan portfolio growth and contributed to the increase in time deposit balances, while lowering the reliance on higher cost short-term borrowings.

Assets

Total assets increased to $2.3 billion at March 31, 2025, an increase of $42.1 million compared to March 31, 2024. Net loans increased $43.3 million to $1.9 billion at March 31, 2025 compared to March 31, 2024, as continued emphasis was placed on commercial loan growth and indirect auto lending. The investment portfolio decreased $14.3 million from March 31, 2024 to March 31, 2025 as the portfolio cash flow is being utilized to fund loan growth. Short-term and long-term borrowings decreased $28.3 million and $47.2 million, respectively, from March 31, 2024 to March 31, 2025 as deposit growth allowed for a reduction in total borrowings.

Non-performing Loans

The ratio of non-performing loans to total loans ratio increased to 0.53% at March 31, 2025 from 0.43% at March 31, 2024, as non-performing loans increased to $10.0 million at March 31, 2025 from $8.0 million at March 31, 2024. The majority of non-performing loans involve loans that are either in a secured position and have sureties with a strong underlying financial position or have been classified as individually evaluated loans that have a specific allocation recorded within the allowance for credit losses. Net loan recoveries of $957,000 for the three months ended March 31, 2025, impacted the allowance for credit losses, which was 0.54% of total loans at March 31, 2025 compared to 0.62% at March 31, 2024. Exposure to non-owner occupied office space is minimal at $13.7 million at March 31, 2025 with none of these loans being delinquent.

Deposits

Deposits increased $105.4 million to $1.7 billion at March 31, 2025 compared to March 31, 2024. Noninterest-bearing deposits decreased $5.7 million to $465.8 million at March 31, 2025 compared to March 31, 2024. Core deposits increased $3.6 million with growth in money market accounts offsetting a decline in savings and NOW accounts. Core deposit gathering efforts remained focused on increasing the utilization of electronic (internet and mobile) deposit banking by our customers. Core deposits have remained stable at $1.2 billion over the past five quarters. Interest-bearing deposits increased $111.1 million from March 31, 2024 to March 31, 2025 due to growth in the time deposit portfolio of $50.6 million as customers sought a higher rate of interest. Brokered deposit balances increased $51.2 million to $177.0 million at March 31, 2025 as this funding source was utilized to supplement funding loan portfolio growth, while reducing the need to draw upon available borrowing lines. A campaign to attract time deposits with a maturity of five to twenty-four months commenced during the latter part of 2022 and has continued throughout 2024 and 2025.

Shareholders’ Equity

Shareholders’ equity increased $18.5 million to $212.0 million at March 31, 2025 compared to March 31, 2024. Accumulated other comprehensive loss of $3.5 million at March 31, 2025 decreased from a loss of $9.2 million at March 31, 2024 as a result of a decrease in net unrealized loss on available for sale securities to $2.8 million at March 31, 2025 from a net unrealized loss of $6.4 million at March 31, 2024, coupled with a decrease in loss of $2.0 million in the defined benefit plan obligation. The current level of shareholders’ equity equates to a book value per share of $27.85 at March 31, 2025 compared to $25.72 at March 31, 2024, and an equity to asset ratio of 9.41% at March 31, 2025 and 8.76% at March 31, 2024. Tangible book value per share (a non-GAAP measure) increased to $25.67 at March 31, 2025 compared to $23.50 at March 31, 2024. Dividends declared for the three months ended March 31, 2025 and 2024 were $0.32 per share.

Penns Woods Bancorp, Inc. is the parent company of Jersey Shore State Bank, which operates sixteen branch offices providing financial services in Lycoming, Clinton, Centre, Montour, Union, and Blair Counties, and Luzerne Bank, which operates eight branch offices providing financial services in Luzerne County, and United Insurance Solutions, LLC, which offers insurance products. Investment and insurance products are offered through Jersey Shore State Bank’s subsidiary, The M Group, Inc. D/B/A The Comprehensive Financial Group.

NOTE: This press release contains financial information determined by methods other than in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”). Management uses the non-GAAP measure of net income from core operations in its analysis of the company’s performance. This measure, as used by the Company, adjusts net income determined in accordance with GAAP to exclude the effects of special items, including significant gains or losses that are unusual in nature such as net securities gains and losses. Because these certain items and their impact on the Company’s performance are difficult to predict, management believes presentation of financial measures excluding the impact of such items provides useful supplemental information in evaluating the operating results of the Company’s core businesses. These disclosures should not be viewed as a substitute for net income determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies.

This press release may contain certain “forward-looking statements” including statements concerning plans, objectives, future events or performance and assumptions and other statements, which are statements other than statements of historical fact. The Company cautions readers that the following important factors, among others, may have affected and could in the future affect actual results and could cause actual results for subsequent periods to differ materially from those expressed in any forward-looking statement made by or on behalf of the Company herein: (i) the effect of changes in laws and regulations, including federal and state banking laws and regulations, and the associated costs of compliance with such laws and regulations either currently or in the future as applicable; (ii) the effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies as well as by the Financial Accounting Standards Board, or of changes in the Company’s organization, compensation and benefit plans; (iii) the effect on the Company’s competitive position within its market area of the increasing consolidation within the banking and financial services industries, including the increased competition from larger regional and out-of-state banking organizations as well as non-bank providers of various financial services; (iv) the effect of changes in interest rates; (v) the effects of health emergencies, including the spread of infectious diseases or pandemics; (vi) the effect of changes in the business cycle and downturns in the local, regional or national economies; or (vii) any potential adverse events or developments resulting from the merger agreement, dated December 16, 2024, between Penns Woods Bancorp, Inc. and Northwest Bancshares, Inc., including, without limitation, any event, change, or other circumstances that could give rise to the right of one or both of the parties to terminate the merger agreement or the possibility that the parties may be unable to achieve expected synergies and operating efficiencies in the merger within the expected timeframes or to successfully integrate the business and operations of Jersey Shore State Bank and Luzerne Bank with those of Northwest Savings Bank after closing. For a list of other factors which could affect the Company’s results, see the Company’s filings with the Securities and Exchange Commission, including “Item 1A. Risk Factors,” set forth in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

You should not place undue reliance on any forward-looking statements. These statements speak only as of the date of this press release, even if subsequently made available by the Company on its website or otherwise. The Company undertakes no obligation to update or revise these statements to reflect events or circumstances occurring after the date of this press release.

Previous press releases and additional information can be obtained from the Company’s website at www.pwod.com.

Contact:	Richard A. Grafmyre, Chief Executive Officer
	110 Reynolds Street
	Williamsport, PA 17702
	570-322-1111	e-mail: pwod@pwod.com

PENNS WOODS BANCORP, INC. CONSOLIDATED BALANCE SHEET (UNAUDITED)

	March 31,
(In Thousands, Except Share and Per Share Data)		2025			2024		% Change
ASSETS:
Noninterest-bearing cash	$	26,604		$	23,488		13.27	%
Interest-bearing balances in other financial institutions		10,841			9,055		19.72	%
Total cash and cash equivalents		37,445			32,543		15.06	%

Investment debt securities, available for sale, at fair value		175,721			187,245		(6.15	)%
Investment equity securities, at fair value		1,128			1,112		1.44	%
Restricted investment in bank stock		20,613			23,420		(11.99	)%
Loans held for sale		2,583			3,360		(23.13	)%
Loans		1,897,376			1,855,347		2.27	%
Allowance for credit losses		(10,236	)		(11,542	)	(11.32	)%
Loans, net		1,887,140			1,843,805		2.35	%
Premises and equipment, net		27,441			28,970		(5.28	)%
Accrued interest receivable		10,871			11,344		(4.17	)%
Bank-owned life insurance		45,982			32,853		39.96	%
Investment in limited partnerships		6,466			7,515		(13.96	)%
Goodwill		16,450			16,450		—	%
Intangibles		82			184		(55.43	)%
Operating lease right of use asset		2,761			2,922		(5.51	)%
Deferred tax asset		2,067			4,546		(54.53	)%
Other assets		15,485			13,847		11.83	%
TOTAL ASSETS	$	2,252,235		$	2,210,116		1.91	%

LIABILITIES:
Interest-bearing deposits	$	1,258,188		$	1,147,111		9.68	%
Noninterest-bearing deposits		465,766			471,451		(1.21	)%
Total deposits		1,723,954			1,618,562		6.51	%

Short-term borrowings		82,910			111,208		(25.45	)%
Long-term borrowings		214,542			261,770		(18.04	)%
Accrued interest payable		3,908			4,174		(6.37	)%
Operating lease liability		2,841			2,987		(4.89	)%
Other liabilities		12,057			17,898		(32.63	)%
TOTAL LIABILITIES		2,040,212			2,016,599		1.17	%

SHAREHOLDERS’ EQUITY:
Preferred stock, no par value, 3,000,000 shares authorized; no shares issued		—			—		n/a
Common stock, par value $5.55, 22,500,000 shares authorized; 8,124,439 and 8,035,597 shares issued; 7,614,214 and 7,525,372 shares outstanding		45,134			44,641		1.10	%
Additional paid-in capital		62,931			62,215		1.15	%
Retained earnings		120,261			108,642		10.69	%
Accumulated other comprehensive loss:
Net unrealized loss on available for sale securities		(2,762	)		(6,425	)	57.01	%
Defined benefit plan		(726	)		(2,741	)	73.51	%
Treasury stock at cost, 510,225 shares		(12,815	)		(12,815	)	—	%
TOTAL SHAREHOLDERS’ EQUITY		212,023			193,517		9.56	%
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	2,252,235		$	2,210,116		1.91	%

PENNS WOODS BANCORP, INC. CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)

	Three Months Ended March 31,
(In Thousands, Except Share and Per Share Data)		2025			2024		% Change
INTEREST AND DIVIDEND INCOME:
Loans including fees	$	26,014		$	23,860		9.03	%
Investment securities:
Taxable		1,723			1,594		8.09	%
Tax-exempt		60			97		(38.14	)%
Dividend and other interest income		581			679		(14.43	)%
TOTAL INTEREST AND DIVIDEND INCOME		28,378			26,230		8.19	%

INTEREST EXPENSE:
Deposits		8,744			7,963		9.81	%
Short-term borrowings		1,056			2,005		(47.33	)%
Long-term borrowings		2,438			2,516		(3.10	)%
TOTAL INTEREST EXPENSE		12,238			12,484		(1.97	)%

NET INTEREST INCOME		16,140			13,746		17.42	%

(RECOVERY) PROVISION FOR CREDIT LOSSES		(2,969	)		138		(2,251.45	)%

NET INTEREST INCOME AFTER (RECOVERY) PROVISION OF CREDIT LOSSES		19,109			13,608		40.42	%

NON-INTEREST INCOME:
Service charges		483			515		(6.21	)%
Net debt securities gains (losses), available for sale		305			(23	)	1,426.09	%
Net equity securities gains (losses)		17			(10	)	270.00	%
Bank-owned life insurance		301			463		(34.99	)%
Gain on sale of loans		408			305		33.77	%
Insurance commissions		152			153		(0.65	)%
Brokerage commissions		167			186		(10.22	)%
Loan broker income		252			222		13.51	%
Debit card income		308			329		(6.38	)%
Other		175			322		(45.65	)%
TOTAL NON-INTEREST INCOME		2,568			2,462		4.31	%

NON-INTEREST EXPENSE:
Salaries and employee benefits		6,483			6,422		0.95	%
Occupancy		874			905		(3.43	)%
Furniture and equipment		997			939		6.18	%
Software amortization		419			190		120.53	%
Pennsylvania shares tax		413			320		29.06	%
Professional fees		505			552		(8.51	)%
Federal Deposit Insurance Corporation deposit insurance		397			359		10.58	%
Marketing		47			71		(33.80	)%
Intangible amortization		25			26		(3.85	)%
Merger expense		1,093			—		n/a
Other		1,341			1,839		(27.08	)%
TOTAL NON-INTEREST EXPENSE		12,594			11,623		8.35	%
INCOME BEFORE INCOME TAX PROVISION		9,083			4,447		104.25	%
INCOME TAX PROVISION		1,716			639		168.54	%
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS’	$	7,367		$	3,808		93.46	%
EARNINGS PER SHARE – BASIC	$	0.97		$	0.51		90.20	%
EARNINGS PER SHARE – DILUTED	$	0.95		$	0.51		86.27	%
WEIGHTED AVERAGE SHARES OUTSTANDING – BASIC		7,589,592			7,512,520		1.03	%
WEIGHTED AVERAGE SHARES OUTSTANDING – DILUTED		7,728,688			7,512,520		2.88	%

PENNS WOODS BANCORP, INC. AVERAGE BALANCES AND INTEREST RATES (UNAUDITED)

	Three Months Ended
	March 31, 2025						March 31, 2024
(Dollars in Thousands)	Average Balance (1)		Interest		Average Rate		Average Balance (1)		Interest		Average Rate
ASSETS:
Tax-exempt loans (3)	$	68,615	$	556	3.28	%	$	69,349	$	463	2.69	%
All other loans		1,824,502		25,575	5.68	%		1,781,962		23,494	5.30	%
Total loans (2)		1,893,117		26,131	5.60	%		1,851,311		23,957	5.20	%

Taxable securities		191,040		2,188	4.64	%		200,275		2,144	4.35	%
Tax-exempt securities (3)		10,751		76	2.87	%		16,529		123	3.03	%
Total securities		201,791		2,264	4.55	%		216,804		2,267	4.25	%

Interest-bearing balances in other financial institutions		14,699		116	3.20	%		10,199		129	5.09	%

Total interest-earning assets		2,109,607		28,511	5.48	%		2,078,314		26,353	5.10	%

Other assets		138,990						130,958

TOTAL ASSETS	$	2,248,597					$	2,209,272

LIABILITIES AND SHAREHOLDERS’ EQUITY:
Savings	$	209,025		234	0.45	%	$	218,722		268	0.49	%
Super Now deposits		208,537		904	1.76	%		215,870		1,084	2.02	%
Money market deposits		317,306		2,468	3.15	%		292,707		2,359	3.24	%
Time deposits		507,085		5,138	4.11	%		407,169		4,252	4.20	%
Total interest-bearing deposits		1,241,953		8,744	2.86	%		1,134,468		7,963	2.82	%

Short-term borrowings		95,339		1,056	4.49	%		144,350		2,005	5.59	%
Long-term borrowings		230,682		2,438	4.29	%		259,697		2,516	3.90	%
Total borrowings		326,021		3,494	4.35	%		404,047		4,521	4.50	%

Total interest-bearing liabilities		1,567,974		12,238	3.17	%		1,538,515		12,484	3.26	%

Demand deposits		449,384						451,877
Other liabilities		31,524						29,260
Shareholders’ equity		199,715						189,620

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	2,248,597					$	2,209,272
Interest rate spread (3)					2.31	%					1.84	%
Net interest income/margin (3)			$	16,273	3.13	%			$	13,869	2.69	%

_1.	_{Information on this table has been calculated using average daily balance sheets to obtain average balances.}
_2.	_{Non-accrual loans have been included with loans for the purpose of analyzing net interest earnings.}
_3.	_{Income and rates on fully taxable equivalent basis include an adjustment for the difference between annual income from tax-exempt obligations and the taxable equivalent of such income at the standard tax rate of 21%}

	Three Months Ended March 31,
		2025		2024
Total interest income	$	28,378	$	26,230
Total interest expense		12,238		12,484
Net interest income (GAAP)		16,140		13,746
Tax equivalent adjustment		133		123
Net interest income (fully taxable equivalent) (non-GAAP)	$	16,273	$	13,869

(Dollars in Thousands, Except Per Share Data, Unaudited)	Quarter Ended
	3/31/2025			12/31/2024			9/30/2024			6/30/2024			3/31/2024
Operating Data
Net income	$	7,367		$	3,741		$	4,801		$	5,390		$	3,808
Net interest income		16,140			15,563			15,056			14,515			13,746
(Recovery) provision for credit losses		(2,969	)		420			740			(1,177	)		138
Net security gains (losses)		322			(44	)		36			(19	)		(33	)
Non-interest income, excluding net security gains (losses)		2,246			2,754			2,385			2,044			2,495
Non-interest expense		12,594			12,980			10,884			10,996			11,623

Performance Statistics
Net interest margin		3.13	%		2.98	%		2.88	%		2.83	%		2.69	%
Annualized cost of total deposits		2.07	%		2.22	%		2.27	%		2.14	%		2.01	%
Annualized non-interest income to average assets		0.46	%		0.48	%		0.43	%		0.37	%		0.45	%
Annualized non-interest expense to average assets		2.24	%		2.32	%		1.95	%		1.98	%		2.10	%
Annualized return on average assets		1.31	%		0.67	%		0.86	%		0.97	%		0.69	%
Annualized return on average equity		14.76	%		7.28	%		9.60	%		11.12	%		8.03	%
Annualized net loan (recoveries) charge-offs to average loans	(0.20		)%		0.05	%		0.07	%	(0.09		)%		0.08	%
Net (recoveries) charge-offs		(957	)		228			328			(396	)		380
Efficiency ratio		68.36	%		70.73	%		62.26	%		66.25	%		71.41	%

Per Share Data
Basic earnings per share	$	0.97		$	0.50		$	0.64		$	0.72		$	0.51
Diluted earnings per share		0.95			0.49			0.64			0.72			0.51
Dividend declared per share		0.32			0.32			0.32			0.32			0.32
Book value		27.85			27.16			26.96			26.13			25.72
Tangible book value (Non-GAAP)		25.67			24.97			24.77			23.93			23.50
Common stock price:
High		31.90			34.06			23.98			21.08			22.64
Low		27.61			23.74			19.29			17.17			18.44
Close		27.91			30.39			23.79			20.55			19.41
Weighted average common shares:
Basic		7,590			7,555			7,544			7,529			7,513
Fully Diluted		7,729			7,693			7,544			7,529			7,513
End-of-period common shares:
Issued		8,124			8,067			8,065			8,052			8,036
Treasury		(510	)		(510	)		(510	)		(510	)		(510	)

(Dollars in Thousands, Unaudited)	Quarter Ended
	3/31/2025			12/31/2024			9/30/2024			6/30/2024			3/31/2024
Financial Condition Data:
General
Total assets	$	2,252,235		$	2,232,338		$	2,259,250		$	2,234,617		$	2,210,116
Loans, net		1,887,140			1,865,230			1,863,586			1,855,054			1,843,805
Goodwill		16,450			16,450			16,450			16,450			16,450
Intangibles		82			107			133			158			184
Total deposits		1,723,954			1,706,081			1,700,321			1,648,093			1,618,562
Noninterest-bearing		465,766			456,936			452,922			461,092			471,451
Savings		211,136			208,340			211,560			218,354			220,932
NOW		203,191			212,687			218,279			209,906			208,073
Money Market		323,869			308,977			321,614			320,101			299,916
Time Deposits		342,983			340,844			328,294			310,187			292,372
Brokered Deposits		177,009			178,297			167,652			128,453			125,818
Total interest-bearing deposits		1,258,188			1,249,145			1,247,399			1,187,001			1,147,111

Core deposits*		1,203,962			1,186,940			1,204,375			1,209,453			1,200,372
Shareholders’ equity		212,023			205,231			203,694			197,087			193,517

Asset Quality
Non-performing loans	$	9,987		$	8,904		$	7,940		$	6,784		$	7,958
Non-performing loans to total assets		0.44	%		0.40	%		0.35	%		0.30	%		0.36	%
Allowance for credit losses on loans		10,236			11,848			11,588			11,234			11,542
Allowance for credit losses on loans to total loans		0.54	%		0.63	%		0.62	%		0.60	%		0.62	%
Allowance for credit losses on loans to non-performing loans		102.49	%		133.06	%		145.94	%		165.60	%		145.04	%
Non-performing loans to total loans		0.53	%		0.47	%		0.42	%		0.36	%		0.43	%

Capitalization
Shareholders’ equity to total assets		9.41	%		9.19	%		9.02	%		8.82	%		8.76	%

* Core deposits are defined as total deposits less time deposits and brokered deposits.

Reconciliation of GAAP and Non-GAAP Financial Measures (UNAUDITED)

	Three Months Ended March 31,
(Dollars in Thousands, Except Per Share Data, Unaudited)		2025			2024
GAAP net income	$	7,367		$	3,808
Net securities (gains) losses, net of tax		(254	)		26
Merger expenses, net of tax		948			—
Non-GAAP core earnings	$	8,061		$	3,834

	Three Months Ended March 31,
		2025			2024
Return on average assets (ROA)		1.31	%		0.69	%
Net securities (gains) losses, net of tax	(0.04		)%		—	%
Merger expenses, net of tax		0.16	%		—	%
Non-GAAP core ROA		1.43	%		0.69	%

	Three Months Ended March 31,
		2025			2024
Return on average equity (ROE)		14.76	%		8.03	%
Net securities (gains) losses, net of tax	(0.51		)%		0.06	%
Merger expenses, net of tax		1.90	%		—	%
Non-GAAP core ROE		16.15	%		8.09	%

	Three Months Ended March 31,
		2025			2024
Basic earnings per share (EPS)	$	0.97		$	0.51
Net securities (gains) losses, net of tax		(0.03	)		—
Merger expenses, net of tax		0.12			—
Non-GAAP basic core EPS	$	1.06		$	0.51

	Three Months Ended March 31,
		2025			2024
Diluted EPS	$	0.95		$	0.51
Net securities (gains) losses, net of tax		(0.03	)		—
Merger expenses, net of tax		0.12			—
Non-GAAP diluted core EPS	$	1.04		$	0.51

(Dollars in Thousands, Except Share and Per Share Data, Unaudited)	Quarter Ended
	3/31/2025			12/31/2024			9/30/2024			6/30/2024			3/31/2024
Total shareholders’ equity	$	212,023		$	205,231		$	203,694		$	197,087		$	193,517
Goodwill		(16,450	)		(16,450	)		(16,450	)		(16,450	)		(16,450	)
Intangibles		(82	)		(107	)		(133	)		(158	)		(184	)
Tangible shareholders’ equity	$	195,491		$	188,674		$	187,111		$	180,479		$	176,883

Shares outstanding		7,614,214			7,556,743			7,554,488			7,541,474			7,525,372

Book value per share	$	27.85		$	27.16		$	26.96		$	26.13		$	25.72
Tangible book value per share (Non-GAAP)	$	25.67		$	24.97		$	24.77		$	23.93		$	23.50

The MIL Network –

April 26, 2025

MIL-OSI: Preferred Bank Reports First Quarter Results

Source: GlobeNewswire (MIL-OSI)

LOS ANGELES, April 25, 2025 (GLOBE NEWSWIRE) — Preferred Bank (NASDAQ: PFBC), one of the larger independent California banks, today reported results for the quarter ended March 31, 2025. Preferred Bank (“the Bank”) reported net income of $30.0 million or $2.23 per diluted share for the first quarter of 2025. This represents a small decrease in net income of $197,000 from the prior quarter and a decrease of $3.4 million from the same quarter last year. The decrease compared to both periods was mainly due to a decrease in net interest income. In the first quarter of 2025, the incremental impact to interest income from loans placed on nonaccrual status was approximately $2.8 million. In addition, a property securing one of our loans was damaged in the Palisades fire in January and as a result, the Bank has reversed out the $208,000 interest receivable on this loan although we expect to recoup this amount after the property is sold. In addition to a lowering of overall interest rates, these were the main factors in the decrease in net interest income.

Net interest income was $62.7 million, a decrease of $6.5 million from the previous quarter and a decrease of $5.8 million compared to the same quarter last year. Noninterest income was $4.0 million, an increase of $361,000 over the prior quarter and an increase of $933,000 over the same quarter last year. Noninterest expense was $23.4 million, a decrease of $4.9 million from the previous quarter and an increase of $3.3 million over the same quarter last year.

Highlights for the Quarter:

Return on average assets was 1.76%
Return on beginning equity of 15.96%
Total deposits increased by $155.9 million or 2.6%, linked quarter
Efficiency ratio was 35.1%

Li Yu, Chairman and CEO, commented, “Preferred Bank’s net income for the first quarter, 2025 was $30.0 million or $2.23 per fully diluted share. This quarter, there was an outsized impact to interest income of approximately $2.8 million on nonaccrual loans. We have also written down the value of our one OREO property by $1.3 million.

Non-accrual loans totaled $78.9 million as of March 31, 2025 and are mostly comprised of two loans totaling $65.6 million. These two loans are well-secured, and we do not anticipate any losses associated with these two credits. Overall criticized loans have decreased to $129.2 million from $158.2 million at year-end. There were very few new migrations into the criticized loan category.

The large interest reversal of $2.8 million significantly affected the reported net interest margin, which was 3.75% for the quarter. Without that, the margin would have been much closer to the 4.06% reported in the fourth quarter of 2024. Deposit growth for the quarter was $155.9 million or 2.6% on a linked quarter basis. However, total loans reduced slightly from December 31, 2024. We do not feel there will be material changes in the loan demand in the near future under the shadow of the import tariff uncertainty.

The import tariff impositions and threats are truly unprecedented. At this time, we are still completely uncertain as to the size of the tariffs and which countries will ultimately be tariffed. In short, every American’s economic well-being will likely be impacted. Even if an agreement can be reached within the “90 days”, there seems to be no certainty that the issue will be completely resolved and this uncertainty may persist for a year or possibly more. We at Preferred Bank will stay alert and constantly monitoring our activities.

As a starting point, we have began a “deep-dive” within our relatively small “trade finance” portfolio and will continue to widen the scope of our credit monitoring activities related to trade.”

Results of Operations

Net Interest Income and Net Interest Margin. Net interest income before provision for credit losses was $62.7 million for the first quarter of 2025. This represents a $6.5 million decrease from the $69.2 million recorded in the prior quarter and a $5.8 million decrease from the same quarter last year. The decrease compared to both comparable quarters was primarily due to the reversal of interest income of $2.8 million associated with the nonaccrual loans. In addition, there was a property in the Palisades fire that secured a construction loan financed by the Bank. As part of that restructuring, the Bank elected to reverse $208,000 out of interest income that had accrued on that loan. Interest expense decreased compared to both comparable periods despite growth in deposits during the quarter. The Bank’s net interest margin came in at 3.75% for the quarter, this is down from the 4.06% recorded last quarter and from the 4.19% margin achieved in the first quarter of the prior year. The loan interest reversals played a major role in the decrease of the net interest margin in the first quarter. Management believes that efforts to reduce the Bank’s deposit costs have been largely effective as evidenced by the decreases in interest expense.

Noninterest Income. For the first quarter of 2025, noninterest income was $4.0 million compared with $3.1 million for the same quarter last year and compared to $3.6 million for the fourth quarter of 2024. The increase over the prior quarter was primarily due to letter of credit (LC) fee income which was up by $268,000 and gains on sales of SBA loans which increased by $163,000. In comparing to the same quarter last year, fee income was down but LC fee income increased by $741,000 and gains on sales of SBA loans increased by $172,000.

Noninterest Expense. Total noninterest expense was $23.4 million for the first quarter of 2025 compared to $28.2 million for the fourth quarter of 2024 and compared to the $20.0 million recorded in the same period last year. The primary reason for the decrease over the prior quarter was the $8.1 million occupancy expense adjustment recorded in the fourth quarter of 2024. This was related to accounting pronouncement ASC 842, accounting for leases. Partially offsetting that was an increase in personnel expense of $1.6 million and an increase in OREO expense of $1.4 million. In the first quarter of 2025, the Bank recorded a valuation charge of $1.3 million related to the OREO property in Santa Barbara. In comparing to the same quarter last year; personnel expense was up by $939,000, occupancy expense was up by $583,000 and OREO expense was up by $1.4 million due to the aforementioned OREO valuation charge recorded in the first quarter of 2025. Salary expense increased over the same quarter last year due mainly to an increase in personnel and merit increases. The increase in personnel expense over the prior quarter was primarily due to employer paid taxes as during the first quarter, incentive compensation is paid out to employees.

Income Taxes. The Bank recorded a provision for income taxes of $12.6 million for the first quarter of 2025. This represents an effective tax rate (“ETR”) of 29.5% which is up from the 29.0% ETR for last quarter and up from the 29.0% ETR recorded in the same period last year. The Bank’s ETR will fluctuate slightly from quarter to quarter within a fairly small range due to the timing of taxable events throughout the year.

Balance Sheet Summary

Total gross loans at March 31, 2025 were $5.63 billion, a decrease of $6.2 million from the total of $5.64 billion as of December 31, 2024. Total deposits were $6.07 billion, an increase of $155.9 million from the $5.92 billion as of December 31, 2024. Total assets were $7.1 billion, an increase of $176.7 million over the total of $6.92 billion as of December 31, 2024.

Asset Quality

Non-accrual loans and loans 90 days past due and still accruing totaled $78.9 million as of March 31, 2025. The bulk of the nonaccrual loans comprised of two loans totaling $65.6 million. One of the loans is a multi-family loan which is well-secured and the other loan is now vacant, entitled land in a prime area of Orange County. Again, this loan is also well-secured. The loans were part of the same relationship and one is now working its way through the bankruptcy court while the other loan is in the process of being sold, at par. Management is confident that there will be no loss associated with these two loans. Total net charge-offs (recoveries) for the quarter were ($97,000) compared to net charge-offs of $6.6 million in the prior quarter. In addition to that, the Bank wrote down the value of its OREO property in Santa Barbara by $1.34 million, reflecting the proposed net proceeds of the most recent sales contract that the Bank was involved in, which sale did not materialize.

Total criticized loans decreased to $129.2 million from $158.1 million reported in the prior quarter.

Allowance for Credit Losses

The provision for credit losses for the first quarter of 2025 was $700,000 compared to $2.0 million last quarter and compared to $4.4 million in the same quarter last year. The Bank’s allowance coverage ratio increased to 1.28% of loans as compared to 1.27% in the prior quarter.

Capitalization

As of March 31, 2025, the Bank’s tangible capital ratio was 10.96%, the leverage ratio was 11.52%, the common equity tier 1 capital ratio was 11.86% and the total capital ratio stood at 15.15%. As of December 31, 2024, the Bank’s tangible capital ratio was 11.02%, the Bank’s leverage ratio was 11.33%, the common equity tier 1 ratio was 11.80% and the total capital ratio was 15.11%.

Conference Call and Webcast

A conference call with simultaneous webcast to discuss Preferred Bank’s first quarter 2025 financial results will be held this afternoon April 25, 2025 at 2:00 p.m. Eastern / 11:00 a.m. Pacific. Interested participants and investors may access the conference call by dialing 844-826-3037 (domestic) or 412-317-5182 (international) and referencing “Preferred Bank.” There will also be a live webcast of the call available at the Investor Relations section of Preferred Bank’s website at www.preferredbank.com.

Preferred Bank’s Chairman and CEO Li Yu, President and Chief Operating Officer Wellington Chen, Chief Financial Officer Edward J. Czajka, Chief Credit Officer Nick Pi and Deputy Chief Operating Officer Johnny Hsu will discuss Preferred Bank’s financial results, business highlights and outlook. After the live webcast, a replay will be available at the Investor Relations section of Preferred Bank’s website. A replay of the call will also be available at 877-344-7529 (domestic) or 412-317-0088 (international) through May 2, 2025; the passcode is 8939265.

About Preferred Bank

Preferred Bank is one of the larger independent commercial banks headquartered in California. The Bank is chartered by the State of California, and its deposits are insured by the Federal Deposit Insurance Corporation, or FDIC, to the maximum extent permitted by law. The Bank conducts its banking business from its main office in Los Angeles, California, and through twelve full-service branch banking offices in California (Alhambra, Century City, City of Industry, Torrance, Arcadia, Irvine (2), Diamond Bar, Pico Rivera, Tarzana and San Francisco (2)), two branches in New York (Manhattan and Flushing, Queens) and a branch office in the Houston, Texas suburb of Sugar Land. In addition, the Bank also operates a loan production office in Sunnyvale, California. Preferred Bank offers a broad range of deposit and loan products and services to both commercial and consumer customers. The Bank provides personalized deposit services as well as real estate finance, commercial loans and trade finance to small and mid-sized businesses, entrepreneurs, real estate developers, professionals and high net worth individuals. Although originally founded as a Chinese-American Bank, Preferred Bank now derives most of its customers from the diversified mainstream market but does continue to benefit from the significant migration to California of ethnic Chinese from China and other areas of East Asia.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements about the Bank’s future financial and operating results, the Bank’s plans, objectives, expectations and intentions and other statements that are not historical facts. Such statements are based upon the current beliefs and expectations of the Bank’s management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements. The following factors, among others, could cause actual results to differ from those set forth in the forward-looking statements: changes in economic conditions; changes in the California real estate market; the loss of senior management and other employees; natural disasters or recurring energy
shortage; changes in interest rates; competition from other financial services companies; ineffective underwriting practices; inadequate allowance for loan and lease losses to cover actual losses; risks inherent in construction lending; adverse economic conditions in Asia; downturn in international trade; inability to attract deposits; inability to raise additional capital when needed or on favorable terms; inability to manage growth; inadequate communications, information, operating and financial control systems, technology from fourth party service providers; the U.S. government’s monetary policies; government regulation; environmental liability with respect to properties to which the bank takes title; and the threat of terrorism. Additional factors that could cause the Bank’s results to differ materially from those described in the forward-looking statements can be found in the Bank’s 2024 Annual Report on Form 10-K filed with the Federal Deposit Insurance Corporation which can be found on Preferred Bank’s website. The forward-looking statements in this press release speak only as of the date of the press release, and the Bank assumes no obligation to update the forward-looking statements or to update the reasons why actual results could differ from those contained in the forward-looking statements. For additional information about Preferred Bank, please visit the Bank’s website at www.preferredbank.com.

AT THE COMPANY:	AT FINANCIAL PROFILES:
Edward J. Czajka	Jeffrey Haas
Executive Vice President	General Information
Chief Financial Officer	(310) 622-8240
(213) 891-1188	PFBC@finprofiles.com

Financial Tables to Follow


PREFERRED BANK
Condensed Consolidated Statements of Operations
(unaudited)
(in thousands, except for net income per share and shares)


	For the Quarter Ended
	March 31,		December 31,		March 31,
		2025		2024		2024
Interest income:
Loans, including fees	$	101,491	$	111,596	$	109,980
Investment securities		12,810		14,013		16,257
Fed funds sold		228		249		283
Total interest income		114,529		125,858		126,520

Interest expense:
Interest-bearing demand		16,590		18,245		22,290
Savings		69		85		75
Time certificates		33,887		37,030		34,330
Subordinated debt		1,325		1,325		1,325
Total interest expense		51,871		56,685		58,020
Net interest income		62,658		69,173		68,500
Provision for credit losses		700		2,000		4,400
Net interest income after provision for credit losses		61,958		67,173		64,100

Noninterest income:
Fees & service charges on deposit accounts		716		761		845
Letters of credit fee income		2,244		1,977		1,503
BOLI income		103		102		105
Net gain on sale of loans		275		112		103
Other income		660		685		509
Total noninterest income		3,998		3,637		3,065

Noninterest expense:
Salary and employee benefits		14,839		13,279		13,900
Net occupancy expense		2,294		10,110		1,711
Business development and promotion expense		462		340		266
Professional services		1,651		1,606		1,457
Office supplies and equipment expense		386		396		473
OREO valuation allowance and related expense		1,531		155		135
Other		2,206		2,360		2,086
Total noninterest expense		23,369		28,246		20,028
Income before provision for income taxes		42,587		42,564		47,137
Income tax expense		12,563		12,343		13,671
Net income	$	30,024	$	30,221	$	33,466

Income per share available to common shareholders
Basic	$	2.27	$	2.29	$	2.48
Diluted	$	2.23	$	2.25	$	2.44

Weighted-average common shares outstanding
Basic		13,226,582		13,190,696		13,508,878
Diluted		13,453,176		13,442,294		13,736,986

Cash dividends per common share	$	0.75	$	0.75	$	0.70

PREFERRED BANK
Condensed Consolidated Statements of Financial Condition
(unaudited)
(in thousands)


	March 31,			December 31,
		2025			2024
	(Unaudited)			(Audited)
Assets
Cash and due from banks	$	905,183		$	765,515
Fed funds sold		20,000			20,000
Cash and cash equivalents		925,183			785,515

Securities held-to-maturity, at amortized cost		19,745			20,021
Securities available-for-sale, at fair value		390,096			348,706

Loans held for sale, at lower of cost or fair value		–			2,214

Loans		5,634,413			5,640,615
Less allowance for credit losses		(72,274	)		(71,477	)
Less amortized deferred loan fees, net		(9,652	)		(9,234	)
Loans, net		5,552,487			5,559,904

Other real estate owned and repossessed assets		13,650			14,991
Bank furniture and fixtures, net		8,276			8,462
Bank-owned life insurance		10,502			10,433
Accrued interest receivable		31,775			33,561
Investment in affordable housing partnerships		63,612			58,346
Federal Home Loan Bank stock, at cost		15,000			15,000
Deferred tax assets		46,280			47,402
Income tax receivable		–			2,195
Operating lease right-of-use assets		20,281			13,182
Other assets		3,205			3,497
Total assets	$	7,100,092		$	6,923,429

Liabilities and Shareholders’ Equity
Deposits:
Noninterest bearing demand deposits	$	730,270		$	704,859
Interest bearing deposits:		2,099,987			2,026,965
Savings		32,631			30,150
Time certificates of $250,000 or more		1,531,715			1,477,931
Other time certificates		1,678,132			1,676,943
Total deposits		6,072,735			5,916,848

Subordinated debt issuance, net		148,529			148,469
Commitments to fund investment in affordable housing partnerships		20,956			21,623
Operating lease liabilities		24,021			16,990
Accrued interest payable		14,634			16,517
Other liabilities		40,613			39,830
Total liabilities		6,321,488			6,160,277

Shareholders’ equity		778,604			763,152
Total liabilities and shareholders’ equity	$	7,100,092		$	6,923,429

Book value per common share	$	59.30		$	57.86
Number of common shares outstanding		13,130,296			13,188,776

PREFERRED BANK
Selected Consolidated Financial Information
(unaudited)
(in thousands, except for ratios)


	For the Quarter Ended
	March 31,			December 31,			September 30,			June 30,			March 31,
	2025			2024			2024			2024			2024
Unaudited historical quarterly operations data:
Interest income	$	114,529		$	125,858		$	129,424		$	127,294		$	126,520
Interest expense		51,871			56,685			60,576			61,187			58,020
Interest income before provision for credit losses		62,658			69,173			68,848			66,107			68,500
Provision for credit losses		700			2,000			3,200			2,500			4,400
Noninterest income		3,998			3,637			3,459			3,404			3,065
Noninterest expense		23,369			28,246			22,089			19,697			20,028
Income tax expense		12,563			12,343			13,635			13,722			13,671
Net income	$	30,024		$	30,221		$	33,383		$	33,592		$	33,466

Earnings per share
Basic	$	2.27		$	2.29		$	2.50		$	2.51		$	2.48
Diluted	$	2.23		$	2.25		$	2.46		$	2.48		$	2.44

Ratios for the period:
Return on average assets		1.76	%		1.74	%		1.95	%		1.97	%		2.00	%
Return on beginning equity		15.96	%		16.03	%		18.37	%		19.31	%		19.36	%
Net interest margin (Fully-taxable equivalent)		3.75	%		4.06	%		4.10	%		3.96	%		4.19	%
Noninterest expense to average assets		1.37	%		1.62	%		1.29	%		1.15	%		1.20	%
Efficiency ratio		35.06	%		38.79	%		30.55	%		28.34	%		27.99	%
Net (recoveries) charge-offs to average loans (annualized)		-0.01	%		0.47	%		-0.00	%		0.68	%		0.26	%

Ratios as of period end:
Tangible common equity ratio		10.96	%		11.02	%		10.92	%		10.55	%		10.35	%
Tier 1 leverage capital ratio		11.52	%		11.33	%		11.28	%		10.89	%		10.80	%
Common equity tier 1 risk-based capital ratio		11.86	%		11.80	%		11.66	%		11.52	%		11.50	%
Tier 1 risk-based capital ratio		11.86	%		11.80	%		11.66	%		11.52	%		11.50	%
Total risk-based capital ratio		15.15	%		15.11	%		15.06	%		14.93	%		15.08	%
Allowances for credit losses to loans at end of period		1.28	%		1.27	%		1.36	%		1.34	%		1.49	%
Allowance for credit losses to non-performing loans	0.91		x	1.89		x		3.92	x		1.79	x		4.33	x

Average balances:
Total securities	$	402,754		$	350,732		$	356,590		$	353,357		$	348,961
Total loans		5,555,010			5,542,558			5,458,613			5,320,360			5,263,562
Total earning assets		6,780,438			6,788,487			6,684,766			6,728,498			6,585,853
Total assets		6,905,249			6,920,325			6,817,979			6,863,829			6,718,018
Total time certificate of deposits		3,164,766			3,144,523			2,874,985			2,884,259			2,852,860
Total interest bearing deposits		5,244,243			5,220,655			5,124,245			5,203,034			5,004,834
Total deposits		5,886,163			5,905,127			5,828,227			5,901,976			5,761,488
Total interest bearing liabilities		5,392,735			5,369,092			5,272,617			5,351,347			5,153,089
Total equity		779,339			760,345			747,222			715,190			704,996

PREFERRED BANK
Selected Consolidated Financial Information
(unaudited)
(in thousands, except for ratios)


				As of
				March 31,			December 31,			September 30,			June 30,			March 31,
				2025			2024			2024			2024			2024
Unaudited quarterly statement of financial position data:
Assets:
	Cash and cash equivalents			$	925,183		$	785,515		$	804,994		$	917,677		$	936,600
	Securities held-to-maturity, at amortized cost				19,745			20,021			20,311			20,605			20,904
	Securities available-for-sale, at fair value				390,096			348,706			337,363			331,909			333,411
	Loans:
		Real estate – Mortgage:
			Real estate—Residential	$	779,462		$	790,069		$	753,453		$	732,251		$	724,101
			Real estate—Commercial		2,897,956			2,840,771			2,882,506			2,833,430			2,777,608
			Total Real Estate – Mortgage		3,677,418			3,630,840			3,635,959			3,565,681			3,501,709
		Real estate – Construction:
			R/E Construction — Residential		306,283			296,580			274,214			238,062			236,596
			R/E Construction — Commercial		269,065			287,185			290,308			247,582			213,727
			Total real estate construction loans		575,348			583,765			564,522			485,644			450,323
		Commercial and industrial			1,374,379			1,418,930			1,365,550			1,371,694			1,369,529
		SBA			7,104			6,833			5,424			5,463			3,914
		Consumer and others			164			247			124			118			379
			Gross loans		5,634,413			5,640,615			5,571,579			5,428,600			5,325,854
	Allowance for credit losses on loans				(72,274	)		(71,477	)		(76,051	)		(72,848	)		(79,311	)
	Net deferred loan fees				(9,652	)		(9,234	)		(10,414	)		(10,502	)		(10,460	)
		Net loans, excluding loans held for sale		$	5,552,487		$	5,559,904		$	5,485,114		$	5,345,250		$	5,236,083
	Loans held for sale			$	–		$	2,214		$	225		$	955		$	605
		Net loans		$	5,552,487		$	5,562,118		$	5,485,339		$	5,346,205		$	5,236,688

	Other real estate owned and repossessed assets			$	13,650		$	14,991		$	15,082		$	16,716		$	16,716
	Investment in affordable housing partnerships				63,612			58,346			58,009			60,432			62,854
	Federal Home Loan Bank stock, at cost				15,000			15,000			15,000			15,000			15,000
	Other assets				120,319			118,732			136,246			138,036			134,040
		Total assets		$	7,100,092		$	6,923,429		$	6,872,344		$	6,846,580		$	6,756,213

Liabilities:
	Deposits:
		Demand		$	730,270		$	704,859		$	682,859		$	675,767		$	709,767
		Interest bearing demand			2,099,987			2,026,965			1,994,288			2,326,214			2,159,948
		Savings			32,631			30,150			29,793			28,251			29,261
		Time certificates of $250,000 or more			1,531,715			1,477,931			1,478,500			1,406,149			1,349,927
		Other time certificates			1,678,132			1,676,943			1,682,324			1,442,381			1,552,805
		Total deposits		$	6,072,735		$	5,916,848		$	5,867,764		$	5,878,762		$	5,801,708

	Subordinated debt issuance, net				148,529			148,469			148,410			148,351			148,292
	Commitments to fund investment in affordable housing partnerships				20,956			21,623			23,617			27,946			29,647
	Other liabilities				79,268			73,337			82,436			68,394			77,008
		Total liabilities		$	6,321,488		$	6,160,277		$	6,122,227		$	6,123,453		$	6,056,655

Equity:
	Net common stock, no par value			$	96,079		$	105,501		$	109,928		$	113,509		$	115,915
	Retained earnings				705,360			685,108			664,808			640,675			616,417
	Accumulated other comprehensive income				(22,835	)		(27,457	)		(24,619	)		(31,057	)		(32,774	)
		Total shareholders’ equity		$	778,604		$	763,152		$	750,117		$	723,127		$	699,558
		Total liabilities and shareholders’ equity		$	7,100,092		$	6,923,429		$	6,872,344		$	6,846,580		$	6,756,213

PREFERRED BANK
Quarter-to-Date Average Balances, Yield and Rates
(Unaudited)


			Three months ended March 31,							Three months ended December 31,							Three months ended March 31,
			2025							2024							2024
						Interest		Average					Interest		Average					Interest		Average
			Average			Income or		Yield/		Average			Income or		Yield/		Average			Income or		Yield/
			Balance			Expense		Rate		Balance			Expense		Rate		Balance			Expense		Rate
ASSETS			(Dollars in thousands)
Interest earning assets:
	Loans ^(1,2)		$	5,556,521		$	101,491	7.41	%	$	5,543,215		$	111,596	8.01	%	$	5,265,940		$	109,980	8.40	%
	Investment securities ⁽³⁾			402,754			4,093	4.12	%		350,732			3,566	4.04	%		348,961			3,430	3.95	%
	Federal funds sold			20,222			228	4.57	%		20,172			249	4.91	%		20,390			283	5.58	%
	Other earning assets			800,941			8,816	4.46	%		874,368			10,546	4.80	%		950,562			12,928	5.47	%
		Total interest earning assets		6,780,438			114,628	6.86	%		6,788,487			125,957	7.38	%		6,585,853			126,621	7.73	%
	Deferred loan fees, net			(9,189	)						(9,808	)						(10,694	)
	Allowance for credit losses on loans			(71,550	)						(75,474	)						(78,349	)
Noninterest earning assets:
	Cash and due from banks			11,513							10,626							11,244
	Bank furniture and fixtures			8,439							8,866							10,084
	Right of use assets			15,201							28,570							22,003
	Other assets			170,397							169,058							177,877
		Total assets	$	6,905,249						$	6,920,325						$	6,718,018

LIABILITIES AND SHAREHOLDERS’ EQUITY
Interest bearing liabilities:
	Deposits:
		Interest bearing demand and savings	$	2,079,477		$	16,659	3.25	%	$	2,076,132		$	18,330	3.51	%	$	2,151,974		$	22,365	4.18	%
		TCD $250K or more		1,482,324			15,640	4.28	%		1,481,219			17,514	4.70	%		1,341,298			16,501	4.95	%
		Other time certificates		1,682,442			18,247	4.40	%		1,663,304			19,516	4.67	%		1,511,562			17,829	4.74	%
		Total interest bearing deposits		5,244,243			50,546	3.91	%		5,220,655			55,360	4.22	%		5,004,834			56,695	4.56	%
Short-term borrowings				–			–	0.00	%		3			0	3.31	%		–			–	0.00	%
Subordinated debt, net				148,492			1,325	3.62	%		148,434			1,325	3.55	%		148,255			1,325	3.59	%
		Total interest bearing liabilities		5,392,735			51,871	3.90	%		5,369,092			56,685	4.20	%		5,153,089			58,020	4.53	%
Noninterest bearing liabilities:
	Demand deposits			641,920							684,472							756,654
	Lease liability			18,963							25,486							19,500
	Other liabilities			72,292							80,930							83,779
		Total liabilities		6,125,910							6,159,980							6,013,022
Shareholders’ equity				779,339							760,345							704,996
		Total liabilities and shareholders’ equity	$	6,905,249						$	6,920,325						$	6,718,018
Net interest income						$	62,757						$	69,272						$	68,601
Net interest spread								2.96	%						3.18	%						3.20	%
Net interest margin								3.75	%						4.06	%						4.19	%

Cost of Deposits:
	Noninterest bearing demand deposits		$	641,920						$	684,472						$	756,654
	Interest bearing deposits			5,244,243			50,546	3.91	%		5,220,655			55,360	4.22	%		5,004,834			56,695	4.56	%
		Total Deposits	$	5,886,163		$	50,546	3.48	%	$	5,905,127		$	55,360	3.73	%	$	5,761,488		$	56,695	3.96	%

⁽¹⁾	Includes non-accrual loans and loans held for sale
⁽²⁾	Net loan fee income of $865,000, $1.2 million, and $1.1 million for the quarter ended March 31, 2025, December 31, 2024 and March 31, 2024, respectively, are included in the yield computations
⁽³⁾	Yields on securities have been adjusted to a tax-equivalent basis

Preferred Bank
Loan and Credit Quality Information

Allowance For Credit Losses History
			Quarter Ended			Year Ended
			March 31, 2025			December 31, 2024
			(Dollars in 000’s)
Allowance For Credit Losses
Balance at Beginning of Period			$	71,477		$	78,355
	Charge-Offs
		Commercial & Industrial		–			19,028
		Total Charge-Offs		–			19,028

	Recoveries
		Commercial & Industrial		97			50
		Total Recoveries		97			50

	Net (Recoveries) Charge-Offs			(97	)		18,978
	Provision for Credit Losses:			700			12,100
Balance at End of Period			$	72,274		$	71,477

Average Loans Held for Investment			$	5,555,010		$	5,396,844
Loans Held for Investment at End of Period			$	5,634,413		$	5,640,615
Net (Recoveries) Charge-Offs to Average Loans				-0.01%			0.35%
Allowances for Credit Losses to Loans at End of Period				1.28%			1.27%

The MIL Network –

April 26, 2025

MIL-OSI: Oxford Square Capital Corp. Announces Net Asset Value and Selected Financial Results for the Quarter Ended March 31, 2025 and Declaration of Distributions on Common Stock for the Months Ending July 31, August 31, and September 30, 2025

Source: GlobeNewswire (MIL-OSI)

GREENWICH, Conn., April 25, 2025 (GLOBE NEWSWIRE) — Oxford Square Capital Corp. (NasdaqGS: OXSQ) (NasdaqGS: OXSQZ) (NasdaqGS: OXSQG) (the “Company,” “we,” “us” or “our”) announced today its financial results and related information for the quarter ended March 31, 2025.

On April 22, 2025, our Board of Directors declared the following distributions on our common stock:


Month Ending	Record Date	Payment Date	Amount Per Share
July 31, 2025	July 17, 2025	July 31, 2025	$0.035
August 31, 2025	August 15, 2025	August 29, 2025	$0.035
September 30, 2025	September 16, 2025	September 30, 2025	$0.035

Net asset value (“NAV”) per share as of March 31, 2025 stood at $2.09, compared with a NAV per share on December 31, 2024 of $2.30.

Net investment income (“NII”) was approximately $6.1 million, or $0.09 per share, for the quarter ended March 31, 2025, compared with approximately $6.0 million, or $0.09 per share, for the quarter ended December 31, 2024.
Total investment income for the quarter ended March 31, 2025 amounted to approximately $10.2 million, which was approximately the same as the quarter ended December 31, 2024.
- For the quarter ended March 31, 2025 we recorded investment income from our portfolio as follows:
  - $5.5 million from our debt investments;
  - $4.0 million from our CLO equity investments; and
  - $0.7 million from other income.
Our total expenses for the quarter ended March 31, 2025 were approximately $4.1 million, compared with total expenses of approximately $4.2 million for the quarter ended December 31, 2024.
As of March 31, 2025, the following metrics applied (note that none of these metrics represented a total return to shareholders):
- The weighted average yield of our debt investments was 14.3% at current cost, compared with 15.8% as of December 31, 2024;
- The weighted average effective yield of our CLO equity investments at current cost was 9.0%, compared with 8.8% as of December 31, 2024; and
- The weighted average cash distribution yield of our cash income producing CLO equity investments at current cost was 16.0%, compared with 16.2% as of December 31, 2024.
For the quarter ended March 31, 2025, we recorded a net decrease in net assets resulting from operations of approximately $8.1 million, consisting of:
- NII of approximately $6.1 million;
- Net realized losses of approximately $12.2 million; and
- Net unrealized depreciation of approximately $2.1 million.
During the first quarter of 2025, our investment activity consisted of purchases of approximately $16.0 million, sales of approximately $10.7 million and repayments of approximately $8.7 million.
Our weighted average credit rating was 2.2 based on total fair value and 2.3 based on total principal amount as of March 31, 2025, compared with a weighted average credit rating of 2.3 based on total fair value and 2.4 based on total principal amount as of December 31, 2024.
As of March 31, 2025, our preferred equity investments in one of our portfolio companies were on non-accrual status, which had an aggregate fair value of approximately $3.9 million.
For the quarter ended March 31, 2025, we issued a total of approximately 1.3 million shares of common stock pursuant to an “at-the-market” offering. After deducting the sales agent’s commissions and offering expenses, this resulted in net proceeds of approximately $3.5 million. As of March 31, 2025, we had approximately 71.2 million shares of common stock outstanding.

We will hold a conference call to discuss first quarter results today, Friday, April 25^th, 2025 at 9:00 AM ET. The toll-free dial-in number is 1-800-549-8228 and the conference identification number is 26294. There will be a recording available for 30 days. If you are interested in hearing the recording, please dial 1-888-660-6264. The replay pass-code number is 26294#.

A presentation containing further detail regarding our quarterly results of operations has been posted under the Investor Relations section of our website at www.oxfordsquarecapital.com.


OXFORD SQUARE CAPITAL CORP.

STATEMENTS OF ASSETS AND LIABILITIES
	March 31, 2025			December 31, 2024
	(unaudited)
ASSETS
Non-affiliated/non-control investments (cost: $342,775,122 and $358,356,496, respectively)	$	239,291,367		$	256,238,759
Affiliated investments (cost: $16,814,586 and $16,836,822, respectively)		3,890,986			4,614,100
Cash and cash equivalents		37,252,672			34,926,468
Interest and distributions receivable		2,426,368			2,724,049
Securities sold not settled		1,589,875			—
Other assets		1,039,370			1,227,598
Total assets	$	285,490,638		$	299,730,974
LIABILITIES
Notes payable – 6.25% Unsecured Notes, net of deferred issuance costs of $252,321 and $309,812, respectively	$	44,538,429		$	44,480,938
Notes payable – 5.50% Unsecured Notes, net of deferred issuance costs of $1,286,553 and $1,381,619 respectively		79,213,447			79,118,381
Securities purchased not settled		9,516,875			12,027,463
Base Fee and Net Investment Income Incentive Fee payable to affiliate		1,058,784			1,215,964
Accrued interest payable		1,204,487			1,204,487
Accrued expenses		1,076,306			1,018,261
Total liabilities		136,608,328			139,065,494
COMMITMENTS AND CONTINGENCIES
NET ASSETS
Common stock, $0.01 par value, 100,000,000 shares authorized; 71,187,166 and 69,758,938 shares issued and outstanding, respectively		711,872			697,590
Capital in excess of par value		491,617,243			487,943,476
Total distributable earnings/(accumulated losses)		(343,446,805	)		(327,975,586	)
Total net assets		148,882,310			160,665,480
Total liabilities and net assets	$	285,490,638		$	299,730,974
Net asset value per common share	$	2.09		$	2.30


OXFORD SQUARE CAPITAL CORP.

STATEMENTS OF OPERATIONS (unaudited)

	Three Months Ended March 31, 2025			Three Months Ended March 31, 2024
INVESTMENT INCOME
From non-affiliated/non-control investments:
Interest income – debt investments	$	5,534,755		$	6,421,047
Income from securitization vehicles and investments		3,956,053			3,932,374
Other income		670,242			324,003
Total investment income from non-affiliated/non-control investments		10,161,050			10,677,424
Total investment income		10,161,050			10,677,424
EXPENSES
Interest expense		1,959,287			1,960,982
Base Fee		1,058,785			987,816
Professional fees		323,452			311,747
Compensation expense		239,577			206,898
General and administrative		355,259			346,625
Excise tax		120,816			325,800
Total expenses before incentive fees		4,057,176			4,139,868
Net Investment Income Incentive Fees		—			—
Total incentive fees		—			—
Total expenses		4,057,176			4,139,868
Net investment income		6,103,874			6,537,556
NET UNREALIZED (DEPRECIATION)/APPRECIATION AND REALIZED LOSSES ON INVESTMENT TRANSACTIONS
Net change in unrealized (depreciation)/appreciation on investments:
Non-Affiliate/non-control investments		(1,366,018	)		145,111
Affiliated investments		(700,878	)		(356,117	)
Total net change in unrealized depreciation on investments		(2,066,896	)		(211,006	)
Net realized losses:
Non-affiliated/non-control investments		(12,158,495	)		(8,094,940	)
Total net realized losses		(12,158,495	)		(8,094,940	)
Net decrease in net assets resulting from operations	$	(8,121,517	)	$	(1,768,390	)
Net increase in net assets resulting from net investment income per common share (Basic and Diluted):	$	0.09		$	0.11
Net decrease in net assets resulting from operations per common share (Basic and Diluted):	$	(0.12	)	$	(0.03	)
Weighted average shares of common stock outstanding (Basic and Diluted):		69,984,752			59,639,285
Distributions per share	$	0.105		$	0.105

FINANCIAL HIGHLIGHTS (Unaudited)

	Three Months Ended March 31, 2025			Three Months Ended March 31, 2024
Per Share Data
Net asset value at beginning of period	$	2.30		$	2.55
Net investment income⁽¹⁾		0.09			0.11
Net realized and unrealized losses⁽²⁾		(0.20	)		(0.13	)
Net decrease in net asset value from operations		(0.11	)		(0.02	)
Distributions per share from net investment income		(0.11	)		(0.11	)
Tax return of capital distributions⁽³⁾		—			—
Total distributions		(0.11	)		(0.11	)
Effect of shares issued/repurchased, gross		0.01			—
Net asset value at end of period	$	2.09		$	2.42
Per share market value at beginning of period	$	2.44		$	2.86
Per share market value at end of period	$	2.61		$	3.17
Total return based on Market Value⁽⁴⁾		11.39	%		14.63	%
Total return based on Net Asset Value⁽⁵⁾		(4.57	)%		(0.98	)%
Shares outstanding at end of period		71,187,166			59,672,337

Ratios/Supplemental Data⁽⁸⁾
Net assets at end of period (000’s)	$	148,882		$	144,340
Average net assets (000’s)	$	153,493		$	148,260
Ratio of expenses to average net assets⁽⁶⁾		10.57	%		11.17	%
Ratio of net investment income to average net assets⁽⁶⁾		15.91	%		17.64	%
Portfolio turnover rate⁽⁷⁾		6.26	%		3.09	%

____________

(1)	Represents per share net investment income for the period, based upon weighted average shares outstanding.
(2)	Net realized and unrealized losses include rounding adjustments to reconcile change in net asset value per share.
(3)	Management monitors available taxable earnings, including net investment income and realized capital gains, to determine if a tax return of capital may occur for the year. To the extent the Company’s taxable earnings fall below the total amount of the Company’s distributions for that fiscal year, a portion of those distributions may be deemed a tax return of capital to the Company’s stockholders. The ultimate tax character of the Company’s earnings cannot be determined until tax returns are prepared after the end of the fiscal year. The amounts and sources of distributions reported are only estimates (based on an average of the reported tax character historically) and are not being provided for U.S. tax reporting purposes.
(4)	Total return based on market value equals the increase or decrease of ending market value over beginning market value, plus distributions, divided by the beginning market value, assuming distribution reinvestment prices obtained under the Company’s distribution reinvestment plan. Total return is not annualized.
(5)	Total return based on net asset value equals the increase or decrease of ending net asset value over beginning net asset value, plus distributions, divided by the beginning net asset value. Total return is not annualized.
(6)	Annualized and includes excise tax.
(7)	Portfolio turnover rate is calculated using the lesser of the year-to-date investment sales and debt repayments or year-to-date investment purchases over the average of the total investments at fair value.
(8)	The following table provides supplemental performance ratios (annualized) measured for the three months ended March 31, 2025 and 2024:

	Three Months Ended March 31, 2025		Three Months Ended March 31, 2024
Ratio of expenses to average net assets:
Operating expenses before incentive fees	10.57	%	11.17	%
Net investment income incentive fees	—	%	—	%
Ratio of expenses, excluding interest expense to average net assets	5.47	%	5.88	%

About Oxford Square Capital Corp.

Oxford Square Capital Corp. is a publicly-traded business development company principally investing in syndicated bank loans and, to a lesser extent, debt and equity tranches of collateralized loan obligation (“CLO”) vehicles. CLO investments may also include warehouse facilities, which are financing structures intended to aggregate loans that may be used to form the basis of a CLO vehicle.

Forward-Looking Statements

This press release contains forward-looking statements subject to the inherent uncertainties in predicting future results and conditions. Any statements that are not statements of historical fact (including statements containing the words “believes,” “plans,” “anticipates,” “expects,” “estimates” and similar expressions) should also be considered to be forward-looking statements. These statements are not guarantees of future performance, conditions or results and involve a number of risks and uncertainties. Certain factors could cause actual results and conditions to differ materially from those projected in these forward-looking statements. These factors are identified from time to time in our filings with the Securities and Exchange Commission. We undertake no obligation to update such statements to reflect subsequent events, except as may be required by law.

Contact:
Bruce Rubin
203-983-5280

The MIL Network –

April 26, 2025

MIL-OSI: Ponce Financial Group, Inc. Reports First Quarter 2025 Results

Source: GlobeNewswire (MIL-OSI)

NEW YORK, April 25, 2025 (GLOBE NEWSWIRE) — Ponce Financial Group, Inc., (the “Company”) (NASDAQ: PDLB), the holding company for Ponce Bank (the “Bank”), today announced results for the first quarter of 2025.

First Quarter 2025 Highlights (Compared to Prior Periods):

Net income available to common stockholders was $5.7 million, or $0.25 per diluted share for the three months ended March 31, 2025, as compared to net income available to common stockholders of $2.7 million, or $0.12 per diluted share for the three months ended December 31, 2024 and net income available to common stockholders of $2.4 million, or $0.11 per diluted share for the three months ended March 31, 2024. Total net income for the three months ended March 31, 2025 was $6.0 million. The Company paid dividends of $0.3 million on its preferred stock during the three months ended March 31, 2025.
Included in the $5.7 million of net income available to common stockholders for the first quarter of 2025 results is $44.0 million in interest and dividend income, $2.4 million in non-interest income and $0.3 million in benefit for credit losses, offset by $21.8 million in interest expense, $16.9 million in non-interest expense, $2.0 million in provision for income taxes and $0.3 million in dividends on preferred shares.
Net interest income of $22.2 million for the first quarter of 2025 increased $1.5 million, or 7.11%, from the prior quarter and increased $3.4 million, or 17.96%, from the same quarter last year.
Net interest margin was 2.98% for the first quarter of 2025, versus 2.80% for the prior quarter and 2.71% for the same quarter last year.
Non-interest income for the three months ended March 31, 2025 was $2.4 million, an increase of $0.3 million, or 13.54%, from $2.1 million for the three months ended December 31, 2024, and an increase of $0.7 million, or 39.48%, from $1.7 million for the three months ended March 31, 2024.
Non-interest expense for the three months ended March 31, 2025 was $16.9 million, a decrease of $0.6 million, or 3.30%, from $17.5 million for the three months ended December 31, 2024, and an increase of $0.1 million, or 0.61%, compared to $16.8 million for the three months ended March 31, 2024.
Cash and equivalents were $129.9 million as of March 31, 2025, a decrease of $9.9 million, or 7.11%, from $139.8 million as of December 31, 2024.
Securities totaled $461.6 million as of March 31, 2025, a decrease of $11.3 million, or 2.39%, from $472.9 million as of December 31, 2024 primarily due to regular principal payments and the call of one available-for-sale security in the amount of $1.0 million.
Net loans receivable were $2.37 billion as of March 31, 2025, an increase of $84.3 million, or 3.69%, from $2.29 billion as of December 31, 2024.
Deposits were $2.00 billion as of March 31, 2025, an increase of $120.1 million, or 6.37%, from $1.88 billion as of December 31, 2024.

President and Chief Executive Officer’s Comments

Carlos P. Naudon, Ponce Financial Group, Inc.’s President and CEO, stated “We continued executing well our strategy of focusing on net interest margin, operating expenses and fee income, which translated into several positive trends this quarter. Our net interest margin this quarter increased by 18 basis points, reflecting both our high-yielding construction loans and our decreasing borrowing costs. In fact, our loan yields rose by 9 basis points while our cost of funds decreased by 10 basis points. Our operating expenses have decreased quarter over quarter, and our non-interest income compares favorably to prior periods. All-in-all, a very good quarter in these turbulent and uncertain times.”

Executive Chairman’s Comment

Steven A. Tsavaris, Ponce Financial Group’s Executive Chairman added “Most of our high-yielding construction lending has an additional benefit – it qualifies as Deep Impact lending under the U.S. Treasury’s Emergency Capital Investment Program and serves to lower the dividends payable on our preferred stock to the U.S. Treasury. Importantly, our construction initiatives also reflect our conservative underwriting, high developer equity requirements and short duration. Of our 64 on-going projects, more than 43 percent already have at least a temporary certificate of occupancy and 80 percent are at least halfway through construction.”

The table below indicate the Key Metrics at or for the three months ended:

	At or for the Three Months Ended
	March 31,			December 31,			September 30,			June 30,			March 31,
	2025			2024			2024			2024			2024
Performance Ratios:
Return on average assets⁽¹⁾		0.77	%		0.38	%		0.33	%		0.45	%		0.33	%
Return on common equity⁽¹⁾		7.97	%		3.76	%		3.06	%		4.60	%		3.61	%
Net interest margin^{(1) (2)}		2.98	%		2.80	%		2.65	%		2.62	%		2.71	%
Non-interest expense to average assets⁽¹⁾		2.19	%		2.25	%		2.19	%		2.28	%		2.35	%
Efficiency ratio⁽³⁾		68.70	%		75.63	%		80.87	%		80.09	%		82.56	%
Capital Ratios:
Total capital to risk-weighted assets (Ponce Financial Group)		22.84	%		22.98	%		22.87	%		23.86	%		24.47	%
Common equity Tier 1 capital to risk-weighted assets (Ponce Financial Group)		12.51	%		12.44	%		12.28	%		12.71	%		12.98	%
Tier 1 capital to total assets (Ponce Financial Group)		16.84	%		17.70	%		17.81	%		17.88	%		17.59	%
Total capital to risk-weighted assets (Bank only)		21.38	%		21.47	%		21.61	%		22.47	%		22.79	%
Common equity Tier 1 capital to risk-weighted assets (Bank only)		20.35	%		20.40	%		20.45	%		21.24	%		21.54	%
Tier 1 capital to total assets (Bank only)		15.61	%		15.81	%		16.19	%		16.70	%		16.26	%
Asset Quality Ratios:
Allowance for credit losses on loans as a percentage of total loans		0.96	%		0.97	%		1.09	%		1.18	%		1.23	%
Allowance for credit losses on loans as a percentage of nonperforming loans		84.15	%		82.29	%		139.52	%		130.28	%		140.90	%
Net (charge-offs) recoveries to average outstanding loans⁽¹⁾		(0.04	%)		(0.45	%)		(0.17	%)		(0.10	%)		(0.25	%)
Non-performing loans as a percentage of total assets		0.88	%		0.90	%		0.57	%		0.65	%		0.62	%
Other:
Number of offices		18			19			19			18			18
Number of full-time equivalent employees		211			218			228			227			233

(1) Annualized where appropriate.
(2) Net interest margin represents net interest income divided by average total interest-earning assets.
(3) Efficiency ratio represents noninterest expense divided by the sum of net interest income and noninterest income.

Summary of Results of Operations

Net income for the three months ended March 31, 2025 was $6.0 million compared to net income of $2.9 million for the three months ended December 31, 2024 and net income of $2.4 million for the three months ended March 31, 2024.

The $3.0 million increase of net income for the three months ended March 31, 2025 compared to the three months ended December 31, 2024 was attributed mainly to increases of $1.5 million in net interest income, an increase of $1.2 million in benefit for credit losses, a decrease of $0.6 million in non-interest expense and an increase of $0.3 million in non-interest income; partially offset by an increase of $0.5 million in provision for income taxes.

The $3.5 million increase of net income for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 was largely due to increases of $3.4 million in net interest income, $0.7 million in non-interest income and $0.3 million in benefit for credit losses, partially offset by increases of $0.7 million in provision for income taxes and $0.1 million in non-interest expense

Net Interest Income and Net Margin

Net interest income for the three months ended March 31, 2025, increased $1.5 million, or 7.11%, to $22.2 million compared to $20.7 million for the three months ended December 31, 2024 and increased $3.4 million, or 17.96%, compared to $18.8 million for the three months ended March 31, 2024.

The $1.5 million increase in net interest income from the three months ended December 31, 2024 was attributable to an increase of $1.1 million in total interest and dividend income and a decrease of $0.4 million in total interest expense.

The $3.4 million increase in net interest income from the three months ended March 31, 2024 was attributable to an increase of $4.3 million in total interest and dividend income, offset by an increase of $0.9 million in total interest expense.

For the three months ended March 31, 2025, benefit for credit losses amounted to $0.3 million, compared to $0.9 million in provision for credit losses for the prior quarter and a credit loss benefit on loans of less than $0.1 million during the first quarter of 2024.

Net interest margin was 2.98% for the three months ended March 31, 2025 compared to 2.80% for the prior quarter, an increase of 18bps and 2.71% for the same period last year, an increase of 27bps.

Non-interest Income

Non-interest income for the three months ended March 31, 2025, was $2.4 million, an increase of $0.3 million, or 13.54%, compared to $2.1 million for the three months ended December 31, 2024 and an increase of $0.7 million, or 39.48%, compared to $1.7 million for the three months ended March 31, 2024.

The $0.3 million increase in non-interest income from the three months ended December 31, 2024 was largely attributable to increases of $0.4 million in late and prepayment charges and $0.3 million in income on sale of SBA loans, partially offset by decreases of $0.2 million in other non-interest income and $0.1 million in income on sale of mortgage loans.

The $0.7 million increase in non-interest income from the three months ended March 31, 2024 was largely attributable to increases of $0.4 million in income on sale of SBA loans and $0.3 million in late and prepayment charges, partially offset by a decrease of $0.2 million in income on the sale of mortgage loans.

Non-interest Expense

Non-interest expense for the three months ended March 31, 2025, was $16.9 million, a decrease of $0.6 million, or 3.30%, compared to $17.5 million for the three months ended December 31, 2024 and an increase of $0.1 million, or 0.61%, compared to $16.8 million for the three months ended March 31, 2024.

The $0.6 million decrease in non-interest expense from the three months ended December 31, 2024 was mainly attributable to decreases of $0.3 million in professional fees, $0.2 million in marketing and promotional expenses, $0.2 million in direct loan expenses, $0.1 million in office supplies, telephone and postage, partially offset by an increase of $0.1 million in compensation and benefits.

The $0.1 million increase in non-interest expense from the three months ended March 31, 2024 was mainly attributable to increases of $0.5 million in other operating expense and $0.2 million in occupancy and equipment, partially offset by decreases of $0.4 million in professional fees and $0.3 million in direct loan expenses.

Credit Quality:

Non-performing loans were $32.0 million at March 31, 2025 compared to $32.1 million at December 31, 2024 and $22.4 million at March 31, 2024.

During the three months ended March 31, 2025, a credit loss benefit of $0.3 million on loans was recorded, consisting of $0.7 million charged on the funded portion and a benefit of $1.0 million on the unfunded portion on loans. During the three months ended December 31, 2024, a credit loss provision of $0.9 million on loans were recorded, consisting of $1.1 million charged on the funded portion and a benefit of $0.2 million on unfunded portion on loans. During the three months ended March 31, 2024, a credit loss benefit of $0.1 million on loans were recorded, consisting of $0.3 million benefit on the funded portion and a $0.2 million charged on the on unfunded portion on loans.

Balance Sheet Summary

Total assets increased $49.9 million, or 1.64%, to $3.09 billion as of March 31, 2025 from $3.04 billion as of December 31, 2024. The increase in total assets is largely attributable to increases of $84.3 million in net loans receivable, $1.2 million in accrued interest receivable and $0.4 million in right of use assets, partially offset by decreases of $9.9 million in cash and cash equivalents, $9.9 million in held-to-maturity securities, $8.4 million in other assets, $3.4 million in Federal Home Loan Bank of New York stock, $2.2 million in mortgage loans held for sale and $1.4 million in available-for-sale securities.

Total liabilities increased $41.5 million, or 1.64%, to $2.58 billion as of March 31, 2025 from $2.53 billion as of December 31, 2024. The increase in total liabilities was largely attributable to an increase of $120.1 million in deposits, $2.6 million in advance payments by borrowers for taxes, $0.9 million in accrued interest payable, $0.4 million in operating lease liabilities, partially offset by decreases of $75.0 million in borrowings and $7.5 million in other liabilities.

Total stockholders’ equity increased $8.4 million, or 1.66%, to $513.9 million as of March 31, 2025, from $505.5 million as of December 31, 2024. The $8.4 million increase in stockholders’ equity was largely attributable to $6.0 million in net income, $1.8 million in other comprehensive income, $0.5 million impact to additional paid in capital as a result of share-based compensation and $0.4 million from release of ESOP shares, offset by $0.3 million in dividends on preferred shares.

About Ponce Financial Group, Inc.

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

Forward Looking Statements

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

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

	As of
	March 31,			December 31,			September 30,			June 30,			March 31,
	2025			2024			2024			2024			2024
ASSETS
Cash and due from banks:
Cash	$	32,113		$	35,478		$	32,061		$	23,128		$	29,972
Interest-bearing deposits		97,780			104,361			123,751			80,038			104,752
Total cash and cash equivalents		129,893			139,839			155,812			103,166			134,724
Available-for-sale securities, at fair value		103,570			104,970			111,005			113,125			116,044
Held-to-maturity securities, at amortized cost		358,024			367,938			403,736			442,113			452,955
Placement with banks		249			249			249			249			249
Mortgage loans held for sale, at fair value		8,567			10,736			9,566			37,764			7,860
Loans receivable, net		2,370,931			2,286,599			2,180,331			2,022,173			1,981,428
Accrued interest receivable		19,008			17,771			16,890			17,441			18,063
Premises and equipment, net		16,417			16,794			16,843			16,976			17,396
Right of use assets		29,496			29,093			29,785			30,349			31,021
Federal Home Loan Bank of New York stock (FHLBNY), at cost		25,807			29,182			28,515			23,972			23,892
Deferred tax assets		11,629			12,074			11,845			13,172			13,919
Other assets		16,245			24,693			51,392			21,507			21,151
Total assets	$	3,089,836		$	3,039,938		$	3,015,969		$	2,842,007		$	2,818,702
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities:
Deposits	$	2,004,947		$	1,884,864		$	1,870,323		$	1,606,097		$	1,585,784
Operating lease liabilities		31,126			30,696			31,343			31,861			32,486
Accrued interest payable		4,628			3,712			2,918			6,820			4,218
Advance payments by borrowers for taxes and insurance		12,901			10,349			13,733			10,838			13,245
Borrowings		521,100			596,100			580,421			680,421			680,421
Other liabilities		1,248			8,717			12,642			8,313			8,866
Total liabilities		2,575,950			2,534,438			2,511,380			2,344,350			2,325,020
Commitments and contingencies
Stockholders’ Equity:
Preferred stock, $0.01 par value; 100,000,000 shares authorized		225,000			225,000			225,000			225,000			225,000
Common stock, $0.01 par value; 200,000,000 shares authorized		249			249			249			249			249
Treasury stock, at cost		(7,641	)		(7,707	)		(9,445	)		(9,519	)		(9,702	)
Additional paid-in-capital		207,888			207,319			208,478			207,934			207,584
Retained earnings		113,432			107,754			105,103			102,951			99,834
Accumulated other comprehensive loss		(13,515	)		(15,297	)		(12,686	)		(16,557	)		(16,590	)
Unearned compensation ─ ESOP		(11,527	)		(11,818	)		(12,110	)		(12,401	)		(12,693	)
Total stockholders’ equity		513,886			505,500			504,589			497,657			493,682
Total liabilities and stockholders’ equity	$	3,089,836		$	3,039,938		$	3,015,969		$	2,842,007		$	2,818,702

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

	Three Months Ended
	March 31,			December 31,			September 30,			June 30,			March 31,
	2025			2024			2024			2024			2024
Interest and dividend income:
Interest on loans receivable	$	37,136		$	35,622		$	32,945		$	31,281		$	30,664
Interest on deposits due from banks		1,668			1,783			2,430			1,542			2,911
Interest and dividend on securities and FHLBNY stock		5,193			5,481			5,918			5,969			6,091
Total interest and dividend income		43,997			42,886			41,293			38,792			39,666
Interest expense:
Interest on certificates of deposit		7,754			8,104			6,926			6,358			6,380
Interest on other deposits		8,554			8,476			8,519			7,389			6,540
Interest on borrowings		5,486			5,576			6,825			7,141			7,923
Total interest expense		21,794			22,156			22,270			20,888			20,843
Net interest income		22,203			20,730			19,023			17,904			18,823
(Benefit) provision for credit losses⁽¹⁾		(285	)		897			537			(867	)		(16	)
Net interest income after (benefit) provision for credit losses		22,488			19,833			18,486			18,771			18,839
Non-interest income:
Service charges and fees		525			500			508			492			473
Brokerage commissions		4			44			—			9			8
Late and prepayment charges		697			318			77			426			359
Income on sale of mortgage loans		148			254			218			274			302
Income on sale of SBA loans		404			148			—			—			—
Other		603			833			348			1,057			565
Total non-interest income		2,381			2,097			1,151			2,258			1,707
Non-interest expense:
Compensation and benefits		7,780			7,668			7,674			7,724			7,844
Occupancy and equipment		3,913			3,863			3,786			3,564			3,667
Data processing expenses		1,152			1,143			1,099			1,013			1,127
Direct loan expenses		388			617			573			633			732
Insurance and surety bond premiums		315			293			292			263			253
Office supplies, telephone and postage		170			294			222			233			249
Professional fees		1,364			1,703			1,351			1,369			1,723
Microloans recoveries		—			(29	)		(54	)		(65	)		(53	)
Marketing and promotional expenses		83			289			180			145			100
Federal deposit insurance and regulatory assessment⁽²⁾		461			418			392			428			389
Other operating expenses⁽²⁾		1,262			1,206			1,051			1,333			755
Total non-interest expense⁽¹⁾		16,888			17,465			16,566			16,640			16,786
Income before income taxes		7,981			4,465			3,071			4,389			3,760
Provision for income taxes		2,022			1,532			638			1,197			1,346
Net income	$	5,959		$	2,933		$	2,433		$	3,192		$	2,414
Dividends on preferred shares		281			282			281			75			—
Net income available to common stockholders	$	5,678		$	2,651		$	2,152		$	3,117		$	2,414
Earnings per common share:
Basic	$	0.25		$	0.12		$	0.10		$	0.14		$	0.11
Diluted	$	0.25		$	0.12		$	0.10		$	0.14		$	0.11
Weighted average common shares outstanding:
Basic		22,662,916			22,528,160			22,446,009			22,409,803			22,353,492
Diluted		22,876,740			22,807,644			22,612,028			22,419,309			22,366,728

(1) For the three months ended December 31, 2024, September 30, 2024, June 30, 2024, and March 31, 2024, (benefit) provision for contingencies in the amounts of ($0.2 million), ($0.3 million), ($0.5 million) and $0.2 million were reclassified from total non-interest expense to (benefit) provision for credit losses.

(2) For the three months ended September 30, 2024, June 30, 2024, and March 31, 2024, $0.3 million of federal deposit insurance was reclassified from other operating expenses to federal deposit insurance and regulatory assessments and $0.1 million of directors’ fees were reclassified from federal deposit insurance and regulatory assessments to other operating expenses for each periods.

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

	For the Three Months Ended March 31,
	2025			2024			Variance $			Variance %
Interest and dividend income:
Interest on loans receivable	$	37,136		$	30,664		$	6,472			21.11	%
Interest on deposits due from banks		1,668			2,911			(1,243	)		(42.70	%)
Interest and dividend on securities and FHLBNY stock		5,193			6,091			(898	)		(14.74	%)
Total interest and dividend income		43,997			39,666			4,331			10.92	%
Interest expense:
Interest on certificates of deposit		7,754			6,380			1,374			21.54	%
Interest on other deposits		8,554			6,540			2,014			30.80	%
Interest on borrowings		5,486			7,923			(2,437	)		(30.76	%)
Total interest expense		21,794			20,843			951			4.56	%
Net interest income		22,203			18,823			3,380			17.96	%
Benefit for credit losses ⁽¹⁾		(285	)		(16	)		(269	)		1,681.25	%
Net interest income after benefit for credit losses		22,488			18,839			3,649			19.37	%
Non-interest income:
Service charges and fees		525			473			52			10.99	%
Brokerage commissions		4			8			(4	)		(50.00	%)
Late and prepayment charges		697			359			338			94.15	%
Income on sale of mortgage loans		148			302			(154	)		(50.99	%)
Income on sale of SBA loans		404			—			404			—	%
Other		603			565			38			6.73	%
Total non-interest income		2,381			1,707			674			39.48	%
Non-interest expense:
Compensation and benefits		7,780			7,844			(64	)		(0.82	%)
Occupancy and equipment		3,913			3,667			246			6.71	%
Data processing expenses		1,152			1,127			25			2.22	%
Direct loan expenses		388			732			(344	)		(46.99	%)
Insurance and surety bond premiums		315			253			62			24.51	%
Office supplies, telephone and postage		170			249			(79	)		(31.73	%)
Professional fees		1,364			1,723			(359	)		(20.84	%)
Microloans recoveries		—			(53	)		53			(100.00	%)
Marketing and promotional expenses		83			100			(17	)		(17.00	%)
Federal deposit insurance and regulatory assessments ⁽²⁾		461			389			72			18.51	%
Other operating expenses ⁽²⁾		1,262			755			507			67.15	%
Total non-interest expense ⁽¹⁾		16,888			16,786			102			0.61	%
Income before income taxes		7,981			3,760			4,221			112.26	%
Provision for income taxes		2,022			1,346			676			50.22	%
Net income	$	5,959		$	2,414		$	3,545			146.85	%
Dividends on preferred shares		281			—			281			—	%
Net income available to common stockholders	$	5,678		$	2,414		$	3,264			135.21	%
Earnings per common share:
Basic	$	0.25		$	0.11		$	0.14			127.27	%
Diluted	$	0.25		$	0.11		$	0.14			127.27	%
Weighted average common shares outstanding:
Basic		22,662,916			22,353,492			309,424			1.38	%
Diluted		22,876,740			22,366,728			510,012			2.28	%

(1) For the three months ended March 31, 2024, provision for contingencies in the amount of $0.2 million were reclassified from total non-interest expense to benefit for credit losses.

(2) For the three months ended March 31, 2024, $0.3 million of federal deposit insurance was reclassified from other operating expenses to federal deposit insurance and regulatory assessments and $0.1 million of directors’ fees were reclassified from federal deposit insurance and regulatory assessments to other operating expenses.

Ponce Financial Group, Inc. and Subsidiaries
Loans Receivable excluding Mortgage Loans Held for Sale

	As of
	March 31,						December 31,						September 30,						June 30,						March 31,
	2025						2024						2024						2024						2024
	Amount			Percent			Amount			Percent			Amount			Percent			Amount			Percent			Amount			Percent

	(Dollars in thousands)
Mortgage loans:
1-4 family residential
Investor Owned	$	325,866			13.62	%	$	330,053			14.30	%	$	332,380			15.09	%	$	337,292			16.49	%	$	339,331			16.92	%
Owner-Occupied		137,676			5.75	%		142,363			6.17	%		145,065			6.59	%		147,485			7.21	%		150,842			7.52	%
Multifamily residential		675,541			28.24	%		670,159			29.04	%		678,029			30.78	%		545,323			26.66	%		545,825			27.22	%
Nonresidential properties		390,681			16.33	%		389,898			16.89	%		383,277			17.40	%		337,583			16.51	%		327,350			16.32	%
Construction and land		815,425			34.08	%		733,660			31.79	%		631,461			28.67	%		641,879			31.39	%		608,665			30.35	%
Total mortgage loans		2,345,189			98.02	%		2,266,133			98.19	%		2,170,212			98.53	%		2,009,562			98.26	%		1,972,013			98.33	%
Non-mortgage loans:
Business loans		46,329			1.94	%		40,849			1.77	%		28,499			1.29	%		30,222			1.48	%		26,664			1.33	%
Consumer loans⁽¹⁾		997			0.04	%		1,038			0.04	%		4,021			0.18	%		5,305			0.26	%		6,741			0.34	%
Total non-mortgage loans		47,326			1.98	%		41,887			1.81	%		32,520			1.47	%		35,527			1.74	%		33,405			1.67	%
Total loans, gross		2,392,515			100.00	%		2,308,020			100.00	%		2,202,732			100.00	%		2,045,089			100.00	%		2,005,418			100.00	%
Net deferred loan origination costs		1,390						1,081						1,565						1,145						674
Allowance for credit losses on loans		(22,974	)					(22,502	)					(23,966	)					(24,061	)					(24,664	)
Loans, net	$	2,370,931					$	2,286,599					$	2,180,331					$	2,022,173					$	1,981,428

(1) As of September 30, 2024, June 30, 2024, and March 31, 2024, consumer loans include $3.0 million, $4.3 million, and $5.7 million, respectively, of microloans originated by the Bank. As of December 31, 2024, these microloans were charged-off.

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

	For the Three Months Ended
	March 31,			December 31,			September 30,			June 30,			March 31,
	2024			2024			2024			2024			2024

	(Dollars in thousands)
Allowance for credit losses on loans at beginning of the period	$	22,502		$	23,966		$	24,061		$	24,664		$	26,154
Provision (benefit) for credit losses on loans		731			1,090			801			(120	)		(255	)
Charge-offs:
Mortgage loans:
1-4 family residences
Investor owned		(38	)		—			—			—			—
Owner occupied		—			—			—			—			—
Multifamily residences		—			—			—			—			—
Nonresidential properties		—			—			(7	)		—			—
Construction and land		—			—			—			—			—
Non-mortgage loans:
Business		(222	)		(232	)		(450	)		—			(52	)
Consumer		(3	)		(2,465	)		(634	)		(747	)		(1,302	)
Total charge-offs		(263	)		(2,697	)		(1,091	)		(747	)		(1,354	)
Recoveries:
Non-mortgage loans:
Business		4			—			1			7			1
Consumer		—			143			194			257			118
Total recoveries		4			143			195			264			119
Net (charge-offs) recoveries		(259	)		(2,554	)		(896	)		(483	)		(1,235	)
Allowance for credit losses on loans at end of the period	$	22,974		$	22,502		$	23,966		$	24,061		$	24,664

Ponce Financial Group, Inc. and Subsidiaries
Deposits

	As of
	March 31,					December 31,					September 30,					June 30,					March 31,
	2025					2024					2024					2024					2024
	Amount		Percent			Amount		Percent			Amount		Percent			Amount		Percent			Amount		Percent

	(Dollars in thousands)
Demand	$	212,139		10.58	%	$	169,178		8.98	%	$	182,737		9.78	%	$	178,125		11.09	%	$	191,541		12.07	%
Interest-bearing deposits:
NOW/IOLA accounts		74,430		3.71	%		62,616		3.32	%		71,445		3.82	%		81,178		5.05	%		73,202		4.62	%
Money market accounts		692,753		34.55	%		636,219		33.75	%		660,168		35.30	%		502,255		31.27	%		482,344		30.42	%
Reciprocal deposits		141,838		7.07	%		130,677		6.93	%		94,145		5.03	%		109,945		6.85	%		97,718		6.16	%
Savings accounts		106,122		5.29	%		105,870		5.62	%		108,941		5.82	%		109,694		6.83	%		112,713		7.11	%
Total NOW, money market, reciprocal and savings accounts		1,015,143		50.62	%		935,382		49.62	%		934,699		49.97	%		803,072		50.00	%		765,977		48.31	%
Certificates of deposit of $250K or more⁽¹⁾		219,721		10.96	%		204,293		10.84	%		210,262		11.25	%		189,683		11.82	%		183,478		11.57	%
Brokered certificates of deposit⁽²⁾		84,531		4.22	%		94,531		5.02	%		94,531		5.05	%		94,614		5.89	%		94,689		5.97	%
Listing service deposits⁽²⁾		6,140		0.31	%		7,376		0.39	%		7,376		0.39	%		9,361		0.58	%		12,688		0.80	%
All other certificates of deposit less than $250K⁽¹⁾		467,273		23.31	%		474,104		25.15	%		440,718		23.56	%		331,242		20.62	%		337,411		21.28	%
Total certificates of deposit		777,665		38.80	%		780,304		41.40	%		752,887		40.25	%		624,900		38.91	%		628,266		39.62	%
Total interest-bearing deposits		1,792,808		89.42	%		1,715,686		91.02	%		1,687,586		90.22	%		1,427,972		88.91	%		1,394,243		87.93	%
Total deposits	$	2,004,947		100.00	%	$	1,884,864		100.00	%	$	1,870,323		100.00	%	$	1,606,097		100.00	%	$	1,585,784		100.00	%

(1) As of September 30, 2024, June 30, 2024 and March 31, 2024, $36.2 million, $33.5 million and $37.2 million, respectively, were reclassified from all other certificates of deposit less than $250K to certificates of deposit of $250K or more.

(2) There were no individual listing service deposits amounting to $250,000 or more. There was one brokered certificates of deposit in the amount of $1.5 million amounting to $250,000 or more. All other brokered certificates of deposit individually amounted to less than $250,000.

Ponce Financial Group, Inc. and Subsidiaries
Nonperforming Assets

	As of Three Months Ended
	March 31,			December 31,			September 30,			June 30,			March 31,
	2025			2024			2024			2024			2024

	(Dollars in thousands)
Non-accrual loans:
Mortgage loans:
1-4 family residential
Investor owned	$	1,052		$	436		$	436		$	436		$	399
Owner occupied		1,423			1,423			1,423			1,423			1,426
Multifamily residential		9,788			10,271			4,685			5,754			4,098
Nonresidential properties		—			—			824			828			441
Construction and land		14,159			14,158			8,907			8,907			10,277
Non-mortgage loans:
Business		170			343			180			396			146
Consumer		—			—			—			—			—
Total non-accrual loans (not including non-accruing modifications to borrowers experiencing financial difficulty)⁽¹⁾	$	26,592		$	26,631		$	16,455		$	17,744		$	16,787

Non-accruing modifications to borrowers experiencing financial difficulty⁽¹⁾:
Mortgage loans:
1-4 family residential
Investor owned	$	279		$	279		$	278		$	277		$	270
Owner occupied		431			435			444			448			447
Multifamily residential		—			—			—			—			—
Nonresidential properties		—			—			—			—			—
Construction and land		—			—			—			—			—
Non-mortgage loans:
Business		—			—			—			—			—
Consumer		—			—			—			—			—
Total non-accruing modifications to borrowers experiencing financial difficulty⁽¹⁾		710			714			722			725			717
Total non-accrual loans⁽²⁾	$	27,302		$	27,345		$	17,177		$	18,469		$	17,504

Accruing modifications to borrowers experiencing financial difficulty (1):
Mortgage loans:
1-4 family residential
Investor owned	$	1,792		$	1,807		$	1,821		$	1,830		$	1,850
Owner occupied		2,038			2,062			2,116			2,171			2,288
Multifamily residential		—			—			—			—			—
Nonresidential properties		644			652			672			707			748
Construction and land		—			—			—			—			—
Non-mortgage loans:
Business		209			215			222			—			—
Consumer		—			—			—			—			—
Total accruing modifications to borrowers experiencing financial difficulty⁽¹⁾	$	4,683		$	4,736		$	4,831		$	4,708		$	4,886
Total non-performing assets and accruing modifications to borrowers experiencing financial difficulty⁽¹⁾	$	31,985		$	32,081		$	22,008		$	23,177		$	22,390
Total non-performing assets to total assets		0.88	%		0.90	%		0.57	%		0.65	%		0.62	%

(1) Balances include both modifications to borrowers experiencing financial difficulty, in accordance with ASU 2022-02 adopted on January 1, 2023, and previously existing troubled debt restructurings.

(2) Includes nonperforming mortgage loans held for sale.

Ponce Financial Group, Inc. and Subsidiaries
Average Balance Sheets

	For the Three Months Ended March 31,
	2025						2024
	Average						Average
	Outstanding				Average		Outstanding				Average
	Balance		Interest		Yield/Rate⁽¹⁾		Balance		Interest		Yield/Rate⁽¹⁾

	(Dollars in thousands)
Interest-earning assets:
Loans⁽²⁾	$	2,369,433	$	37,136	6.36	%	$	1,979,263	$	30,664	6.23	%
Securities⁽³⁾		467,560		4,521	3.92	%		576,235		5,619	3.92	%
Other⁽⁴⁾		186,021		2,340	5.10	%		238,432		3,383	5.71	%
Total interest-earning assets		3,023,014		43,997	5.90	%		2,793,930		39,666	5.71	%
Non-interest-earning assets		109,166						106,566
Total assets	$	3,132,180					$	2,900,496
Interest-bearing liabilities:
NOW/IOLA	$	72,354	$	115	0.64	%	$	82,849	$	218	1.06	%
Money market		827,948		8,411	4.12	%		544,563		6,292	4.65	%
Savings		105,171		26	0.10	%		113,501		28	0.10	%
Certificates of deposit		794,270		7,754	3.96	%		629,528		6,380	4.08	%
Total deposits		1,799,743		16,306	3.67	%		1,370,441		12,918	3.79	%
Advance payments by borrowers		12,445		2	0.07	%		12,886		2	0.06	%
Borrowings		568,601		5,486	3.91	%		771,070		7,923	4.13	%
Total interest-bearing liabilities		2,380,789		21,794	3.71	%		2,154,397		20,843	3.89	%
Non-interest-bearing liabilities:
Non-interest-bearing demand		196,627		—				198,862		—
Other non-interest-bearing liabilities		43,915		—				54,061		—
Total non-interest-bearing liabilities		240,542		—				252,923		—
Total liabilities		2,621,331		21,794				2,407,320		20,843
Total equity		510,849						493,176
Total liabilities and total equity	$	3,132,180			3.71	%	$	2,900,496			3.89	%
Net interest income			$	22,203					$	18,823
Net interest rate spread⁽⁵⁾					2.19	%					1.82	%
Net interest-earning assets⁽⁶⁾	$	642,225					$	639,533
Net interest margin⁽⁷⁾					2.98	%					2.71	%
Average interest-earning assets to interest-bearing liabilities					126.98	%					129.69	%

(1) Annualized where appropriate.
(2) Loans include loans and mortgage loans held for sale, at fair value.
(3) Securities include available-for-sale securities and held-to-maturity securities.
(4) Includes FHLBNY demand account, FHLBNY stock dividends and FRBNY demand deposits.
(5) Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average rate of interest-bearing liabilities.
(6) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.
(7) Net interest margin represents net interest income divided by average total interest-earning assets.

Ponce Financial Group, Inc. and Subsidiaries
Other Data

	As of
	March 31,		December 31,		September 30,		June 30,		March 31,
	2025		2024		2024		2024		2024
Other Data
Common shares issued		24,886,711		24,886,711		24,886,711		24,886,711		24,886,711
Less treasury shares		920,520		925,497		1,067,248		1,074,979		1,096,214
Common shares outstanding at end of period		23,966,191		23,961,214		23,819,463		23,811,732		23,790,497

Book value per common share	$	12.05	$	11.71	$	11.74	$	11.45	$	11.29
Tangible book value per common share	$	12.05	$	11.71	$	11.74	$	11.45	$	11.29

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

The MIL Network –

April 26, 2025

MIL-OSI: Lakeland Financial Reports a 12% Increase in Net Interest Income and Organic Loan Growth of 4%

Source: GlobeNewswire (MIL-OSI)

WARSAW, Ind., April 25, 2025 (GLOBE NEWSWIRE) — Lakeland Financial Corporation (Nasdaq Global Select/LKFN), parent company of Lake City Bank, today reported net income of $20.1 million for the three months ended March 31, 2025, which represents a decrease of $3.3 million, or 14%, compared with net income of $23.4 million for the three months ended March 31, 2024. Diluted earnings per share were $0.78 for the first quarter of 2025 and decreased $0.13, or 14%, compared to $0.91 for the first quarter of 2024. On a linked quarter basis, net income decreased $4.1 million, or 17%, to $24.2 million. Diluted earnings per share decreased $0.16, or 17%, from $0.94 on a linked quarter basis.

Pretax pre-provision earnings, which is a non-GAAP measure, were $31.0 million for the three months ended March 31, 2025, an increase of $1.7 million, or 6%, compared to $29.3 million for the three months ended March 31, 2024.

“Our first quarter results are highlighted by double digit growth in net interest income and strong net interest margin expansion,” stated David M. Findlay, Chairman and CEO. “Further, we continued to experience healthy loan growth that was funded with equally positive deposit growth. The Lake City Bank team delivered encouraging operating results in the quarter.”

Quarterly Financial Performance

First Quarter 2025 versus First Quarter 2024 highlights:

Tangible book value per share grew by $1.80, or 7%, to $26.85
Average loans grew by $214.9 million, or 4%, to $5.19 billion
Core deposits grew by $402.5 million, or 7%, to $5.83 billion
Net interest margin improved 25 basis points to 3.40% versus 3.15%
Net interest income increased by $5.5 million, or 12%
Revenue grew by 6% from $60.0 million to $63.8 million
Provision expense of $6.8 million, compared to $1.5 million
Watch list loans as a percentage of total loans increased to 4.13% from 3.67%
Pretax, pre-provision earnings increased by $1.7 million, or 6%
Common equity tier 1 capital improved to 14.51%, compared to 14.21%
Tangible capital ratio improved to 10.09%, compared to 9.80%
Average equity increased by $51.0 million, or 8%

First Quarter 2025 versus Fourth Quarter 2024 highlights:

Tangible book value per share grew by $0.38, or 1%, to $26.85
Average loans grew by $99.3 million, or 2%, to $5.19 billion
Net interest margin improved 15 basis points to 3.40% versus 3.25%
Net interest income increased by $1.2 million, or 2%
Provision expense of $6.8 million, compared to $3.7 million
Watch list loans as a percentage of total loans remained at 4.13%
Pretax, pre-provision earnings decreased $1.9 million, or 6%
Common equity tier 1 capital of 14.51%, compared to 14.64%
Tangible capital ratio of 10.09%, compared to 10.19%

Capital Strength

The company’s total capital as a percentage of risk-weighted assets improved to 15.77% at March 31, 2025, compared to 15.46% at March 31, 2024, and down from 15.90% at December 31, 2024. These capital levels significantly exceeded the 10.00% regulatory threshold required to be characterized as “well capitalized” and reflect the company’s robust capital base.

The company’s tangible common equity to tangible assets ratio, which is a non-GAAP financial measure, improved to 10.09% at March 31, 2025, compared to 9.80% at March 31, 2024, and down from 10.19% at December 31, 2024. Unrealized losses from available-for-sale investment securities were $188.3 million at March 31, 2025, compared to $189.9 million at March 31, 2024 and $191.1 million at December 31, 2024. Excluding the impact of accumulated other comprehensive income (loss) on tangible common equity and tangible assets, the company’s ratio of adjusted tangible common equity to adjusted tangible assets, a non-GAAP financial measure, improved to 12.19% at March 31, 2025, compared to 12.03% at March 31, 2024, and down from 12.37% at December 31, 2024.

As announced on April 8, 2025, the board of directors approved a cash dividend for the first quarter of $0.50 per share, payable on May 5, 2025, to shareholders of record as of April 25, 2025. The first quarter dividend per share represents a 4% increase from the $0.48 dividend per share paid for the first quarter of 2024.

The board of directors also reauthorized and extended the company’s share repurchase program through April 30, 2027 with remaining aggregate purchase price authority of $30.0 million. The company anticipates activating the share repurchase program during the second quarter of 2025.

Kristin L. Pruitt, President commented, “We believe that the recent stock price performance, driven by the impact of tariff activity, provides us with an opportunity to return capital to shareholders at attractive prices through our repurchase plan. Further, our strong capital levels continue to provide capacity for organic loan growth in our Indiana markets. Our capital position also supports our continued growth in the dividend paid to shareholders.”

Loan Portfolio

Average total loans of $5.19 billion in the first quarter of 2025 increased $214.9 million, or 4%, from $4.97 billion for the first quarter of 2024, and increased $99.3 million, or 2%, from $5.09 billion for the fourth quarter of 2024. Total loans, net of deferred loan fees, increased by $224.8 million, or 4%, from $5.00 billion as of March 31, 2024, to $5.23 billion as of March 31, 2025. The increase in loans occurred across much of the portfolio with our commercial real estate and multi-family residential loan portfolio growing by $143.4 million, or 6%, our commercial and industrial loan portfolio growing by $46.3 million, or 3%, our consumer 1-4 family mortgage loans portfolio growing by $39.7 million, or 9%, and our agri-business and agricultural loan portfolio growing by $15.9 million, or 4%. These increases were offset by a decrease to other commercial loans of $25.4 million, or 21%. On a linked quarter basis, total loans, net of deferred loan fees, increased by $104.9 million, or 2%, from $5.12 billion at December 31, 2024. The linked quarter increase was primarily a result of growth in total commercial and industrial loans of $72.7 million, or 5%, growth in total commercial real estate and multi-family residential loans of $28.3 million, or 1%, and growth in our consumer 1-4 family mortgage loans portfolio of $10.0 million, or 2%.

Commercial loan originations for the first quarter included approximately $365.0 million in loan originations, offset by approximately $268.0 million in commercial loan pay downs. Line of credit usage increased to 43% as of March 31, 2025, compared to 39% at March 31, 2024 and 41% as of December 31, 2024. Total available lines of credit contracted by $153.0 million, or 3%, as compared to a year ago, and line usage increased by $122.0 million, or 7%, over that period. The company has limited exposure to commercial office space borrowers, all of which are in the bank’s Indiana markets. Loans totaling $100.6 million for this sector represented 2% of total loans at March 31, 2025, a decrease of $1.1 million, or 1%, from December 31, 2024. Commercial real estate loans secured by multi-family residential properties and secured by non-farm non-residential properties were approximately 214% of total risk-based capital at March 31, 2025.

“We are encouraged by the continued organic loan growth during the quarter. In particular, we are pleased to see the upward trend in commercial line utilization, which reached 43% in the first quarter compared to 39% a year ago. Commercial and Industrial loan growth was a highlight this quarter and positively impacted our commercial line utilization,” added Findlay. “Linked quarter loan growth was largely driven by expansion in working capital lines of credit loans and construction and land development loans.”

Diversified Deposit Base

The bank’s diversified deposit base has grown on a year over year basis and on a linked quarter basis.

DEPOSIT DETAIL (unaudited, in thousands)

	March 31, 2025				December 31, 2024				March 31, 2024
Retail	$	1,787,992	30.0	%	$	1,780,726	30.2	%	$	1,770,007	31.5	%
Commercial		2,336,910	39.2			2,269,049	38.4			2,117,536	37.7
Public funds		1,709,883	28.7			1,809,631	30.7			1,544,775	27.5
Core deposits		5,834,785	97.9			5,859,406	99.3			5,432,318	96.7
Brokered deposits		125,409	2.1			41,560	0.7			185,767	3.3
Total	$	5,960,194	100.0	%	$	5,900,966	100.0	%	$	5,618,085	100.0	%

Total deposits increased $342.1 million, or 6%, from $5.62 billion as of March 31, 2024, to $5.96 billion as of March 31, 2025. The increase in total deposits was driven by an increase in core deposits (which excludes brokered deposits) of $402.5 million, or 7%. Total core deposits at March 31, 2025 were $5.83 billion and represented 98% of total deposits, as compared to $5.43 billion and 97% of total deposits at March 31, 2024. Brokered deposits were $125.4 million, or 2% of total deposits, at March 31, 2025, compared to $185.8 million, or 3% of total deposits, at March 31, 2024.

The increase in core deposits since March 31, 2024, reflects growth in all three core deposit components. Commercial deposits grew annually by $219.4 million, or 10%, to $2.34 billion. Commercial deposits as a percentage of total deposits expanded to 39%, up from 38%. Public funds deposits grew annually by $165.1 million, or 11%, to $1.71 billion. Public funds deposits as a percentage of total deposits was 29%, up from 28%. Growth in public funds was positively impacted by the addition of new public funds customers in the Lake City Bank footprint, including their operating accounts. Retail deposits expanded by $18.0 million, or 1%, to $1.79 billion. Retail deposits as a percentage of total deposits was 30% of total deposits, down from 32%.

On a linked quarter basis, total deposits increased $59.2 million, or 1%, from $5.90 billion at December 31, 2024, to $5.96 billion at March 31, 2025. Core deposits decreased by $24.6 million, or less than 1%, while brokered deposits increased by $83.8 million, or 202%. The linked quarter reduction in core deposits resulted primarily from a seasonal decrease in public funds deposits of $99.7 million, or 6%. Offsetting this increase was an increase in commercial deposits of $67.9 million, or 3%, and an increase in retail deposits of $7.3 million, or less than 1%.

“Annual core deposit growth of 7% continues to provide liquidity to fund loan growth. We continue to see opportunities to gain market share in our Indiana footprint,” noted Lisa M. O’Neill, Executive Vice President and Chief Financial Officer. “Our diversified funding base is stable, and average checking account balances continue to maintain liquidity in excess of pre-pandemic levels.”

Average total deposits were $5.87 billion for the first quarter of 2025, an increase of $244.3 million, or 4%, from $5.63 billion for the first quarter of 2024. Average interest-bearing deposits drove the increase in average total deposits and increased by $260.1 million, or 6%. Contributing to the overall growth of interest-bearing deposits was an increase to average interest-bearing checking accounts of $439.5 million, or 14%. Offsetting this increase was a reduction in average time deposits of $167.7 million, or 17%, and a decrease to average savings deposits of $11.8 million, or 4%. Average noninterest-bearing demand deposits decreased by $15.8 million, or 1%.

On a linked quarter basis, average total deposits decreased by $136.4 million, or 2%, from $6.01 billion for the fourth quarter of 2024 to $5.87 billion for the first quarter of 2025. Average interest bearing deposits drove the decrease to total average deposits, which decreased by $112.8 million, or 2%. Driving the decrease to average interest bearing deposits were decreases to total average time deposits of $102.7 million, or 11%, and interest bearing checking accounts of $19.0 million, or 1%. Average noninterest bearing demand deposits decreased by $23.6 million, or 2%.

Checking account trends as of March 31, 2025 compared to March 31, 2024, include growth of $222.5 million, or 17%, in aggregate public fund checking account balances, growth of $212.3 million, or 11%, in aggregate commercial checking account balances, and growth of $35.5 million, or 4%, in aggregate retail checking account balances. The number of accounts has also grown for all three segments, with growth of 7% for public funds accounts, 2% for commercial accounts and 1% for retail accounts during the prior twelve months.

Deposits not covered by FDIC deposit insurance as a percentage of total deposits were 57% as of March 31, 2025, compared to 62% at December 31, 2024, and 54% at March 31, 2024, reflecting changes in core deposits and growth in public fund deposits over those periods. Deposits not covered by FDIC deposit insurance or the Indiana Public Deposit Insurance Fund (which insures public funds deposits in Indiana), were 29% of total deposits at March 31, 2025, compared to 32% at December 31, 2024, and 27% at March 31, 2024. At March 31, 2025, 98% of deposit accounts had deposit balances less than $250,000.

Net Interest Margin

Net interest margin was 3.40% for the first quarter of 2025, representing a 25 basis point increase from 3.15% for the first quarter of 2024. This improvement was driven by a reduction in the company’s funding costs, with interest expense as a percentage of average earning assets falling by 45 basis points from 2.82% for the first quarter of 2024 to 2.37% for the first quarter of 2025. Offsetting the decrease in funding costs was a decrease to earning asset yields of 20 basis points from 5.97% for the first quarter of 2024 to 5.77% for the first quarter of 2025.

Linked quarter net interest margin expanded by 15 basis points to 3.40% for the first quarter of 2025, compared to 3.25% for the fourth quarter of 2024. Interest expense as a percentage of average earning assets decreased 19 basis points from 2.56% to 2.37% on a linked quarter basis. Average earning asset yields decreased by 4 basis points from 5.81% to 5.77% on a linked quarter basis. The easing of monetary policy by the Federal Reserve Bank, which began in September of 2024, drove the reduction in funding costs that provided for the net interest margin expansion through deposit repricing. Notably, the deposit mix shift from noninterest bearing deposits to interest bearing deposits experienced by the company during the previous monetary tightening cycle has stabilized with noninterest bearing deposits representing 22% of total deposits at March 31, 2025, March 31, 2024 and December 31, 2024.

“We continue to see improvements in net interest margin due to the Federal Reserve Bank’s rate easing cycle. Our deposit costs have declined more than loan yields resulting in year over year improvements in net interest margin of 25 basis points and linked quarter improvements of 15 basis points,” stated O’Neill. “Net interest margin expansion combined with healthy loan growth has contributed to double digit growth in net interest income.”

The loan beta for the current rate-easing cycle is 37% compared to the deposit beta of 55%. The cumulative loan beta, which measures the sensitivity of a bank’s average loan yield to changes in short-term interest rates, was 56% for the recent rate-tightening cycle. The cumulative deposit beta, which measures the sensitivity of a bank’s deposit cost to changes in short-term interest rates, was 54% for the recent rate-tightening cycle.

Net interest income was $52.9 million for the first quarter of 2025, representing an increase of $5.5 million, or 12%, as compared to the first quarter of 2024. Net interest income for the first quarter of 2025 benefited from a decrease in deposit interest expense of $4.7 million and a decrease in borrowings interest expense of $1.3 million. Offsetting these effects on net interest income was a decrease in loan interest of $910,000. On a linked quarter basis, net interest income increased $1.2 million, or 2%, from $51.7 million for the fourth quarter of 2024. On a linked quarter basis, the increase to net interest income was driven by a reduction in interest expense of $4.1 million and offset by a reduction in interest income of $2.9 million.

Asset Quality

The company recorded a provision for credit losses of $6.8 million in the first quarter of 2025, an increase of $5.3 million, as compared to $1.5 million in the first quarter of 2024. On a linked quarter basis, the provision expense increased by $3.1 million, from $3.7 million for the fourth quarter of 2024. Provision expense during the first quarter of 2025 was primarily attributable to an increase in the specific allocation for the previously disclosed $43.3 million nonperforming credit to an industrial company in Northern Indiana.

The allowance for credit loss reserve to total loans was 1.77% at March 31, 2025, up from 1.46% at March 31, 2024, and 1.68% at December 31, 2024. Net charge offs in the first quarter of 2025 were $327,000 compared to $312,000 in the first quarter of 2024 and $1.4 million during the linked fourth quarter of 2024. Annualized net charge offs to average loans were 0.03% for the first quarter of 2025, compared to 0.03% for the first quarter of 2024, and 0.11% for the linked fourth quarter of 2024.

Nonperforming assets increased $42.6 million, or 280%, to $57.9 million as of March 31, 2025, versus $15.2 million as of March 31, 2024. On a linked quarter basis, nonperforming assets increased $1.0 million, or 2%, compared to $56.9 million as of December 31, 2024. The ratio of nonperforming assets to total assets at March 31, 2025 increased to 0.84% from 0.23% at March 31, 2024, and decreased from 0.85% at December 31, 2024. The increase in nonperforming assets was primarily driven by the aforementioned credit.

Total individually analyzed and watch list loans increased by $32.3 million, or 18%, to $215.6 million as of March 31, 2025, versus $183.3 million as of March 31, 2024. On a linked quarter basis, total individually analyzed and watch list loans increased by $4.4 million, or 2%, from $211.1 million at December 31, 2024. The linked quarter increase in total individually analyzed and watch list loans was primarily driven by the addition of five commercial relationships to the watch list with aggregate balances of $11.5 million and offset by watch list removals of two relationships with aggregate balances of $8.0 million. Watch list loans as a percentage of total loans were 4.13% at March 31, 2025, an increase of 46 basis points compared to 3.67% at March 31, 2024, and unchanged from December 31, 2024.

“Asset quality remains stable with watch list loans as a percentage of total loans at 4.13%,” commented Findlay. “It is premature to comment on the impact of the tariff activity on our borrowers’ businesses and we are actively talking with our clients to understand the impact of this trade policy activity. As part of our internal credit administration and loan review process, we initiated a detailed plan to identify and analyze specific industries and clients that may be more sensitive to the effects of tariffs. As part of this process, our credit team is aggregating and segmenting direct and indirect exposure that our commercial and industrial borrowers have with international trading partners.”

Investment Portfolio Overview

Total investment securities were $1.13 billion at March 31, 2025, reflecting a decrease of $12.0 million, or 1%, as compared to $1.14 billion at March 31, 2024. On a linked quarter basis, investment securities increased $9.9 million, or 1%, due primarily to security purchases of $22.2 million, offset by improvement in the fair market value of available-for-sale securities of $2.8 million, and cash flows from calls, paydowns and maturities of $14.7 million. Investment securities represented 17% of total assets on March 31, 2025, March 31, 2024 and December 31, 2024. The company anticipates receiving principal and interest cash flows of approximately $82.3 million during the remainder of 2025 from the investment securities portfolio and plans to use that liquidity to fund loan growth and reinvestment of investment securities cash flows. Tax equivalent adjusted effective duration for the investment portfolio was 5.9 years at March 31, 2025, compared to 6.6 years at March 31, 2024 and 6.0 years December 31, 2024.

Noninterest Income

The company’s noninterest income decreased $1.7 million, or 13%, to $10.9 million for the first quarter of 2025, compared to $12.6 million for the first quarter of 2024. Adjusted core noninterest income, a non-GAAP financial measure that excludes the effect of the insurance recovery recorded during the first quarter of 2024, was $11.6 million for the first quarter of 2024, a decrease of $684,000, or 6%, compared to $10.9 million for the first quarter of 2025. Wealth advisory fees increased $412,000, or 17%, driven by growth in customers and assets under management. Deposit fees increased $83,000, or 3% driven primarily by growth in our treasury management services. Other income decreased $1.3 million, or 61%. Other income during the first quarter of 2024 benefited from a $1.0 million insurance recovery related to the wire fraud loss from 2023 and death benefits received from the company’s bank owned life insurance program. Bank owned life insurance income decreased $714,000, or 69%, primarily due to a reduction in the market performance of the company’s variable bank owned life insurance policies, which are tied to the equity markets.

Noninterest income for the first quarter of 2025 decreased by $948,000, or 8%, on a linked quarter basis from $11.9 million during the fourth quarter of 2024. Wealth advisory fees increased by $168,000, or 6%. The linked quarter decrease in noninterest income was impacted by a decrease in bank owned life insurance income, which decreased $894,000, or 74%, due to market performance of the company’s variable bank owned life insurance policies.

“The growth of our wealth advisory business continues to positively impact revenue growth with 17% improvement in fees on a year over year basis,” added Findlay, “We continue to focus on our fee-based businesses that contribute to noninterest income and revenue growth.”

Noninterest Expense

Noninterest expense increased $2.1 million, or 7%, to $32.8 million for the first quarter of 2025, compared to $30.7 million during the first quarter of 2024. Salaries and benefits expense increased by $1.1 million, or 6%, driven by performance-based incentive compensation expense of $1.3 million and salary expense of $524,000. These increases were offset by reduced deferred compensation expense of $687,000, which moves in tandem with the market performance of the company’s variable bank owned life insurance. Other expense increased by $400,000, or 18%, from increased customer reimbursements for counterfeit checks and account takeover wire fraud losses. Data processing fees and supplies expense increased $426,000, or 11%, from continued investment in customer-facing and operational technology solutions.

On a linked quarter basis, noninterest expense increased by $2.1 million, or 7%, from $30.7 million during the fourth quarter of 2024. Salaries and employee benefits increased by $641,000, or 4%, due to merit-based increases for salaries, incentive pay, and annual health insurance benefits that are funded at the beginning of each year. Data processing fees and supplies expense increased $523,000, or 14%. Corporate and business development expense increased by $456,000, or 48%, which was primarily driven by an increase in advertising expense of $462,000 during the quarter from the company’s seasonal promotional campaigns. Other expense increased $228,000, or 9%.

The company’s efficiency ratio was 51.4% for the first quarter of 2025, compared to 51.2% for the first quarter of 2024 and 48.2% for the linked fourth quarter of 2024.

Information regarding Lakeland Financial Corporation may be accessed on the home page of its subsidiary, Lake City Bank, at lakecitybank.com. The company’s common stock is traded on the Nasdaq Global Select Market under “LKFN.” Lake City Bank, a $6.9 billion bank headquartered in Warsaw, Indiana, was founded in 1872 and serves Central and Northern Indiana communities with 54 branch offices and a robust digital banking platform. Lake City Bank’s community banking model prioritizes building in-market long-term customer relationships while delivering technology-forward solutions for retail and commercial clients.

This document contains, and future oral and written statements of the company and its management may contain, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to the financial condition, results of operations, plans, objectives, future performance and business of the company. Forward-looking statements, which may be based upon beliefs, expectations and assumptions of the company’s management and on information currently available to management, are generally identifiable by the use of words such as “believe,” “expect,” “anticipate,” “continue,” “plan,” “intend,” “estimate,” “may,” “will,” “would,” “could,” “should” or other similar expressions. The company’s ability to predict results or the actual effect of future plans or strategies is inherently uncertain and, accordingly, the reader is cautioned not to place undue reliance on any forward-looking statements made by the company. Additionally, all statements in this document, including forward-looking statements, speak only as of the date they are made, and the company undertakes no obligation to update any statement in light of new information or future events. Numerous factors could cause the company’s actual results to differ from those reflected in forward-looking statements, including the effects of economic, business and market conditions and changes, particularly in our Indiana market area, including prevailing interest rates and the rate of inflation; governmental trade, monetary and fiscal policies; the risks of changes in interest rates on the levels, composition and costs of deposits, loan demand and the values and liquidity of loan collateral, securities and other interest sensitive assets and liabilities; and changes in borrowers’ credit risks and payment behaviors, as well as those identified in the company’s filings with the Securities and Exchange Commission, including the company’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q.

LAKELAND FINANCIAL CORPORATION FIRSTQUARTER2025FINANCIAL HIGHLIGHTS

	Three Months Ended
(Unaudited – Dollars in thousands, except per share data)	March 31,			December 31,			March 31,
END OF PERIOD BALANCES		2025			2024			2024
Assets	$	6,851,178		$	6,678,374		$	6,566,861
Investments		1,132,854			1,122,994			1,144,816
Loans		5,223,221			5,117,948			4,997,559
Allowance for Credit Losses		92,433			85,960			73,180
Deposits		5,960,194			5,900,966			5,618,085
Brokered Deposits		125,409			41,560			185,767
Core Deposits (1)		5,834,785			5,859,406			5,432,318
Total Equity		694,509			683,911			647,009
Goodwill Net of Deferred Tax Assets		3,803			3,803			3,803
Tangible Common Equity (2)		690,706			680,108			643,206
Adjusted Tangible Common Equity (2)		854,585			846,040			809,395
AVERAGE BALANCES
Total Assets	$	6,762,970		$	6,795,596		$	6,554,468
Earning Assets		6,430,804			6,470,920			6,216,929
Investments		1,136,404			1,134,011			1,158,503
Loans		5,185,918			5,086,614			4,971,020
Total Deposits		5,874,725			6,011,122			5,630,431
Interest Bearing Deposits		4,616,381			4,729,201			4,356,328
Interest Bearing Liabilities		4,716,465			4,729,206			4,532,137
Total Equity		696,053			693,744			645,007
INCOME STATEMENT DATA
Net Interest Income	$	52,875		$	51,694		$	47,416
Net Interest Income-Fully Tax Equivalent		53,983			52,804			48,683
Provision for Credit Losses		6,800			3,691			1,520
Noninterest Income		10,928			11,876			12,612
Noninterest Expense		32,763			30,653			30,705
Net Income		20,085			24,190			23,401
Pretax Pre-Provision Earnings (2)		31,040			32,917			29,323
PER SHARE DATA
Basic Net Income Per Common Share	$	0.78		$	0.94		$	0.91
Diluted Net Income Per Common Share		0.78			0.94			0.91
Cash Dividends Declared Per Common Share		0.50			0.48			0.48
Dividend Payout		64.10	%		51.06	%		52.75	%
Book Value Per Common Share (equity per share issued)	$	26.99		$	26.62		$	25.20
Tangible Book Value Per Common Share (2)		26.85			26.47			25.05
Market Value – High	$	71.77		$	78.61		$	73.22
Market Value – Low		58.24			61.10			60.56
Basic Weighted Average Common Shares Outstanding		25,714,818			25,686,276			25,657,063
Diluted Weighted Average Common Shares Outstanding		25,802,865			25,792,460			25,747,643


	Three Months Ended
(Unaudited – Dollars in thousands, except per share data)	March 31,			December 31,			March 31,
KEY RATIOS		2025			2024			2024
Return on Average Assets		1.20	%		1.42	%		1.44	%
Return on Average Total Equity		11.70			13.87			14.59
Average Equity to Average Assets		10.29			10.21			9.84
Net Interest Margin		3.40			3.25			3.15
Efficiency (Noninterest Expense/Net Interest Income plus Noninterest Income)		51.35			48.22			51.15
Loans to Deposits		87.64			86.73			88.95
Investment Securities to Total Assets		16.54			16.82			17.43
Tier 1 Leverage (3)		12.30			12.15			12.01
Tier 1 Risk-Based Capital (3)		14.51			14.64			14.21
Common Equity Tier 1 (CET1) (3)		14.51			14.64			14.21
Total Capital (3)		15.77			15.90			15.46
Tangible Capital (2)		10.09			10.19			9.80
Adjusted Tangible Capital (2)		12.19			12.37			12.03
ASSET QUALITY
Loans Past Due 30 – 89 Days	$	4,288		$	4,273		$	3,177
Loans Past Due 90 Days or More		7			28			7
Nonaccrual Loans		57,392			56,431			14,762
Nonperforming Loans		57,399			56,459			14,769
Other Real Estate Owned		284			284			384
Other Nonperforming Assets		193			143			78
Total Nonperforming Assets		57,876			56,886			15,231
Individually Analyzed Loans		81,346			78,647			15,181
Non-Individually Analyzed Watch List Loans		134,218			132,499			168,133
Total Individually Analyzed and Watch List Loans		215,564			211,146			183,314
Gross Charge Offs		508			1,657			504
Recoveries		181			299			192
Net Charge Offs/(Recoveries)		327			1,358			312
Net Charge Offs/(Recoveries) to Average Loans		0.03	%		0.11	%		0.03	%
Credit Loss Reserve to Loans		1.77			1.68			1.46
Credit Loss Reserve to Nonperforming Loans		161.04			152.25			495.51
Nonperforming Loans to Loans		1.10			1.10			0.30
Nonperforming Assets to Assets		0.84			0.85			0.23
Total Individually Analyzed and Watch List Loans to Total Loans		4.13	%		4.13	%		3.67	%
OTHER DATA
Full Time Equivalent Employees		647			643			628
Offices		54			54			53

__________________________________________________

(1)		Core deposits equals deposits less brokered deposits.
(2)		Non-GAAP financial measure – see “Reconciliation of Non-GAAP Financial Measures”.
(3)		Capital ratios for March 31, 2025 are preliminary until the Call Report is filed.

CONSOLIDATED BALANCE SHEETS (in thousands, except share data)
	March 31, 2025			December 31, 2024
	(Unaudited)
ASSETS
Cash and due from banks	$	89,325		$	71,733
Short-term investments		145,899			96,472
Total cash and cash equivalents		235,224			168,205

Securities available-for-sale, at fair value		1,000,875			991,426
Securities held-to-maturity, at amortized cost (fair value of $109,481 and $113,107, respectively)		131,979			131,568
Real estate mortgage loans held-for-sale		1,295			1,700

Loans, net of allowance for credit losses of $92,433 and $85,960		5,130,788			5,031,988

Land, premises and equipment, net		60,797			60,489
Bank owned life insurance		113,826			113,320
Federal Reserve and Federal Home Loan Bank stock		21,420			21,420
Accrued interest receivable		28,818			28,446
Goodwill		4,970			4,970
Other assets		121,186			124,842
Total assets	$	6,851,178		$	6,678,374


LIABILITIES
Noninterest bearing deposits	$	1,296,907		$	1,297,456
Interest bearing deposits		4,663,287			4,603,510
Total deposits		5,960,194			5,900,966

Borrowings – Federal Home Loan Bank advances		108,200			0
Accrued interest payable		14,699			15,117
Other liabilities		73,576			78,380
Total liabilities		6,156,669			5,994,463

STOCKHOLDERS’ EQUITY
Common stock: 90,000,000 shares authorized, no par value
26,016,494 shares issued and 25,556,904 outstanding as of March 31, 2025
25,978,831 shares issued and 25,509,592 outstanding as of December 31, 2024		130,243			129,664
Retained earnings		743,650			736,412
Accumulated other comprehensive income (loss)		(163,879	)		(166,500	)
Treasury stock, at cost (459,590 shares and 469,239 shares as of March 31, 2025 and December 31, 2024, respectively)		(15,594	)		(15,754	)
Total stockholders’ equity		694,420			683,822
Noncontrolling interest		89			89
Total equity		694,509			683,911
Total liabilities and equity	$	6,851,178		$	6,678,374

CONSOLIDATED STATEMENTS OF INCOME (unaudited – in thousands, except share and per share data)
	Three Months Ended March 31,
		2025			2024
NET INTEREST INCOME
Interest and fees on loans
Taxable	$	81,740		$	82,042
Tax exempt		292			900
Interest and dividends on securities
Taxable		3,389			3,039
Tax exempt		3,910			3,947
Other interest income		1,124			1,106
Total interest income		90,455			91,034

Interest on deposits		36,458			41,164
Interest on short-term borrowings		1,122			2,454
Total interest expense		37,580			43,618

NET INTEREST INCOME		52,875			47,416

Provision for credit losses		6,800			1,520

NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES		46,075			45,896

NONINTEREST INCOME
Wealth advisory fees		2,867			2,455
Investment brokerage fees		452			522
Service charges on deposit accounts		2,774			2,691
Loan and service fees		2,884			2,852
Merchant and interchange fee income		822			863
Bank owned life insurance income		322			1,036
Mortgage banking income (loss)		(51	)		52
Net securities gains (losses)		0			(46	)
Other income		858			2,187
Total noninterest income		10,928			12,612

NONINTEREST EXPENSE
Salaries and employee benefits		17,902			16,833
Net occupancy expense		1,980			1,740
Equipment costs		1,382			1,412
Data processing fees and supplies		4,265			3,839
Corporate and business development		1,406			1,381
FDIC insurance and other regulatory fees		800			789
Professional fees		2,380			2,463
Other expense		2,648			2,248
Total noninterest expense		32,763			30,705

INCOME BEFORE INCOME TAX EXPENSE		24,240			27,803
Income tax expense		4,155			4,402
NET INCOME	$	20,085		$	23,401

BASIC WEIGHTED AVERAGE COMMON SHARES		25,714,818			25,657,063

BASIC EARNINGS PER COMMON SHARE	$	0.78		$	0.91

DILUTED WEIGHTED AVERAGE COMMON SHARES		25,802,865			25,747,643

DILUTED EARNINGS PER COMMON SHARE	$	0.78		$	0.91

LAKELAND FINANCIAL CORPORATION LOAN DETAIL (unaudited, in thousands)

	March 31, 2025					December 31, 2024					March 31, 2024
Commercial and industrial loans:
Working capital lines of credit loans	$	716,522		13.7	%	$	649,609		12.7	%	$	646,459		12.9	%
Non-working capital loans		807,048		15.5			801,256		15.6			830,817		16.6
Total commercial and industrial loans		1,523,570		29.2			1,450,865		28.3			1,477,276		29.5

Commercial real estate and multi-family residential loans:
Construction and land development loans		623,905		12.0			567,781		11.1			659,712		13.2
Owner occupied loans		804,933		15.4			807,090		15.8			833,410		16.7
Nonowner occupied loans		852,033		16.3			872,671		17.0			744,346		14.9
Multifamily loans		339,946		6.5			344,978		6.7			239,974		4.8
Total commercial real estate and multi-family residential loans		2,620,817		50.2			2,592,520		50.6			2,477,442		49.6

Agri-business and agricultural loans:
Loans secured by farmland		156,112		3.0			156,609		3.1			167,271		3.3
Loans for agricultural production		227,659		4.3			230,787		4.5			200,581		4.0
Total agri-business and agricultural loans		383,771		7.3			387,396		7.6			367,852		7.3

Other commercial loans		94,927		1.8			95,584		1.9			120,302		2.4
Total commercial loans		4,623,085		88.5			4,526,365		88.4			4,442,872		88.8

Consumer 1-4 family mortgage loans:
Closed end first mortgage loans		265,855		5.1			259,286		5.1			260,633		5.2
Open end and junior lien loans		217,981		4.2			214,125		4.2			188,927		3.8
Residential construction and land development loans		16,359		0.3			16,818		0.3			10,956		0.2
Total consumer 1-4 family mortgage loans		500,195		9.6			490,229		9.6			460,516		9.2

Other consumer loans		102,254		1.9			104,041		2.0			97,369		2.0
Total consumer loans		602,449		11.5			594,270		11.6			557,885		11.2
Subtotal		5,225,534		100.0	%		5,120,635		100.0	%		5,000,757		100.0	%
Less: Allowance for credit losses		(92,433	)				(85,960	)				(73,180	)
Net deferred loan fees		(2,313	)				(2,687	)				(3,198	)
Loans, net	$	5,130,788				$	5,031,988				$	4,924,379

LAKELAND FINANCIAL CORPORATION DEPOSITS AND BORROWINGS (unaudited, in thousands)

	March 31, 2025		December 31, 2024		March 31, 2024
Noninterest bearing demand deposits	$	1,296,907	$	1,297,456	$	1,254,200
Savings and transaction accounts:
Savings deposits		293,768		276,179		296,671
Interest bearing demand deposits		3,554,310		3,471,455		3,041,025
Time deposits:
Deposits of $100,000 or more		602,577		642,776		805,832
Other time deposits		212,632		213,100		220,357
Total deposits	$	5,960,194	$	5,900,966	$	5,618,085
FHLB advances and other borrowings		108,200		0		200,000
Total funding sources	$	6,068,394	$	5,900,966	$	5,818,085

LAKELAND FINANCIAL CORPORATION AVERAGE BALANCE SHEET AND NET INTEREST ANALYSIS (UNAUDITED)

	Three Months Ended March 31, 2025							Three Months Ended December 31, 2024							Three Months Ended March 31, 2024
(fully tax equivalent basis, dollars in thousands)	Average Balance			Interest Income		Yield (1)/ Rate		Average Balance			Interest Income		Yield (1)/ Rate		Average Balance			Interest Income		Yield (1)/ Rate
Earning Assets
Loans:
Taxable (2)(3)	$	5,160,031		$	81,740	6.42	%	$	5,060,397		$	83,253	6.54	%	$	4,916,943		$	82,042	6.71	%
Tax exempt (1)		25,887			361	5.66			26,217			364	5.52			54,077			1,118	8.31
Investments: (1)
Securities		1,136,404			8,338	2.98			1,134,011			7,953	2.79			1,158,503			8,035	2.79
Short-term investments		2,964			28	3.83			2,765			29	4.17			2,710			33	4.90
Interest bearing deposits		105,518			1,096	4.21			247,530			2,881	4.63			84,696			1,073	5.10
Total earning assets	$	6,430,804		$	91,563	5.77	%	$	6,470,920		$	94,480	5.81	%	$	6,216,929		$	92,301	5.97	%
Less: Allowance for credit losses		(87,477	)						(84,687	)						(72,433	)
Nonearning Assets
Cash and due from banks		71,004							67,994							68,584
Premises and equipment		60,523							60,325							57,883
Other nonearning assets		288,116							281,044							283,505
Total assets	$	6,762,970						$	6,795,596						$	6,554,468

Interest Bearing Liabilities
Savings deposits	$	283,888		$	42	0.06	%	$	274,960		$	43	0.06	%	$	295,650		$	49	0.07	%
Interest bearing checking accounts		3,486,447			28,075	3.27			3,505,470			31,562	3.58			3,046,958			30,365	4.01
Time deposits:
In denominations under $100,000		212,934			1,832	3.49			214,429			1,921	3.56			224,139			1,918	3.44
In denominations over $100,000		633,112			6,509	4.17			734,342			8,150	4.42			789,581			8,832	4.50
Miscellaneous short-term borrowings		99,830			1,122	4.56			5			0	5.30			175,809			2,454	5.61
Long-term borrowings		254			0	0.00			0			0	0.00			0			0	0.00
Total interest bearing liabilities	$	4,716,465		$	37,580	3.23	%	$	4,729,206		$	41,676	3.51	%	$	4,532,137		$	43,618	3.87	%
Noninterest Bearing Liabilities
Demand deposits		1,258,344							1,281,921							1,274,103
Other liabilities		92,108							90,725							103,221
Stockholders’ Equity		696,053							693,744							645,007
Total liabilities and stockholders’ equity	$	6,762,970						$	6,795,596						$	6,554,468
Interest Margin Recap
Interest income/average earning assets					91,563	5.77	%					94,480	5.81	%					92,301	5.97	%
Interest expense/average earning assets					37,580	2.37						41,676	2.56						43,618	2.82
Net interest income and margin				$	53,983	3.40	%				$	52,804	3.25	%				$	48,683	3.15	%

(1)		Tax exempt income was converted to a fully taxable equivalent basis at a 21 percent tax rate. The tax equivalent rate for tax exempt loans and tax-exempt securities acquired after January 1, 1983, included the Tax Equity and Fiscal Responsibility Act of 1982 (“TEFRA”) adjustment applicable to nondeductible interest expenses. Taxable equivalent basis adjustments were $1.11 million, $1.11 million and $1.27 million in the three-month periods ended March 31, 2025, December 31, 2024, and March 31, 2024, respectively.
(2)		Loan fees, which are immaterial in relation to total taxable loan interest income for the three-month periods ended March 31, 2025, December 31, 2024, and March 31, 2024, are included as taxable loan interest income.
(3)		Nonaccrual loans are included in the average balance of taxable loans.

Reconciliation of Non-GAAP Financial Measures

Tangible common equity, adjusted tangible common equity, tangible assets, adjusted tangible assets, tangible book value per common share, tangible common equity to tangible assets, adjusted tangible common equity to adjusted tangible assets, and pretax pre-provision earnings are non-GAAP financial measures calculated based on GAAP amounts. Tangible common equity is calculated by excluding the balance of goodwill and other intangible assets from the calculation of equity, net of deferred tax. Tangible assets are calculated by excluding the balance of goodwill and other intangible assets from the calculation of total assets, net of deferred tax. Adjusted tangible assets and adjusted tangible common equity remove the fair market value adjustment impact of the available-for-sale investment securities portfolio in accumulated other comprehensive income (loss) (“AOCI”). Tangible book value per common share is calculated by dividing tangible common equity by the number of shares outstanding less true treasury stock. Pretax pre-provision earnings is calculated by adding net interest income to noninterest income and subtracting noninterest expense. Because not all companies use the same calculation of tangible common equity and tangible assets, this presentation may not be comparable to other similarly titled measures calculated by other companies. However, management considers these measures of the company’s value meaningful to understanding of the company’s financial information and performance.

A reconciliation of these non-GAAP financial measures is provided below (dollars in thousands, except per share data).

	Three Months Ended
	Mar. 31, 2025			Dec. 31, 2024			Mar. 31, 2024
Total Equity	$	694,509		$	683,911		$	647,009
Less: Goodwill		(4,970	)		(4,970	)		(4,970	)
Plus: DTA Related to Goodwill		1,167			1,167			1,167
Tangible Common Equity		690,706			680,108			643,206
Market Value Adjustment in AOCI		163,879			165,932			166,189
Adjusted Tangible Common Equity		854,585			846,040			809,395

Assets	$	6,851,178		$	6,678,374		$	6,566,861
Less: Goodwill		(4,970	)		(4,970	)		(4,970	)
Plus: DTA Related to Goodwill		1,167			1,167			1,167
Tangible Assets		6,847,375			6,674,571			6,563,058
Market Value Adjustment in AOCI		163,879			165,932			166,189
Adjusted Tangible Assets		7,011,254			6,840,503			6,729,247

Ending Common Shares Issued		25,727,393			25,689,730			25,677,399

Tangible Book Value Per Common Share	$	26.85		$	26.47		$	25.05

Tangible Common Equity/Tangible Assets		10.09	%		10.19	%		9.80	%
Adjusted Tangible Common Equity/Adjusted Tangible Assets		12.19	%		12.37	%		12.03	%

Net Interest Income	$	52,875		$	51,694		$	47,416
Plus: Noninterest Income		10,928			11,876			12,612
Minus: Noninterest Expense		(32,763	)		(30,653	)		(30,705	)

Pretax Pre-Provision Earnings	$	31,040		$	32,917		$	29,323

Adjusted core noninterest income, adjusted earnings before income taxes, core operational profitability, core operational diluted earnings per common share and adjusted core efficiency ratio are non-GAAP financial measures calculated based on GAAP amounts. These adjusted amounts are calculated by excluding the impact of insurance recoveries related to the 2023 wire fraud loss for the periods presented below. Management considers these measures of financial performance to be meaningful to understanding the company’s core business performance for these periods.

A reconciliation of these non-GAAP financial measures is provided below (dollars in thousands, except per share data).

	Three Months Ended
	Mar. 31, 2025			Dec. 31, 2024			Mar. 31, 2024
Noninterest Income	$	10,928		$	11,876		$	12,612
Less: Insurance Recovery		0			0			(1,000	)
Adjusted Core Noninterest Income	$	10,928		$	11,876		$	11,612

Earnings Before Income Taxes	$	24,240		$	29,226		$	27,803
Adjusted Core Impact:
Noninterest Income		0			0			(1,000	)
Total Adjusted Core Impact		0			0			(1,000	)
Adjusted Earnings Before Income Taxes		24,240			29,226			26,803
Tax Effect		(4,155	)		(5,036	)		(4,153	)
Core Operational Profitability (1)	$	20,085		$	24,190		$	22,650

Diluted Earnings Per Common Share	$	0.78		$	0.94		$	0.91
Impact of Adjusted Core Items		0.00			0.00			(0.03	)
Core Operational Diluted Earnings Per Common Share	$	0.78		$	0.94		$	0.88

Adjusted Core Efficiency Ratio		51.35	%		48.22	%		52.02	%

(1)

Core operational profitability was $751,000 lower than reported net income for the three months ended March 31, 2024.

Contact
Lisa M. O’Neill
Executive Vice President and Chief Financial Officer
(574) 267-9125
lisa.oneill@lakecitybank.com

The MIL Network –

April 25, 2025

MIL-OSI: MidWestOne Financial Group, Inc. Reports Financial Results For the First Quarter of 2025

Source: GlobeNewswire (MIL-OSI)

IOWA CITY, Iowa, April 24, 2025 (GLOBE NEWSWIRE) — MidWestOne Financial Group, Inc. (Nasdaq: MOFG) (“we,” “our,” or the “Company”) today reported results for the first quarter of 2025.

First Quarter 2025 Summary¹

Net income of $15.1 million, or $0.73 per diluted common share.
- Net interest margin (tax equivalent) was 3.44%;² core net interest margin expanded 10 basis points (“bps”) to 3.36%.²
- Noninterest expenses were $36.3 million; efficiency ratio was 59.38%.²
- Return on average assets of 1.00%.
Criticized loans ratio improved 54 bps to 5.47%; nonperforming assets ratio improved 7 bps to 0.33%.
Tangible book value per share of $23.36,² an increase of 4.4%.
Common equity tier 1 (“CET1”) capital ratio improved 24 bps to 10.97%.

CEO Commentary

Charles (Chip) Reeves, Chief Executive Officer of the Company, commented, “We are pleased with the continued execution of our strategic plan initiatives despite a more uncertain economic environment. Our return on average assets eclipsed 1% for the second straight quarter driven by disciplined balance sheet management, core net interest margin expansion of 10 bps² and solid expense control. Loan growth was flat in the quarter, somewhat softer than anticipated, due to pay-offs and latter quarter market volatility. The majority of our asset quality metrics improved significantly, led by reductions in nonperforming assets and criticized loans. Net charge-offs increased to 29 basis points, with the majority of the increase due to a partial charge-off on a previously reserved CRE loan as we prepare for resolution. Driven by earnings and lower accumulated other comprehensive loss, tangible book value per share increased 4.4% to $23.36² and the CET1 ratio grew to 10.97%, edging closer to our target range of 11.0%-11.50%.

Thank you to our team members who continued to execute well and serve our customers amidst market volatility. We are pleased with the transformation of our company and our solid foundation of increased capital, earnings power, asset quality, and a premium core deposit franchise position us well for uncertain economic times and the remainder of 2025.”

¹ First Quarter Summary compares to the fourth quarter of 2024 (the “linked quarter”) unless noted.
² Non-GAAP measure. See the separate Non-GAAP Measures section for a reconciliation to the most directly comparable GAAP measure.

	As of or for the quarter ended
(Dollars in thousands, except per share amounts and as noted)	March 31,			December 31,			March 31,
		2025			2024			2024
Financial Results
Revenue	$	57,575		$	59,775		$	44,481
Credit loss expense		1,687			1,291			4,689
Noninterest expense		36,293			37,372			35,565
Net income		15,138			16,330			3,269
Adjusted earnings⁽³⁾		15,301			16,112			4,504
Per Common Share
Diluted earnings per share	$	0.73		$	0.78		$	0.21
Adjusted earnings per share⁽³⁾		0.73			0.77			0.29
Book value		27.85			26.94			33.53
Tangible book value⁽³⁾		23.36			22.37			27.14
Balance Sheet & Credit Quality
Loans In millions	$	4,304.2		$	4,315.6		$	4,414.6
Investment securities In millions		1,305.5			1,328.4			1,862.2
Deposits In millions		5,489.1			5,478.0			5,585.2
Net loan charge-offs In millions		3.1			0.7			0.2
Allowance for credit losses ratio		1.25	%		1.28	%		1.27	%
Selected Ratios
Return on average assets		1.00	%		1.03	%		0.20	%
Net interest margin, tax equivalent⁽³⁾		3.44	%		3.43	%		2.33	%
Return on average equity		10.74	%		11.53	%		2.49	%
Return on average tangible equity⁽³⁾		13.75	%		14.80	%		4.18	%
Efficiency ratio⁽³⁾		59.38	%		59.06	%		71.28	%

REVENUE REVIEW

Revenue							Change	Change
Revenue							1Q25 vs	1Q25 vs
(Dollars in thousands)	1Q25		4Q24		1Q24		4Q24	1Q24
Net interest income	$	47,439	$	48,938	$	34,731	(3)%	37	%
Noninterest income		10,136		10,837		9,750	(6)%	4	%
Total revenue, net of interest expense	$	57,575	$	59,775	$	44,481	(4)%	29	%

Total revenue for the first quarter of 2025 decreased $2.2 million from the fourth quarter of 2024 due to lower net interest income and noninterest income during the quarter. When compared to the first quarter of 2024, total revenue increased $13.1 million, due to higher net interest income and higher noninterest income.

Net interest income of $47.4 million for the first quarter of 2025 decreased $1.5 million from the fourth quarter of 2024, due to lower earning asset volumes and yields, partially offset by lower funding volumes and costs. When compared to the first quarter of 2024, net interest income increased $12.7 million, due to higher earning asset yields and lower funding volumes and costs, partially offset by lower earning asset volumes.

The Company’s tax equivalent net interest margin was 3.44%³ in the first quarter of 2025, compared to 3.43%³ in the fourth quarter of 2024, driven by lower funding costs, partially offset by a decline in earning asset yields. Interest bearing liability costs during the first quarter of 2025 decreased 11 bps to 2.41%, due to reductions of short-term borrowings, interest bearing deposits, and long-term debt costs of 78 bps, 10 bps, and 7 bps, to 3.75%, 2.31%, and 6.41%, respectively, from the fourth quarter of 2024.

The Company’s tax equivalent net interest margin was 3.44%³ in the first quarter of 2025, compared to 2.33%³ in the first quarter of 2024, driven by higher earning asset yields and lower interest-bearing liability costs. Total earning assets yield increased 79 bps from the first quarter of 2024, primarily due to increases of 192 bps and 20 bps in total investment securities and loan yields, respectively. Interest bearing liability costs decreased 34 bps to 2.41%, due to short-term borrowing costs of 3.75%, long-term debt costs of 6.41%, and interest-bearing deposit costs of 2.31%, which decreased 107 bps, 45 bps, and 14 bps, respectively, from the first quarter of 2024.

³ Non-GAAP measure. See the separate Non-GAAP Measures section for a reconciliation to the most directly comparable GAAP measure.

Noninterest Income									Change		Change
Noninterest Income									1Q25 vs		1Q25 vs
(In thousands)	1Q25			4Q24		1Q24			4Q24		1Q24
Investment services and trust activities	$	3,544		$	3,779	$	3,503		(6)%		1	%
Service charges and fees		2,131			2,159		2,144		(1)%		(1)%
Card revenue		1,744			1,833		1,943		(5)%		(10)%
Loan revenue		1,194			1,841		856		(35)%		39	%
Bank-owned life insurance		1,057			719		660		47	%	60	%
Investment securities gains, net		33			161		36		(80)%		(8)%
Other		433			345		608		26	%	(29)%
Total noninterest income	$	10,136		$	10,837	$	9,750		(6)%		4	%

MSR adjustment (included above in Loan revenue)	$	(213	)	$	164	$	(368	)	(230)%		(42)%

Noninterest income for the first quarter of 2025 decreased $0.7 million from the linked quarter, primarily due to declines of $0.6 million and $0.2 million in loan revenue and investment services and trust activities revenue, respectively. The decrease in loan revenue was reflective of an unfavorable change in the fair value of our mortgage servicing rights of $0.4 million, coupled with a decrease in Small Business Administration (“SBA”) gain on sale revenue of $0.3 million. The decrease in investment services and trust activities revenue was driven by a decline in assets under administration due to market volatility. Partially offsetting these decreases was an increase of $0.3 million in bank-owned life insurance revenue, due primarily to $0.4 million of death benefit recognized in the first quarter of 2025.

Noninterest income for the first quarter of 2025 increased $0.4 million from the first quarter of 2024 due primarily to increases of $0.4 million and $0.3 million in bank-owned life insurance and loan revenue, respectively. The bank-owned life insurance increase was due primarily to the death benefit noted above. The increase in loan revenue was due primarily to the mortgage servicing right valuation adjustment, coupled with higher SBA gain on sale revenue and other loan income. Partially offsetting these increases were decreases of $0.2 million in each of card revenue and other revenue.

EXPENSE REVIEW

Noninterest Expense							Change		Change
Noninterest Expense							1Q25 vs		1Q25 vs
(In thousands)	1Q25		4Q24		1Q24		4Q24		1Q24
Compensation and employee benefits	$	21,212	$	20,684	$	20,930	3	%	1	%
Occupancy expense of premises, net		2,588		2,772		2,813	(7)%		(8)%
Equipment		2,426		2,688		2,600	(10)%		(7)%
Legal and professional		2,226		2,534		2,059	(12)%		8	%
Data processing		1,698		1,719		1,360	(1)%		25	%
Marketing		552		793		598	(30)%		(8)%
Amortization of intangibles		1,408		1,449		1,637	(3)%		(14)%
FDIC insurance		917		980		942	(6)%		(3)%
Communications		159		154		196	3	%	(19)%
Foreclosed assets, net		74		56		358	32	%	(79)%
Other		3,033		3,543		2,072	(14)%		46	%
Total noninterest expense	$	36,293	$	37,372	$	35,565	(3)%		2	%

Merger-related Expenses
Merger-related Expenses
(In thousands)	1Q25		4Q24		1Q24
Compensation and employee benefits	$	—	$	—	$	241
Occupancy expense of premises, net		—		—		152
Equipment		—		21		149
Legal and professional		40		—		573
Data processing		—		10		61
Marketing		—		—		32
Communications		—		—		1
Other		—		—		105
Total merger-related expenses	$	40	$	31	$	1,314

Noninterest expense for the first quarter of 2025 decreased $1.1 million from the linked quarter, primarily due to decreases in other noninterest expense, legal and professional, equipment, and occupancy expense of premises, net, of $0.5 million, $0.3 million, $0.3 million, and $0.2 million, respectively. The primary drivers of the decrease in other noninterest expense were declines in fraud loss expense of $0.3 million and customer deposit costs of $0.1 million. The $0.3 million decrease in legal and professional expense was primarily driven by lower litigation-related legal costs. The decrease in equipment of $0.3 million was primarily driven by fewer small equipment purchases, while the decrease in occupancy expense of premises, net was due primarily to lower property tax expense. Partially offsetting these decreases was an increase of $0.5 million in compensation and employee benefits which reflected an increase in equity compensation and payroll tax expenses.

Noninterest expense for the first quarter of 2025 increased $0.7 million from the first quarter of 2024 primarily due to increases in other noninterest expense, data processing, and compensation and employee benefits of $1.0 million, $0.3 million and $0.3 million, respectively. The increase in other noninterest expense was due primarily to customer deposit costs while the increase in data processing was driven core banking system costs. The increase in compensation and employee benefits was primarily driven by medical benefits expenses, wages expense, and incentive expense due to improved performance. Partially offsetting these identified increases was a decline of $1.3 million in merger-related expenses.

The Company’s effective tax rate was 22.7% in the first quarter of 2025 and the linked quarter. The effective income tax rate for the full year 2025 is expected to be 22-23%.

BALANCE SHEET REVIEW

Total assets were $6.25 billion at March 31, 2025, compared to $6.24 billion at December 31, 2024 and $6.75 billion at March 31, 2024. The increase from December 31, 2024 was primarily due to higher cash balances, partially offset by lower securities balances. Compared to March 31, 2024, the decrease was primarily driven by the sale of assets associated with our Florida banking operations in the second quarter of 2024 coupled with the pay-off of Bank Term Funding Program (“BTFP”) borrowings with proceeds received from securities sales transactions in the fourth quarter of 2024.

Loans Held for Investment	March 31, 2025			December 31, 2024			March 31, 2024
(Dollars in thousands)	Balance	% of Total		Balance	% of Total		Balance	% of Total
Commercial and industrial	$1,140,138	26.5	%	$1,126,813	26.1	%	$1,105,718	25.0	%
Agricultural	131,409	3.1		119,051	2.8		113,029	2.6
Commercial real estate
Construction and development	293,280	6.8		324,896	7.5		403,571	9.1
Farmland	180,633	4.2		182,460	4.2		184,109	4.2
Multifamily	421,204	9.8		423,157	9.8		409,504	9.3
Other	1,425,062	33.0		1,414,168	32.7		1,440,645	32.7
Total commercial real estate	2,320,179	53.8		2,344,681	54.2		2,437,829	55.3
Residential real estate
One-to-four family first liens	471,688	11.0		477,150	11.1		495,408	11.2
One-to-four family junior liens	182,346	4.2		179,232	4.2		182,001	4.1
Total residential real estate	654,034	15.2		656,382	15.3		677,409	15.3
Consumer	58,424	1.4		68,700	1.6		80,661	1.8
Loans held for investment, net of unearned income	$4,304,184	100.0	%	$4,315,627	100.0	%	$4,414,646	100.0	%

Total commitments to extend credit	$1,080,300			$1,080,737			$1,230,612

Loans held for investment, net of unearned income, decreased $11.4 million, or 0.3%, to $4.30 billion from $4.32 billion at December 31, 2024, primarily due to the reclassification of $11.0 million of credit card receivables to loans held for sale in the first quarter of 2025. Management expects the credit card portfolio sale to close in the fourth quarter of 2025.

Loans held for investment, net of unearned income, decreased $110.5 million, or 2.5%, to $4.30 billion from $4.41 billion at March 31, 2024. The decrease from the first quarter of 2024 was driven primarily by the sale of loans associated with our Florida banking operations in the second quarter of 2024, partially offset by organic loan growth and higher line of credit usage.

Investment Securities	March 31, 2025			December 31, 2024			March 31, 2024
(Dollars in thousands)	Balance	% of Total		Balance	% of Total		Balance	% of Total
Available for sale	$1,305,530	100.0	%	$1,328,433	100.0	%	$797,230	42.8	%
Held to maturity	—	—	%	—	—	%	1,064,939	57.2	%
Total investment securities	$1,305,530			$1,328,433			$1,862,169

Investment securities at March 31, 2025 were $1.31 billion, decreasing $22.9 million from December 31, 2024 and decreasing $556.6 million from March 31, 2024. The decrease from the fourth quarter of 2024 was primarily due to principal cash flows received from scheduled payments, calls, and maturities. The decrease from the first quarter of 2024 stemmed primarily from the sale of debt securities in connection with a balance sheet repositioning, as well as principal cash flows received from scheduled payments, calls, and maturities.

Deposits	March 31, 2025			December 31, 2024			March 31, 2024
(Dollars in thousands)	Balance	% of Total		Balance	% of Total		Balance	% of Total
Noninterest bearing deposits	$903,714	16.5	%	$951,423	17.4	%	$920,764	16.5	%
Interest checking deposits	1,283,328	23.3		1,258,191	22.9		1,349,823	24.2
Money market deposits	1,002,066	18.3		1,053,988	19.2		1,122,717	20.1
Savings deposits	877,348	16.0		820,549	15.0		728,276	13.0
Time deposits of $250 and under	818,012	14.9		826,793	15.1		787,851	14.1
Total core deposits	4,884,468	89.0		4,910,944	89.6		4,909,431	87.9
Brokered time deposits	200,000	3.6		200,000	3.7		205,000	3.7
Time deposits over $250	404,674	7.4		367,038	6.7		470,805	8.4
Total deposits	$5,489,142	100.0	%	$5,477,982	100.0	%	$5,585,236	100.0	%

Total deposits increased $11.2 million, or 0.2%, to $5.49 billion, from $5.48 billion at December 31, 2024. Total deposits decreased $96.1 million, or 1.7%, from $5.59 billion at March 31, 2024, primarily due to the deposits transferred in the sale of our Florida banking operations, partially offset by organic deposit growth in our targeted metropolitan markets.

Borrowed Funds	March 31, 2025			December 31, 2024			March 31, 2024
(Dollars in thousands)	Balance	% of Total		Balance	% of Total		Balance	% of Total
Short-term borrowings	$1,482	1.3	%	$3,186	2.7	%	$422,988	77.6	%
Long-term debt	111,398	98.7	%	113,376	97.3	%	122,066	22.4	%
Total borrowed funds	$112,880			$116,562			$545,054

Borrowed funds were $112.9 million at March 31, 2025, a decrease of $3.7 million from December 31, 2024 and a decrease of $432.2 million from March 31, 2024. The decrease compared to the linked quarter was due to lower customer repurchase agreement volumes and scheduled payments on long-term debt. The decrease compared to March 31, 2024 was primarily due to the pay-off of $405.0 million of BTFP borrowings and $13.0 million of a revolving credit facility, as well as scheduled payments on long-term debt.

Capital	March 31,			December 31,			March 31,
(Dollars in thousands)	2025 ⁽¹⁾				2024			2024
Total shareholders’ equity	$	579,625		$	559,696		$	528,040
Accumulated other comprehensive loss		(63,098	)		(72,762	)		(60,804	)
MidWestOneFinancial Group, Inc. Consolidated
Tier 1 leverage to average assets ratio		9.50	%		9.15	%		8.16	%
Common equity tier 1 capital to risk-weighted assets ratio		10.97	%		10.73	%		8.98	%
Tier 1 capital to risk-weighted assets ratio		11.84	%		11.59	%		9.75	%
Total capital to risk-weighted assets ratio		14.34	%		14.07	%		11.97	%
MidWestOneBank
Tier 1 leverage to average assets ratio		10.42	%		10.12	%		9.36	%
Common equity tier 1 capital to risk-weighted assets ratio		13.02	%		12.86	%		11.20	%
Tier 1 capital to risk-weighted assets ratio		13.02	%		12.86	%		11.20	%
Total capital to risk-weighted assets ratio		14.21	%		14.02	%		12.25	%
⁽¹⁾ Regulatory capital ratios for March 31, 2025 are preliminary

Total shareholders’ equity at March 31, 2025 increased $19.9 million from December 31, 2024, driven primarily by an increase in retained earnings and a decrease in accumulated other comprehensive loss. Total shareholders’ equity at March 31, 2025 increased $51.6 million from March 31, 2024, primarily due to increases in common stock and additional pain-in-capital stemming from the common equity capital raise in the third quarter of 2024, partially offset by a decrease in retained earnings.

On April 22, 2025, the Board of Directors of the Company declared a cash dividend of $0.2425 per common share. The dividend is payable June 16, 2025, to shareholders of record at the close of business on June 2, 2025.

No common shares were repurchased by the Company during the period December 31, 2024 through March 31, 2025 or for the subsequent period through April 24, 2025. The current share repurchase program allows for the repurchase of up to $15.0 million of the Company’s common shares. As of March 31, 2025, $15.0 million remained available under this program.

CREDIT QUALITY REVIEW

Credit Quality	As of or For the Three Months Ended
Credit Quality	March 31,			December 31,			March 31,
(Dollars in thousands)		2025			2024			2024
Credit loss expense related to loans	$	1,787		$	1,891		$	4,589
Net charge-offs		3,087			691			189
Allowance for credit losses		53,900			55,200			55,900
Pass	$	4,068,707		$	4,056,361		$	4,098,102
Special Mention		121,494			148,462			152,604
Classified		113,983			110,804			163,940
Criticized		235,477			259,266			316,544
Loans greater than 30 days past due and accruing	$	6,119		$	9,378		$	8,772
Nonperforming loans	$	17,470		$	21,847		$	29,267
Nonperforming assets		20,889			25,184			33,164
Net charge-off ratio⁽¹⁾		0.29	%		0.06	%		0.02	%
Classified loans ratio⁽²⁾		2.65	%		2.57	%		3.71	%
Criticized loans ratio⁽³⁾		5.47	%		6.01	%		7.17	%
Nonperforming loans ratio⁽⁴⁾		0.41	%		0.51	%		0.66	%
Nonperforming assets ratio⁽⁵⁾		0.33	%		0.40	%		0.49	%
Allowance for credit losses ratio⁽⁶⁾		1.25	%		1.28	%		1.27	%
Allowance for credit losses to nonaccrual loans ratio⁽⁷⁾		309.47	%		254.32	%		197.53	%
⁽¹⁾ Net charge-off ratio is calculated as annualized net charge-offs divided by the sum of average loans held for investment, net of unearned income and average loans held for sale, during the period.
⁽²⁾ Classified loans ratio is calculated as classified loans divided by loans held for investment, net of unearned income, at the end of the period.
⁽³⁾ Criticized loans ratio is calculated as criticized loans divided by loans held for investment, net of unearned income, at the end of the period.
⁽⁴⁾ Nonperforming loans ratio is calculated as nonperforming loans divided by loans held for investment, net of unearned income, at the end of the period.
⁽⁵⁾ Nonperforming assets ratio is calculated as nonperforming assets divided by total assets at the end of the period.
⁽⁶⁾ Allowance for credit losses ratio is calculated as allowance for credit losses divided by loans held for investment, net of unearned income, at the end of the period.
⁽⁷⁾ Allowance for credit losses to nonaccrual loans ratio is calculated as allowance for credit losses divided by nonaccrual loans at the end of the period.

Nonperforming loans and nonperforming assets ratios improved 10 bps and 7 bps, to 0.41% and 0.33%, respectively, compared to the linked quarter. In addition, special mention loan balances decreased $27.0 million, or 18%, while classified loan balances remained relatively stable with an increase of $3.2 million, or 3%. When compared to the same period of the prior year, the nonperforming loans and nonperforming asset ratios improved 25 bps and 16 bps, respectively, while the classified loan ratio improved 106 bps. Special mention loan balances decreased $31.1 million, or 20%. The net charge-off ratio increased 23 bps from the linked quarter and 27 bps from the same period in the prior year.

As of March 31, 2025, the allowance for credit losses was $53.9 million and the allowance for credit losses ratio was 1.25%, compared with $55.2 million and 1.28%, respectively, at December 31, 2024. Credit loss expense of $1.7 million in the first quarter of 2025 primarily reflected additional reserve on pooled loans, offset by a reduction of $0.1 million in the reserve for unfunded loan commitments.

Nonperforming Loans Roll Forward	Nonaccrual	90+ Days Past Due & Still Accruing	Total
(Dollars in thousands)	Nonaccrual	90+ Days Past Due & Still Accruing	Total
Balance at December 31, 2024	$21,705	$142	$21,847
Loans placed on nonaccrual or 90+ days past due & still accruing	3,121	225	3,346
Proceeds related to repayment or sale	(4,158)	—	(4,158)
Loans returned to accrual status or no longer past due	(336)	(49)	(385)
Charge-offs	(2,774)	(259)	(3,033)
Transfers to foreclosed assets	(141)	—	(141)
Transfer to nonaccrual	—	(6)	(6)
Balance at March 31, 2025	$17,417	$53	$17,470

CONFERENCE CALL DETAILS

The Company will host a conference call for investors at 11:00 a.m. CT on Friday, April 25, 2025. To participate, you may pre-register for this call utilizing the following link: https://www.netroadshow.com/events/login?show=29396e9f&confId=80376. After pre-registering for this event you will receive your access details via email. On the day of the call, you are also able to dial 1-833-470-1428 using an access code of 527448 at least fifteen minutes before the call start time. If you are unable to participate on the call, a replay will be available until July 24, 2025 by calling 1-866-813-9403 and using the replay access code of 162684. A transcript of the call will also be available on the Company’s web site (www.midwestonefinancial.com) within three business days of the call.

ABOUT MIDWESTONE FINANCIAL GROUP, INC.

MidWestOne Financial Group, Inc. is a financial holding company headquartered in Iowa City, Iowa. MidWestOne is the parent company of MidWestOne Bank, which operates banking offices in Iowa, Minnesota, Wisconsin, and Colorado. MidWestOne provides electronic delivery of financial services through its website, MidWestOne.bank. MidWestOne Financial Group, Inc. trades on the Nasdaq Global Select Market under the symbol “MOFG”.

Cautionary Note Regarding Forward-Looking Statements

This release contains certain “forward-looking statements” within the meaning of such term in the Private Securities Litigation Reform Act of 1995. We and our representatives may, from time to time, make written or oral statements that are “forward-looking” and provide information other than historical information. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results to be materially different from any results, levels of activity, performance or achievements expressed or implied by any forward-looking statement. These factors include, among other things, the factors listed below. Forward-looking statements, which may be based upon beliefs, expectations and assumptions of our management and on information currently available to management, are generally identifiable by the use of words such as “believe,” “expect,” “anticipate,” “should,” “could,” “would,” “plans,” “goals,” “intend,” “project,” “estimate,” “forecast,” “may” or similar expressions. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those expressed in, or implied by, these statements. Readers are cautioned not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Additionally, we undertake no obligation to update any statement in light of new information or future events, except as required under federal securities law.

Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors that could have an impact on our ability to achieve operating results, growth plan goals and future prospects include, but are not limited to, the following: (1) the effects of changes in interest rates, including on our net income and the value of our securities portfolio; (2) fluctuations in the value of our investment securities; (3) effects on the U.S. economy resulting from the implementation of proposed policies and executive orders, including the imposition of tariffs, changes in immigration policy, changes to regulatory or other governmental agencies, changes in foreign policy and tax regulations; (4) volatility of rate-sensitive deposits; (5) asset/liability matching risks and liquidity risks; (6) the ability to successfully manage liquidity risk, which may increase dependence on non-core funding sources such as brokered deposits, and may negatively impact the Company’s cost of funds; (7) the concentration of large deposits from certain clients, including those who have balances above current FDIC insurance limits; (8) credit quality deterioration, pronounced and sustained reduction in real estate market values, or other uncertainties, including the impact of inflationary pressures and future monetary policies of the Federal Reserve in response thereto on economic conditions and our business, resulting in an increase in the allowance for credit losses, an increase in the credit loss expense, and a reduction in net earnings; (9) the sufficiency of the allowance for credit losses to absorb the amount of expected losses inherent in our existing loan portfolio; (10) the failure of assumptions underlying the establishment of allowances for credit losses and estimation of values of collateral and various financial assets and liabilities; (11) credit risks and risks from concentrations (by type of borrower, collateral, geographic area and by industry) within our loan portfolio; (12) changes in the economic environment, competition, or other factors that may affect our ability to acquire loans or influence the anticipated growth rate of loans and deposits and the quality of the loan portfolio and loan and deposit pricing; (13) governmental monetary and fiscal policies; (14) new or revised general economic, political, or industry conditions, nationally, internationally or in the communities in which we conduct business, including the risk of a recession; (15) the imposition of domestic or foreign tariffs or other governmental policies impacting the global supply chain and value of the agricultural or other products of our borrowers; (16) war or terrorist activities, including ongoing conflicts in the Middle East and the Russian invasion of Ukraine, widespread disease or pandemic, or other adverse external events, which may cause deterioration in the economy or cause instability in credit markets; (17) legislative and regulatory changes, including changes in banking, securities, trade, and tax laws and regulations and their application by our regulators, and including changes in interpretation or prioritization of such laws and regulations; (18) changes in accounting policies and practices, as may be adopted by state and federal regulatory agencies and the Financial Accounting Standards Board; (19) the effects of competition from other commercial banks, thrifts, mortgage banking firms, consumer finance companies, credit unions, securities brokerage firms, insurance companies, money market and other mutual funds, financial technology companies, and other financial institutions operating in our markets or elsewhere or providing similar services; (20) changes in the business and economic conditions generally and in the financial services industry, and the effects of recent developments and events in the financial services industry, including the large-scale deposit withdrawals over a short period of time that resulted in prior bank failures; (21) the occurrence of fraudulent activity, breaches, or failures of our or our third party vendors’ information security controls or cyber-security related incidents, including as a result of sophisticated attacks using artificial intelligence and similar tools or as a result of insider fraud; (22) the ability to attract and retain key executives and employees experienced in banking and financial services; (23) our ability to adapt successfully to technological changes to compete effectively in the marketplace; (24) operational risks, including data processing system failures and fraud; (25) the costs, effects and outcomes of existing or future litigation or other legal proceedings and regulatory actions; (26) the risks of mergers or branch sales (including the sale of our Florida banking operations and the acquisition of Denver Bankshares, Inc.), including, without limitation, the related time and costs of implementing such transactions, integrating operations as part of these transactions and possible failures to achieve expected gains, revenue growth and/or expense savings from such transactions; (27) the economic impacts on the Company and its customers of climate change, natural disasters and exceptional weather occurrences, such as: tornadoes, floods and blizzards; and (28) other risk factors detailed from time to time in Securities and Exchange Commission filings made by the Company.

MIDWESTONE FINANCIAL GROUP, INC.
FIVE QUARTER CONSOLIDATED BALANCE SHEETS

	March 31,			December 31,			September 30,			June 30,			March 31,
(In thousands)		2025			2024			2024			2024			2024
ASSETS
Cash and due from banks	$	68,545		$	71,803		$	72,173		$	66,228		$	68,430
Interest earning deposits in banks		182,360			133,092			129,695			35,340			29,328
Federal funds sold		—			—			—			—			4
Total cash and cash equivalents		250,905			204,895			201,868			101,568			97,762
Debt securities available for sale at fair value		1,305,530			1,328,433			1,623,104			771,034			797,230
Held to maturity securities at amortized cost		—			—			—			1,053,080			1,064,939
Total securities		1,305,530			1,328,433			1,623,104			1,824,114			1,862,169
Loans held for sale		13,836			749			3,283			2,850			2,329
Gross loans held for investment		4,315,546			4,328,413			4,344,559			4,304,619			4,433,258
Unearned income, net		(11,362	)		(12,786	)		(15,803	)		(17,387	)		(18,612	)
Loans held for investment, net of unearned income		4,304,184			4,315,627			4,328,756			4,287,232			4,414,646
Allowance for credit losses		(53,900	)		(55,200	)		(54,000	)		(53,900	)		(55,900	)
Total loans held for investment, net		4,250,284			4,260,427			4,274,756			4,233,332			4,358,746
Premises and equipment, net		90,031			90,851			90,750			91,793			95,986
Goodwill		69,788			69,788			69,788			69,388			71,118
Other intangible assets, net		23,611			25,019			26,469			27,939			29,531
Foreclosed assets, net		3,419			3,337			3,583			6,053			3,897
Other assets		246,990			252,830			258,881			224,621			226,477
Total assets	$	6,254,394		$	6,236,329		$	6,552,482		$	6,581,658		$	6,748,015
LIABILITIES
Noninterest bearing deposits	$	903,714		$	951,423		$	917,715		$	882,472		$	920,764
Interest bearing deposits		4,585,428			4,526,559			4,451,012			4,529,947			4,664,472
Total deposits		5,489,142			5,477,982			5,368,727			5,412,419			5,585,236
Short-term borrowings		1,482			3,186			410,630			414,684			422,988
Long-term debt		111,398			113,376			115,051			114,839			122,066
Other liabilities		72,747			82,089			95,836			96,430			89,685
Total liabilities		5,674,769			5,676,633			5,990,244			6,038,372			6,219,975
SHAREHOLDERS’ EQUITY
Common stock		21,580			21,580			21,580			16,581			16,581
Additional paid-in capital		414,258			414,987			414,965			300,831			300,845
Retained earnings		227,790			217,776			206,490			306,030			294,066
Treasury stock		(20,905	)		(21,885	)		(21,955	)		(22,021	)		(22,648	)
Accumulated other comprehensive loss		(63,098	)		(72,762	)		(58,842	)		(58,135	)		(60,804	)
Total shareholders’ equity		579,625			559,696			562,238			543,286			528,040
Total liabilities and shareholders’ equity	$	6,254,394		$	6,236,329		$	6,552,482		$	6,581,658		$	6,748,015

MIDWESTONE FINANCIAL GROUP, INC.
FIVE QUARTER CONSOLIDATED STATEMENTS OF INCOME

	Three Months Ended
	March 31,		December 31,		September 30,			June 30,		March 31,
(In thousands, except per share data)		2025		2024		2024			2024		2024
Interest income
Loans, including fees	$	59,462	$	62,458	$	62,521		$	61,643	$	57,947
Taxable investment securities		13,327		11,320		8,779			9,228		9,460
Tax-exempt investment securities		703		728		1,611			1,663		1,710
Other		1,247		3,761		785			242		418
Total interest income		74,739		78,267		73,696			72,776		69,535
Interest expense
Deposits		25,484		27,324		29,117			28,942		27,726
Short-term borrowings		25		115		5,043			5,409		4,975
Long-term debt		1,791		1,890		2,015			2,078		2,103
Total interest expense		27,300		29,329		36,175			36,429		34,804
Net interest income		47,439		48,938		37,521			36,347		34,731
Credit loss expense		1,687		1,291		1,535			1,267		4,689
Net interest income after credit loss expense		45,752		47,647		35,986			35,080		30,042
Noninterest income
Investment services and trust activities		3,544		3,779		3,410			3,504		3,503
Service charges and fees		2,131		2,159		2,170			2,156		2,144
Card revenue		1,744		1,833		1,935			1,907		1,943
Loan revenue		1,194		1,841		760			1,525		856
Bank-owned life insurance		1,057		719		879			668		660
Investment securities gains (losses), net		33		161		(140,182	)		33		36
Other		433		345		640			11,761		608
Total noninterest income (loss)		10,136		10,837		(130,388	)		21,554		9,750
Noninterest expense
Compensation and employee benefits		21,212		20,684		19,943			20,985		20,930
Occupancy expense of premises, net		2,588		2,772		2,443			2,435		2,813
Equipment		2,426		2,688		2,486			2,530		2,600
Legal and professional		2,226		2,534		2,261			2,253		2,059
Data processing		1,698		1,719		1,580			1,645		1,360
Marketing		552		793		619			636		598
Amortization of intangibles		1,408		1,449		1,470			1,593		1,637
FDIC insurance		917		980		923			1,051		942
Communications		159		154		159			191		196
Foreclosed assets, net		74		56		330			138		358
Other		3,033		3,543		3,584			2,304		2,072
Total noninterest expense		36,293		37,372		35,798			35,761		35,565
Income (loss) before income tax expense		19,595		21,112		(130,200	)		20,873		4,227
Income tax expense (benefit)		4,457		4,782		(34,493	)		5,054		958
Net income (loss)	$	15,138	$	16,330	$	(95,707	)	$	15,819	$	3,269

Earnings (loss) per common share
Basic	$	0.73	$	0.79	$	(6.05	)	$	1.00	$	0.21
Diluted	$	0.73	$	0.78	$	(6.05	)	$	1.00	$	0.21
Weighted average basic common shares outstanding		20,797		20,776		15,829			15,763		15,723
Weighted average diluted common shares outstanding		20,849		20,851		15,829			15,781		15,774
Dividends paid per common share	$	0.2425	$	0.2425	$	0.2425		$	0.2425	$	0.2425

MIDWESTONE FINANCIAL GROUP, INC.
FINANCIAL STATISTICS

	As of or for the Three Months Ended
	March 31,			December 31,			March 31,
(Dollars in thousands, except per share amounts)		2025			2024			2024
Earnings:
Net interest income	$	47,439		$	48,938		$	34,731
Noninterest income		10,136			10,837			9,750
Total revenue, net of interest expense		57,575			59,775			44,481
Credit loss expense		1,687			1,291			4,689
Noninterest expense		36,293			37,372			35,565
Income before income tax expense		19,595			21,112			4,227
Income tax expense		4,457			4,782			958
Net income	$	15,138		$	16,330		$	3,269
Adjusted earnings⁽¹⁾	$	15,301		$	16,112		$	4,504
Per Share Data:
Diluted earnings	$	0.73		$	0.78		$	0.21
Adjusted earnings⁽¹⁾		0.73			0.77			0.29
Book value		27.85			26.94			33.53
Tangible book value⁽¹⁾		23.36			22.37			27.14
Ending Balance Sheet:
Total assets	$	6,254,394		$	6,236,329		$	6,748,015
Loans held for investment, net of unearned income		4,304,184			4,315,627			4,414,646
Total securities		1,305,530			1,328,433			1,862,169
Total deposits		5,489,142			5,477,982			5,585,236
Short-term borrowings		1,482			3,186			422,988
Long-term debt		111,398			113,376			122,066
Total shareholders’ equity		579,625			559,696			528,040
Average Balance Sheet:
Average total assets	$	6,168,546		$	6,279,975		$	6,635,379
Average total loans		4,290,710			4,307,583			4,298,216
Average total deposits		5,398,819			5,464,900			5,481,114
Financial Ratios:
Return on average assets		1.00	%		1.03	%		0.20	%
Return on average equity		10.74	%		11.53	%		2.49	%
Return on average tangible equity⁽¹⁾		13.75	%		14.80	%		4.18	%
Efficiency ratio⁽¹⁾		59.38	%		59.06	%		71.28	%
Net interest margin, tax equivalent⁽¹⁾		3.44	%		3.43	%		2.33	%
Loans to deposits ratio		78.41	%		78.78	%		79.04	%
CET1 Ratio		10.97	%		10.73	%		8.98	%
Common equity ratio		9.27	%		8.97	%		7.83	%
Tangible common equity ratio⁽¹⁾		7.89	%		7.57	%		6.43	%
Credit Risk Profile:
Total nonperforming loans	$	17,470		$	21,847		$	29,267
Nonperforming loans ratio		0.41	%		0.51	%		0.66	%
Total nonperforming assets	$	20,889		$	25,184		$	33,164
Nonperforming assets ratio		0.33	%		0.40	%		0.49	%
Net charge-offs	$	3,087		$	691		$	189
Net charge-off ratio		0.29	%		0.06	%		0.02	%
Allowance for credit losses	$	53,900		$	55,200		$	55,900
Allowance for credit losses ratio		1.25	%		1.28	%		1.27	%
Allowance for credit losses to nonaccrual ratio		309.47	%		254.32	%		197.53	%

⁽¹⁾ Non-GAAP measure. See the Non-GAAP Measures section for a reconciliation to the most directly comparable GAAP measure.

MIDWESTONE FINANCIAL GROUP, INC.
AVERAGE BALANCE SHEET AND YIELD ANALYSIS

	Three Months Ended
	March 31, 2025			December 31, 2024			March 31, 2024
(Dollars in thousands)	Average Balance	Interest Income/ Expense	Average Yield/ Cost	Average Balance	Interest Income/ Expense	Average Yield/ Cost	Average Balance	Interest Income/ Expense	Average Yield/ Cost
ASSETS
Loans, including fees ^(1)(2)(3)	$4,290,710	$60,443	5.71%	$4,307,583	$63,443	5.86%	$4,298,216	$58,867	5.51%
Taxable investment securities	1,207,844	13,327	4.47%	1,080,716	11,320	4.17%	1,557,603	9,460	2.44%
Tax-exempt investment securities ⁽²⁾⁽⁴⁾	105,563	865	3.32%	109,183	896	3.26%	328,736	2,097	2.57%
Total securities held for investment⁽²⁾	1,313,407	14,192	4.38%	1,189,899	12,216	4.08%	1,886,339	11,557	2.46%
Other	124,133	1,247	4.07%	309,904	3,761	4.83%	30,605	418	5.49%
Total interest earning assets⁽²⁾	$5,728,250	$75,882	5.37%	$5,807,386	$79,420	5.44%	$6,215,160	$70,842	4.58%
Other assets	440,296			472,589			420,219
Total assets	$6,168,546			$6,279,975			$6,635,379
LIABILITIES AND SHAREHOLDERS’ EQUITY
Interest checking deposits	$1,240,586	$2,127	0.70%	$1,252,481	$2,205	0.70%	$1,301,470	$2,890	0.89%
Money market deposits	1,002,743	6,333	2.56%	1,046,571	7,197	2.74%	1,102,543	8,065	2.94%
Savings deposits	835,731	3,057	1.48%	799,931	3,158	1.57%	694,143	2,047	1.19%
Time deposits	1,397,595	13,967	4.05%	1,410,542	14,764	4.16%	1,446,981	14,724	4.09%
Total interest bearing deposits	4,476,655	25,484	2.31%	4,509,525	27,324	2.41%	4,545,137	27,726	2.45%
Securities sold under agreements to repurchase	2,705	5	0.75%	3,640	8	0.87%	5,330	11	0.83%
Other short-term borrowings	—	20	—%	6,465	107	6.58%	409,525	4,964	4.88%
Total short-term borrowings	2,705	25	3.75%	10,105	115	4.53%	414,855	4,975	4.82%
Long-term debt	113,364	1,791	6.41%	116,018	1,890	6.48%	123,266	2,103	6.86%
Total borrowed funds	116,069	1,816	6.35%	126,123	2,005	6.32%	538,121	7,078	5.29%
Total interest bearing liabilities	$4,592,724	$27,300	2.41%	$4,635,648	$29,329	2.52%	$5,083,258	$34,804	2.75%
Noninterest bearing deposits	922,164			955,375			935,977
Other liabilities	82,280			125,536			88,611
Shareholders’ equity	571,378			563,416			527,533
Total liabilities and shareholders’ equity	$6,168,546			$6,279,975			$6,635,379
Net interest income⁽²⁾		$48,582			$50,091			$36,038
Net interest spread⁽²⁾			2.96%			2.92%			1.83%
Net interest margin⁽²⁾			3.44%			3.43%			2.33%

Total deposits⁽⁵⁾	$5,398,819	$25,484	1.91%	$5,464,900	$27,324	1.99%	$5,481,114	$27,726	2.03%
Cost of funds⁽⁶⁾			2.01%			2.09%			2.33%

⁽¹⁾	Average balance includes nonaccrual loans.
⁽²⁾	Tax equivalent. The federal statutory tax rate utilized was 21%.
⁽³⁾	Interest income includes net loan fees, loan purchase discount accretion and tax equivalent adjustments. Net loan fees were $256 thousand, $456 thousand, and $237 thousand for the three months ended March 31, 2025, December 31, 2024, and March 31, 2024, respectively. Loan purchase discount accretion was $1.2 million, $2.5 million, and $1.2 million for the three months ended March 31, 2025, December 31, 2024, and March 31, 2024, respectively. Tax equivalent adjustments were $981 thousand, $985 thousand, and $920 thousand for the three months ended March 31, 2025, December 31, 2024, and March 31, 2024, respectively. The federal statutory tax rate utilized was 21%.
⁽⁴⁾	Interest income includes tax equivalent adjustments of $162 thousand, $168 thousand, and $387 thousand for the three months ended March 31, 2025, December 31, 2024, and March 31, 2024, respectively. The federal statutory tax rate utilized was 21%.
⁽⁵⁾	Total deposits is the sum of total interest-bearing deposits and noninterest bearing deposits. The cost of total deposits is calculated as annualized interest expense on deposits divided by average total deposits.
⁽⁶⁾	Cost of funds is calculated as annualized total interest expense divided by the sum of average total deposits and borrowed funds.

Non-GAAP Measures

This earnings release contains non-GAAP measures for tangible common equity, tangible book value per share, tangible common equity ratio, return on average tangible equity, net interest margin (tax equivalent), core net interest margin, loan yield (tax equivalent), core yield on loans, efficiency ratio, adjusted earnings and adjusted earnings per share. Management believes these measures provide investors with useful information regarding the Company’s profitability, financial condition and capital adequacy, consistent with how management evaluates the Company’s financial performance. The following tables provide a reconciliation of each non-GAAP measure to the most comparable GAAP measure.

Tangible Common Equity/Tangible Book Value
per Share/Tangible Common Equity Ratio	March 31,			December 31,			September 30,			June 30,			March 31,
(Dollars in thousands, except per share data)		2025			2024			2024			2024			2024
Total shareholders’ equity	$	579,625		$	559,696		$	562,238		$	543,286		$	528,040
Intangible assets, net		(93,399	)		(94,807	)		(96,257	)		(97,327	)		(100,649	)
Tangible common equity	$	486,226		$	464,889		$	465,981		$	445,959		$	427,391

Total assets	$	6,254,394		$	6,236,329		$	6,552,482		$	6,581,658		$	6,748,015
Intangible assets, net		(93,399	)		(94,807	)		(96,257	)		(97,327	)		(100,649	)
Tangible assets	$	6,160,995		$	6,141,522		$	6,456,225		$	6,484,331		$	6,647,366

Book value per share	$	27.85		$	26.94		$	27.06		$	34.44		$	33.53
Tangible book value per share⁽¹⁾	$	23.36		$	22.37		$	22.43		$	28.27		$	27.14
Shares outstanding		20,815,715			20,777,485			20,774,919			15,773,468			15,750,471

Common equity ratio		9.27	%		8.97	%		8.58	%		8.25	%		7.83	%
Tangible common equity ratio⁽²⁾		7.89	%		7.57	%		7.22	%		6.88	%		6.43	%

⁽¹⁾ Tangible common equity divided by shares outstanding.
⁽²⁾ Tangible common equity divided by tangible assets.

	Three Months Ended
Return on Average Tangible Equity	March 31,			December 31,			March 31,
(Dollars in thousands)		2025			2024			2024
Net income	$	15,138		$	16,330		$	3,269
Intangible amortization, net of tax⁽¹⁾		1,047			1,075			1,228
Tangible net income	$	16,185		$	17,405		$	4,497

Average shareholders’ equity	$	571,378		$	563,416		$	527,533
Average intangible assets, net		(94,169	)		(95,498	)		(95,296	)
Average tangible equity	$	477,209		$	467,918		$	432,237

Return on average equity		10.74	%		11.53	%		2.49	%
Return on average tangible equity⁽²⁾		13.75	%		14.80	%		4.18	%

⁽¹⁾ The income tax rate utilized was the blended marginal tax rate.
⁽²⁾ Annualized tangible net income divided by average tangible equity.

Net Interest Margin, Tax Equivalent/ Core Net Interest Margin	Three Months Ended
	March 31,			December 31,			March 31,
(Dollars in thousands)		2025			2024			2024
Net interest income	$	47,439		$	48,938		$	34,731
Tax equivalent adjustments:
Loans⁽¹⁾		981			985			920
Securities⁽¹⁾		162			168			387
Net interest income, tax equivalent	$	48,582		$	50,091		$	36,038
Loan purchase discount accretion		(1,166	)		(2,496	)		(1,152	)
Core net interest income	$	47,416		$	47,595		$	34,886

Net interest margin		3.36	%		3.35	%		2.25	%
Net interest margin, tax equivalent⁽²⁾		3.44	%		3.43	%		2.33	%
Core net interest margin⁽³⁾		3.36	%		3.26	%		2.26	%
Average interest earning assets	$	5,728,250		$	5,807,386		$	6,215,160

⁽¹⁾ The federal statutory tax rate utilized was 21%.
⁽²⁾ Annualized tax equivalent net interest income divided by average interest earning assets.
⁽³⁾ Annualized core net interest income divided by average interest earning assets.

	Three Months Ended
Loan Yield, Tax Equivalent / Core Yield on Loans	March 31,			December 31,			March 31,
(Dollars in thousands)		2025			2024			2024
Loan interest income, including fees	$	59,462		$	62,458		$	57,947
Tax equivalent adjustment⁽¹⁾		981			985			920
Tax equivalent loan interest income	$	60,443		$	63,443		$	58,867
Loan purchase discount accretion		(1,166	)		(2,496	)		(1,152	)
Core loan interest income	$	59,277		$	60,947		$	57,715

Yield on loans		5.62	%		5.77	%		5.42	%
Yield on loans, tax equivalent⁽²⁾		5.71	%		5.86	%		5.51	%
Core yield on loans⁽³⁾		5.60	%		5.63	%		5.40	%
Average loans	$	4,290,710		$	4,307,583		$	4,298,216

⁽¹⁾ The federal statutory tax rate utilized was 21%.
⁽²⁾ Annualized tax equivalent loan interest income divided by average loans.
⁽³⁾ Annualized core loan interest income divided by average loans.

	Three Months Ended
Efficiency Ratio	March 31,			December 31,			March 31,
(Dollars in thousands)		2025			2024			2024
Total noninterest expense	$	36,293		$	37,372		$	35,565
Amortization of intangibles		(1,408	)		(1,449	)		(1,637	)
Merger-related expenses		(40	)		(31	)		(1,314	)
Noninterest expense used for efficiency ratio	$	34,845		$	35,892		$	32,614

Net interest income, tax equivalent⁽¹⁾	$	48,582		$	50,091		$	36,038
Plus: Noninterest income		10,136			10,837			9,750
Less: Investment securities gains, net		33			161			36
Net revenues used for efficiency ratio	$	58,685		$	60,767		$	45,752

Efficiency ratio ⁽²⁾		59.38	%		59.06	%		71.28	%

⁽¹⁾ The federal statutory tax rate utilized was 21%.
⁽²⁾ Noninterest expense adjusted for amortization of intangibles and merger-related expenses divided by the sum of tax equivalent net interest income, noninterest income and net investment securities gains.

	Three Months Ended
Adjusted Earnings	March 31,			December 31,		March 31,
(Dollars in thousands, except per share data)		2025			2024		2024
Net income	$	15,138		$	16,330	$	3,269
Less: Investment securities gains, net of tax⁽¹⁾		25			119		27
Less: Mortgage servicing rights (loss) gain, net of tax⁽¹⁾		(158	)		122		(276	)
Plus: Merger-related expenses, net of tax⁽¹⁾		30			23		986
Adjusted earnings	$	15,301		$	16,112	$	4,504

Weighted average diluted common shares outstanding		20,849			20,851		15,774

Earnings per common share – diluted	$	0.73		$	0.78	$	0.21
Adjusted earnings per common share⁽²⁾	$	0.73		$	0.77	$	0.29

⁽¹⁾ The income tax rate utilized was the blended marginal tax rate.
⁽²⁾ Adjusted earnings divided by weighted average diluted common shares outstanding.

Category: Earnings

This news release may be downloaded from Corporate Profile | MidWestOne Financial Group, Inc.

Source: MidWestOne Financial Group, Inc.

Industry: Banks

Contact:

	Charles N. Reeves	Barry S. Ray
	Chief Executive Officer	Chief Financial Officer
	319.356.5800	319.356.5800

The MIL Network –

April 25, 2025

MIL-OSI: Middlefield Banc Corp. Reports 2025 Three-Month Financial Results

Source: GlobeNewswire (MIL-OSI)

MIDDLEFIELD, Ohio, April 24, 2025 (GLOBE NEWSWIRE) — Middlefield Banc Corp. (NASDAQ: MBCN) today reported financial results for the three months ended March 31, 2025.

2025 Three-Month Financial Highlights (on a year-over-year basis):

	●	Earnings per share increased 17.6% year-over-year to $0.60 per diluted share
	●	Net interest margin expanded 15 basis points to 3.69%
	●	Return on average assets (annualized) increased 12 basis points year-over-year to 1.04%
	●	Asset quality improved from the 2024 fourth quarter with nonperforming assets to total assets decreasing by 6 basis points to 1.56%
	●	First quarter dividend payment increased 5% to $0.21 per share

“The first quarter of 2025 was a strong period of growth, profitability and value creation for Middlefield,” stated Ronald L. Zimmerly, Jr., President and Chief Executive Officer. “Total loans increased by 4% year-over-year to a record $1.55 billion, driven by stable economic trends within our Ohio markets, the strength of our balance sheet, and the continued execution of our strategic initiatives. The 15-basis point expansion in our net interest margin is encouraging, reflecting our disciplined approach to pricing and ongoing efforts to reduce our cost of funds. As a result, net income expanded by 15.9% year-over-year to $4.8 million, delivering a strong return on average assets of 1.04% and supporting a 5.5% increase in tangible book value per share⁽¹⁾, which reached $21.29 as of March 31, 2025.” ⁽¹⁾ See non-GAAP reconciliation under the section “GAAP to Non-GAAP Reconciliations”.

“During the quarter, we made significant upgrades to our infrastructure to support our multi-year technology road map. Additional investments in our physical footprint and back-office capabilities are planned throughout the year as we continue to strengthen Middlefield’s platform and support our long-term growth. We believe 2025 will be another good year of profitable expansion, reflecting our commitment to disciplined underwriting, community banking values, and ongoing reinvestment in the business,” concluded Mr. Zimmerly.

Income Statement
Net interest income for the three months ended March 31, 2025, increased $1.1 million to $16.1 million, compared to $15.0 million for the same period last year. The increase was driven by strong loan growth and the impact of rate cuts on our short-term borrowings. The net interest margin for the three months ended March 31, 2025, was 3.69%, compared to 3.54% last year.

For the three months ended March 31, 2025, noninterest income increased $148,000 to $1.9 million, compared to $1.8 million for the same period in 2024.

Noninterest expense for the three months ended March 31, 2025, was $12.2 million, compared to $12.0 million for the same period in 2024.

Net income for the three months ended March 31, 2025, was $4.8 million, or $0.60 per diluted share, compared to $4.2 million, or $0.51 per diluted share, for the same period last year.

For the three months ended March 31, 2025, pre-tax, pre-provision net income was $5.8 million, compared to $4.8 million for the same period last year. (See non-GAAP reconciliation under the section “GAAP to Non-GAAP Reconciliations”.)

Balance Sheet
Total assets at March 31, 2025, increased 3.9% to $1.89 billion, compared to $1.82 billion at March 31, 2024. Total loans at March 31, 2025, were $1.55 billion, compared to $1.49 billion at March 31, 2024. The 4.0% year-over-year increase in total loans was primarily due to higher residential real estate loans, home equity lines of credit, and non-owner occupied loans, partially offset by a reduction in construction and other loans.

The investment securities available-for-sale portfolio was $165.0 million at March 31, 2025, compared with $167.9 million at March 31, 2024.

Total liabilities at March 31, 2025, increased 3.9% to $1.67 billion, compared to $1.61 billion at March 31, 2024. Total deposits at March 31, 2025, were $1.54 billion, compared to $1.45 billion at March 31, 2024. The 6.4% year-over-year increase in deposits was primarily due to growth in money market and interest-bearing demand deposits, partially offset by declines in time and noninterest-bearing demand deposit accounts. Noninterest-bearing demand deposits were 24.0% of total deposits at March 31, 2025, compared to 27.0% at March 31, 2024. At March 31, 2025, the Company had brokered deposits of $92.4 million, compared to $90.4 million at March 31, 2024.

Michael C. Ranttila, Chief Financial Officer, stated, “We remain focused on proactively managing our funding sources to support loan growth, while optimizing our cost of funds. At March 31, 2025, we reduced our balance of Federal Home Loan Bank advances by $62.4 million from December 31, 2024, and ended the first quarter with $346.9 million in additional borrowing capacity. The combination of high levels of potentially liquid assets, cash flows from operations, and additional borrowing capacity continues to provide us with excellent liquidity levels to support our long-term growth strategies and our legacy of returning excess capital to shareholders.”

Middlefield’s CRE portfolio included the following categories at March 31, 2025:

			Percent of			Percent of			Weighted Average
(Dollar amounts in thousands)	Balance		CRE Portfolio			Loan Portfolio			Loan-to-Value

Multi-Family	$	88,737		12.9	%		5.7	%		61.3	%
Owner Occupied
Real Estate and Rental and Leasing		61,835		9.0	%		4.0	%		55.7	%
Other Services (except Public Administration)		32,815		4.8	%		2.1	%		54.1	%
Manufacturing		18,397		2.7	%		1.2	%		44.7	%
Agriculture, Forestry, Fishing and Hunting		12,628		1.8	%		0.8	%		36.4	%
Other		59,737		8.6	%		3.9	%		54.0	%
Total Owner Occupied	$	185,412		26.9	%		12.0	%
Non-Owner Occupied
Real Estate and Rental and Leasing		343,169		49.9	%		22.1	%		55.5	%
Accommodation and Food Services		40,039		5.8	%		2.6	%		55.9	%
Health Care and Social Assistance		19,328		2.8	%		1.2	%		65.5	%
Manufacturing		7,428		1.1	%		0.5	%		49.5	%
Other		3,657		0.6	%		0.2	%		85.4	%
Total Non-Owner Occupied	$	413,621		60.2	%		26.6	%
Total CRE	$	687,770		100.0	%		44.3	%

Stockholders’ Equity and Dividends
At March 31, 2025, stockholders’ equity was $213.8 million, compared to $205.6 million at March 31, 2024. The 4.0% year-over-year increase in stockholders’ equity was primarily from higher retained earnings, partially offset by an increase in the unrealized losses on the available-for-sale investment portfolio. On a per-share basis, shareholders’ equity at March 31, 2025, was $26.46, compared to $25.48 at March 31, 2024.

At March 31, 2025, tangible stockholders’ equity⁽¹⁾ was $172.1 million, compared to $162.8 million at March 31, 2024. On a per-share basis, tangible stockholders’ equity⁽¹⁾ was $21.29 at March 31, 2025, compared to $20.18 at March 31, 2024. ⁽¹⁾See non-GAAP reconciliation under the section “GAAP to Non-GAAP Reconciliations”.

For the three months ended March 31, 2025, the Company declared cash dividends of $0.21 per share, totaling $1.7 million. Beginning in the first quarter of 2025, the Company increased the quarterly cash dividend by $0.01 or 5% from the previous quarter’s $0.20 per share cash dividend.

For the three months ended March 31, 2025, the Company did not repurchase any shares of its common stock. The Company repurchased 43,858 shares of its common stock, at an average price of $24.00 per share during the same period in 2024.

At March 31, 2025, the Company’s equity-to-assets ratio was 11.32%, compared to 11.32% at March 31, 2024.

Asset Quality

For the 2025 first quarter, the Company recorded a provision for credit losses of $95,000, compared to a recovery of credit losses of $136,000 for the same period of 2024.

Net recoveries were $209,000, or (0.06%) of average loans, annualized, for the 2025 first quarter, compared to net recoveries of $68,000, or (0.02%) of average loans, annualized, for the same period of 2024.

Nonperforming loans at March 31, 2025, were $29.6 million, compared to $10.8 million at March 31, 2024. The increase in nonperforming assets is primarily the result of a $12.4 million loan moved to nonaccrual in the 2024 third quarter. The allowance for credit losses at March 31, 2025, stood at $22.4 million, or 1.44% of total loans, compared to $21.1 million, or 1.41% of total loans at March 31, 2024. The increase in the allowance for credit losses was mainly from changes in projected loss drivers, prepayment assumptions, curtailment expectations over the reasonable and supportable forecast period, and geographic footprint of unemployment data, as well as an overall increase in total loans.

Mr. Ranttila continued, “Asset quality remains stable, with nonperforming assets to total assets of 1.56% at March 31, 2025, compared to 1.62% at December 31, 2024. Nonperforming assets at March 31, 2025, included two relationships that moved into nonaccrual status in the second quarter of 2024 and one that moved into nonaccrual status in the third quarter of 2024. We remain well reserved for potential credit losses with an allowance for credit losses to total loans of 1.44% at March 31, 2025, compared to 1.48% at December 31, 2024, and 1.41% at March 31, 2024. We continue to expect stable economic activity across our Central, Western, and Northeast Ohio markets that will support loan demand and asset quality throughout 2025.”

About Middlefield Banc Corp.

Middlefield Banc Corp., headquartered in Middlefield, Ohio, is the Bank holding Company of The Middlefield Banking Company, with total assets of $1.89 billion at March 31, 2025. The Bank operates 21 full-service banking centers and an LPL Financial® brokerage office serving Ada, Beachwood, Bellefontaine, Chardon, Cortland, Dublin, Garrettsville, Kenton, Mantua, Marysville, Middlefield, Newbury, Orwell, Plain City, Powell, Solon, Sunbury, Twinsburg, and Westerville. The Bank also operates a Loan Production Office in Mentor, Ohio.

Additional information is available at www.middlefieldbank.bank.

NON-GAAP FINANCIAL MEASURES

This press release includes disclosure of Middlefield Banc Corp.’s tangible book value per share, return on average tangible equity, and pre-tax, pre-provision for loan losses income, which are financial measures not prepared in accordance with generally accepted accounting principles in the United States (GAAP). A non-GAAP financial measure is a numerical measure of historical or future financial performance, financial position or cash flows that excludes or includes amounts required to be disclosed by GAAP. Middlefield Banc Corp. believes that these non-GAAP financial measures provide both management and investors a more complete understanding of the underlying operational results and trends and Middlefield Banc Corp.’s marketplace performance. The presentation of this additional information is not meant to be considered in isolation or as a substitute for the numbers prepared in accordance with GAAP. The reconciliations of non-GAAP financial measures are included in the following Consolidated Financial Highlights tables below.

FORWARD-LOOKING STATEMENTS
This press release of Middlefield Banc Corp. and the reports Middlefield Banc Corp. files with the Securities and Exchange Commission often contain “forward-looking statements” relating to present or future trends or factors affecting the banking industry and, specifically, the financial operations, markets and products of Middlefield Banc Corp. These forward-looking statements involve certain risks and uncertainties. There are several important factors that could cause Middlefield Banc Corp.’s future results to differ materially from historical performance or projected performance. These factors include, but are not limited to: (1) a significant increase in competitive pressures among financial institutions; (2) changes in the interest rate environment that may reduce interest margins; (3) changes in prepayment speeds, charge-offs and loan loss provisions; (4) less favorable than expected general economic conditions; (5) legislative or regulatory changes that may adversely affect businesses in which Middlefield Banc Corp. is engaged; (6) technological issues which may adversely affect Middlefield Banc Corp.’s financial operations or customers; (7) changes in the securities markets; or (8) risk factors mentioned in the reports and registration statements Middlefield Banc Corp. files with the Securities and Exchange Commission. Middlefield Banc Corp. undertakes no obligation to release revisions to these forward-looking statements or to reflect events or circumstances after the date of this press release.

Company Contact:	Investor and Media Contact:
Ronald L. Zimmerly, Jr. President and Chief Executive Officer Middlefield Banc Corp. (419) 673-1217 rzimmerly@middlefieldbank.com	Andrew M. Berger Managing Director SM Berger & Company, Inc. (216) 464-6400 andrew@smberger.com

MIDDLEFIELD BANC CORP.
Consolidated Selected Financial Highlights
(Dollar amounts in thousands, unaudited)

	March 31,		December 31,		September 30,		June 30,		March 31,
Balance Sheets (period end)	2025		2024		2024		2024		2024
ASSETS
Cash and due from banks	$	56,150	$	46,037	$	61,851	$	50,496	$	44,816
Federal funds sold		10,720		9,755		12,022		1,762		1,438
Cash and cash equivalents		66,870		55,792		73,873		52,258		46,254
Investment securities available for sale, at fair value		165,014		165,802		169,895		166,424		167,890
Other investments		1,021		855		895		881		907
Loans held for sale		–		–		249		–		–
Loans:
Commercial real estate:
Owner occupied		185,412		181,447		187,313		182,809		178,543
Non-owner occupied		413,621		412,291		407,159		385,648		398,845
Multifamily		88,737		89,849		94,798		86,951		81,691
Residential real estate		351,274		353,442		345,748		337,121		331,480
Commercial and industrial		235,547		229,034		213,172		234,702		227,433
Home equity lines of credit		147,154		143,379		137,761		131,047		129,287
Construction and other		122,653		103,608		111,550		132,530		135,716
Consumer installment		5,951		6,564		7,030		6,896		7,131
Total loans		1,550,349		1,519,614		1,504,531		1,497,704		1,490,126
Less allowance for credit losses		22,401		22,447		22,526		21,795		21,069
Net loans		1,527,948		1,497,167		1,482,005		1,475,909		1,469,057
Premises and equipment, net		22,339		20,565		20,528		20,744		21,035
Goodwill		36,356		36,356		36,356		36,356		36,356
Core deposit intangibles		5,361		5,611		5,869		6,126		6,384
Bank-owned life insurance		34,866		35,259		35,049		34,802		34,575
Accrued interest receivable and other assets		28,581		35,952		32,916		34,686		34,210
TOTAL ASSETS	$	1,888,356	$	1,853,359	$	1,857,635	$	1,828,186	$	1,816,668

	March 31,			December 31,			September 30,			June 30,			March 31,
	2025			2024			2024			2024			2024
LIABILITIES
Deposits:
Noninterest-bearing demand	$	369,492		$	377,875		$	390,933		$	387,024		$	390,185
Interest-bearing demand		222,953			208,291			218,002			206,542			209,015
Money market		481,664			414,074			376,619			355,630			318,823
Savings		189,943			197,749			199,984			192,472			196,721
Time		275,673			247,704			327,231			327,876			332,165
Total deposits		1,539,725			1,445,693			1,512,769			1,469,544			1,446,909
Federal Home Loan Bank advances		110,000			172,400			106,000			125,000			137,000
Other borrowings		11,609			11,660			11,711			11,762			11,812
Accrued interest payable and other liabilities		13,229			13,044			16,450			15,092			15,372
TOTAL LIABILITIES		1,674,563			1,642,797			1,646,930			1,621,398			1,611,093
STOCKHOLDERS’ EQUITY
Common stock, no par value; 25,000,000 shares authorized, 9,960,503
shares issued, 8,081,193 shares outstanding as of March 31, 2025		162,195			161,999			161,916			161,823			161,823
Additional paid-in capital		515			246			108			–			–
Retained earnings		112,432			109,299			106,067			105,342			102,791
Accumulated other comprehensive loss		(20,440	)		(20,073	)		(16,477	)		(19,468	)		(18,130	)
Treasury stock, at cost; 1,879,310 shares as of March 31, 2025		(40,909	)		(40,909	)		(40,909	)		(40,909	)		(40,909	)
TOTAL STOCKHOLDERS’ EQUITY		213,793			210,562			210,705			206,788			205,575

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	1,888,356		$	1,853,359		$	1,857,635		$	1,828,186		$	1,816,668

MIDDLEFIELD BANC CORP.
Consolidated Selected Financial Highlights
(Dollar amounts in thousands, unaudited)

	For the Three Months Ended
	March 31,			December 31,			September 30,		June 30,			March 31,
Statements of Income	2025			2024			2024		2024			2024

INTEREST AND DIVIDEND INCOME
Interest and fees on loans	$	23,387		$	23,308		$	23,441	$	23,422		$	22,395
Interest-earning deposits in other institutions		291			320			348		386			437
Federal funds sold		155			151			143		122			152
Investment securities:
Taxable interest		530			528			528		505			467
Tax-exempt interest		960			961			962		966			972
Dividends on stock		150			170			191		198			189
Total interest and dividend income		25,473			25,438			25,613		25,599			24,612
INTEREST EXPENSE
Deposits		7,885			8,582			8,792		8,423			7,466
Short-term borrowings		1,347			1,128			1,575		1,920			1,993
Other borrowings		143			173			173		173			184
Total interest expense		9,375			9,883			10,540		10,516			9,643
NET INTEREST INCOME		16,098			15,555			15,073		15,083			14,969
Provision for (recovery of) credit losses		95			(177	)		2,234		87			(136	)
NET INTEREST INCOME AFTER PROVISION
FOR (RECOVERY OF) CREDIT LOSSES		16,003			15,732			12,839		14,996			15,105
NONINTEREST INCOME
Service charges on deposit accounts		989			1,068			959		971			909
Gain (Loss) on equity securities		(34	)		56			14		(27	)		(52	)
Earnings on bank-owned life insurance		493			230			246		227			227
Gain on sale of loans		24			64			56		69			10
Revenue from investment services		268			237			206		269			204
Gross rental income		–			1			–		–			67
Other income		204			258			262		251			431
Total noninterest income		1,944			1,914			1,743		1,760			1,796

NONINTEREST EXPENSE
Salaries and employee benefits		6,557			5,996			6,201		6,111			6,333
Occupancy expense		687			596			627		601			552
Equipment expense		225			221			203		261			240
Data processing costs		1,271			1,174			1,214		1,135			1,217
Ohio state franchise tax		399			390			399		397			397
Federal deposit insurance expense		267			293			255		256			251
Professional fees		598			611			539		557			558
Advertising expense		364			371			283		508			419
Software amortization expense		90			83			74		21			22
Core deposit intangible amortization		249			258			257		258			258
Gross other real estate owned expenses		–			–			–		–			99
Other expense		1,486			1,810			1,819		1,797			1,619
Total noninterest expense		12,193			11,803			11,871		11,902			11,965

Income before income taxes		5,754			5,843			2,711		4,854			4,936
Income taxes		924			995			371		690			769

NET INCOME	$	4,830		$	4,848		$	2,340	$	4,164		$	4,167

PTPP ⁽¹⁾	$	5,849		$	5,666		$	4,945	$	4,941		$	4,800

⁽¹⁾ See section “GAAP to Non-GAAP Reconciliations” for the reconciliation of GAAP performance measures to non-GAAP measures.

MIDDLEFIELD BANC CORP.
Consolidated Selected Financial Highlights
(Dollar amounts in thousands, except per share and share amounts, unaudited)

	For the Three Months Ended
	March 31,			December 31,			September 30,			June 30,			March 31,
	2025			2024			2024			2024			2024
Per common share data
Net income per common share – basic	$	0.60		$	0.60		$	0.29		$	0.52		$	0.52
Net income per common share – diluted	$	0.60		$	0.60		$	0.29		$	0.52		$	0.51
Dividends declared per share	$	0.21		$	0.20		$	0.20		$	0.20		$	0.20
Book value per share (period end)	$	26.46		$	26.08		$	26.11		$	25.63		$	25.48
Tangible book value per share (period end) (1) (2)	$	21.29		$	20.88		$	20.87		$	20.37		$	20.18
Dividends declared	$	1,697		$	1,616		$	1,615		$	1,613		$	1,613
Dividend yield		3.05	%		2.84	%		2.76	%		3.34	%		3.37	%
Dividend payout ratio		35.13	%		33.33	%		69.02	%		38.74	%		38.71	%
Average shares outstanding – basic		8,078,805			8,071,905			8,071,032			8,067,144			8,091,203
Average shares outstanding – diluted		8,097,545			8,092,357			8,086,872			8,072,499			8,096,317
Period ending shares outstanding		8,081,193			8,073,708			8,071,032			8,067,144			8,067,144

Selected ratios
Return on average assets (Annualized)		1.04	%		1.04	%		0.50	%		0.91	%		0.92	%
Return on average equity (Annualized)		9.22	%		9.19	%		4.45	%		8.15	%		8.16	%
Return on average tangible common equity (1) (3)		11.48	%		11.50	%		5.58	%		10.29	%		10.30	%
Efficiency (4)		65.22	%		65.05	%		67.93	%		67.97	%		68.68	%
Equity to assets at period end		11.32	%		11.36	%		11.34	%		11.31	%		11.32	%
Noninterest expense to average assets		0.65	%		0.63	%		0.66	%		0.64	%		0.66	%

⁽¹⁾ See section “GAAP to Non-GAAP Reconciliations” for the reconciliation of GAAP performance measures to non-GAAP measures.

⁽²⁾ Calculated by dividing tangible common equity by shares outstanding.

⁽³⁾ Calculated by dividing annualized net income for each period by average tangible common equity.

⁽⁴⁾ The efficiency ratio is calculated by dividing noninterest expense less amortization of intangibles by the sum of net interest income on a fully taxable equivalent basis plus noninterest income.

	For the Three Months Ended
	March 31,			December 31,			September 30,			June 30,			March 31,
Yields	2025			2024			2024			2024			2024
Interest-earning assets:
Loans receivable (1)		6.17	%		6.12	%		6.19	%		6.27	%		6.11	%
Investment securities (1) (2)		3.69	%		3.63	%		3.62	%		3.59	%		3.52	%
Interest-earning deposits with other banks		3.57	%		4.23	%		4.27	%		4.59	%		4.88	%
Total interest-earning assets		5.81	%		5.78	%		5.84	%		5.92	%		5.77	%
Deposits:
Interest-bearing demand deposits		2.13	%		2.07	%		2.16	%		1.93	%		1.86	%
Money market deposits		3.38	%		3.81	%		3.93	%		3.95	%		3.81	%
Savings deposits		0.82	%		0.75	%		0.71	%		0.64	%		0.58	%
Certificates of deposit		3.93	%		4.21	%		4.49	%		4.57	%		4.06	%
Total interest-bearing deposits		2.82	%		3.05	%		3.17	%		3.15	%		2.88	%
Non-Deposit Funding:
Borrowings		4.58	%		4.93	%		5.54	%		5.60	%		5.61	%
Total interest-bearing liabilities		3.01	%		3.21	%		3.41	%		3.45	%		3.23	%
Cost of deposits		2.10	%		2.24	%		2.33	%		2.30	%		2.08	%
Cost of funds		2.30	%		2.41	%		2.58	%		2.61	%		2.42	%
Net interest margin (3)		3.69	%		3.56	%		3.46	%		3.51	%		3.54	%

⁽¹⁾ Tax-equivalent adjustments to calculate the yield on tax-exempt securities and loans were determined using an effective tax rate of 21%.

⁽²⁾ Yield is calculated on the basis of amortized cost.

⁽³⁾ Net interest margin represents net interest income as a percentage of average interest-earning assets.

MIDDLEFIELD BANC CORP.
Consolidated Selected Financial Highlights
(unaudited)

	For the Three Months Ended
	March 31,			December 31,			September 30,			June 30,			March 31,
Asset quality data	2025			2024			2024			2024			2024
(Dollar amounts in thousands, unaudited)
Nonperforming assets ⁽¹⁾	$	29,550		$	29,984		$	30,078		$	15,961		$	10,831

Allowance for credit losses	$	22,401		$	22,447		$	22,526		$	21,795		$	21,069
Allowance for credit losses/total loans		1.44	%		1.48	%		1.50	%		1.46	%		1.41	%
Net charge-offs (recoveries):
Quarter-to-date	$	(209	)	$	151		$	1,382		$	(29	)	$	(68	)
Year-to-date		(209	)		1,436			1,285			(97	)		(68	)
Net charge-offs (recoveries) to average loans, annualized:
Quarter-to-date		(0.06	%)		0.04	%		0.36	%		(0.01	%)		(0.02	%)
Year-to-date		(0.06	%)		0.10	%		0.11	%		(0.01	%)		(0.02	%)

Nonperforming loans/total loans		1.91	%		1.97	%		2.00	%		1.07	%		0.73	%
Allowance for credit losses/nonperforming loans		75.81	%		74.86	%		74.89	%		136.55	%		194.52	%
Nonperforming assets/total assets		1.56	%		1.62	%		1.62	%		0.87	%		0.60	%

(1) Nonperforming assets consist of nonperforming loans.

MIDDLEFIELD BANC CORP.
GAAP to Non-GAAP Reconciliations

Reconciliation of Common Stockholders’ Equity to Tangible Common Equity	For the Three Months Ended
(Dollar amounts in thousands, unaudited)	March 31,		December 31,		September 30,		June 30,		March 31,
	2025		2024		2024		2024		2024

Stockholders’ equity	$	213,793	$	210,562	$	210,705	$	206,788	$	205,575
Less goodwill and other intangibles		41,717		41,967		42,225		42,482		42,740
Tangible common equity	$	172,076	$	168,595	$	168,480	$	164,306	$	162,835

Shares outstanding		8,081,193		8,073,708		8,071,032		8,067,144		8,067,144
Tangible book value per share	$	21.29	$	20.88	$	20.87	$	20.37	$	20.18

Reconciliation of Average Equity to Return on Average Tangible Common Equity	For the Three Months Ended

	March 31,			December 31,			September 30,			June 30,			March 31,
	2025			2024			2024			2024			2024

Average stockholders’ equity	$	212,465		$	209,864		$	209,096		$	205,379		$	205,342
Less average goodwill and other intangibles		41,839			42,092			42,350			42,607			42,654
Average tangible common equity	$	170,626		$	167,772		$	166,746		$	162,772		$	162,688

Net income	$	4,830		$	4,848		$	2,340		$	4,164		$	4,167
Return on average tangible common equity (annualized)		11.48	%		11.50	%		5.58	%		10.29	%		10.30	%

Reconciliation of Pre-Tax Pre-Provision Income (PTPP)	For the Three Months Ended

	March 31,		December 31,			September 30,		June 30,		March 31,
	2025		2024			2024		2024		2024

Net income	$	4,830	$	4,848		$	2,340	$	4,164	$	4,167
Add income taxes		924		995			371		690		769
Add provision for (recovery of) credit losses		95		(177	)		2,234		87		(136	)
PTPP	$	5,849	$	5,666		$	4,945	$	4,941	$	4,800

MIDDLEFIELD BANC CORP.
Average Balance Sheets
(Dollar amounts in thousands, unaudited)

	For the Three Months Ended
	March 31,							March 31,
	2025							2024
	Average				Average			Average				Average
	Balance		Interest		Yield/Cost			Balance		Interest		Yield/Cost
Interest-earning assets:
Loans receivable (1)	$	1,537,337	$	23,387		6.17	%	$	1,476,543	$	22,395		6.11	%
Investment securities (1) (2)		191,996		1,490		3.69	%		191,851		1,439		3.56	%
Interest-earning deposits with other banks (3)		67,661		596		3.57	%		64,139		778		4.88	%
Total interest-earning assets		1,796,994		25,473		5.81	%		1,732,533		24,612		5.78	%
Noninterest-earning assets		84,542							90,151
Total assets	$	1,881,536						$	1,822,684
Interest-bearing liabilities:
Interest-bearing demand deposits	$	220,192	$	1,154		2.13	%	$	211,009	$	978		1.86	%
Money market deposits		458,446		3,816		3.38	%		298,479		2,827		3.81	%
Savings deposits		192,931		388		0.82	%		201,080		290		0.58	%
Certificates of deposit		261,006		2,527		3.93	%		333,871		3,371		4.06	%
Short-term borrowings		120,238		1,347		4.54	%		144,357		1,993		5.55	%
Other borrowings		11,639		143		4.98	%		11,840		184		6.25	%
Total interest-bearing liabilities		1,264,452		9,375		3.01	%		1,200,636		9,643		3.23	%
Noninterest-bearing liabilities:
Noninterest-bearing demand deposits		390,354							400,209
Other liabilities		14,265							16,497
Stockholders’ equity		212,465							205,342
Total liabilities and stockholders’ equity	$	1,881,536						$	1,822,684
Net interest income			$	16,098						$	14,969
Interest rate spread (4)						2.80	%						2.55	%
Net interest margin (5)						3.69	%						3.54	%
Ratio of average interest-earning assets to average interest-bearing liabilities						142.12	%						144.30	%

⁽¹⁾ Tax-equivalent adjustments to calculate the yield on tax-exempt securities and loans were $272 and $281 for the three months ended March 31, 2025 and 2024, respectively.

⁽²⁾ Yield is calculated on the basis of amortized cost.

⁽³⁾ Includes dividends received on restricted stock.

⁽⁴⁾ Interest rate spread represents the difference between the average yield on interest-earning assets and the average cost of interest-bearing liabilities.

⁽⁵⁾ Net interest margin represents net interest income as a percentage of average interest-earning assets.

	For the Three Months Ended
	March 31,							December 31,
	2025							2024
	Average				Average			Average				Average
	Balance		Interest		Yield/Cost			Balance		Interest		Yield/Cost
Interest-earning assets:
Loans receivable (1)	$	1,537,337	$	23,387		6.17	%	$	1,517,051	$	23,308		6.12	%
Investment securities (1) (2)		191,996		1,490		3.69	%		191,390		1,489		3.63	%
Interest-earning deposits with other banks (3)		67,661		596		3.57	%		60,241		641		4.23	%
Total interest-earning assets		1,796,994		25,473		5.81	%		1,768,682		25,438		5.78	%
Noninterest-earning assets		84,542							88,205
Total assets	$	1,881,536						$	1,856,887
Interest-bearing liabilities:
Interest-bearing demand deposits	$	220,192	$	1,154		2.13	%	$	216,492	$	1,126		2.07	%
Money market deposits		458,446		3,816		3.38	%		393,298		3,768		3.81	%
Savings deposits		192,931		388		0.82	%		197,257		373		0.75	%
Certificates of deposit		261,006		2,527		3.93	%		313,582		3,315		4.21	%
Short-term borrowings		120,238		1,347		4.54	%		93,200		1,128		4.81	%
Other borrowings		11,639		143		4.98	%		11,690		173		5.89	%
Total interest-bearing liabilities		1,264,452		9,375		3.01	%		1,225,519		9,883		3.21	%
Noninterest-bearing liabilities:
Noninterest-bearing demand deposits		390,354							404,428
Other liabilities		14,265							17,076
Stockholders’ equity		212,465							209,864
Total liabilities and stockholders’ equity	$	1,881,536						$	1,856,887
Net interest income			$	16,098						$	15,555
Interest rate spread (4)						2.80	%						2.57	%
Net interest margin (5)						3.69	%						3.56	%
Ratio of average interest-earning assets to average interest-bearing liabilities						142.12	%						144.32	%

⁽¹⁾ Tax-equivalent adjustments to calculate the yield on tax-exempt securities and loans were $272 and $280 for the three months ended March 31, 2025 and December 31, 2024, respectively.

⁽²⁾ Yield is calculated on the basis of amortized cost.

⁽³⁾ Includes dividends received on restricted stock.

⁽⁴⁾ Interest rate spread represents the difference between the average yield on interest-earning assets and the average cost of interest-bearing liabilities.

⁽⁵⁾ Net interest margin represents net interest income as a percentage of average interest-earning assets.

The MIL Network –

April 25, 2025

MIL-OSI: Heritage Commerce Corp Reports First Quarter 2025 Financial Results

Source: GlobeNewswire (MIL-OSI)

SAN JOSE, Calif., April 24, 2025 (GLOBE NEWSWIRE) — Heritage Commerce Corp (Nasdaq: HTBK), (the “Company”), the holding company for Heritage Bank of Commerce (the “Bank”) today announced its financial results for the first quarter of 2025. All data are unaudited.

QUARTERLY HIGHLIGHTS:

Net Income	Earnings Per Share	Pre-Provision Net Revenue (“PPNR”)⁽¹⁾	Fully Tax Equivalent (“FTE”) Net Interest Margin⁽¹⁾	Efficiency Ratio⁽¹⁾	Tangible Book Value Per Share⁽¹⁾

$11.6 million	$0.19	$16.6 million	3.39%	63.96%	$8.48

CEO COMMENTARY:
“We delivered a solid quarter of performance with a 9% increase in our level of profitability from the prior quarter,” said Clay Jones, President and Chief Executive Officer. “While our balance sheet trends reflected the seasonally low loan demand and deposit outflows in the first quarter, we generated a higher level of profitability due to improved net interest margin, strong expense control, and an improvement in our asset quality. We also redeployed some of our excess liquidity to purchase new investment securities, which we expect will have a positive impact on our net interest income and net interest margin going forward. Our longer-term trends remain positive as well, with notable improvement in many areas compared to the first quarter of last year, including a 14% increase in net income and increases in the annualized returns on average assets and average equity.”

“While economic uncertainty has increased over the past few months, we still expect to deliver solid financial performance in 2025 as we continue to capitalize on our market position to assist new clients that have been impacted by dislocation and disruption in our markets resulting from bank failures and acquisitions. We believe that we will continue to see positive trends in areas such as net interest margin, loan and deposit growth, and expense management, which should lead to strong financial performance for our shareholders as we move through the year,” said Mr. Jones.

LINKED-QUARTER BASIS	YEAR-OVER-YEAR
FINANCIAL HIGHLIGHTS:
Net income of $11.6 million and earnings per share of $0.19, up 9% and 12%, from $10.6 million and $0.17, respectively Total revenue of $46.1 million, a decrease of 1%, or $314,000, compared to a decrease in noninterest expense of 3%, or $848,000 PPNR⁽¹⁾ of $16.6 million, up $534,000 from $16.1 million Effective tax rate of 28.8%, compared to 27.9%	Net income of $11.6 million and earnings per share of $0.19, up 14% and 12%, from $10.2 million and $0.17, respectively Total revenue of $46.1 million, an increase of 9%, or $3.9 million, compared to an increase in noninterest expense of 7%, or $1.9 million PPNR⁽¹⁾ of $16.6 million, up $2.0 million from $14.6 million Effective tax rate of 28.8%, compared to 29.5%
FINANCIAL CONDITION:
Loans held-for-investment (“HFI”) remained relatively flat at $3.5 billion Total deposits of $4.7 billion, down $136.8 million, or 3% Loan to deposit ratio of 74.45%, up from 72.45% Total shareholders’ equity of $696 million, up $6.5 million	Increase in loans HFI of $150.8 million, or 5% Increase in total deposits of $238.6 million, or 5% Loan to deposit ratio of 74.45%, down from 75.06% Increase in total shareholders’ equity of $19.9 million
CREDIT QUALITY:
Nonperforming assets (“NPAs”) to total assets of 0.11%, compared to 0.14% Classified assets to total assets of 0.73%, compared to 0.74%	NPAs to total assets of 0.11%, compared to 0.15% Classified assets to total assets of 0.73%, compared to 0.67%
KEY PERFORMANCE METRICS:
FTE net interest margin⁽¹⁾ of 3.39%, an increase from 3.32% Return on average tangible assets⁽¹⁾ and on tangible common equity⁽¹⁾ of 0.88% and 9.09%, compared to 0.78% and 8.25%, respectively Efficiency ratio⁽¹⁾ of 63.96%, compared to 65.35% Common equity tier 1 capital ratio of 13.6%, compared to 13.4% Total capital ratio of 15.9%, compared to 15.6% Tangible common equity ratio⁽¹⁾ of 9.78%, an increase of 4% from 9.43% Tangible book value per share⁽¹⁾ of $8.48, compared to $8.41	FTE net interest margin⁽¹⁾ of 3.39%, an increase from 3.31% Return on average tangible assets⁽¹⁾ and on tangible common equity⁽¹⁾ of 0.88% and 9.09%, compared to 0.82% and 8.24%, respectively Efficiency ratio⁽¹⁾ of 63.96%, compared to 65.34% Common equity tier 1 capital ratio of 13.6%, compared to 13.4% Total capital ratio of 15.9%, compared to 15.6% Tangible common equity ratio⁽¹⁾ of 9.78%, a decrease of 1% from 9.85% Tangible book value per share⁽¹⁾ of $8.48, compared to $8.17

⁽¹⁾This is a non-GAAP financial measure as defined and discussed under “Non-GAAP Financial Measures” later in this press release.

Results of Operations:

Net interest income totaled $43.4 million for the first quarter of 2025, a slight decrease of $235,000, or 1%, compared to $43.6 million for the fourth quarter of 2024. The decrease was primarily due to two fewer accrual days during the quarter from the prior linked quarter, together with a lower average balance on interest earning assets, which was largely offset by a decrease in rates paid on deposits and a decrease of higher cost deposit balances. Net interest income increased $3.9 million, or 10%, compared to $39.5 million for the first quarter of 2024. The increase was primarily due to growth in average earning asset balances, partially offset by an increase in interest-bearing deposit balances.

The FTE net interest margin⁽¹⁾ was 3.39% for the first quarter of 2025, an increase over 3.32% for the fourth quarter of 2024 primarily due to lower rates paid on customer deposits, an increase in the average balances of securities and loans, and higher average yields on securities, partially offset by a decrease in the average balance of noninterest-bearing demand deposits and a lower average yield on overnight funds. The FTE net interest margin⁽¹⁾ increased from 3.31% for the first quarter of 2024 primarily due to lower rates paid on customer deposits, an increase in the average balances of loans, and higher average yields on securities and loans, and an increase in the average balance of deposits resulting in a higher average balance of overnight funds, partially offset by a lower average yield on overnight funds.

We recorded a provision for credit losses on loans of $274,000 for the first quarter of 2025, compared to a $1.3 million provision for credit losses on loans for the fourth quarter of 2024, and a $184,000 provision for credit losses on loans for the first quarter of 2024.

Total noninterest income remained relatively flat at $2.7 million for the first quarter of 2025, compared to $2.8 million for the fourth quarter of 2024, and $2.6 million for the first quarter of 2024.

Total revenue, which is defined as net interest income before provision for credit losses on loans plus noninterest income, decreased $314,000, or 1%, to $46.1 million for the first quarter of 2025, compared to $46.4 million for the fourth quarter of 2024, and increased $3.9 million, or 9%, from $42.1 million for the first quarter of 2024.

Total noninterest expense for the first quarter of 2025 decreased to $29.5 million, compared to $30.3 million for the fourth quarter of 2024, primarily due to nonrecurring personnel related expenses and legal fees of approximately $1.1 million, and higher professional fees and homeowner association vendor payments during the fourth quarter of 2024. Total noninterest expense increased compared to $27.5 million for the first quarter of 2024, primarily due to higher salaries and employee benefits, professional fees, and information technology related expenses.

Income tax expense was $4.7 million for the first quarter of 2025, compared to $4.1 million for the fourth quarter of 2024, and $4.3 million for the first quarter of 2024. The effective tax rate for the first quarter of 2025 was 28.8%, compared to 27.9% for the fourth quarter of 2024, and 29.5% for the first quarter of 2024.

Net income was $11.6 million, or $0.19 per average diluted common share, for the first quarter of 2025, compared to $10.6 million, or $0.17 per average diluted common share, for the fourth quarter of 2024, and $10.2 million, or $0.17 per average diluted common share, for the first quarter of 2024.

For the first quarter of 2025, the Company’s PPNR⁽¹⁾, which is defined as total revenue less noninterest expense, was $16.6 million, compared to $16.1 million for the fourth quarter of 2024, and $14.6 million for the first quarter of 2024.

The efficiency ratio⁽¹⁾ improved to 63.96% for the first quarter of 2025, compared to 65.35% for the fourth quarter of 2024, as a result of lower noninterest expense, partially offset by lower total revenue. The efficiency ratio⁽¹⁾ improved from 65.34% for the first quarter of 2024, primarily due to higher total revenue, partially offset by higher noninterest expense during the first quarter of 2025.

Full time equivalent employees were 350 at March 31, 2025 compared to 355 at December 31, 2024, and 351 at March 31, 2024.

⁽¹⁾This is a non-GAAP financial measure as defined and discussed under “Non-GAAP Financial Measures” later in this press release.

Financial Condition and Capital Management:

Total assets decreased 2% to $5.5 billion at March 31, 2025, compared to $5.6 billion at December 31, 2024, primarily due to a decrease in deposits resulting in a decrease in overnight funds. Total assets increased 5% from $5.3 billion at March 31, 2024, primarily due to an increase in deposits resulting in an increase in overnight funds, and an increase in loans.

Investment securities available-for-sale (at fair value) totaled $371.0 million at March 31, 2025, compared to $256.3 million at December 31, 2024, and $404.5 million at March 31, 2024. The pre-tax unrealized loss on the securities available-for-sale portfolio was $3.1 million, or $2.3 million net of taxes, which equaled less than 1% of total shareholders’ equity at March 31, 2025.

During the first quarter of 2025, the Company purchased $62.3 million of agency mortgage-backed securities, $44.8 million of collateralized mortgage obligations, and $44.7 million of U.S. Treasury securities, for total purchases of $151.8 million in the available-for-sale portfolio. Securities purchased had a book yield of 4.86% and an average life of 4.34 years.

Investment securities held-to-maturity (at amortized cost, net of allowance for credit losses of $12,000), totaled $576.7 million at March 31, 2025, compared to $590.0 million at December 31, 2024, and $636.2 million at March 31, 2024. The fair value of the securities held-to-maturity portfolio was $496.3 million at March 31, 2025. The pre-tax unrecognized loss on the securities held-to-maturity portfolio was $80.5 million, or $56.7 million net of taxes, which equaled 8.1% of total shareholders’ equity at March 31, 2025.

The unrealized and unrecognized losses in both the available-for-sale and held-to-maturity portfolios were due to higher interest rates at March 31, 2025 compared to when the securities were purchased. The issuers are of high credit quality and all principal amounts are expected to be repaid when the securities mature. The fair value is expected to recover as the securities approach their maturity date and/or market rates decline.

Loans HFI, net of deferred costs and fees, remained flat at $3.5 billion at March 31, 2025 as compared to December 31, 2024, and increased $150.8 million, or 5%, from $3.3 billion at March 31, 2024. Loans HFI, excluding residential mortgages, remained flat at $3.0 billion at March 31, 2025 as compared to December 31, 2024, and increased $175.5 million, or 6%, from $2.8 billion at March 31, 2024.

Commercial and industrial line utilization was 31% at March 31, 2025, compared to 34% at December 31, 2024, and 28% at March 31, 2024. Commercial real estate (“CRE”) loans totaled $2.0 billion at March 31, 2025, of which 31% were owner occupied and 69% were investor CRE loans. Owner occupied CRE loans totaled 31% at December 31, 2024 and 32% at March 31, 2024. At March 31, 2025, approximately 24% of the Company’s loan portfolio consisted of floating interest rate loans, compared to 26% at both December 31, 2024 and March 31, 2024.

At March 31, 2025, paydowns and maturities of investment securities and fixed interest rate loans maturing within one year totaled $395.6 million.

Total deposits decreased $136.8 million, or 3%, to $4.7 billion at March 31, 2025, compared to $4.8 billion at December 31, 2024 due to deposits outflows we typically see in the first quarter, and increased $238.6 million, or 5% from $4.4 billion at March 31, 2024.

The following table shows the Company’s deposit types as a percentage of total deposits at the dates indicated:


	March 31,		December 31,		March 31,
DEPOSITS TYPE % TO TOTAL DEPOSITS	2025		2024		2024
Demand, noninterest-bearing	24	%	25	%	28	%
Demand, interest-bearing	20	%	19	%	21	%
Savings and money market	29	%	28	%	25	%
Time deposits — under $250	1	%	1	%	1	%
Time deposits — $250 and over	5	%	4	%	4	%
ICS/CDARS — interest-bearing demand,
money market and time deposits	21	%	23	%	21	%
Total deposits	100	%	100	%	100	%

The loan to deposit ratio was 74.45% at March 31, 2025, compared to 72.45% at December 31, 2024, and 75.06% at March 31, 2024.

The Company’s total available liquidity and borrowing capacity was $3.2 billion at March 31, 2025, compared to $3.3 billion at December 31, 2024, and $3.0 billion at March 31, 2024.

Total shareholders’ equity was $696.2 million at March 31, 2025, compared to $689.7 million at December 31, 2024, and $676.3 million at March 31, 2024. The increase in shareholders’ equity at March 31, 2025 is primarily a function of net income and the decrease in the total accumulated other comprehensive loss, partially offset by dividends to stockholders.

Total accumulated other comprehensive loss of $6.8 million at March 31, 2025 was comprised of unrealized losses on securities available-for-sale of $2.3 million, a split dollar insurance contracts liability of $2.4 million, a supplemental executive retirement plan liability of $2.2 million, and a $49,000 unrealized gain on interest-only strip from SBA loans.

The Company’s consolidated capital ratios exceeded regulatory guidelines and the Bank’s capital ratios exceeded regulatory guidelines under the prompt corrective action (“PCA”) regulatory guidelines for a well-capitalized financial institution, and the Basel III minimum regulatory requirements at March 31, 2025.

Tangible book value per share⁽¹⁾ was $8.48 at March 31, 2025, compared to $8.41 at December 31, 2024, and $8.17 at March 31, 2024.

In July 2024, the Company announced that its Board of Directors adopted a share repurchase program under which the Company is authorized to repurchase up to $15 million of the Company’s shares of its issued and outstanding common stock. The Company did not repurchase any of its common stock during 2024 or the first quarter of 2025.

⁽¹⁾This is a non-GAAP financial measure as defined and discussed under “Non-GAAP Financial Measures” later in this press release.

Credit Quality:

The provision for credit losses on loans totaled $274,000 for the first quarter of 2025, compared to a $1.3 million provision for credit losses on loans for the fourth quarter of 2024, and a provision for credit losses on loans of $184,000 for the first quarter of 2024. Net charge-offs totaled $965,000 for the first quarter of 2025, compared to $197,000 for the fourth quarter of 2024, and $254,000 for the first quarter of 2024. More than half of the net charge-offs for the first quarter of 2025 related to one commercial contractor that was previously reserved for during the fourth quarter of 2024. The remaining charge-offs were related to five different small businesses in a variety of industries. Four loans were underwritten using a scored small business product whose underwriting guidelines have been tightened since the loans were made.

The allowance for credit losses on loans (“ACLL”) at March 31, 2025 was $48.3 million, or 1.38% of total loans, representing 765% of total nonperforming loans. The ACLL at December 31, 2024 was $49.0 million, or 1.40% of total loans, representing 638% of total nonperforming loans. The ACLL at March 31, 2024 was $47.9 million, or 1.44% of total loans, representing 608% of total nonperforming loans. The reduction to the allowance for credit on losses on loans reflects our credit assessment and economic factors.

NPAs were $6.3 million at March 31, 2025, compared to $7.7 million at December 31, 2024, and $7.9 million at March 31, 2024. There were no CRE loans in NPAs at March 31, 2025, December 31, 2024, or March 31, 2024. There were no foreclosed assets on the balance sheet at March 31, 2025, December 31, 2024, or March 31, 2024. There were no Shared National Credits (“SNCs”) or material purchased participations included in NPAs or total loans at March 31, 2025, December 31, 2024, or March 31, 2024.

Classified assets totaled $40.0 million, or 0.73% of total assets, at March 31, 2025, compared to $41.7 million, or 0.74% of total assets, at December 31, 2024, and $35.4 million, or 0.67% of total assets, at March 31, 2024. The increase in classified assets from March 31, 2024 was primarily the result of one downgraded owner occupied CRE credit, and a number of residential related loans downgraded during the fourth quarter of 2024. The loans are well-collateralized and we do not anticipate to incur losses as a result of the downgrades of these loans.

Heritage Commerce Corp, a bank holding company established in October 1997, is the parent company of Heritage Bank of Commerce, established in 1994 and headquartered in San Jose, CA with full-service branches in Danville, Fremont, Gilroy, Hollister, Livermore, Los Altos, Los Gatos, Morgan Hill, Oakland, Palo Alto, Pleasanton, Redwood City, San Francisco, San Jose, San Mateo, San Rafael, and Walnut Creek. Heritage Bank of Commerce is an SBA Preferred Lender. Bay View Funding, a subsidiary of Heritage Bank of Commerce, is based in San Jose, CA and provides business-essential working capital factoring financing to various industries throughout the United States. For more information, please visit www.heritagecommercecorp.com. The contents of our website are not incorporated into, and do not form a part of, this release or of our filings with the Securities and Exchange Commission.

Reclassifications

During the first quarter of 2025, we reclassified Federal Home Loan Bank (“FHLB”) and Federal Reserve Bank (“FRB”) stock dividends from interest income to noninterest income and the related average asset balances were reclassified from interest earning assets to other assets on the “Net Interest Income and Net Interest Margin” tables. The amounts for the prior periods were reclassified to conform to the current presentation. These reclassifications did not affect previously reported net income or shareholders’ equity.

Non-GAAP Financial Measures

Financial results are presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and prevailing practices in the banking industry. However, certain non-GAAP performance measures and ratios are used by management to evaluate and measure the Company’s performance. Management believes these non-GAAP financial measures are common in the banking industry, and may enhance comparability for peer comparison purposes. These non-GAAP financial measures should be supplemental to primary GAAP financial measures and should not be read in isolation or relied upon as a substitute for primary GAAP financial measures. A reconciliation of GAAP to non-GAAP financial measures is presented in the tables at the end of this press release under “Reconciliation of Non-GAAP Financial Measures.”

Forward-Looking Statement Disclaimer

Certain matters discussed in this press release constitute forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements are inherently uncertain in that they reflect plans and expectations for future events. These statements may include, among other things, those relating to the Company’s future financial performance, plans and objectives regarding future events, expectations regarding changes in interest rates and market conditions, projected cash flows of our investment securities portfolio, the performance of our loan portfolio, estimated net interest income resulting from a shift in interest rates, expectation of high credit quality issuers ability to repay, as well as statements relating to the anticipated effects on the Company’s financial condition and results of operations from expected developments or events. Any statements that reflect our belief about, confidence in, or expectations for future events, performance or condition should be considered forward-looking statements. Readers should not construe these statements as assurances of a given level of performance, nor as promises that we will take actions that we currently expect to take. All statements are subject to various risks and uncertainties, many of which are outside our control and some of which may fall outside our ability to predict or anticipate. Accordingly, our actual results may differ materially from our projected results, and we may take actions or experience events that we do not currently expect. Risks and uncertainties that could cause our financial performance to differ materially from our goals, plans, expectations and projections expressed in forward-looking statements include those set forth in our filings with the Securities and Exchange Commission, Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, and include: (i) risks of geographic concentration of our client base, our loans, and the collateral securing our loans, as those clients and assets may be particularly subject to natural disasters and to events and conditions that directly or indirectly affect those regions, including the particular risks of natural disasters (including earthquakes, fires, and flooding) and other events that disproportionately affect that region; (ii) cybersecurity risks that may affect us directly or may impact us indirectly by virtue of their effects on our clients, markets or vendors, including our ability to identify and address cybersecurity risks, including those posed by the increasing use of artificial intelligence, such as data security breaches, “denial of service” attacks, “hacking” and identity theft affecting us, our clients, and our third-party vendors and service providers; (iii) domestic, international and multinational political events that have accompanied or that may in the future accompany or result from recent political changes, particularly including sociopolitical events and conditions that result from political conflicts and law enforcement activities that may adversely affect our markets or our clients; (iv) media items and consumer confidence as those factors affect our clients’ confidence in the banking system generally and in our bank specifically; (v) adequacy of our risk management framework, disclosure controls and procedures and internal control over financial reporting; (vi) market, geographic and sociopolitical factors that arise by virtue of the fact that we operate primarily in the general San Francisco Bay Area of Northern California; (vii) the effects of recent wildfires affecting Southern California, which have affected certain clients and certain loans secured by mortgages in Los Angeles County, and which are affecting or may, in the future, affect other clients in those and other markets throughout California; (viii) factors that affect our liquidity and our ability to meet client demands for withdrawals from deposit accounts and undrawn lines of credit, including our cash on hand and the availability of funds from our own lines of credit; (ix) factors that affect the value and liquidity of our investment portfolios, particularly the values of securities available-for-sale; (x) our ability to estimate accurately, and to establish adequate reserves against, the risk of loss associated with our loan and lease portfolios and our factoring business; (xi) inflationary pressures and changes in the interest rate environment that reduce our margins and yields, the fair value of financial instruments or our level of loan originations, or increase the level of defaults, losses and prepayments on loans to clients, whether held in the portfolio or in the secondary market; (xii) increased capital requirements for our continual growth or as imposed by banking regulators, which may require us to raise capital at a time when capital is not available on favorable terms or at all; (xiii) operational issues stemming from, and/or capital spending necessitated by, the potential need to adapt to industry changes in information technology systems, on which we are highly dependent; (xiv) events that affect our ability to attract, recruit, and retain qualified officers and other personnel to implement our strategic plan, and that enable current and future personnel to protect and develop our relationships with clients, and to promote our business, results of operations and growth prospects; (xv) the expense and uncertain resolution of litigation matters whether occurring in the ordinary course of business or otherwise, particularly including but not limited to the effects of recent and ongoing developments in California labor and employment laws, regulations and court decisions; and (xvi) our success in managing the risks involved in the foregoing factors.

Member FDIC

For additional information, contact:
Debbie Reuter
EVP, Corporate Secretary
Direct: (408) 494-4542
Debbie.Reuter@herbank.com


	For the Quarter Ended:									Percent Change From:
CONSOLIDATED INCOME STATEMENTS	March 31,			December 31,			March 31,			December 31,			March 31,
(in $000’s, unaudited)	2025			2024			2024			2024			2024
Interest income	$	61,832		$	64,043		$	56,960		(3	)	%	9		%
Interest expense		18,472			20,448			17,458		(10	)	%	6		%
Net interest income before provision
for credit losses on loans		43,360			43,595			39,502		(1	)	%	10		%
Provision for credit losses on loans		274			1,331			184		(79	)	%	49		%
Net interest income after provision
for credit losses on loans		43,086			42,264			39,318		2		%	10		%
Noninterest income:
Service charges and fees on deposit
accounts		892			885			877		1		%	2		%
FHLB and FRB stock dividends		590			590			591		0		%	0		%
Increase in cash surrender value of
life insurance		538			528			518		2		%	4		%
Gain on sales of SBA loans		98			125			178		(22	)	%	(45	)	%
Servicing income		82			77			90		6		%	(9	)	%
Termination fees		87			18			13		383		%	569		%
Other		409			552			371		(26	)	%	10		%
Total noninterest income		2,696			2,775			2,638		(3	)	%	2		%
Noninterest expense:
Salaries and employee benefits		16,575			16,976			15,509		(2	)	%	7		%
Occupancy and equipment		2,534			2,495			2,443		2		%	4		%
Professional fees		1,580			1,711			1,327		(8	)	%	19		%
Other		8,767			9,122			8,257		(4	)	%	6		%
Total noninterest expense		29,456			30,304			27,536		(3	)	%	7		%
Income before income taxes		16,326			14,735			14,420		11		%	13		%
Income tax expense		4,700			4,114			4,254		14		%	10		%
Net income	$	11,626		$	10,621		$	10,166		9		%	14		%

PER COMMON SHARE DATA
(unaudited)
Basic earnings per share	$	0.19		$	0.17		$	0.17		12		%	12		%
Diluted earnings per share	$	0.19		$	0.17		$	0.17		12		%	12		%
Weighted average shares outstanding – basic		61,479,579			61,320,505			61,186,623		0		%	0		%
Weighted average shares outstanding – diluted		61,708,361			61,679,735			61,470,552		0		%	0		%
Common shares outstanding at period-end		61,611,121			61,348,095			61,253,625		0		%	1		%
Dividend per share	$	0.13		$	0.13		$	0.13		0		%	0		%
Book value per share	$	11.30		$	11.24		$	11.04		1		%	2		%
Tangible book value per share⁽¹⁾	$	8.48		$	8.41		$	8.17		1		%	4		%

KEY PERFORMANCE METRICS
(in $000’s, unaudited)
Annualized return on average equity		6.81	%		6.16	%		6.08	%	11		%	12		%
Annualized return on average tangible
common equity⁽¹⁾		9.09	%		8.25	%		8.24	%	10		%	10		%
Annualized return on average assets		0.85	%		0.75	%		0.79	%	13		%	8		%
Annualized return on average tangible assets⁽¹⁾		0.88	%		0.78	%		0.82	%	13		%	7		%
Net interest margin (FTE)⁽¹⁾		3.39	%		3.32	%		3.31	%	2		%	2		%
Total revenue	$	46,056		$	46,370		$	42,140		(1	)	%	9		%
Pre-provision net revenue⁽¹⁾	$	16,600		$	16,066		$	14,604		3		%	14		%
Efficiency ratio⁽¹⁾		63.96	%		65.35	%		65.34	%	(2	)	%	(2	)	%

AVERAGE BALANCES
(in $000’s, unaudited)
Average assets	$	5,559,896		$	5,607,840		$	5,178,636		(1	)	%	7		%
Average tangible assets⁽¹⁾	$	5,386,001		$	5,433,439		$	5,002,597		(1	)	%	8		%
Average earning assets	$	5,188,317		$	5,235,986		$	4,810,505		(1	)	%	8		%
Average loans held-for-sale	$	2,290		$	2,260		$	2,749		1		%	(17	)	%
Average loans held-for-investment	$	3,429,014		$	3,388,729		$	3,297,240		1		%	4		%
Average deposits	$	4,717,517		$	4,771,491		$	4,360,150		(1	)	%	8		%
Average demand deposits – noninterest-bearing	$	1,167,330		$	1,222,393		$	1,177,078		(5	)	%	(1	)	%
Average interest-bearing deposits	$	3,550,187		$	3,549,098		$	3,183,072		0		%	12		%
Average interest-bearing liabilities	$	3,589,872		$	3,588,755		$	3,222,603		0		%	11		%
Average equity	$	692,733		$	686,263		$	672,292		1		%	3		%
Average tangible common equity⁽¹⁾	$	518,838		$	511,862		$	496,253		1		%	5		%

⁽¹⁾This is a non-GAAP financial measure as defined and discussed under “Non-GAAP Financial Measures” in this press release.


	For the Quarter Ended:
CONSOLIDATED INCOME STATEMENTS	March 31,			December 31,			September 30,			June 30,			March 31,
(in $000’s, unaudited)	2025			2024			2024			2024			2024
Interest income	$	61,832		$	64,043		$	60,852		$	58,489		$	56,960
Interest expense		18,472			20,448			21,523			19,622			17,458
Net interest income before provision
for credit losses on loans		43,360			43,595			39,329			38,867			39,502
Provision for credit losses on loans		274			1,331			153			471			184
Net interest income after provision
for credit losses on loans		43,086			42,264			39,176			38,396			39,318
Noninterest income:
Service charges and fees on deposit
accounts		892			885			908			891			877
FHLB and FRB stock dividends		590			590			586			588			591
Increase in cash surrender value of
life insurance		538			528			530			521			518
Gain on sales of SBA loans		98			125			94			76			178
Servicing income		82			77			108			90			90
Termination fees		87			18			46			100			13
Gain on proceeds from company-owned
life insurance		—			—			—			219			—
Other		409			552			554			379			371
Total noninterest income		2,696			2,775			2,826			2,864			2,638
Noninterest expense:
Salaries and employee benefits		16,575			16,976			15,673			15,794			15,509
Occupancy and equipment		2,534			2,495			2,599			2,689			2,443
Professional fees		1,580			1,711			1,306			1,072			1,327
Other		8,767			9,122			7,977			8,633			8,257
Total noninterest expense		29,456			30,304			27,555			28,188			27,536
Income before income taxes		16,326			14,735			14,447			13,072			14,420
Income tax expense		4,700			4,114			3,940			3,838			4,254
Net income	$	11,626		$	10,621		$	10,507		$	9,234		$	10,166

PER COMMON SHARE DATA
(unaudited)
Basic earnings per share	$	0.19		$	0.17		$	0.17		$	0.15		$	0.17
Diluted earnings per share	$	0.19		$	0.17		$	0.17		$	0.15		$	0.17
Weighted average shares outstanding – basic		61,479,579			61,320,505			61,295,877			61,279,914			61,186,623
Weighted average shares outstanding – diluted		61,708,361			61,679,735			61,546,157			61,438,088			61,470,552
Common shares outstanding at period-end		61,611,121			61,348,095			61,297,344			61,292,094			61,253,625
Dividend per share	$	0.13		$	0.13		$	0.13		$	0.13		$	0.13
Book value per share	$	11.30		$	11.24		$	11.18		$	11.08		$	11.04
Tangible book value per share⁽¹⁾	$	8.48		$	8.41		$	8.33		$	8.22		$	8.17

KEY PERFORMANCE METRICS
(in $000’s, unaudited)
Annualized return on average equity		6.81	%		6.16	%		6.14	%		5.50	%		6.08	%
Annualized return on average tangible
common equity⁽¹⁾		9.09	%		8.25	%		8.27	%		7.43	%		8.24	%
Annualized return on average assets		0.85	%		0.75	%		0.78	%		0.71	%		0.79	%
Annualized return on average tangible assets⁽¹⁾		0.88	%		0.78	%		0.81	%		0.74	%		0.82	%
Net interest margin (FTE)⁽¹⁾		3.39	%		3.32	%		3.15	%		3.23	%		3.31	%
Total revenue	$	46,056		$	46,370		$	42,155		$	41,731		$	42,140
Pre-provision net revenue⁽¹⁾	$	16,600		$	16,066		$	14,600		$	13,543		$	14,604
Efficiency ratio⁽¹⁾		63.96	%		65.35	%		65.37	%		67.55	%		65.34	%

AVERAGE BALANCES
(in $000’s, unaudited)
Average assets	$	5,559,896		$	5,607,840		$	5,352,067		$	5,213,171		$	5,178,636
Average tangible assets⁽¹⁾	$	5,386,001		$	5,433,439		$	5,177,114		$	5,037,673		$	5,002,597
Average earning assets	$	5,188,317		$	5,235,986		$	4,980,082		$	4,840,670		$	4,810,505
Average loans held-for-sale	$	2,290		$	2,260		$	1,493		$	1,503		$	2,749
Average loans held-for-investment	$	3,429,014		$	3,388,729		$	3,359,647		$	3,328,358		$	3,297,240
Average deposits	$	4,717,517		$	4,771,491		$	4,525,946		$	4,394,545		$	4,360,150
Average demand deposits – noninterest-bearing	$	1,167,330		$	1,222,393		$	1,172,304		$	1,127,145		$	1,177,078
Average interest-bearing deposits	$	3,550,187		$	3,549,098		$	3,353,642		$	3,267,400		$	3,183,072
Average interest-bearing liabilities	$	3,589,872		$	3,588,755		$	3,393,264		$	3,306,972		$	3,222,603
Average equity	$	692,733		$	686,263		$	680,404		$	675,108		$	672,292
Average tangible common equity⁽¹⁾	$	518,838		$	511,862		$	505,451		$	499,610		$	496,253

⁽¹⁾This is a non-GAAP financial measure as defined and discussed under “Non-GAAP Financial Measures” in this press release.


	End of Period:									Percent Change From:
CONSOLIDATED BALANCE SHEETS	March 31,			December 31,			March 31,			December 31,			March 31,
(in $000’s, unaudited)	2025			2024			2024			2024			2024
ASSETS
Cash and due from banks	$	44,281		$	29,864		$	32,543		48		%	36		%
Other investments and interest-bearing deposits
in other financial institutions		700,769			938,259			508,816		(25	)	%	38		%
Securities available-for-sale, at fair value		370,976			256,274			404,474		45		%	(8	)	%
Securities held-to-maturity, at amortized cost		576,718			590,016			636,249		(2	)	%	(9	)	%
Loans – held-for-sale – SBA, including deferred costs		1,884			2,375			1,946		(21	)	%	(3	)	%
Loans – held-for-investment:
Commercial		489,241			531,350			452,231		(8	)	%	8		%
Real estate:
CRE – owner occupied		616,825			601,636			585,031		3		%	5		%
CRE – non-owner occupied		1,363,275			1,341,266			1,271,184		2		%	7		%
Land and construction		136,106			127,848			129,712		6		%	5		%
Home equity		119,138			127,963			122,794		(7	)	%	(3	)	%
Multifamily		284,510			275,490			269,263		3		%	6		%
Residential mortgages		465,330			471,730			490,035		(1	)	%	(5	)	%
Consumer and other		12,741			14,837			16,439		(14	)	%	(22	)	%
Loans		3,487,166			3,492,120			3,336,689		0		%	5		%
Deferred loan fees, net		(268	)		(183	)		(587	)	46		%	(54	)	%
Total loans – held-for-investment, net of deferred fees		3,486,898			3,491,937			3,336,102		0		%	5		%
Allowance for credit losses on loans		(48,262	)		(48,953	)		(47,888	)	(1	)	%	1		%
Loans, net		3,438,636			3,442,984			3,288,214		0		%	5		%
Company-owned life insurance		81,749			81,211			80,007		1		%	2		%
Premises and equipment, net		9,772			10,140			9,986		(4	)	%	(2	)	%
Goodwill		167,631			167,631			167,631		0		%	0		%
Other intangible assets		5,986			6,439			8,074		(7	)	%	(26	)	%
Accrued interest receivable and other assets		115,853			119,813			118,134		(3	)	%	(2	)	%
Total assets	$	5,514,255		$	5,645,006		$	5,256,074		(2	)	%	5		%

LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities:
Deposits:
Demand, noninterest-bearing	$	1,128,593		$	1,214,192		$	1,242,059		(7	)	%	(9	)	%
Demand, interest-bearing		949,068			936,587			925,100		1		%	3		%
Savings and money market		1,353,293			1,325,923			1,124,900		2		%	20		%
Time deposits – under $250		37,592			38,988			38,105		(4	)	%	(1	)	%
Time deposits – $250 and over		213,357			206,755			200,739		3		%	6		%
ICS/CDARS – interest-bearing demand, money market
and time deposits		1,001,365			1,097,586			913,757		(9	)	%	10		%
Total deposits		4,683,268			4,820,031			4,444,660		(3	)	%	5		%
Subordinated debt, net of issuance costs		39,691			39,653			39,539		0		%	0		%
Accrued interest payable and other liabilities		95,106			95,595			95,579		(1	)	%	0		%
Total liabilities		4,818,065			4,955,279			4,579,778		(3	)	%	5		%

Shareholders’ Equity:
Common stock		511,596			510,070			507,578		0		%	1		%
Retained earnings		191,401			187,762			181,306		2		%	6		%
Accumulated other comprehensive loss		(6,807	)		(8,105	)		(12,588	)	(16	)	%	(46	)	%
Total shareholders’ equity		696,190			689,727			676,296		1		%	3		%
Total liabilities and shareholders’ equity	$	5,514,255		$	5,645,006		$	5,256,074		(2	)	%	5		%


	End of Period:
CONSOLIDATED BALANCE SHEETS	March 31,			December 31,			September 30,			June 30,			March 31,
(in $000’s, unaudited)	2025			2024			2024			2024			2024
ASSETS
Cash and due from banks	$	44,281		$	29,864		$	49,722		$	37,497		$	32,543
Other investments and interest-bearing deposits
in other financial institutions		700,769			938,259			906,588			610,763			508,816
Securities available-for-sale, at fair value		370,976			256,274			237,612			273,043			404,474
Securities held-to-maturity, at amortized cost		576,718			590,016			604,193			621,178			636,249
Loans – held-for-sale – SBA, including deferred costs		1,884			2,375			1,649			1,899			1,946
Loans – held-for-investment:
Commercial		489,241			531,350			481,266			477,929			452,231
Real estate:
CRE – owner occupied		616,825			601,636			602,062			594,504			585,031
CRE – non-owner occupied		1,363,275			1,341,266			1,310,578			1,283,323			1,271,184
Land and construction		136,106			127,848			125,761			125,374			129,712
Home equity		119,138			127,963			124,090			126,562			122,794
Multifamily		284,510			275,490			273,103			268,968			269,263
Residential mortgages		465,330			471,730			479,524			484,809			490,035
Consumer and other		12,741			14,837			14,179			18,758			16,439
Loans		3,487,166			3,492,120			3,410,563			3,380,227			3,336,689
Deferred loan fees, net		(268	)		(183	)		(327	)		(434	)		(587	)
Total loans – held-for-investment, net of deferred fees		3,486,898			3,491,937			3,410,236			3,379,793			3,336,102
Allowance for credit losses on loans		(48,262	)		(48,953	)		(47,819	)		(47,954	)		(47,888	)
Loans, net		3,438,636			3,442,984			3,362,417			3,331,839			3,288,214
Company-owned life insurance		81,749			81,211			80,682			80,153			80,007
Premises and equipment, net		9,772			10,140			10,398			10,310			9,986
Goodwill		167,631			167,631			167,631			167,631			167,631
Other intangible assets		5,986			6,439			6,966			7,521			8,074
Accrued interest receivable and other assets		115,853			119,813			123,738			121,190			118,134
Total assets	$	5,514,255		$	5,645,006		$	5,551,596		$	5,263,024		$	5,256,074

LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities:
Deposits:
Demand, noninterest-bearing	$	1,128,593		$	1,214,192		$	1,272,139		$	1,187,320		$	1,242,059
Demand, interest-bearing		949,068			936,587			913,910			928,246			925,100
Savings and money market		1,353,293			1,325,923			1,309,676			1,126,520			1,124,900
Time deposits – under $250		37,592			38,988			39,060			39,046			38,105
Time deposits – $250 and over		213,357			206,755			196,945			203,886			200,739
ICS/CDARS – interest-bearing demand, money market
and time deposits		1,001,365			1,097,586			997,803			959,592			913,757
Total deposits		4,683,268			4,820,031			4,729,533			4,444,610			4,444,660
Other short-term borrowings		—			—			—			—			—
Subordinated debt, net of issuance costs		39,691			39,653			39,615			39,577			39,539
Accrued interest payable and other liabilities		95,106			95,595			97,096			99,638			95,579
Total liabilities		4,818,065			4,955,279			4,866,244			4,583,825			4,579,778

Shareholders’ Equity:
Common stock		511,596			510,070			509,134			508,343			507,578
Retained earnings		191,401			187,762			185,110			182,571			181,306
Accumulated other comprehensive loss		(6,807	)		(8,105	)		(8,892	)		(11,715	)		(12,588	)
Total shareholders’ equity		696,190			689,727			685,352			679,199			676,296
Total liabilities and shareholders’ equity	$	5,514,255		$	5,645,006		$	5,551,596		$	5,263,024		$	5,256,074


	At or For the Quarter Ended:									Percent Change From:
CREDIT QUALITY DATA	March 31,			December 31,			March 31,			December 31,			March 31,
(in $000’s, unaudited)	2025			2024			2024			2024			2024
Nonaccrual loans – held-for-investment:
Land and construction loans	$	4,793		$	5,874		$	4,673		(18	)	%	3		%
Home equity and other loans		927			290			120		220		%	673		%
Commercial loans		324			1,014			1,127		(68	)	%	(71	)	%
CRE loans		—			—			—		N/A			N/A
Total nonaccrual loans – held-for-investment:		6,044			7,178			5,920		(16	)	%	2		%
Loans over 90 days past due
and still accruing		268			489			1,951		(45	)	%	(86	)	%
Total nonperforming loans		6,312			7,667			7,871		(18	)	%	(20	)	%
Foreclosed assets		—			—			—		N/A			N/A
Total nonperforming assets	$	6,312		$	7,667		$	7,871		(18	)	%	(20	)	%
Net charge-offs during the quarter	$	965		$	197		$	254		390		%	280		%
Provision for credit losses on loans during the quarter	$	274		$	1,331		$	184		(79	)	%	49		%
Allowance for credit losses on loans	$	48,262		$	48,953		$	47,888		(1	)	%	1		%
Classified assets	$	40,034		$	41,661		$	35,392		(4	)	%	13		%
Allowance for credit losses on loans to total loans		1.38	%		1.40	%		1.44	%	(1	)	%	(4	)	%
Allowance for credit losses on loans to total nonperforming loans		764.61	%		638.49	%		608.41	%	20		%	26		%
Nonperforming assets to total assets		0.11	%		0.14	%		0.15	%	(21	)	%	(27	)	%
Nonperforming loans to total loans		0.18	%		0.22	%		0.24	%	(18	)	%	(25	)	%
Classified assets to Heritage Commerce Corp
Tier 1 capital plus allowance for credit losses on loans		7	%		7	%		6	%	0		%	17		%
Classified assets to Heritage Bank of Commerce
Tier 1 capital plus allowance for credit losses on loans		7	%		7	%		6	%	0		%	17		%

OTHER PERIOD-END STATISTICS
(in $000’s, unaudited)
Heritage Commerce Corp:
Tangible common equity ⁽¹⁾	$	522,573		$	515,657		$	500,591		1		%	4		%
Shareholders’ equity / total assets		12.63	%		12.22	%		12.87	%	3		%	(2	)	%
Tangible common equity / tangible assets ⁽¹⁾		9.78	%		9.43	%		9.85	%	4		%	(1	)	%
Loan to deposit ratio		74.45	%		72.45	%		75.06	%	3		%	(1	)	%
Noninterest-bearing deposits / total deposits		24.10	%		25.19	%		27.94	%	(4	)	%	(14	)	%
Total capital ratio		15.9	%		15.6	%		15.6	%	2		%	2		%
Tier 1 capital ratio		13.6	%		13.4	%		13.4	%	1		%	1		%
Common Equity Tier 1 capital ratio		13.6	%		13.4	%		13.4	%	1		%	1		%
Tier 1 leverage ratio		9.8	%		9.6	%		10.2	%	2		%	(4	)	%
Heritage Bank of Commerce:
Tangible common equity / tangible assets ⁽¹⁾		10.15	%		9.79	%		10.22	%	4		%	(1	)	%
Total capital ratio		15.4	%		15.1	%		15.1	%	2		%	2		%
Tier 1 capital ratio		14.1	%		13.9	%		13.9	%	1		%	1		%
Common Equity Tier 1 capital ratio		14.1	%		13.9	%		13.9	%	1		%	1		%
Tier 1 leverage ratio		10.2	%		10.0	%		10.6	%	2		%	(4	)	%

⁽¹⁾This is a non-GAAP financial measure as defined and discussed under “Non-GAAP Financial Measures” in this press release.


	At or For the Quarter Ended:
CREDIT QUALITY DATA	March 31,			December 31,			September 30,			June 30,			March 31,
(in $000’s, unaudited)	2025			2024			2024			2024			2024
Nonaccrual loans – held-for-investment:
Land and construction loans	$	4,793		$	5,874		$	5,862		$	4,774		$	4,673
Home equity and other loans		927			290			84			108			120
Commercial loans		324			1,014			752			900			1,127
CRE loans		—			—			—			—			—
Total nonaccrual loans – held-for-investment:		6,044			7,178			6,698			5,782			5,920
Loans over 90 days past due
and still accruing		268			489			460			248			1,951
Total nonperforming loans		6,312			7,667			7,158			6,030			7,871
Foreclosed assets		—			—			—			—			—
Total nonperforming assets	$	6,312		$	7,667		$	7,158		$	6,030		$	7,871
Net charge-offs during the quarter	$	965		$	197		$	288		$	405		$	254
Provision for credit losses on loans during the quarter	$	274		$	1,331		$	153		$	471		$	184
Allowance for credit losses on loans	$	48,262		$	48,953		$	47,819		$	47,954		$	47,888
Classified assets	$	40,034		$	41,661		$	32,609		$	33,605		$	35,392
Allowance for credit losses on loans to total loans		1.38	%		1.40	%		1.40	%		1.42	%		1.44	%
Allowance for credit losses on loans to total nonperforming loans		764.61	%		638.49	%		668.05	%		795.26	%		608.41	%
Nonperforming assets to total assets		0.11	%		0.14	%		0.13	%		0.11	%		0.15	%
Nonperforming loans to total loans		0.18	%		0.22	%		0.21	%		0.18	%		0.24	%
Classified assets to Heritage Commerce Corp
Tier 1 capital plus allowance for credit losses on loans		7	%		7	%		6	%		6	%		6	%
Classified assets to Heritage Bank of Commerce
Tier 1 capital plus allowance for credit losses on loans		7	%		7	%		6	%		6	%		6	%

OTHER PERIOD-END STATISTICS
(in $000’s, unaudited)
Heritage Commerce Corp:
Tangible common equity ⁽¹⁾	$	522,573		$	515,657		$	510,755		$	504,047		$	500,591
Shareholders’ equity / total assets		12.63	%		12.22	%		12.35	%		12.91	%		12.87	%
Tangible common equity / tangible assets ⁽¹⁾		9.78	%		9.43	%		9.50	%		9.91	%		9.85	%
Loan to deposit ratio		74.45	%		72.45	%		72.11	%		76.04	%		75.06	%
Noninterest-bearing deposits / total deposits		24.10	%		25.19	%		26.90	%		26.71	%		27.94	%
Total capital ratio		15.9	%		15.6	%		15.6	%		15.6	%		15.6	%
Tier 1 capital ratio		13.6	%		13.4	%		13.4	%		13.4	%		13.4	%
Common Equity Tier 1 capital ratio		13.6	%		13.4	%		13.4	%		13.4	%		13.4	%
Tier 1 leverage ratio		9.8	%		9.6	%		10.0	%		10.2	%		10.2	%
Heritage Bank of Commerce:
Tangible common equity / tangible assets ⁽¹⁾		10.15	%		9.79	%		9.86	%		10.28	%		10.22	%
Total capital ratio		15.4	%		15.1	%		15.1	%		15.1	%		15.1	%
Tier 1 capital ratio		14.1	%		13.9	%		13.9	%		13.9	%		13.9	%
Common Equity Tier 1 capital ratio		14.1	%		13.9	%		13.9	%		13.9	%		13.9	%
Tier 1 leverage ratio		10.2	%		10.0	%		10.4	%		10.6	%		10.6	%

⁽¹⁾This is a non-GAAP financial measure as defined and discussed under “Non-GAAP Financial Measures” in this press release.


	For the Quarter Ended								For the Quarter Ended
	March 31, 2025								December 31, 2024
				Interest			Average					Interest			Average
NET INTEREST INCOME AND NET INTEREST MARGIN	Average			Income/			Yield/		Average			Income/			Yield/
(in $000’s, unaudited)	Balance			Expense			Rate		Balance			Expense			Rate
Assets:
Loans, core bank	$	2,945,072			39,758		5.47	%	$	2,899,347		$	39,852		5.47	%
Prepayment fees		—			224		0.03	%		—			35		0.00	%
Bay View Funding factored receivables		60,250			2,942		19.80	%		59,153			3,084		20.74	%
Purchased residential mortgages		427,963			3,597		3.41	%		434,846			3,732		3.41	%
Loan fair value mark / accretion		(1,981	)		181		0.02	%		(2,357	)		429		0.06	%
Loans, gross ⁽¹⁾⁽²⁾		3,431,304			46,702		5.52	%		3,390,989			47,132		5.53	%
Securities – taxable		876,092			5,559		2.57	%		800,174			4,475		2.22	%
Securities – exempt from Federal tax ⁽³⁾		30,480			275		3.66	%		30,570			274		3.57	%
Other investments and interest-bearing deposits
in other financial institutions		850,441			9,354		4.46	%		1,014,253			12,220		4.79	%
Total interest earning assets ⁽³⁾		5,188,317			61,890		4.84	%		5,235,986			64,101		4.87	%
Cash and due from banks		31,869								32,569
Premises and equipment, net		10,007								10,301
Goodwill and other intangible assets		173,895								174,401
Other assets		155,808								154,583
Total assets	$	5,559,896							$	5,607,840

Liabilities and shareholders’ equity:
Deposits:
Demand, noninterest-bearing	$	1,167,330							$	1,222,393

Demand, interest-bearing		944,375			1,438		0.62	%		906,581			1,452		0.64	%
Savings and money market		1,323,038			8,073		2.47	%		1,339,397			9,090		2.70	%
Time deposits – under $100		11,383			47		1.67	%		11,388			49		1.71	%
Time deposits – $100 and over		234,421			2,129		3.68	%		234,446			2,310		3.92	%
ICS/CDARS – interest-bearing demand, money market
and time deposits		1,036,970			6,248		2.44	%		1,057,286			7,009		2.64	%
Total interest-bearing deposits		3,550,187			17,935		2.05	%		3,549,098			19,910		2.23	%
Total deposits		4,717,517			17,935		1.54	%		4,771,491			19,910		1.66	%

Short-term borrowings		18			—		0.00	%		28			—		0.00	%
Subordinated debt, net of issuance costs		39,667			537		5.49	%		39,629			538		5.40	%
Total interest-bearing liabilities		3,589,872			18,472		2.09	%		3,588,755			20,448		2.27	%
Total interest-bearing liabilities and demand,
noninterest-bearing / cost of funds		4,757,202			18,472		1.57	%		4,811,148			20,448		1.69	%
Other liabilities		109,961								110,429
Total liabilities		4,867,163								4,921,577
Shareholders’ equity		692,733								686,263
Total liabilities and shareholders’ equity	$	5,559,896							$	5,607,840

Net interest income / margin ⁽³⁾					43,418		3.39	%					43,653		3.32	%
Less tax equivalent adjustment ⁽³⁾					(58	)							(58	)
Net interest income				$	43,360		3.39	%				$	43,595		3.31	%

⁽¹⁾Includes loans held-for-sale. Nonaccrual loans are included in average balances.
⁽²⁾Yield amounts earned on loans include fees and costs. The accretion of net deferred loan fees into loan interest income was $214,000 for the first quarter of 2025, compared to $167,000 for the fourth quarter of 2024. Prepayment fees totaled $224,000 for the first quarter of 2025, compared to $35,000 for the fourth quarter of 2024.
⁽³⁾Reflects the FTE adjustment for Federal tax-exempt income based on a 21% tax rate. This is a non-GAAP financial measure as defined and discussed under “Non-GAAP Financial Measures” in this press release.


	For the Quarter Ended								For the Quarter Ended
	March 31, 2025								March 31, 2024
				Interest			Average					Interest			Average
NET INTEREST INCOME AND NET INTEREST MARGIN	Average			Income/			Yield/		Average			Income/			Yield/
(in $000’s, unaudited)	Balance			Expense			Rate		Balance			Expense			Rate
Assets:
Loans, core bank	$	2,945,072		$	39,758		5.47	%	$	2,795,351		$	37,721		5.43	%
Prepayment fees		—			224		0.03	%		—			24		0.00	%
Bay View Funding factored receivables		60,250			2,942		19.80	%		53,511			2,838		21.33	%
Purchased residential mortgages		427,963			3,597		3.41	%		454,240			3,788		3.35	%
Loan fair value mark / accretion		(1,981	)		181		0.02	%		(3,113	)		229		0.03	%
Loans, gross ⁽¹⁾⁽²⁾		3,431,304			46,702		5.52	%		3,299,989			44,600		5.44	%
Securities – taxable		876,092			5,559		2.57	%		1,042,484			6,183		2.39	%
Securities – exempt from Federal tax ⁽³⁾		30,480			275		3.66	%		31,939			286		3.60	%
Other investments and interest-bearing deposits
in other financial institutions		850,441			9,354		4.46	%		436,093			5,951		5.49	%
Total interest earning assets ⁽³⁾		5,188,317			61,890		4.84	%		4,810,505			57,020		4.77	%
Cash and due from banks		31,869								33,214
Premises and equipment, net		10,007								10,015
Goodwill and other intangible assets		173,895								176,039
Other assets		155,808								148,863
Total assets	$	5,559,896							$	5,178,636

Liabilities and shareholders’ equity:
Deposits:
Demand, noninterest-bearing	$	1,167,330							$	1,177,078

Demand, interest-bearing		944,375			1,438		0.62	%		920,048			1,554		0.68	%
Savings and money market		1,323,038			8,073		2.47	%		1,067,581			6,649		2.50	%
Time deposits – under $100		11,383			47		1.67	%		10,945			42		1.54	%
Time deposits – $100 and over		234,421			2,129		3.68	%		221,211			2,064		3.75	%
ICS/CDARS – interest-bearing demand, money market
and time deposits		1,036,970			6,248		2.44	%		963,287			6,611		2.76	%
Total interest-bearing deposits		3,550,187			17,935		2.05	%		3,183,072			16,920		2.14	%
Total deposits		4,717,517			17,935		1.54	%		4,360,150			16,920		1.56	%

Short-term borrowings		18			—		0.00	%		15			—		0.00	%
Subordinated debt, net of issuance costs		39,667			537		5.49	%		39,516			538		5.48	%
Total interest-bearing liabilities		3,589,872			18,472		2.09	%		3,222,603			17,458		2.18	%
Total interest-bearing liabilities and demand,
noninterest-bearing / cost of funds		4,757,202			18,472		1.57	%		4,399,681			17,458		1.60	%
Other liabilities		109,961								106,663
Total liabilities		4,867,163								4,506,344
Shareholders’ equity		692,733								672,292
Total liabilities and shareholders’ equity	$	5,559,896							$	5,178,636

Net interest income / margin ⁽³⁾					43,418		3.39	%					39,562		3.31	%
Less tax equivalent adjustment ⁽³⁾					(58	)							(60	)
Net interest income				$	43,360		3.39	%				$	39,502		3.30	%

⁽¹⁾Includes loans held-for-sale. Nonaccrual loans are included in average balances.
⁽²⁾Yield amounts earned on loans include fees and costs. The accretion of net deferred loan fees into loan interest income was $214,000 for the first quarter of 2025, compared to $160,000 for the first quarter of 2024. Prepayment fees totaled $224,000 for the first quarter of 2025, compared to $24,000 for the first quarter of 2024.
⁽³⁾Reflects the FTE adjustment for Federal tax-exempt income based on a 21% tax rate. This is a non-GAAP financial measure as defined and discussed under “Non-GAAP Financial Measures” in this press release.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

Management considers tangible book value per share as a useful measurement of the Company’s equity. The Company references the return on average tangible common equity and the return on average tangible assets as measurements of profitability.

The following table summarizes components of the tangible book value per share at the dates indicated:


TANGIBLE BOOK VALUE PER SHARE	March 31,			December 31,			September 30,			June 30,			March 31,
(in $000’s, unaudited)	2025			2024			2024			2024			2024
Capital components:
Total Equity (GAAP)	$	696,190		$	689,727		$	685,352		$	679,199		$	676,296
Less: Preferred Stock		—			—			—			—			—
Total Common Equity		696,190			689,727			685,352			679,199			676,296
Less: Goodwill		(167,631	)		(167,631	)		(167,631	)		(167,631	)		(167,631	)
Less: Other Intangible Assets		(5,986	)		(6,439	)		(6,966	)		(7,521	)		(8,074	)
Total Tangible Common Equity (non-GAAP)	$	522,573		$	515,657		$	510,755		$	504,047		$	500,591

Common shares outstanding at period-end		61,611,121			61,348,095			61,297,344			61,292,094			61,253,625

Tangible book value per share (non-GAAP)	$	8.48		$	8.41		$	8.33		$	8.22		$	8.17

The following tables summarize components of the annualized return on average tangible common equity and the annualized return on average tangible assets for the periods indicated:


RETURN ON AVERAGE TANGIBLE COMMON	For the Quarter Ended:
EQUITY AND AVERAGE TANGIBLE COMMON ASSETS	March 31,				December 31,				September 30,				June 30,				March 31,
(in $000’s, unaudited)	2025				2024					2024			2024				2024
Net income	$	11,626			$	10,621			$	10,507			$	9,234			$	10,166

Average tangible common equity components:
Average Equity (GAAP)	$	692,733			$	686,263			$	680,404			$	675,108			$	672,292
Less: Goodwill		(167,631	)			(167,631	)			(167,631	)			(167,631	)			(167,631	)
Less: Other Intangible Assets		(6,264	)			(6,770	)			(7,322	)			(7,867	)			(8,408	)
Total Average Tangible Common Equity (non-GAAP)	$	518,838			$	511,862			$	505,451			$	499,610			$	496,253

Annualized return on average tangible common equity (non-GAAP)		9.09		%		8.25		%		8.27		%		7.43		%		8.24		%

Average tangible assets components:
Average Assets (GAAP)	$	5,559,896			$	5,607,840			$	5,352,067			$	5,213,171			$	5,178,636
Less: Goodwill		(167,631	)			(167,631	)			(167,631	)			(167,631	)			(167,631	)
Less: Other Intangible Assets		(6,264	)			(6,770	)			(7,322	)			(7,867	)			(8,408	)
Total Average Tangible Assets (non-GAAP)	$	5,386,001			$	5,433,439			$	5,177,114			$	5,037,673			$	5,002,597

Annualized return on average tangible assets (non-GAAP)		0.88		%		0.78		%		0.81		%		0.74		%		0.82		%

Management reviews yields on certain asset categories and the net interest margin of the Company on an FTE basis. In this non-GAAP presentation, net interest income is adjusted to reflect tax-exempt interest income on an equivalent before-tax basis using tax rates effective as of the end of the period. This measure ensures comparability of net interest income arising from both taxable and tax-exempt sources. The following tables summarize components of FTE net interest income of the Company for the periods indicated:


	For the Quarter Ended:
	March 31,			December 31,			September 30,			June 30,			March 31,
(in $000’s, unaudited)	2025			2024			2024			2024			2024
Net interest income before
credit losses on loans (GAAP)	$	43,360		$	43,595		$	39,329		$	38,867		$	39,502
Tax-equivalent adjustment on securities –
exempt from Federal tax		58			58			59			60			60
Net interest income, FTE (non-GAAP)	$	43,418		$	43,653		$	39,388		$	38,927		$	39,562

Average balance of total interest earning assets	$	5,188,317		$	5,235,986		$	4,980,082		$	4,840,670		$	4,810,505

Net interest margin (annualized net interest income divided by the
average balance of total interest earnings assets) (GAAP)		3.39	%		3.31	%		3.14	%		3.23	%		3.30	%

Net interest margin, FTE (annualized net interest income, FTE,
divided by the average balance of total
earnings assets) (non-GAAP)		3.39	%		3.32	%		3.15	%		3.23	%		3.31	%

Management views its non-GAAP PPNR as a key metric for assessing the Company’s earnings power. The following table summarizes the components of PPNR for the periods indicated:


	For the Quarter Ended:
	March 31,			December 31,			September 30,			June 30,			March 31,
(in $000’s, unaudited)	2025			2024			2024			2024			2024


Net interest income before credit losses on loans	$	43,360		$	43,595		$	39,329		$	38,867		$	39,502
Noninterest income		2,696			2,775			2,826			2,864			2,638
Total revenue		46,056			46,370		$	42,155		$	41,731		$	42,140
Less: Noninterest expense		(29,456	)		(30,304	)		(27,555	)		(28,188	)		(27,536	)
PPNR (non-GAAP)	$	16,600		$	16,066		$	14,600		$	13,543		$	14,604

The efficiency ratio is a non-GAAP financial measure, which is calculated by dividing noninterest expense by total revenue (net interest income plus noninterest income), and measures how much it costs to produce one dollar of revenue. The following tables summarize components of the efficiency ratio of the Company for the periods indicated:


	For the Quarter Ended:
	March 31,			December 31,			September 30,			June 30,			March 31,
(in $000’s, unaudited)	2025			2024			2024			2024			2024
Noninterest expense	$	29,456		$	30,304		$	27,555		$	28,188		$	27,536

Net interest income before credit losses on loans	$	43,360		$	43,595		$	39,329		$	38,867		$	39,502
Noninterest income		2,696			2,775			2,826			2,864			2,638
Total revenue	$	46,056		$	46,370		$	42,155		$	41,731		$	42,140

Efficiency ratio (noninterest expense divided
by total revenue) (non-GAAP)		63.96	%		65.35	%		65.37	%		67.55	%		65.34	%

Management considers the tangible common equity ratio as a useful measurement of the Company’s and the Bank’s equity. The following table summarizes components of the tangible common equity to tangible assets ratio of the Company at the dates indicated:


TANGIBLE COMMON EQUITY TO TANGIBLE ASSETS	March 31,				December 31,				September 30,				June 30,				March 31,
(in $000’s, unaudited)	2025				2024				2024				2024				2024
Capital components:
Total Equity (GAAP)	$	696,190			$	689,727			$	685,352			$	679,199			$	676,296
Less: Preferred Stock		—				—				—				—				—
Total Common Equity		696,190				689,727				685,352				679,199				676,296
Less: Goodwill		(167,631	)			(167,631	)			(167,631	)			(167,631	)			(167,631	)
Less: Other Intangible Assets		(5,986	)			(6,439	)			(6,966	)			(7,521	)			(8,074	)
Total Tangible Common Equity (non-GAAP)	$	522,573			$	515,657			$	510,755			$	504,047			$	500,591

Asset components:
Total Assets (GAAP)	$	5,514,255			$	5,645,006			$	5,551,596			$	5,263,024			$	5,256,074
Less: Goodwill		(167,631	)			(167,631	)			(167,631	)			(167,631	)			(167,631	)
Less: Other Intangible Assets		(5,986	)			(6,439	)			(6,966	)			(7,521	)			(8,074	)
Total Tangible Assets (non-GAAP)	$	5,340,638			$	5,470,936			$	5,376,999			$	5,087,872			$	5,080,369

Tangible common equity / tangible assets (non-GAAP)		9.78		%		9.43		%		9.50		%		9.91		%		9.85		%

The following table summarizes components of the tangible common equity to tangible assets ratio of the Bank at the dates indicated:


TANGIBLE COMMON EQUITY TO TANGIBLE ASSETS	March 31,				December 31,				September 30,				June 30,				March 31,
(in $000’s, unaudited)	2025				2024				2024				2024				2024
Capital components:
Total Equity (GAAP)	$	715,605			$	709,379			$	704,585			$	697,964			$	694,543
Less: Preferred Stock		—				—				—				—				—
Total Common Equity		715,605				709,379				704,585				697,964				694,543
Less: Goodwill		(167,631	)			(167,631	)			(167,631	)			(167,631	)			(167,631	)
Less: Other Intangible Assets		(5,986	)			(6,439	)			(6,966	)			(7,521	)			(8,074	)
Total Tangible Common Equity (non-GAAP)	$	541,988			$	535,309			$	529,988			$	522,812			$	518,838

Asset components:
Total Assets (GAAP)	$	5,512,160			$	5,641,646			$	5,548,576			$	5,260,500			$	5,254,044
Less: Goodwill		(167,631	)			(167,631	)			(167,631	)			(167,631	)			(167,631	)
Less: Other Intangible Assets		(5,986	)			(6,439	)			(6,966	)			(7,521	)			(8,074	)
Total Tangible Assets (non-GAAP)	$	5,338,543			$	5,467,576			$	5,373,979			$	5,085,348			$	5,078,339

Tangible common equity / tangible assets (non-GAAP)		10.15		%		9.79		%		9.86		%		10.28		%		10.22		%

The MIL Network –

April 25, 2025

MIL-OSI: BayFirst Financial Corp. Reports First Quarter 2025 Results

Source: GlobeNewswire (MIL-OSI)

ST. PETERSBURG, Fla., April 24, 2025 (GLOBE NEWSWIRE) — BayFirst Financial Corp. (NASDAQ: BAFN) (“BayFirst” or the “Company”), parent company of BayFirst National Bank (the “Bank”) today reported a net loss of $0.3 million, or $0.17 per common share and diluted common share, for the first quarter of 2025, a decrease of 103.4% compared to $9.8 million, or $2.27 per common share or $2.11 per diluted common share, in the fourth quarter of 2024.

“While we were encouraged by net interest margin expansion and steady operating expenses during the quarter, our operating results were impacted by deteriorating economic conditions, resulting in net charge-offs and provision expense continuing to be elevated and lower valuations on our portfolio of loans measured at fair value,” stated Thomas G. Zernick, Chief Executive Officer. “Our business customers have been impacted by inflationary pressures, the continued high interest rate environment, recent macro economic changes and the resulting uncertainty. While we wait for clarity regarding the level and duration of the tariffs and begin to see the impact to the general economy from the recent policy changes, we will continue our practice of robust loan oversight and maintain close contact with our borrowers to better understand the longer-term implication to their businesses.”

“Part of our strategic plan is to grow recurring revenue through net interest income, thereby resulting in less reliance on the gain on sale from government guaranteed loans,” Zernick continued. “A critical element of this strategy focuses on growing our low-cost deposit account base to fund our rapidly expanding conventional commercial and consumer loan portfolios. During the quarter, we did a good job of growing core deposit accounts while letting higher-cost time deposits run off. We serve individuals, families and small businesses, with a focus on checking and savings accounts which are not only less rate sensitive but also are far less volatile. Moreover, our focus on providing checking and savings accounts to a broad segment of the communities we serve expands our overall franchise in the attractive Tampa Bay region and increases opportunities for offering consumer loans, residential mortgages, and small business loans throughout our markets. As management works diligently to address credit concerns moving forward, we are exploring strategies to de-risk unguaranteed SBA loan balances on our balance sheet including portfolio sales and continuing to strengthen credit underwriting on SBA 7(a) loans.”

“One of the highlights of the first quarter was strong loan growth within the community bank, supported by steady loan demand in the greater Tampa Bay market,” said Zernick. “Total loans held for investment increased nearly 2% during the first quarter and 16% over the past year. Community bank loans increased 4% during the current quarter, which included increases in CRE and consumer loans, while government guaranteed loan balances decreased 2% during the quarter. Despite a volatile national economic environment, our focus on local relationships and personalized banking solutions remains at the core of our success. We remain confident in our ability to return to profitability and drive long-term shareholder value while staying true to our mission of supporting the financial well-being of our local communities.”

First Quarter 2025 Performance Review

Net interest margin was 3.77% in the first quarter of 2025, an increase of 17 basis points from 3.60% in the fourth quarter of 2024 and an increase of 35 basis points from 3.42% in the first quarter of 2024.
The Company’s government guaranteed loan team originated $106.3 million in new loans during the first quarter of 2025, a slight decrease from $107.8 million of loans produced in the previous quarter, and a decrease from $130.6 million of loans produced during the first quarter of 2024. Since the launch in 2022 of the Company’s Bolt loan program, an SBA 7(a) loan product designed to expeditiously provide working capital loans of $150 thousand or less, the Company has originated 6,207 Bolt loans totaling $802.0 million, of which 481 Bolt loans totaling $60.5 million were originated during the first quarter.
As we reported last quarter, the Company is pausing the practice of electing to measure SBA 7(a) loans at fair value and continued that in the first quarter, however one originated USDA guaranteed loan for $4.8 million was measured at fair value during the first quarter of 2025 versus no loans in the fourth quarter of 2024 and $37 million in the first quarter of 2024.
Loans held for investment increased by $18.3 million, or 1.7%, during the first quarter of 2025 to $1.08 billion and increased $149.9 million, or 16.0%, over the past year. During the quarter, the Company originated $157.5 million of loans and sold $72.5 million of government guaranteed loan balances.
Deposits decreased $15.0 million, or 1.3%, during the first quarter of 2025 and increased $121.0 million, or 12.0%, over the past year to $1.13 billion. A $19.5 million decrease in deposits during the quarter was in primarily high cost interest-bearing time deposits while noninterest-bearing checking accounts increased $4.5 million during the quarter.
Book value and tangible book value at March 31, 2025 were $22.77 per common share, a decrease from $22.95 at December 31, 2024.

Results of Operations

Net Income (Loss)

The Company had a net loss of $0.3 million for the first quarter of 2025, compared to net income of $9.8 million in the fourth quarter of 2024 and $0.8 million in the first quarter of 2024. The change in the first quarter of 2025 from the preceding quarter was primarily the result of the pre-tax gain on sale of two branch office properties of $11.6 million in the fourth quarter of 2024, which was part of a sale-leaseback transaction. Also contributing to lower earnings was a decrease in gain on sale of government guaranteed loans of $1.1 million, a decrease in government guaranteed loan fair value gains of $0.7 million, and an increase in noninterest expense of $0.5 million, primarily higher occupancy and data processing costs, partially offset by an increase in net interest income of $0.3 million and a decrease in income tax expense on continuing operations of $3.4 million. The change from the first quarter of 2024 was due to a decrease in gain on sale of government guaranteed loans of $0.8 million, a decrease in government guaranteed loan fair value gains of $4.1 million, and a decrease in government guaranteed loan packaging fees of $0.7 million. This was partially offset by an increase in net interest income of $2.3 million and a decrease in noninterest expense of $2.0 million.

Net Interest Income and Net Interest Margin

Net interest income from continuing operations was $11.0 million in the first quarter of 2025, an increase from $10.7 million during the fourth quarter of 2024, and an increase from $8.7 million during the first quarter of 2024. The net interest margin was 3.77% in the first quarter of 2025, an increase of 17 basis points from 3.60% in the fourth quarter of 2024 and an increase of 35 basis points from 3.42% in the first quarter of 2024.

The increase in net interest income from continuing operations during the first quarter of 2025, as compared to the fourth quarter of 2024, was mainly due to a decrease in interest cost on deposits of $1.2 million, partially offset by a decrease in loan interest income, including fees, of $1.0 million.

The increase in net interest income from continuing operations during the first quarter of 2025, as compared to the year ago quarter, was mainly due to an increase in loan interest income, including fees, of $1.5 million and a decrease in interest expense on deposits of $0.8 million.

Noninterest Income

Noninterest income from continuing operations was $8.8 million for the first quarter of 2025, which was a decrease from $22.3 million in the fourth quarter of 2024 and a decrease from $14.3 million in the first quarter of 2024. This $5.5 million decrease is due to lower borrower demand combined with tighter credit guidelines deployed over the past year. The decrease in the first quarter of 2025, as compared to the fourth quarter of 2024, was primarily the result of the pre-tax gain on sale of two branch office properties of $11.6 million in the fourth quarter of 2024, which was part of a sale-leaseback transaction, and decreases in gain on sale of government guaranteed loans of $1.1 million and government guaranteed loan fair value gains of $0.7 million. The decrease in the first quarter of 2025, as compared to the first quarter of 2024, was the result of decreases in gain on sale of government guaranteed loans of $0.8 million, fair value gains on government guaranteed loans of $4.1 million, and government guaranteed loan packaging fees of $0.7 million.

Noninterest Expense

Noninterest expense from continuing operations was $15.8 million in the first quarter of 2025 compared to $15.3 million in the fourth quarter of 2024 and $17.8 million in the first quarter of 2024. The increase in the first quarter of 2025, as compared to the prior quarter, was primarily due to increases in occupancy expense of $0.4 million, data processing expense of $0.3 million, and loan origination and collection expenses of $0.3 million, partially offset by a decrease in compensation expense of $0.4 million. The decrease in the first quarter of 2025, as compared to the first quarter of 2024, was primarily due to lower compensation expense of $1.5 million, professional fees of $0.6 million, and loan origination and collection expenses of $0.7 million. This was partially offset by higher occupancy expense of $0.5 million and data processing expense of $0.5 million.

Balance Sheet

Assets

Total assets increased $3.7 million, or 0.3%, during the first quarter of 2025 to $1.29 billion, mainly due to increases in loans held for investment of $18.3 million, partially offset by a decrease in cash and cash equivalents of $14.6 million. Compared to the end of the first quarter last year, total assets increased $147.8 million, or 12.9%, driven primarily by growth of loans held for investment of $149.9 million.

Loans

Loans held for investment increased $18.3 million, or 1.7%, during the first quarter of 2025 and $149.9 million, or 16.0%, over the past year to $1.08 billion, due to originations in both conventional community bank loans and government guaranteed loans, partially offset by government guaranteed loan sales.

Deposits

Deposits decreased $15.0 million, or 1.3%, during the first quarter of 2025 and increased $121.0 million, or 12.0%, from the first quarter of 2024, ending March 31, 2025 at $1.13 billion. During the first quarter, there were decreases in savings and money market deposit account balances of $6.7 million and time deposit balances of $17.1 million, partially offset by increases in noninterest-bearing deposit account balances of $4.5 million and interest-bearing transaction account balances of $4.3 million. The majority of the deposits are generated through the community bank in the Tampa Bay/Sarasota area. At March 31, 2025, approximately 81% of total deposits were insured by the FDIC. At times, the Bank has brokered time deposit and non-maturity deposit relationships available to diversify its funding sources. At March 31, 2025, December 31, 2024, and March 31, 2024, the Company had $112.3 million, $112.1 million, and $30.5 million, respectively, of brokered deposits.

Asset Quality

The Company recorded a provision for credit losses in the first quarter of $4.4 million, compared to provisions of $4.5 million for the fourth quarter of 2024 and $4.1 million during the first quarter of 2024.

The ratio of ACL to total loans held for investment at amortized cost was 1.61% at March 31, 2025, 1.54% as of December 31, 2024, and 1.62% as of March 31, 2024. The ratio of ACL to total loans held for investment at amortized cost, excluding government guaranteed loan balances, was 1.84% at March 31, 2025, 1.79% as of December 31, 2024, and 1.88% as of March 31, 2024.

Net charge-offs for the first quarter of 2025 were $3.3 million, which was a decrease from $3.4 million for the fourth quarter of 2024 and $3.7 million in the first quarter of 2024. Annualized net charge-offs as a percentage of average loans held for investment at amortized cost were 1.28% for the first quarter of 2025, compared to 1.34% in the fourth quarter of 2024 and 1.71% in the first quarter of 2024. Nonperforming assets were 2.08% of total assets as of March 31, 2025, compared to 1.50% as of December 31, 2024, and 0.97% as of March 31, 2024. Nonperforming assets, excluding government guaranteed loan balances, were 1.22% of total assets as of March 31, 2025, compared to 1.06% as of December 31, 2024, and 0.70% as of March 31, 2024. As we discussed in previous quarters, the Bank developed an express modification program for SBA 7(a) borrowers to help those borrowers who are challenged with larger payments in the higher interest rate environment compared to interest rates at the time the loans were originated.

Capital

The Bank’s Tier 1 leverage ratio was 8.56% as of March 31, 2025, compared to 8.82% as of December 31, 2024, and 9.12% as of March 31, 2024. The CET 1 and Tier 1 capital ratio to risk-weighted assets were 10.47% as of March 31, 2025, compared to 10.89% as of December 31, 2024, and 11.04% as of March 31, 2024. The total capital to risk-weighted assets ratio was 11.73% as of March 31, 2025, compared to 12.14% as of December 31, 2024, and 12.29% as of March 31, 2024.

Liquidity

The Bank’s overall liquidity position remains strong and stable with liquidity in excess of internal minimums as stated by policy and monitored by management and the Board. The on-balance sheet liquidity ratio at March 31, 2025 was 8.04%, as compared to 9.17% at December 31, 2024. The Bank has robust liquidity resources which include secured borrowings available from the Federal Home Loan Bank, the Federal Reserve, and lines of credit with other financial institutions. As of March 31, 2025, the Bank had $20.0 million of borrowings from the FHLB and no borrowings from the FRB or other financial institutions. This compared to no borrowings from FHLB, the FRB, or other financial institutions at December 31, 2024.

Recent Events

Share Repurchase Program. During the first quarter of 2025, the Company announced that its Board of Directors has adopted a share repurchase program. Under the repurchase program, the Company may repurchase up to $2.0 million of the Company’s outstanding shares, over a period beginning on January 28, 2025, and continuing until the earlier of the completion of the repurchase, or December 31, 2025, or termination of the program by the Board of Directors. To date, the Company has purchased $335 thousand of shares through this share repurchase program.

Second Quarter Common Stock Dividend. On April 22, 2025, BayFirst’s Board of Directors declared a second quarter 2025 cash dividend of $0.08 per common share. The dividend will be payable June 15, 2025 to common shareholders of record as of June 1, 2025. The Company has continuously paid quarterly common stock cash dividends since 2016.

Conference Call

BayFirst’s management team will host a conference call on Friday, April 25, 2025, at 9:00 a.m. ET to discuss its first quarter results. Interested investors may listen to the call live under the Investor Relations tab at www.bayfirstfinancial.com. Investment professionals are invited to dial (800) 549-8228 to participate in the call using Conference ID 90275. A replay of the call will be available for one year at www.bayfirstfinancial.com.

About BayFirst Financial Corp.

BayFirst Financial Corp. is a registered bank holding company based in St. Petersburg, Florida which commenced operations on September 1, 2000. Its primary source of income is derived from its wholly owned subsidiary, BayFirst National Bank, a national banking association which commenced business operations on February 12, 1999. The Bank currently operates twelve full-service banking offices throughout the Tampa Bay-Sarasota region and offers a broad range of commercial and consumer banking services to businesses and individuals. It was named the best bank in Florida in 2024, according to Forbes and was the 10th largest SBA 7(a) lender by number of units originated and 19th largest by dollar volume nationwide through the SBA’s quarter ended March 31, 2025. As of March 31, 2025, BayFirst Financial Corp. had $1.29 billion in total assets.

Forward-Looking Statements

In addition to the historical information contained herein, this presentation includes “forward-looking statements” within the meaning of such term in the Private Securities Litigation Reform Act of 1995. These statements are subject to many risks and uncertainties, including, but not limited to, the effects of health crises, global military hostilities, weather events, or climate change, including their effects on the economic environment, our customers and our operations, as well as any changes to federal, state or local government laws, regulations or orders in connection with them; the ability of the Company to implement its strategy and expand its banking operations; changes in interest rates and other general economic, business and political conditions, including changes in the financial markets; changes in business plans as circumstances warrant; risks related to mergers and acquisitions; changes in benchmark interest rates used to price loans and deposits, changes in tax laws, regulations and guidance; and other risks detailed from time to time in filings made by the Company with the SEC, including, but not limited to those “Risk Factors” described in our most recent Form 10-K and Form 10-Q. Readers should note that the forward-looking statements included herein are not a guarantee of future events, and that actual events may differ materially from those made in or suggested by the forward-looking statements.


BAYFIRST FINANCIAL CORP. SELECTED FINANCIAL DATA (Unaudited)

	At or for the three months ended
(Dollars in thousands, except for share data)	3/31/2025			12/31/2024			9/30/2024			6/30/2024			3/31/2024
Net income (loss)	$	(335	)	$	9,776		$	1,137		$	866		$	824
Balance sheet data:
Average loans held for investment at amortized cost		1,027,648			1,003,867			948,528			902,417			855,040
Average total assets		1,287,618			1,273,296			1,228,040			1,178,501			1,126,315
Average common shareholders’ equity		96,053			87,961			86,381			84,948			85,385
Total loans held for investment		1,084,817			1,066,559			1,042,445			1,008,314			934,868
Total loans held for investment, excl gov’t gtd loan balances		943,979			917,075			885,444			844,659			776,302
Allowance for credit losses		16,513			15,512			14,186			13,843			13,906
Total assets		1,291,957			1,288,297			1,245,099			1,217,869			1,144,194
Total deposits		1,128,267			1,143,229			1,112,196			1,042,388			1,007,315
Common shareholders’ equity		94,034			94,869			86,242			84,911			84,578
Share data:
Basic earnings (loss) per common share	$	(0.17	)	$	2.27		$	0.18		$	0.12		$	0.11
Diluted earnings (loss) per common share		(0.17	)		2.11			0.18			0.12			0.11
Dividends per common share		0.08			0.08			0.08			0.08			0.08
Book value per common share		22.77			22.95			20.86			20.54			20.45
Tangible book value per common share ⁽¹⁾		22.77			22.95			20.86			20.54			20.45
Performance and capital ratios:
Return on average assets⁽²⁾	(0.10		)%		3.07	%		0.37	%		0.29	%		0.29	%
Return on average common equity⁽²⁾	(3.00		)%		42.71	%		3.48	%		2.26	%		2.06	%
Net interest margin⁽²⁾		3.77	%		3.60	%		3.34	%		3.43	%		3.42	%
Dividend payout ratio	(46.01		)%		3.52	%		43.98	%		68.91	%		75.27	%
Asset quality ratios:
Net charge-offs	$	3,301		$	3,369		$	2,757		$	3,261		$	3,652
Net charge-offs/avg loans held for investment at amortized cost⁽²⁾		1.28	%		1.34	%		1.16	%		1.45	%		1.71	%
Nonperforming loans⁽³⁾	$	24,806		$	17,607		$	15,489		$	12,312		$	9,877
Nonperforming loans (excluding gov’t gtd balance)⁽³⁾	$	15,078		$	13,570		$	10,992		$	8,054		$	7,568
Nonperforming loans/total loans held for investment⁽³⁾		2.42	%		1.75	%		1.62	%		1.34	%		1.15	%
Nonperforming loans (excl gov’t gtd balance)/total loans held for investment⁽³⁾		1.47	%		1.35	%		1.15	%		0.87	%		0.88	%
ACL/Total loans held for investment at amortized cost		1.61	%		1.54	%		1.48	%		1.50	%		1.62	%
ACL/Total loans held for investment at amortized cost, excl government guaranteed loans		1.84	%		1.79	%		1.70	%		1.73	%		1.88	%
Other Data:
Full-time equivalent employees		305			299			295			302			313
Banking center offices		12			12			12			12			12
⁽¹⁾ See section entitled “GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures” below for a reconciliation to most comparable GAAP equivalent.
⁽²⁾ Annualized
⁽³⁾ Excludes loans measured at fair value

Reconciliation and Management Explanation of Non-GAAP Financial Measures

Some of the financial measures included in this report are not measures of financial condition or performance recognized by GAAP. These non-GAAP financial measures include tangible common shareholders’ equity and tangible book value per common share. Our management uses these non-GAAP financial measures in its analysis of our performance, and we believe that providing this information to financial analysts and investors allows them to evaluate capital adequacy.

The following presents the calculation of the non-GAAP financial measures.


Tangible Common Shareholders’ Equity and Tangible Book Value Per Common Share (Unaudited)
	As of
(Dollars in thousands, except for share data)	March 31, 2025			December 31, 2024			September 30, 2024			June 30, 2024			March 31, 2024
Total shareholders’ equity	$	110,085		$	110,920		$	102,293		$	100,962		$	100,629
Less: Preferred stock liquidation preference		(16,051	)		(16,051	)		(16,051	)		(16,051	)		(16,051	)
Total equity available to common shareholders		94,034			94,869			86,242			84,911			84,578
Less: Goodwill		—			—			—			—			—
Tangible common shareholders’ equity	$	94,034		$	94,869		$	86,242		$	84,911		$	84,578

Common shares outstanding		4,129,027			4,132,986			4,134,059			4,134,219			4,134,914
Tangible book value per common share	$	22.77		$	22.95		$	20.86		$	20.54		$	20.45

BAYFIRST FINANCIAL CORP.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)	3/31/2025			12/31/2024			3/31/2024
Assets	(Unaudited)						(Unaudited)
Cash and due from banks	$	6,517		$	4,499		$	4,425
Interest-bearing deposits in banks		56,637			73,289			53,080
Cash and cash equivalents		63,154			77,788			57,505
Time deposits in banks		2,025			2,270			3,000
Investment securities available for sale, at fair value (amortized cost $39,507, $40,279, and $46,816 at March 31, 2025, December 31, 2024, and March 31, 2024, respectively)		36,318			36,291			42,514
Investment securities held to maturity, at amortized cost, net of allowance for credit losses of $12, $12, and $14 (fair value: $2,356, $2,346, and $2,352 at March 31, 2025, December 31, 2024, and March 31, 2024, respectively)		2,488			2,488			2,487
Nonmarketable equity securities		5,480			4,526			5,228
Government guaranteed loans held for sale		—			—			2,226
Government guaranteed loans held for investment, at fair value		57,901			60,833			77,769
Loans held for investment, at amortized cost		1,026,916			1,005,726			857,099
Allowance for credit losses on loans		(16,513	)		(15,512	)		(13,906	)
Net Loans held for investment, at amortized cost		1,010,403			990,214			843,193
Accrued interest receivable		9,153			9,155			7,625
Premises and equipment, net		32,769			33,249			39,327
Loan servicing rights		16,460			16,534			15,742
Right-of-use operating lease assets		15,484			15,814			2,499
Bank owned life insurance		26,696			26,513			25,974
Other real estate owned		132			132			404
Other assets		13,494			12,490			18,401
Assets from discontinued operations		—			—			300
Total assets	$	1,291,957		$	1,288,297		$	1,144,194
Liabilities:
Noninterest-bearing deposit accounts	$	106,236		$	101,743		$	96,977
Interest-bearing transaction accounts		261,074			256,793			250,478
Savings and money market deposit accounts		467,766			474,425			391,915
Time deposits		293,191			310,268			267,945
Total deposits		1,128,267			1,143,229			1,007,315
FHLB borrowings		20,000			—			15,000
Subordinated debentures		5,957			5,956			5,950
Notes payable		1,820			1,934			2,276
Accrued interest payable		1,053			1,036			1,598
Operating lease liabilities		14,102			14,510			2,673
Deferred income tax liabilities		648			301			728
Accrued expenses and other liabilities		10,025			10,411			7,496
Liabilities from discontinued operations		—			—			529
Total liabilities		1,181,872			1,177,377			1,043,565
Shareholders’ equity:	(Unaudited)						(Unaudited)
Preferred stock, Series A; no par value, 10,000 shares authorized, 6,395 shares issued and outstanding at March 31, 2025, December 31, 2024, and March 31, 2024; aggregate liquidation preference of $6,395 each period		6,161			6,161			6,161
Preferred stock, Series B; no par value, 20,000 shares authorized, 3,210 shares issued and outstanding at March 31, 2025, December 31, 2024, and March 31, 2024; aggregate liquidation preference of $3,210 each period		3,123			3,123			3,123
Preferred stock, Series C; no par value, 10,000 shares authorized, 6,446 shares issued and outstanding at March 31, 2025, December 31, 2024, and March 31, 2024; aggregate liquidation preference of $6,446 at March 31, 2025, December 31, 2024, and March 31, 2024		6,446			6,446			6,446
Common stock and additional paid-in capital; no par value, 15,000,000 shares authorized, 4,129,027, 4,132,986, and 4,134,914 shares issued and outstanding at March 31, 2025, December 31, 2024, and March 31, 2024, respectively		54,657			54,764			54,776
Accumulated other comprehensive loss, net		(2,378	)		(2,956	)		(3,188	)
Unearned compensation		(1,006	)		(752	)		(1,192	)
Retained earnings		43,082			44,134			34,503
Total shareholders’ equity		110,085			110,920			100,629
Total liabilities and shareholders’ equity	$	1,291,957		$	1,288,297		$	1,144,194

BAYFIRST FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF INCOME
	For the Quarter Ended
(Dollars in thousands, except per share data)	3/31/2025			12/31/2024			3/31/2024
Interest income:	(Unaudited)			(Unaudited)			(Unaudited)
Loans, including fees	$	19,751		$	20,747		$	18,228
Interest-bearing deposits in banks and other		934			1,007			959
Total interest income		20,685			21,754			19,187
Interest expense:
Deposits		9,431			10,600			10,215
Other		255			501			230
Total interest expense		9,686			11,101			10,445
Net interest income		10,999			10,653			8,742
Provision for credit losses		4,400			4,546			4,058
Net interest income after provision for credit losses		6,599			6,107			4,684
Noninterest income:
Loan servicing income, net		736			582			795
Gain on sale of government guaranteed loans, net		7,327			8,425			8,089
Service charges and fees		449			451			444
Government guaranteed loans fair value gain (loss), net		(755	)		(80	)		3,305
Government guaranteed loan packaging fees		716			773			1,407
Gain on sale of premises and equipment		—			11,649			—
Other noninterest income		278			476			228
Total noninterest income		8,751			22,276			14,268
Noninterest Expense:
Salaries and benefits		7,998			7,351			8,005
Bonus, commissions, and incentives		71			1,074			1,571
Occupancy and equipment		1,634			1,217			1,110
Data processing		2,045			1,749			1,560
Marketing and business development		487			390			588
Professional services		732			803			1,349
Loan origination and collection		1,035			758			1,719
Employee recruiting and development		617			445			597
Regulatory assessments		339			379			282
Other noninterest expense		855			1,169			992
Total noninterest expense		15,813			15,335			17,773
Income (loss) before taxes from continuing operations		(463	)		13,048			1,179
Income tax expense (benefit) from continuing operations		(128	)		3,272			296
Net income (loss) from continuing operations		(335	)		9,776			883
Loss from discontinued operations before income taxes		—			—			(78	)
Income tax benefit from discontinued operations		—			—			(19	)
Net loss from discontinued operations		—			—			(59	)

Net income (loss)		(335	)		9,776			824
Preferred dividends		385			385			385
Net income available to (loss attributable to) common shareholders	$	(720	)	$	9,391		$	439
Basic earnings (loss) per common share:	(Unaudited)			(Unaudited)			(Unaudited)
Continuing operations	$	(0.17	)	$	2.27		$	0.12
Discontinued operations		—			—			(0.01	)
Basic earnings (loss) per common share	$	(0.17	)	$	2.27		$	0.11

Diluted earnings (loss) per common share:
Continuing operations	$	(0.17	)	$	2.11		$	0.12
Discontinued operations		—			—			(0.01	)
Diluted earnings (loss) per common share	$	(0.17	)	$	2.11		$	0.11

Loan Composition

(Dollars in thousands)	3/31/2025			12/31/2024			9/30/2024			6/30/2024			3/31/2024
	(Unaudited)						(Unaudited)			(Unaudited)			(Unaudited)
Real estate:
Residential	$	339,886		$	330,870		$	321,740		$	304,234		$	285,214
Commercial		296,351			305,721			292,026			288,185			273,227
Construction and land		46,740			32,914			33,784			35,759			36,764
Commercial and industrial		234,384			226,522			200,212			192,140			182,264
Commercial and industrial – PPP		457			941			1,656			2,324			2,965
Consumer and other		93,889			93,826			92,546			85,789			63,854
Loans held for investment, at amortized cost, gross		1,011,707			990,794			941,964			908,431			844,288
Deferred loan costs, net		20,521			19,499			18,060			17,299			16,233
Discount on government guaranteed loans		(8,727	)		(8,306	)		(7,880	)		(7,731	)		(7,674	)
Premium on loans purchased, net		3,415			3,739			3,860			4,173			4,252
Loans held for investment, at amortized cost, net		1,026,916			1,005,726			956,004			922,172			857,099
Government guaranteed loans held for investment, at fair value		57,901			60,833			86,441			86,142			77,769
Total loans held for investment, net	$	1,084,817		$	1,066,559		$	1,042,445		$	1,008,314		$	934,868

Nonperforming Assets (Unaudited)

(Dollars in thousands)	3/31/2025			12/31/2024			9/30/2024			6/30/2024			3/31/2024
Nonperforming loans (government guaranteed balances), at amortized cost, gross	$	9,728		$	4,037		$	4,497		$	4,258		$	2,309
Nonperforming loans (unguaranteed balances), at amortized cost, gross		15,078			13,570			10,992			8,054			7,568
Total nonperforming loans, at amortized cost, gross		24,806			17,607			15,489			12,312			9,877
Nonperforming loans (government guaranteed balances), at fair value		507			—			24			341			94
Nonperforming loans (unguaranteed balances), at fair value		1,419			1,490			1,535			1,284			729
Total nonperforming loans, at fair value		1,926			1,490			1,559			1,625			823
OREO		132			132			—			1,633			404
Repossessed assets		36			36			94			—			—
Total nonperforming assets, gross	$	26,900		$	19,265		$	17,142		$	15,570		$	11,104
Nonperforming loans as a percentage of total loans held for investment⁽¹⁾		2.42	%		1.75	%		1.62	%		1.34	%		1.15	%
Nonperforming loans (excluding government guaranteed balances) to total loans held for investment⁽¹⁾		1.47	%		1.35	%		1.15	%		0.87	%		0.88	%
Nonperforming assets as a percentage of total assets		2.08	%		1.50	%		1.38	%		1.28	%		0.97	%
Nonperforming assets (excluding government guaranteed balances) to total assets		1.22	%		1.06	%		0.88	%		0.82	%		0.70	%
ACL to nonperforming loans⁽¹⁾		66.57	%		88.10	%		91.59	%		112.44	%		140.79	%
ACL to nonperforming loans (excluding government guaranteed balances)⁽¹⁾		109.52	%		114.31	%		129.06	%		171.88	%		183.75	%
⁽¹⁾ Excludes loans measured at fair value

Contacts:
Thomas G. Zernick	Scott J. McKim
Chief Executive Officer	Chief Financial Officer
727.399.5680	727.521.7085

The MIL Network –

April 25, 2025

MIL-OSI: AppFolio, Inc. Announces First Quarter 2025 Financial Results

Source: GlobeNewswire (MIL-OSI)

SANTA BARBARA, Calif., April 24, 2025 (GLOBE NEWSWIRE) — AppFolio, Inc. (NASDAQ: APPF) (“AppFolio” or the “Company”), a technology leader powering the future of the real estate industry, today announced its financial results for the first quarter ended March 31, 2025.

“AppFolio’s first quarter results underscore that our ongoing commitment to delivering industry-leading innovation and exceptional service is driving new customer adoption of our products and services,” said Shane Trigg, President and CEO, AppFolio. “By connecting our acquisition of LiveEasy with new industry leading partners, such as Zillow and Second Nature, all enabled through FolioSpace, we have accelerated our resident strategy creating value for our customers. We are well positioned to win for all stakeholders as the platform powering the future of the real estate industry.”

Financial Highlights for First Quarter of 2025

Revenue grew 16% year-over-year to $218 million.
Total units under management grew 6% year-over-year to 8.8 million.
GAAP operating income was $34 million, or 15.5% of revenue, compared to operating income of $34 million, or 18.2% of revenue in Q1 2024.
Non-GAAP operating income was $53 million, or 24.3% of revenue, compared to an operating income of $48 million, or 25.7% of revenue, in Q1 2024.
Net cash provided by operating activities was $38 million, or 17.7% of revenue, compared to $43 million, or 22.9% of revenue, in Q1 2024.

Financial Outlook
Based on information available as of April 24, 2025, AppFolio’s outlook for fiscal year 2025 follows:

Full year revenue is expected to be in the range of $920 million to $940 million.
Full year non-GAAP operating margin as a percentage of revenue is expected to be in the range of 24.5% to 26.5%.
Diluted weighted average shares outstanding are expected to be approximately 37 million for the full year.

Stock Repurchase Program

On April 23, 2025, AppFolio’s Board of Directors (the “Board”) authorized a $300.0 million share repurchase program (the “2025 Stock Repurchase Program”) relating to the Company’s outstanding shares of Class A common stock. Under the 2025 Stock Repurchase Program, the Company is authorized to repurchase shares of its Class A common stock from time to time in open market purchases or privately negotiated transactions. The 2025 Stock Repurchase Program does not obligate the Company to repurchase any minimum dollar amount or number of shares, has no expiration date, and can be modified, suspended or terminated at any time and for any reason. The timing and actual number of shares repurchased, will depend on a variety of factors, including price, corporate and legal requirements, market conditions and other factors. The 2025 Stock Repurchase Program replaces the Company’s previously reported $100 million stock repurchase program, which has been substantially exhausted.

Conference Call Information
As previously announced, the Company will host a conference call today, April 24, 2025, at 2:00 p.m. Pacific Time (PT), 5:00 p.m. Eastern Time (ET), to discuss the Company’s first quarter financial results. A live webcast of the call will be available at: https://edge.media-server.com/mmc/p/994jmsnj. To access the call by phone, please go to the following link: https://register-conf.media-server.com/register/BIec9db96ea67145e5b35acbb6ce94b6ad, and you will be provided with dial in details. A replay of the webcast will also be available for a limited time on AppFolio’s Investor Relations website at https://ir.appfolioinc.com/news-events/events.

The Company also provides announcements regarding its financial results and other matters, including SEC filings, investor events, and press releases, on its Investor Relations website at https://ir.appfolioinc.com/, as a means of disclosing material nonpublic information and for complying with AppFolio’s disclosure obligations under Regulation FD.

About AppFolio
AppFolio is a technology leader powering the future of the real estate industry. Our innovative platform and trusted partnership enable our customers to connect communities, increase operational efficiency, and grow their business. For more information about AppFolio, visit ir.appfolioinc.com.

Investor Relations Contact:
Lori Barker
ir@appfolio.com

Use of Non-GAAP Financial Measures
Reconciliations of current and historical non-GAAP financial measures to AppFolio’s financial results as determined in accordance with GAAP are included at the end of this press release following the accompanying financial data. For a description of these non-GAAP financial measures, including the reasons management uses each measure, please see the section of the tables entitled “Statement Regarding the Use of Non-GAAP Financial Measures.”

AppFolio is unable, at this time, to provide GAAP equivalent guidance measures on a forward-looking basis for non-GAAP operating margin because certain items that impact this measure are uncertain, out of our control, or cannot be reasonably predicted, such as charges related to stock-based compensation expense. The effect of these excluded items may be significant.

Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which statements are subject to considerable risks and uncertainties. Forward-looking statements include all statements that are not statements of historical fact contained in this press release, and can be identified by words such as “anticipates,” “believes,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “future’” “predicts, “projects,” “target,” “seeks,” “contemplates,” “should,” “will,” “would” or similar expressions and the negatives of those expressions. In particular, forward-looking statements contained in this press release relate to future operating results and financial position, including the Company’s fiscal year 2025 financial outlook, anticipated future expenses and investments, the Company’s business opportunities, the impact of the Company’s strategic actions and initiatives, the effect of the Company’s 2025 Share Repurchase Program, the potential benefits and effect of the Company’s resident experience related services, including FolioSpace, and their impact on the Company’s plans, objectives, expectations and capabilities.

Forward-looking statements represent AppFolio’s current beliefs and expectations based on information currently available and speak only as of the date the statement is made. Forward-looking statements are subject to numerous known and unknown risks, uncertainties and other factors that may cause the Company’s actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. The risks, uncertainties and other factors that may cause the Company’s actual results, performance or achievements to materially differ from those expressed or implied by these forward-looking statements include those risks, uncertainties and other factors described in the section entitled “Risk Factors” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024, which was filed with the SEC on February 6, 2025, as such risk factors may be updated from time to time in our subsequent filings with the SEC, and the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s most recently filed Annual Report on Form 10-K or Quarterly Report on Form 10-Q, as well as in the Company’s other filings with the SEC. You should read this press release with the understanding that the Company’s actual future results may be materially different from the results expressed or implied by these forward-looking statements.

The Company undertakes no obligation to update any forward-looking statements made in this press release to reflect events or circumstances after the date of this press release or to reflect new information or the occurrence of unanticipated events, except as required by law.


CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(in thousands)

	March 31, 2025		December 31, 2024
Assets
Current assets
Cash and cash equivalents	$	56,933	$	42,504
Investment securities—current		153,881		235,745
Accounts receivable, net		27,462		24,346
Prepaid expenses and other current assets		33,738		32,807
Total current assets		272,014		335,402
Property and equipment, net		23,413		24,483
Operating lease right-of-use assets		16,971		17,472
Capitalized software development costs, net		13,649		15,429
Goodwill		96,410		96,410
Intangible assets, net		46,500		49,057
Deferred income taxes		82,451		76,910
Other long-term assets		13,325		11,515
Total assets	$	564,733	$	626,678
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable	$	4,934	$	2,378
Accrued employee expenses		21,775		30,157
Accrued expenses		15,724		14,658
Other current liabilities		16,173		16,087
Total current liabilities		58,606		63,280
Operating lease liabilities		36,328		37,476
Other liabilities		7,680		6,632
Total liabilities		102,614		107,388
Stockholders’ equity		462,119		519,290
Total liabilities and stockholders’ equity	$	564,733	$	626,678

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(in thousands, except per share amounts)

	Three Months Ended March 31,
		2025		2024
Revenue⁽¹⁾	$	217,702	$	187,430
Costs and operating expenses:
Cost of revenue (exclusive of depreciation and amortization)⁽²⁾		79,498		64,646
Sales and marketing⁽²⁾		31,057		24,455
Research and product development⁽²⁾		43,758		37,895
General and administrative⁽²⁾		23,351		21,132
Depreciation and amortization		6,255		5,212
Total costs and operating expenses		183,919		153,340
Income from operations		33,783		34,090
Other income, net		56		—
Interest income, net		2,953		2,992
Income before provision for income taxes		36,792		37,082
Provision (benefit from) for income taxes		5,409		(1,581	)
Net income	$	31,383	$	38,663
Net income per common share:
Basic	$	0.86	$	1.07
Diluted	$	0.86	$	1.05
Weighted average common shares outstanding
Basic		36,302		36,087
Diluted		36,648		36,674

⁽¹⁾ The following table presents our revenue categories:


	Three Months Ended March 31,
		2025		2024
Core solutions	$	49,513	$	42,920
Value Added Services		164,706		142,331
Other		3,483		2,179
Total revenue	$	217,702	$	187,430

⁽²⁾ Includes stock-based compensation expense as follows:

	Three Months Ended March 31,
		2025		2024
Costs and operating expenses:
Cost of revenue (exclusive of depreciation and amortization)	$	1,287	$	960
Sales and marketing		2,848		1,510
Research and product development		6,931		5,682
General and administrative		5,305		5,322
Total stock-based compensation expense	$	16,371	$	13,474

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(in thousands)

	Three Months Ended March 31,
		2025			2024
Cash from operating activities
Net income	$	31,383		$	38,663
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		6,255			5,211
Amortization of operating lease right-of-use assets		501			523
Amortization of costs capitalized to obtain revenue contracts, net		2,720			2,500
Deferred income taxes		(5,541	)		—
Stock-based compensation, including as amortized		16,371			13,474
Other		(917	)		(1,824	)
Changes in operating assets and liabilities:
Accounts receivable		(3,116	)		(5,470	)
Prepaid expenses and other assets		(5,460	)		6,349
Accounts payable		2,546			733
Operating lease liabilities		(1,051	)		(475	)
Accrued expenses and other liabilities		(5,226	)		(16,730	)
Net cash provided by operating activities		38,465			42,954
Cash from investing activities
Purchases of available-for-sale investments		(62,302	)		(57,162	)
Proceeds from sales of available-for-sale investments		102,718			—
Proceeds from maturities of available-for-sale investments		42,150			36,670
Purchases of property and equipment		(230	)		(1,420	)
Capitalization of software development costs		(636	)		(1,125	)
Cash paid in business acquisition, net of cash acquired		(906	)		—
Net cash used in investing activities		80,794			(23,037	)
Cash from financing activities
Proceeds from stock option exercises		11			3,874
Tax withholding for net share settlement		(9,078	)		(14,086	)
Purchase of common stock		(95,763	)		—
Net cash used in financing activities		(104,830	)		(10,212	)
Net decrease in cash, cash equivalents and restricted cash		14,429			9,705
Cash, cash equivalents and restricted cash
Beginning of period		42,754			49,759
End of period	$	57,183		$	59,464

RECONCILIATION FROM GAAP TO NON-GAAP RESULTS
(UNAUDITED)
(in thousands, except per share data)

	Three Months Ended March 31,
	2025			2024
Costs and operating expenses:
GAAP cost of revenue (exclusive of depreciation and amortization)	$	79,498		$	64,646
Stock-based compensation expense		(1,287	)		(960	)
Non-GAAP cost of revenue (exclusive of depreciation and amortization)	$	78,211		$	63,686
GAAP cost of revenue (exclusive of depreciation and amortization) as a percentage of revenue		37	%		34	%
Non-GAAP cost of revenue (exclusive of depreciation and amortization) as a percentage of revenue		36	%		34	%

GAAP sales and marketing	$	31,057		$	24,455
Stock-based compensation expense		(2,848	)		(1,510	)
Non-GAAP sales and marketing	$	28,209		$	22,945
GAAP sales and marketing as a percentage of revenue		14	%		13	%
Non-GAAP sales and marketing as a percentage of revenue		13	%		12	%

GAAP research and product development	$	43,758		$	37,895
Stock-based compensation expense		(6,931	)		(5,682	)
Non-GAAP research and product development	$	36,827		$	32,213
GAAP research and product development as a percentage of revenue		20	%		20	%
Non-GAAP research and product development as a percentage of revenue		17	%		17	%

GAAP general and administrative	$	23,351		$	21,132
Stock-based compensation expense		(5,305	)		(5,322	)
Non-GAAP general and administrative	$	18,046		$	15,810
GAAP general and administrative as a percentage of revenue		11	%		11	%
Non-GAAP general and administrative as a percentage of revenue		8	%		8	%

GAAP depreciation and amortization	$	6,255		$	5,212
Amortization of stock-based compensation capitalized in software development costs		(241	)		(518	)
Amortization of purchased intangibles		(2,558	)		(119	)
Non-GAAP depreciation and amortization	$	3,456		$	4,575
GAAP depreciation and amortization as a percentage of revenue		3	%		3	%
Non-GAAP depreciation and amortization as a percentage of revenue		2	%		2	%

	Three Months Ended March 31,
	2025			2024
Income from operations:
GAAP income from operations	$	33,783		$	34,090
Stock-based compensation expense		16,371			13,474
Amortization of stock-based compensation capitalized in software development costs		241			518
Amortization of purchased intangibles		2,558			119
Non-GAAP income from operations	$	52,953		$	48,201

Operating margin:
GAAP operating margin		15.5	%		18.2	%
Stock-based compensation expense as a percentage of revenue		7.5			7.1
Amortization of stock-based compensation capitalized in software development costs as a percentage of revenue		0.1			0.3
Amortization of purchased intangibles as a percentage of revenue		1.2			0.1
Non-GAAP operating margin		24.3	%		25.7	%

Net income (loss):
GAAP net income	$	31,383		$	38,663
Stock-based compensation expense		16,371			13,474
Amortization of stock-based compensation capitalized in software development costs		241			518
Amortization of purchased intangibles		2,558			119
Income tax effect of adjustments		(6,343	)		(14,379	)
Non-GAAP net income	$	44,210		$	38,395

Net income per share, basic:
GAAP net income per share, basic	$	0.86		$	1.07
Non-GAAP adjustments to net income		0.36			(0.01	)
Non-GAAP net income per share, basic	$	1.22		$	1.06

Net income per share, diluted:
GAAP net income per share, diluted	$	0.86		$	1.05
Non-GAAP adjustments to net income		0.35			—
Non-GAAP net income per share, diluted	$	1.21		$	1.05

Weighted-average shares used in GAAP and non-GAAP per share calculation
Basic		36,302			36,087
Diluted		36,648			36,674

Statement Regarding the Use of Non-GAAP Financial Measures

We use the following non-GAAP financial measures in addition to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP.

Non-GAAP presentation of income from operations, costs and operating expenses, operating margin, net income, and net income per share. These measures exclude certain non-cash or non-recurring items, including stock-based compensation expense, amortization of stock-based compensation capitalized in software development costs, amortization of purchased intangibles, and the related income tax effect of these adjustments, as applicable and described below. Non-GAAP operating margin is calculated as non-GAAP operating income from operations as a percentage of revenue.

We use each of these non-GAAP financial measures internally to assess and compare operating results across reporting periods, for internal budgeting and forecasting purposes, and to evaluate our financial performance. We believe these non-GAAP financial measures also provide useful supplemental information to investors and facilitate the analysis of our operating results and comparison of operating results across reporting periods.

In particular, we believe these non-GAAP financial measures are useful to investors and others in assessing our operating performance due to the following factors:

Stock-based compensation expense and amortization of stock-based compensation capitalized in software development costs. We utilize stock-based compensation to attract and retain employees. It is principally aimed at aligning their interests with those of our stockholders while ensuring long-term retention, rather than to address operational performance for any particular period. As a result, stock-based compensation expenses vary for reasons that are generally unrelated to financial and operational performance in any particular period.

Amortization of purchased intangibles. We view amortization of purchased intangible assets as items arising from pre-acquisition activities determined at the time of an acquisition. While these intangible assets are evaluated for impairment regularly, amortization of the cost of purchased intangibles is an expense that is not typically affected by operations during any particular period.

Income tax effects of adjustments. We utilize a fixed long-term projected tax rate in our computation of non-GAAP income tax effects to provide better consistency across interim reporting periods. In projecting this long-term non-GAAP tax rate, we utilize a financial projection that excludes the direct impact of other non-GAAP adjustments. The projected rate, which we have determined to be 21% and 25% for 2025 and 2024, respectively, considers other factors such as our current operating structure, existing tax positions in various jurisdictions, and key legislation in major jurisdictions where we operate. We periodically re-evaluate this tax rate, as necessary, for significant events, based on relevant tax law changes, and material changes in the forecasted geographic earnings mix.

Our non-GAAP financial measures may not provide information that is directly comparable to that provided by other companies in our industry, as other companies may calculate non-GAAP financial results differently. In addition, there are limitations in using non-GAAP financial measures because non-GAAP financial measures are not prepared in accordance with GAAP and can exclude expenses that may have a material impact on our reported financial results. As such, non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. A reconciliation of the historical non-GAAP financial measures to their most directly comparable GAAP measures has been provided in the tables above. We encourage investors to review the reconciliation of these historical non-GAAP financial measures to their most directly comparable GAAP financial measures.

The MIL Network –

April 25, 2025

MIL-OSI: SPS Commerce Reports First Quarter 2025 Financial Results

Source: GlobeNewswire (MIL-OSI)

Company delivers 97th consecutive quarter of topline growth
First quarter 2025 revenue grew 21% and recurring revenue grew 23% from the first quarter of 2024

MINNEAPOLIS, April 24, 2025 (GLOBE NEWSWIRE) — SPS Commerce, Inc. (NASDAQ: SPSC), a leader in retail supply chain cloud services, today announced financial results for the first quarter ended March 31, 2025.

Financial Highlights

First Quarter 2025 Financial Highlights

Revenue was $181.5 million in the first quarter of 2025, compared to $149.6 million in the first quarter of 2024, reflecting 21% growth.
Recurring revenue grew 23% from the first quarter of 2024.
Net income was $22.2 million or $0.58 per diluted share, compared to net income of $18.0 million or $0.48 per diluted share in the first quarter of 2024.
Non-GAAP income per diluted share was $1.00, compared to non-GAAP income per diluted share of $0.86 in the first quarter of 2024.
Adjusted EBITDA for the first quarter of 2025 increased 22% to $54.4 million compared to the first quarter of 2024.
Share repurchases in the first quarter of 2025 totaled $40.0 million.

“SPS Commerce operates a network of over 50,000 suppliers, logistics companies and buying organizations across retail, distribution, grocery, and manufacturing, and we are uniquely positioned to support all trading relationships,” said Chad Collins, CEO of SPS Commerce. “With an $11 billion total addressable market, we have a tremendous opportunity to transform how trading partners work together as they continue to advance their supply chain technologies.”

“We delivered strong first-quarter performance, and the 97th consecutive quarter of revenue growth,” said Kim Nelson, CFO of SPS Commerce. “Despite ongoing uncertainty in the macro environment, we remain confident in our full-year 2025 growth outlook and margin expansion profile, which underscores the resilience of our business model and the mission critical nature of our solutions, designed to improve collaboration across the global retail supply chain.”

Guidance

Second Quarter 2025 Guidance

Revenue is expected to be in the range of $184.5 million to $186.2 million, representing 20% to 21% year-over-year growth.
Net income per diluted share is expected to be in the range of $0.41 to $0.44, with fully diluted weighted average shares outstanding of 38.8 million shares.
Non-GAAP income per diluted share is expected to be in the range of $0.87 to $0.90.
Adjusted EBITDA is expected to be in the range of $53.0 million to $54.5 million.
Non-cash, share-based compensation expense is expected to be $15.5 million, depreciation expense is expected to be $5.5 million, and amortization expense is expected to be $9.8 million.

Fiscal Year 2025 Guidance

Revenue is expected to be in the range of $758.5 million to $763.0 million, representing 19% to 20% growth over 2024.
Net income per diluted share is expected to be in the range of $2.06 to $2.13, with fully diluted weighted average shares outstanding of 38.7 million shares.
Non-GAAP income per diluted share is expected to be in the range of $3.86 to $3.93.
Adjusted EBITDA is expected to be in the range of $229.4 million to $232.9 million, representing 23% to 25% growth over 2024.
Non-cash, share-based compensation expense is expected to be $61.4 million, depreciation expense is expected to be $23.0 million, and amortization expense is expected to be $38.0 million.

The forward-looking measures and the underlying assumptions involve significant known and unknown risks and uncertainties, and actual results may vary materially. The Company does not present a reconciliation of the forward-looking non-GAAP financial measures, including Adjusted EBITDA, Adjusted EBITDA margin, and non-GAAP income per share, to the most directly comparable GAAP financial measures because it is impractical to forecast certain items without unreasonable efforts due to the uncertainty and inherent difficulty of predicting, within a reasonable range, the occurrence and financial impact of and the periods in which such items may be recognized.

Quarterly Conference Call

To access the call, please dial 1-833-816-1382, or outside the U.S. 1-412-317-0475 at least 15 minutes prior to the 3:30 p.m. CT start time. Please ask to join the SPS Commerce Q1 2025 conference call. A live webcast of the call will also be available at http://investors.spscommerce.com under the Events and Presentations menu. The replay will also be available on our website at http://investors.spscommerce.com.

About SPS Commerce

SPS Commerce is the world’s leading retail network, connecting trading partners around the globe to optimize supply chain operations for all retail partners. We support data-driven partnerships with innovative cloud technology, customer-obsessed service, and accessible experts so our customers can focus on what they do best. Over 50,000 recurring revenue customers in retail, grocery, distribution, supply, manufacturing, and logistics are using SPS as their retail network. SPS has achieved 97 consecutive quarters of revenue growth and is headquartered in Minneapolis. For additional information, contact SPS at 866-245-8100 or visit www.spscommerce.com.

SPS COMMERCE, SPS, SPS logo and INFINITE RETAIL POWER are marks of SPS Commerce, Inc. and registered in the U.S. Patent and Trademark Office, along with other SPS marks. Such marks may also be registered or otherwise protected in other countries.

SPS-F

Use of Non-GAAP Financial Measures

To supplement our condensed consolidated financial statements, we provide investors with Adjusted EBITDA, Adjusted EBITDA Margin, and non-GAAP income per share, all of which are non-GAAP financial measures. We believe that these non-GAAP financial measures provide useful information to our management, Board of Directors, and investors regarding certain financial and business trends relating to our financial condition and results of operations.

Our management uses these non-GAAP financial measures to compare our performance to that of prior periods for trend analyses and planning purposes. Adjusted EBITDA is also used for purposes of determining executive and senior management incentive compensation. We believe these non-GAAP financial measures are useful to an investor as they are widely used in evaluating operating performance. Adjusted EBITDA and Adjusted EBITDA Margin are used to measure operating performance without regard to items such as depreciation and amortization, which can vary depending upon accounting methods and the book value of assets, and to present a meaningful measure of corporate performance exclusive of capital structure and the method by which assets were acquired.

These non-GAAP financial measures should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP. These non-GAAP financial measures exclude significant expenses and income that are required by GAAP to be recorded in our condensed consolidated financial statements and are subject to inherent limitations. Investors should review the reconciliations of non-GAAP financial measures to the comparable GAAP financial measures that are included in this press release.

Adjusted EBITDA Measures:

Adjusted EBITDA consists of net income adjusted for income tax expense, depreciation and amortization expense, stock-based compensation expense, realized gain or loss from investments held and foreign currency impact on cash and investments, investment income, and other adjustments as necessary for a fair presentation. Other adjustments for the three months ended March 31, 2025 included the expense impacts from disposals of certain capitalized internally developed software and one-time acquisition-related insurance costs. Net income is the comparable GAAP measure of financial performance.

Adjusted EBITDA Margin consists of Adjusted EBITDA divided by revenue. Margin, the comparable GAAP measure of financial performance, consists of net income divided by revenue.

Non-GAAP Income Per Share Measure:

Non-GAAP income per share consists of net income adjusted for stock-based compensation expense, amortization expense related to intangible assets, realized gain or loss from investments held and foreign currency impact on cash and investments, other adjustments as necessary for a fair presentation, including for the three months ended March 31, 2025 the expense impacts from disposals of certain capitalized internally developed software and one-time acquisition-related insurance costs, and the corresponding tax impacts of the adjustments to net income, divided by the weighted average number of shares of common and diluted stock outstanding during each period. Net income per share, the comparable GAAP measure of financial performance, consists of net income divided by the weighted average number of shares of common and diluted stock outstanding during each period. To quantify the tax effects, we recalculated income tax expense excluding the direct book and tax effects of the specific items constituting the non-GAAP adjustments. The difference between this recalculated income tax expense and GAAP income tax expense is presented as the income tax effect of the non-GAAP adjustments.

Forward-Looking Statements

This press release may contain forward-looking statements, including information about management’s view of SPS Commerce’s future expectations, plans and prospects, including our views regarding future execution within our business, the opportunity we see in the retail supply chain world and our performance for the second quarter and full year of 2025, within the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. These statements involve known and unknown risks, uncertainties and other factors which may cause the results of SPS Commerce to be materially different than those expressed or implied in such statements. Certain of these risk factors and others are included in documents SPS Commerce files with the Securities and Exchange Commission, including but not limited to, SPS Commerce’s Annual Report on Form 10-K for the year ended December 31, 2024, as well as subsequent reports filed with the Securities and Exchange Commission. Other unknown or unpredictable factors also could have material adverse effects on SPS Commerce’s future results. The forward-looking statements included in this press release are made only as of the date hereof. SPS Commerce cannot guarantee future results, levels of activity, performance or achievements. Accordingly, you should not place undue reliance on these forward-looking statements. Finally, SPS Commerce expressly disclaims any intent or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

SPS COMMERCE, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except shares)

	March 31, 2025			December 31, 2024
ASSETS	(unaudited)
Current assets
Cash and cash equivalents	$	94,921		$	241,017
Accounts receivable		68,183			56,214
Allowance for credit losses		(4,793	)		(4,179	)
Accounts receivable, net		63,390			52,035
Deferred costs		67,107			65,342
Other assets		26,417			23,513
Total current assets		251,835			381,907
Property and equipment, net		38,687			37,547
Operating lease right-of-use assets		8,424			8,192
Goodwill		533,940			399,180
Intangible assets, net		252,280			181,294
Other assets
Deferred costs, non-current		21,416			20,572
Deferred income tax assets		562			505
Other assets, non-current		1,906			2,033
Total assets	$	1,109,050		$	1,031,230
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	11,255		$	8,577
Accrued compensation		40,747			47,160
Accrued expenses		16,640			12,108
Deferred revenue		78,620			74,256
Operating lease liabilities		6,162			4,583
Total current liabilities		153,424			146,684
Other liabilities
Deferred revenue, non-current		5,748			6,189
Operating lease liabilities, non-current		6,101			7,885
Deferred income tax liabilities		20,298			15,541
Other liabilities, non-current		2,558			241
Total liabilities		188,129			176,540
Commitments and contingencies
Stockholders’ equity
Common stock		40			40
Treasury stock		(102,096	)		(99,748	)
Additional paid-in capital		672,138			627,982
Retained earnings		358,295			336,099
Accumulated other comprehensive loss		(7,456	)		(9,683	)
Total stockholders’ equity		920,921			854,690
Total liabilities and stockholders’ equity	$	1,109,050		$	1,031,230

SPS COMMERCE, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited; in thousands, except per share amounts)

	Three Months Ended March 31,
	2025		2024
Revenues	$	181,549	$	149,576
Cost of revenues		56,914		51,487
Gross profit		124,635		98,089
Operating expenses
Sales and marketing		41,634		36,432
Research and development		17,439		16,009
General and administrative		31,018		25,907
Amortization of intangible assets		8,588		4,338
Total operating expenses		98,679		82,686
Income from operations		25,956		15,403
Other income, net		2,207		3,132
Income before income taxes		28,163		18,535
Income tax expense		5,967		532
Net income	$	22,196	$	18,003

Net income per share
Basic	$	0.58	$	0.49
Diluted	$	0.58	$	0.48

Weighted average common shares used to compute net income per share
Basic		37,990		37,049
Diluted		38,163		37,686

SPS COMMERCE, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited; in thousands)

	Three Months Ended March 31,
	2025			2024
Cash flows from operating activities
Net income	$	22,196		$	18,003
Reconciliation of net income to net cash provided by operating activities
Deferred income taxes		(4,418	)		(7,070	)
Depreciation and amortization of property and equipment		4,957			4,694
Amortization of intangible assets		8,588			4,338
Provision for credit losses		1,822			1,408
Stock-based compensation		13,867			20,018
Other, net		168			(431	)
Changes in assets and liabilities, net of effects of acquisition
Accounts receivable		(7,443	)		(6,759	)
Deferred costs		(1,247	)		(1,651	)
Other assets and liabilities		1,174			3,030
Accounts payable		1,677			5,098
Accrued compensation		(7,948	)		(9,518	)
Accrued expenses		3,868			(674	)
Deferred revenue		3,160			4,129
Operating leases		(438	)		(551	)
Net cash provided by operating activities		39,983			34,064
Cash flows from investing activities
Purchases of property and equipment		(6,150	)		(3,533	)
Purchases of investments		—			(44,412	)
Maturities of investments		—			45,000
Acquisition of business, net		(141,636	)		—
Net cash used in investing activities		(147,786	)		(2,945	)
Cash flows from financing activities
Repurchases of common stock		(40,000	)		(16,540	)
Net proceeds from exercise of options to purchase common stock		635			1,260
Net proceeds from employee stock purchase plan activity		411			391
Net cash used in financing activities		(38,954	)		(14,889	)
Effect of foreign currency exchange rate changes		661			(674	)
Net increase (decrease) in cash and cash equivalents		(146,096	)		15,556
Cash and cash equivalents at beginning of period		241,017			219,081
Cash and cash equivalents at end of period	$	94,921		$	234,637

SPS COMMERCE, INC. NON-GAAP RECONCILIATIONS (Unaudited; in thousands, except Margin, Adjusted EBITDA Margin, and per share amounts)

Adjusted EBITDA
	Three Months Ended March 31,
	2025			2024
Net income	$	22,196		$	18,003
Income tax expense		5,967			532
Depreciation and amortization of property and equipment		4,957			4,694
Amortization of intangible assets		8,588			4,338
Stock-based compensation expense		13,867			20,018
Realized gain from investments held and foreign currency impact on cash and investments		(366	)		(304	)
Investment income		(1,849	)		(2,879	)
Other		1,013			—
Adjusted EBITDA	$	54,373		$	44,402

Adjusted EBITDA Margin
	Three Months Ended March 31,
	2025			2024
Revenue	$	181,549		$	149,576

Net income		22,196			18,003
Margin		12	%		12	%

Adjusted EBITDA		54,373			44,402
Adjusted EBITDA Margin		30	%		30	%

Non-GAAP Income per Share
	Three Months Ended March 31,
	2025			2024
Net income	$	22,196		$	18,003
Stock-based compensation expense		13,867			20,018
Amortization of intangible assets		8,588			4,338
Realized gain from investments held and foreign currency impact on cash and investments		(366	)		(304	)
Other		1,013			—
Income tax effects of adjustments		(7,285	)		(9,554	)
Non-GAAP income	$	38,013		$	32,501

Shares used to compute net income and non-GAAP income per share
Basic		37,990			37,049
Diluted		38,163			37,686

Net income per share, basic	$	0.58		$	0.49
Non-GAAP adjustments to net income per share, basic		0.42			0.39
Non-GAAP income per share, basic	$	1.00		$	0.88

Net income per share, diluted	$	0.58		$	0.48
Non-GAAP adjustments to net income per share, diluted		0.42			0.38
Non-GAAP income per share, diluted	$	1.00		$	0.86

The annual per share amounts may not cross-sum due to rounding.

Contact:
Investor Relations
The Blueshirt Group
Irmina Blaszczyk & Lisa Laukkanen
SPSC@blueshirtgroup.com
415-217-4962

The MIL Network –

April 25, 2025

MIL-OSI Europe: Answer to a written question – The undermining of competition in the cement sector by the allocation of excess free allowances under the Emissions Trading System – E-000947/2025(ASW)

Source: European Parliament

1. The existence of free allocation exceeding emissions in the first phases of the EU Emissions Trading System (ETS) is well known, especially between the years 2008 and 2012, but to a lesser extent also in later years. This situation was addressed already with measures taken following the revision of the ETS Directive[1] in 2018, strengthening the system, and a shortage of free allocation compared to verified emissions can clearly be seen from the start of the fourth trading period in 2021.

It should also be highlighted that the majority of excess allowances are assumed to have been sold, and to a fraction of the value quoted, since the current value of an EU Allowance is more than 10 times higher than 10 years ago.

Hence, the Commission does not see a major risk of distortion of competition.

2. The Carbon Border Adjustment Mechanism (CBAM)[2] obligation to be paid by importers will be reduced by the corresponding free allocation that an EU producer would receive for the production of the same goods. This will ensure that products produced in the EU and in third countries are treated equally.

This adjustment for free allocation will include a definition of CBAM benchmarks, which in turn will be based on a combination of the EU ETS benchmarks. The gradual phase-out of ETS free allowances in CBAM sectors from 2026 to 2034 will be mirrored by a corresponding increase in the CBAM obligation. This is because the CBAM adjustment for free allocation will gradually decrease and thereby the CBAM obligation will increase.

[1] Directive (EU) 2018/410 of the European Parliament and of the Council of 14 March 2018 amending Directive 2003/87/EC to enhance cost-effective emission reductions and low-carbon investments, and Decision (EU) 2015/1814 (OJ L 76, 19.3.2018, p. 3, ELI : http://data.europa.eu/eli/dir/2018/410/oj
[2] Regulation (EU) 2023/956 of the European Parliament and of the Council of 10 May 2023 establishing a carbon border adjustment mechanism (OJ L 130, 16.5.2023, p. 52, ELI: http://data.europa.eu/eli/reg/2023/956/oj

Last updated: 24 April 2025

MIL OSI Europe News –

April 25, 2025

MIL-OSI: ACNB Corporation Reports 2025 First Quarter Financial Results

Source: GlobeNewswire (MIL-OSI)

GETTYSBURG, Pa., April 24, 2025 (GLOBE NEWSWIRE) — ACNB Corporation (NASDAQ: ACNB) (“ACNB” or the “Corporation”), financial holding company for ACNB Bank and ACNB Insurance Services, Inc., announced a net loss of $272 thousand, or $0.03 diluted loss per share, for the three months ended March 31, 2025 compared to net income of $6.8 million, or $0.80 diluted earnings per share, for the three months ended March 31, 2024 and compared to net income of $6.6 million, or $0.77 diluted earnings per share, for the three months ended December 31, 2024.

Financial results for the three months ended March 31, 2025 were impacted by two discrete items that were related to the acquisition of Traditions Bancorp, Inc. (“Traditions”): a provision for credit losses on non- purchase credit deteriorated (“PCD”) loans of $4.2 million, net of taxes, and merger-related expenses, net of taxes, totaling $6.2 million.

2025 First Quarter Highlights

ACNB closed the acquisition of Traditions effective February 1, 2025 (“Acquisition”). This strategic acquisition will result in a premier community bank that is locally headquartered, managed, and focused.
Traditions contributed, after acquisition accounting adjustments, $877.7 million in assets, $648.5 million in loans and $741.5 million in deposits at the Acquisition date.
Fully taxable equivalent (“FTE”) net interest margin was 4.07% for the three months ended March 31, 2025 compared to 3.81% for the three months ended December 31, 2024 and 3.77% for the three months ended March 31, 2024. The accretion impact of acquisition accounting adjustments on loans and deposits from the Acquisition was $1.5 million for the three months ended March 31, 2025.
The allowance for credit losses was $24.6 million at March 31, 2025 compared to $17.3 million at December 31, 2024 and $20.2 million at March 31, 2024. The increases from both prior periods were driven primarily by an initial allowance for credit losses of $5.5 million for non-PCD loans and $1.5 million for accruing PCD loans at the Acquisition date.

Tangible common equity to tangible assets ratio¹ of 9.33% at March 31, 2025 compared to 10.72% at December 31, 2024 and 9.61% at March 31, 2024. The net unrealized loss on the available for sale securities portfolio was $39.7 million at March 31, 2025 compared to a net unrealized loss of $47.7 million at December 31, 2024 and a net unrealized loss of $53.0 million at March 31, 2024.
As announced on Form 8-K on April 23, 2025, the Board of Directors approved and declared a regular quarterly cash dividend of $0.34 per share of ACNB Corporation common stock for the second quarter, reflecting a $0.02, or 6.3%, increase over the same quarter of 2024. ACNB repurchased 75,872 shares of ACNB common stock in open market transactions during the three months ended March 31, 2025.

“At ACNB Corporation, we remain focused on executing our strategic plan to be the community bank of choice in the markets that we serve by building relationships and finding solutions for our customers. As a result, we are pleased to share our first quarter operating results. The quarter represents a solid start to a new year and exciting opportunities for our future,” said James P. Helt, ACNB Corporation President and Chief Executive Officer.

“We are pleased and excited to welcome Traditions Bancorp, Inc. shareholders, employees and customers to the ACNB family as we successfully completed our acquisition in the first quarter. In addition, at the close of the acquisition, three former Traditions directors, Eugene J, Draganosky, Elizabeth F. Carson and John M. Polli joined the Boards of Directors of ACNB Corporation and ACNB Bank. We believe this combination brings together organizations that are unified by a shared vision to banking to create an even stronger community bank and substantially enhance our presence in York and Lancaster counties.”

Mr. Helt continued, “We are cautiously optimistic for the remainder of 2025 in spite of the uncertain economic headwinds as a result of ongoing tariff turmoil. We are not only focused on the challenges, but also the exciting opportunities that lie ahead and are fully committed to the continued growth and profitability of ACNB Corporation and to enhancing long term shareholder value.”

Acquisition Update

During the first quarter of 2025, ACNB acquired Traditions, holding company for Traditions Bank, York, Pennsylvania. Traditions was merged with and into a wholly-owned subsidiary of ACNB Corporation immediately followed by the merger of Traditions Bank with and into ACNB Bank effective February 1, 2025. ACNB Bank is operating the former Traditions Bank offices as “Traditions Bank, A Division of ACNB Bank”. The acquisition method of accounting was used to account for the acquisition. ACNB recorded the assets and liabilities of Traditions at their respective fair values as of February 1, 2025. The transaction was valued at approximately $83.8 million and substantially expanded ACNB’s footprint in the York and Lancaster, Pennsylvania markets. Traditions contributed, after acquisition accounting adjustments, $877.7 million in assets, $648.5 million in loans and $741.5 million in deposits at the Acquisition date. The excess of the merger consideration over the fair value of Traditions assets acquired and liabilities assumed resulted in goodwill of $20.3 million.

As of March 31, 2025, total acquisition accounting adjustments on loans were $24.5 million. The majority of the loan acquisition accounting adjustments are expected to accrete back through as income as loans pay off or mature. Total acquisition accounting adjustments on time deposits were $226 thousand as of March 31, 2025. The acquisition accounting adjustments on time deposits are expected to amortize as an expense over the life of the time deposits. The core deposit intangible was $18.3 million as of March 31, 2025.

________________________________________
¹ Non-GAAP financial measure. Please refer to the calculation on the page titled “Non-GAAP Reconciliation” at the end of this document.

The core deposit intangible is expected to amortize as an expense over an expected life of 10 years using sum of the year’s digits method. The acquisition accounting adjustments are subject to refinement for up to one year from the acquisition date as allowable by U.S. Generally Accepted Accounting Principles (“GAAP”).

ACNB recorded an allowance for credit losses of $6.9 million at the Acquisition date, comprised of $5.5 million for non-PCD loans, which was recognized through the provision for credit losses, and $1.5 million for accruing PCD loans, which was recognized as an acquisition accounting adjustment to the amortized cost basis of the acquired loans.

ACNB completed, following the Acquisition date, the sale of approximately $98.0 million of Traditions’ investments with a yield of 5.03%. With the proceeds from the sale, ACNB paid off $40.2 million of Federal Home Loan Bank (“FHLB”) borrowings with a cost of 4.73% and invested the remainder of the proceeds into investment securities with a yield of 5.07%.

ACNB’s financial results for any periods ended prior to February 1, 2025 reflect ACNB on a standalone basis. As a result, ACNB’s financial results for the three months ended March 31, 2025 may not be directly comparable to prior reported periods.

Net Interest Income and Margin

Net interest income for the three months ended March 31, 2025 totaled $27.1 million, an increase of $6.5 million from the three months ended March 31, 2024 and an increase of $6.0 million from the three months ended December 31, 2024. The increases were driven primarily by the Acquisition. The FTE net interest margin for the three months ended March 31, 2025 was 4.07%, a 30 basis points increase from the three months ended March 31, 2024 and a 26 basis points increase from the three months ended December 31, 2024. The accretion impact of acquisition accounting adjustments on loans and deposits from the Acquisition was $1.5 million for the three months ended March 31, 2025. For the three months ended March 31, 2025, total average loans increased $499.3 million compared to three months ended March 31, 2024 and increased $461.3 million compared to the three months ended December 31, 2024. The yield on total loans was 6.08% for the three months ended March 31, 2025, an increase of 71 basis points compared to the three months ended March 31, 2024 and an increase of 47 basis points from the three months ended December 31, 2024. The increases in total average loans and yields on total loans were driven primarily by the Acquisition. For the three months ended March 31, 2025, total average interest-bearing deposits increased $421.8 million from the three months ended March 31, 2024 and increased $406.8 million from the three months ended December 31, 2024. The average rate paid on interest-bearing deposits was 1.38% for the three months ended March 31, 2025, an increase of 73 basis points from the three months ended March 31, 2024 and an increase of 42 basis points from the three months ended December 31, 2024. The increases in average interest-bearing deposits and average rate paid on interest-bearing deposits were driven primarily by the Acquisition. For the three months ended March 31, 2025, total average noninterest-bearing demand deposits increased $26.3 million from the three months ended March 31, 2024 and increased $48.0 million from the three months ended December 31, 2024. The increase in total average noninterest-bearing demand deposits was driven primarily by the Acquisition.

Noninterest Income

Noninterest income for the three months ended March 31, 2025 was $7.2 million, an increase of $1.5 million from the three months ended March 31, 2024 and an increase of $1.4 million from the three months ended December 31, 2024. Gain from mortgage loans held for sale for the three months ended March 31, 2025 was $855 thousand, an increase $807 thousand from the three months ended March 31, 2024 and increase of $748 thousand from the three months ended December 31, 2024. Earnings on investment in bank-owned life insurance for the three months ended March 31, 2025 was $580 thousand, an increase of $103 thousand from the three months ended March 31, 2024 and increase of $74 thousand from the three months ended December 31, 2024. The increases in gain from mortgage loans held for sale and earnings on investment in bank-owned life insurance for three months ended March 31, 2025 compared to the three months ended March 31, 2024 and three months ended December 31, 2024 were driven primarily by the Acquisition. Wealth management income was $1.1 million for the three months ended March 31, 2025, an increase of $98 thousand from three months ended March 31, 2024 and an increase of $53 thousand from the three months ended December 31, 2024. The increases in wealth management income were driven primarily by increased sales activity and market performance. Gain on life insurance proceeds was $254 thousand for the three months ended March 31, 2025 as a result of a death benefit paid on a life insurance policy.

Noninterest Expense

Noninterest expense for the three months ended March 31, 2025 increased $11.7 million from the three months ended March 31, 2024 and increased $10.9 million from the three months ended December 31, 2024. The increases were driven primarily by the Acquisition. Merger-related expense totaled $8.0 million for the three months ended March 31, 2025 compared to none for the three months ended March 31, 2024 and $885 thousand for the three months ended December 31, 2024. Salaries and employee benefits expense increased $1.7 million during the three months ended March 31, 2025 compared to the three months ended March 31, 2024 and increased $2.5 million compared to three months ended December 31, 2024 driven primarily by higher base wages as a result of the Acquisition, higher restricted stock compensation and higher payroll taxes. Net occupancy increased $312 thousand for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 and increased $346 thousand compared to three months ended December 31, 2024 driven primarily by the Acquisition and higher snow removal costs. Equipment expense increased $551 thousand for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 driven primarily by the Acquisition. Equipment expense decreased $44 thousand for the three months ended March 31, 2025 compared to the three months ended December 31, 2024 as the prior quarter included incremental expenses of $355 thousand for the purchase of office equipment related to Acquisition. Intangible assets amortization increased $536 thousand during the three months ended March 31, 2025 compared to the three months ended March 31, 2024 and increased $553 thousand compared to the three months ended December 31, 2024 driven by the Acquisition.

Loans and Asset Quality

Total loans outstanding were $2.32 billion at March 31, 2025, an increase of $639.3 million from December 31, 2024 and an increase of $657.2 million from March 31, 2024. The increases from both December 31, 2024 and March 31, 2024 were driven primarily by the Acquisition. The allowance for credit losses was $24.6 million at March 31, 2025, an increase of $7.4 million compared to December 31, 2024 and $4.5 million compared to March 31, 2024. The increase was driven primarily by an initial $5.5 million allowance for credit losses for non-PCD loans, which was recognized through the provision for credit losses, and a $1.5 million allowance for credit loss for accruing PCD loans, which was recognized as an acquisition accounting adjustment to the amortized cost basis of the acquired loans, at the Acquisition date. Reversal of $480 thousand was booked to unfunded commitments for the three months ended March 31, 2025 compared to a provision of $44 thousand and a reversal of $151 thousand for the three months ended December 31, 2024 and March 31, 2024, respectively.

Non-performing loans were $10.0 million, or 0.43%, of total loans, net of unearned income, at March 31, 2025 compared to $6.8 million, or 0.40%, of total loans at December 31, 2024 and $3.9 million, or 0.24%, of total loans at March 31, 2024. The increase in non-performing loans at March 31, 2025 compared to March 31, 2024 was driven primarily by one long-standing commercial relationship in the healthcare industry, comprised of both owner-occupied commercial real estate and commercial and industrial loans, that moved into non-performing loan status during 2024 and by the Acquisition. The increase in non-performing loans at March 31, 2025 compared to the three months ended December 31, 2024 was driven primarily by the Acquisition. Annualized net charge-offs for the three months ended March 31, 2025 were 0.01% of total average loans compared to 0.04% for the three months ended December 31, 2024 and 0.00% for the three months ended March 31, 2024.

Deposits and Borrowings

Total deposits totaled $2.54 billion at March 31, 2025, an increase of $747.5 million from December 31, 2024 and an increase of $704.8 million from March 31, 2024. Included in total deposits at March 31, 2025 were $1.98 billion of interest-bearing deposits, which increased $636.3 million from December 31, 2024 and increased $641.7 million from March 31, 2024. Time deposits, included in interest-bearing deposits, increased $204.1 million and $219.8 million since December 31, 2024 and March 31, 2024, respectively. In January 2025, ACNB Bank issued $20.0 million in brokered time deposits to offset seasonal fluctuations in commercial deposits during the quarter, and ACNB assumed, as a result of the Acquisition, $15.0 million of brokered time deposits of which $5.0 million matured in February 2025. Total noninterest-bearing deposits were $562.7 million at March 31, 2025 compared to $451.5 million at December 31, 2024 and $499.6 million at March 31, 2024. The increases in total deposits, interest-bearing deposits, time deposits and noninterest-bearing deposits were driven primarily by the Acquisition.

Total borrowings were $299.5 million at March 31, 2025, an increase of $28.4 million compared to December 31, 2024 and an increase of $26.9 million compared to March 31, 2024. The increases in total borrowings were driven primarily by general balance sheet management.

Stockholders’ Equity

Total stockholders’ equity was $386.9 million at March 31, 2025 compared to $303.3 million at December 31, 2024 and $279.9 million at March 31, 2024. The increase at March 31, 2025 compared to December 31, 2024 and March 31, 2025 was driven primarily by the equity issued in the Acquisition slightly offset by dividends paid of $3.4 million, common stock repurchased of $3.1 million and a $272 thousand net loss for the three months ended March 31, 2025. Tangible book value¹ per share was $28.23, $29.51 and $26.70 at March 31, 2025, December 31, 2024 and March 31, 2024, respectively. ACNB repurchased 75,872 shares of ACNB common stock in open market transactions during the three months ended March 31, 2025. As of March 31, 2025, there were 111,795 shares remaining under the current previously disclosed plan.

________________________________________
¹ Non-GAAP financial measure. Please refer to the calculation on the page titled “Non-GAAP Reconciliation” at the end of this document.

About ACNB Corporation

ACNB Corporation, headquartered in Gettysburg, PA, is the $3.27 billion financial holding company for the wholly-owned subsidiaries of ACNB Bank, Gettysburg, PA, and ACNB Insurance Services, Inc., Westminster, MD. Originally founded in 1857, ACNB Bank serves its marketplace with banking and wealth management services, including trust and retail brokerage, via a network of 33 community banking offices and one loan office located in the Pennsylvania counties of Adams, Cumberland, Franklin, Lancaster and York, and the Maryland counties of Baltimore, Carroll and Frederick. ACNB Insurance Services, Inc. is a full-service insurance agency with licenses in 46 states. The agency offers a broad range of property, casualty, health, life and disability insurance serving personal and commercial clients through office locations in Westminster, MD and Gettysburg, PA. For more information regarding ACNB Corporation and its subsidiaries, please visit investor.acnb.com.

SAFE HARBOR AND FORWARD-LOOKING STATEMENTS – Should there be a material subsequent event prior to the filing of the Quarterly Report on Form 10-Q with the Securities and Exchange Commission, the financial information reported in this press release is subject to change to reflect the subsequent event. In addition to historical information, this press release may contain forward-looking statements. Examples of forward-looking statements include, but are not limited to, (a) projections or statements regarding future earnings, expenses, net interest income, other income, earnings or loss per share, asset mix and quality, growth prospects, capital structure, and other financial terms, (b) statements of plans and objectives of Management or the Board of Directors, and (c) statements of assumptions, such as economic conditions in the Corporation’s market areas. Such forward-looking statements can be identified by the use of forward-looking terminology such as “believes”, “expects”, “may”, “intends”, “will”, “should”, “anticipates”, or the negative of any of the foregoing or other variations thereon or comparable terminology, or by discussion of strategy. Forward-looking statements are subject to certain risks and uncertainties such as national, regional and local economic conditions, competitive factors, and regulatory limitations. Actual results may differ materially from those projected in the forward-looking statements. Such risks, uncertainties, and other factors that could cause actual results and experience to differ from those projected include, but are not limited to, the following: short-term and long-term effects of inflation and rising costs on the Corporation, customers and economy; banking instability caused by bank failures and financial uncertainty of various banks which may adversely impact the Corporation and its securities and loan values, deposit stability, capital adequacy, financial condition, operations, liquidity, and results of operations; effects of governmental and fiscal policies, as well as legislative and regulatory changes; effects of new laws and regulations (including laws and regulations concerning taxes, banking, securities and insurance) and their application with which the Corporation and its subsidiaries must comply; impacts of the capital and liquidity requirements of the Basel III standards; effects of changes in accounting policies and practices, as may be adopted by the regulatory agencies, as well as the Financial Accounting Standards Board and other accounting standard setters; ineffectiveness of the business strategy due to changes in current or future market conditions; future actions or inactions of the United States government, including the effects of short-term and long-term federal budget and tax negotiations and a failure to increase the government debt limit or a prolonged shutdown of the federal government; effects of economic conditions particularly with regard to the negative impact of any pandemic, epidemic or health-related crisis and the responses thereto on the operations of the Corporation and current customers, specifically the effect of the economy on loan customers’ ability to repay loans; effects of competition, and of changes in laws and regulations on competition, including industry consolidation and development of competing financial products and services; inflation, securities market and monetary fluctuations; risks of changes in interest rates on the level and composition of deposits, loan demand, and the values of loan collateral, securities, and interest rate protection agreements, as well as interest rate risks; difficulties in acquisitions and integrating and operating acquired business operations, including information technology difficulties; challenges in establishing and maintaining operations in new markets; effects of technology changes; effects of general economic conditions and more specifically in the Corporation’s market areas; failure of assumptions underlying the establishment of reserves for credit losses and estimations of values of collateral and various financial assets and liabilities; acts of war or terrorism or geopolitical instability; disruption of credit and equity markets; ability to manage current levels of impaired assets; loss of certain key officers; ability to maintain the value and image of the Corporation’s brand and protect the Corporation’s intellectual property rights; continued relationships with major customers; and, potential impacts to the Corporation from continually evolving cybersecurity and other technological risks and attacks, including additional costs, reputational damage, regulatory penalties, and financial losses. Management considers subsequent events occurring after the balance sheet date for matters which may require adjustment to, or disclosure in, the consolidated financial statements. The review period for subsequent events extends up to and including the filing date of the Corporation’s consolidated financial statements when filed with the SEC. Accordingly, the financial information in this announcement is subject to change. We caution readers not to place undue reliance on these forward-looking statements. They only reflect Management’s analysis as of this date. The Corporation does not revise or update these forward-looking statements to reflect events or changed circumstances. Please carefully review the risk factors described in other documents the Corporation files from time to time with the SEC, including the Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q. Please also carefully review any Current Reports on Form 8-K filed by the Corporation with the SEC.

ACNB #2025-10
April 24, 2025



ACNB Corporation Financial Highlights Selected Financial Data by Respective Quarter End (Unaudited)

(Dollars in thousands, except per share data)	March 31, 2025				December 31, 2024				September 30, 2024				June 30, 2024				March 31, 2024
BALANCE SHEET DATA
Assets	$	3,270,041			$	2,394,830			$	2,420,914			$	2,457,753			$	2,414,288
Investment securities		521,306				459,472				483,604				483,868				490,626
Total loans, net of unearned income		2,322,209				1,682,910				1,677,112				1,679,600				1,664,980
Allowance for credit losses		(24,646	)			(17,280	)			(17,214	)			(17,162	)			(20,172	)
Deposits		2,540,009				1,792,501				1,791,317				1,838,588				1,835,224
Allowance for unfunded commitments		1,883				1,394				1,349				1,310				1,569
Borrowings		299,531				271,159				293,091				304,286				272,605
Stockholders’ equity		386,883				303,273				306,755				289,331				279,920
INCOME STATEMENT DATA
Interest and dividend income	$	36,290			$	27,381			$	27,241			$	26,869			$	25,974
Interest expense		9,200				6,269				6,299				5,905				5,381
Net interest income		27,090				21,112				20,942				20,964				20,593
Provision for (reversal of) credit losses		5,968				249				81				(2,990	)			223
(Reversal of) provision for unfunded commitments		(480	)			44				40				(259	)			(151	)
Net interest income after provisions for (reversal of) credit losses and unfunded commitments		21,602				20,819				20,821				24,213				20,521
Noninterest income		7,184				5,803				6,833				6,427				5,667
Noninterest expenses		29,335				18,388				18,244				16,391				17,662
(Loss) income before income taxes		(549	)			8,234				9,410				14,249				8,526
Income tax (benefit) expense		(277	)			1,639				2,206				2,970				1,758
Net (loss) income	$	(272	)		$	6,595			$	7,204			$	11,279			$	6,768
PROFITABILITY RATIOS
Total loans, net of unearned income to deposits		91.43		%		93.89		%		93.62		%		91.35		%		90.72		%
Return on average assets (annualized)		(0.04	)			1.08				1.17				1.86				1.12
Return on average equity (annualized)		(0.31	)			8.57				9.63				16.12				9.76
Efficiency ratio¹		60.13				63.83				60.56				58.61				66.18
FTE Net interest margin		4.07				3.81				3.77				3.82				3.77
Yield on average earning assets		5.45				4.93				4.90				4.89				4.74
Yield on investment securities		2.91				2.58				2.59				2.65				2.70
Yield on total loans		6.08				5.61				5.56				5.53				5.37
Cost of funds		1.45				1.19				1.19				1.12				1.02
PER SHARE DATA
Diluted (loss) earnings per share	$	(0.03	)		$	0.77			$	0.84			$	1.32			$	0.80
Cash dividends paid per share		0.32				0.32				0.32				0.32				0.30
Tangible book value per share¹		28.23				29.51				29.90				27.82				26.70
CAPITAL RATIOS²
Tier 1 leverage ratio		11.81		%		12.52		%		12.46		%		12.25		%		11.91		%
Common equity tier 1 ratio		13.65				16.27				16.07				15.78				15.40
Tier 1 risk based capital ratio		13.86				16.56				16.36				16.07				15.69
Total risk based capital ratio		15.45				18.36				18.15				17.86				17.68
CREDIT QUALITY
Net charge-offs to average loans outstanding (annualized)		0.01		%		0.04		%		0.01		%		0.00		%		0.00		%
Total non-performing loans to total loans, net of unearned income³		0.43				0.40				0.39				0.19				0.24
Total non-performing assets to total assets⁴		0.32				0.30				0.29				0.14				0.18
Allowance for credit losses to total loans, net of unearned income		1.06				1.03				1.03				1.02				1.21

________________________________________
¹ Non-GAAP financial measure. Please refer to the calculation on the page titled “Non-GAAP Reconciliation” at the end of this document.
² Regulatory capital ratios as of March 31, 2025 are preliminary.
³ Non-performing Loans consists of loans on nonaccrual status and loans greater than 90 days past due and still accruing interest.
⁴ Non-performing Assets consists of Non-performing Loans and Foreclosed assets held for resale.


Consolidated Statements of Condition (Unaudited)

(Dollars in thousands, except per share data)	March 31, 2025			December 31, 2024			March 31, 2024
ASSETS
Cash and due from banks	$	23,422		$	16,352		$	17,395
Interest-bearing deposits with banks		100,141			30,910			35,740
Total Cash and Cash Equivalents		123,563			47,262			53,135
Equity securities with readily determinable fair values		933			919			918
Investment securities available for sale, at estimated fair value		455,819			393,975			425,114
Investment securities held to maturity, at amortized cost (fair value $56,219, $56,924 and $58,084)		64,554			64,578			64,594
Loans held for sale		21,413			426			88
Total loans, net of unearned income		2,322,209			1,682,910			1,664,980
Less: Allowance for credit losses		(24,646	)		(17,280	)		(20,172	)
Loans, net		2,297,563			1,665,630			1,644,808
Premises and equipment, net		32,398			25,454			25,916
Right of use asset		5,440			2,663			2,447
Restricted investment in bank stocks		13,560			10,853			10,877
Investment in bank-owned life insurance		98,814			81,850			80,348
Investments in low-income housing partnerships		846			877			971
Goodwill		64,449			44,185			44,185
Intangible assets, net		25,835			7,838			8,761
Foreclosed assets held for resale		438			438			467
Other assets		64,416			47,882			51,659
Total Assets	$	3,270,041		$	2,394,830		$	2,414,288

LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits:
Noninterest-bearing	$	562,700		$	451,503		$	499,583
Interest-bearing		1,977,309			1,340,998			1,335,641
Total Deposits		2,540,009			1,792,501			1,835,224
Short-term borrowings		44,188			15,826			17,303
Long-term borrowings		255,343			255,333			255,302
Lease liability		5,790			2,764			2,447
Allowance for unfunded commitments		1,883			1,394			1,569
Other liabilities		35,945			23,739			22,523
Total Liabilities		2,883,158			2,091,557			2,134,368

Stockholders’ Equity:
Preferred Stock, $2.50 par value; 20,000,000 shares authorized; no shares outstanding at March 31, 2025, December 31, 2024 and March 31, 2024		—			—			—
Common stock, $2.50 par value; 20,000,000 shares authorized; 11,011,051, 8,945,293, and 8,928,441 shares issued; 10,543,671, 8,553,785, and 8,539,575 shares outstanding at March 31, 2025, December 31, 2024 and March 31, 2024, respectively		27,521			22,357			22,315
Treasury stock, at cost; 467,380, 391,508, and 388,866 at March 31, 2025, December 31, 2024, and March 31, 2024, respectively		(14,309	)		(11,203	)		(11,101	)
Additional paid-in capital		178,011			99,163			97,818
Retained earnings		230,978			234,624			217,712
Accumulated other comprehensive loss		(35,318	)		(41,668	)		(46,824	)
Total Stockholders’ Equity		386,883			303,273			279,920
Total Liabilities and Stockholders’ Equity	$	3,270,041		$	2,394,830		$	2,414,288


Consolidated Income Statements (Unaudited)

	Three Months Ended March 31,
(Dollars in thousands, except per share data)		2025			2024
INTEREST AND DIVIDEND INCOME
Loans, including fees
Taxable	$	31,676		$	21,470
Tax-exempt		292			319
Investment securities:
Taxable		2,902			2,911
Tax-exempt		288			284
Dividends		340			240
Other		792			750
Total Interest and Dividend Income		36,290			25,974
INTEREST EXPENSE
Deposits		5,996			2,160
Short-term borrowings		294			339
Long-term borrowings		2,910			2,882
Total Interest Expense		9,200			5,381
Net Interest Income		27,090			20,593
Provision for credit losses		5,968			223
Reversal of provision for unfunded commitments		(480	)		(151	)
Net Interest Income after Provisions for (Reversal of) Credit Losses and Unfunded Commitments		21,602			20,521
NONINTEREST INCOME
Insurance commissions		2,147			2,115
Service charges on deposits		1,094			991
Wealth management		1,060			962
Gain from mortgage loans held for sale		855			48
ATM debit card charges		831			819
Earnings on investment in bank-owned life insurance		580			477
Gain on life insurance proceeds		254			—
Net gains on sales or calls of investment securities		—			69
Net gains (losses) on equity securities		14			(10	)
Other		349			196
Total Noninterest Income		7,184			5,667
NONINTEREST EXPENSES
Salaries and employee benefits		12,861			11,168
Equipment		2,280			1,729
Net occupancy		1,442			1,130
Professional services		577			616
Other tax		527			370
FDIC and regulatory		401			375
Intangible assets amortization		857			321
Merger-related		8,031			—
Other		2,359			1,953
Total Noninterest Expenses		29,335			17,662
(Loss) Income Before Income Taxes		(549	)		8,526
Income tax (benefit) expense		(277	)		1,758
Net (Loss) Income	$	(272	)	$	6,768
PER SHARE DATA
Basic (loss) earnings	$	(0.03	)	$	0.80
Diluted (loss) earnings	$	(0.03	)	$	0.80
Weighted average shares basic		9,806,299			8,493,104
Weighted average shares diluted		9,823,475			8,511,648


Average Balances, Income and Expenses, Yields and Rates

	Three months ended March 31, 2025											Three months ended December 31, 2024											Three months ended September 30, 2024											Three months ended June 30, 2024											Three months ended March 31, 2024
(Dollars in thousands)		Average Balance			Interest¹					Yield/ Rate			Average Balance			Interest¹					Yield/ Rate			Average Balance			Interest¹					Yield/ Rate			Average Balance			Interest¹					Yield/ Rate			Average Balance			Interest¹					Yield/ Rate
ASSETS
Loans:
Taxable	$	2,080,231		$	31,676					6.18	%	$	1,619,245		$	23,294					5.72	%	$	1,618,879		$	23,108					5.68	%	$	1,612,380		$	22,675					5.66	%	$	1,573,109		$	21,470					5.49	%
Tax-exempt		57,969			370					2.59			57,683			366					2.52			62,401			394					2.51			64,276			396					2.48			65,825			404					2.47
Total Loans²		2,138,200			32,046					6.08			1,676,928			23,660					5.61			1,681,280			23,502					5.56			1,676,656			23,071					5.53			1,638,934			21,874					5.37
Investment Securities:
Taxable		447,986			3,242					2.93			431,338			2,786					2.57			441,135			2,868					2.59			442,390			2,913					2.65			467,466			3,151					2.71
Tax-exempt		54,659			365					2.71			54,453			359					2.62			54,549			359					2.62			54,644			359					2.64			54,740			359					2.64
Total Investments³		502,645			3,607					2.91			485,791			3,145					2.58			495,684			3,227					2.59			497,034			3,272					2.65			522,206			3,510					2.70
Interest-bearing deposits with banks		73,181			792					4.39			60,104			728					4.82			48,794			670					5.46			50,851			684					5.41			54,156			750					5.57
Total Earning Assets		2,714,026			36,445					5.45			2,222,823			27,533					4.93			2,225,758			27,399					4.90			2,224,541			27,027					4.89			2,215,296			26,134					4.74
Cash and due from banks		20,603											20,413											21,684											21,041											20,540
Premises and equipment		29,903											25,679											25,716											25,903											26,102
Other assets		224,522											181,180											184,105											187,937											187,075
Allowance for credit losses		(19,939	)										(17,153	)										(17,147	)										(20,124	)										(19,963	)
Total Assets	$	2,969,115										$	2,432,942										$	2,440,116										$	2,439,298										$	2,429,050
LIABILITIES
Interest-bearing demand deposits	$	573,341				$	524		0.37		%	$	519,833				$	511		0.39		%	$	518,368				$	552		0.42		%	$	513,163				$	275		0.22		%	$	512,701				$	264		0.21		%
Money markets		447,297					1,984		1.80				251,781					747		1.18				246,653					692		1.12				248,191					613		0.99				248,297					536		0.87
Savings deposits		331,103					27		0.03				315,512					34		0.04				318,291					26		0.03				327,274					30		0.04				335,215					29		0.03
Time deposits		410,749					3,461		3.42				268,559					1,987		2.94				258,053					1,842		2.84				263,045					1,725		2.64				244,481					1,331		2.19
Total Interest-Bearing Deposits		1,762,490					5,996		1.38				1,355,685					3,279		0.96				1,341,365					3,112		0.92				1,351,673					2,643		0.79				1,340,694					2,160		0.65
Short-term borrowings		38,721					294		3.08				23,087					12		0.21				38,666					204		2.10				37,256					304		3.28				47,084					339		2.90
Long-term borrowings		257,558					2,910		4.58				255,326					2,978		4.64				255,316					2,983		4.65				255,305					2,958		4.66				248,701					2,882		4.66
Total Borrowings		296,279					3,204		4.39				278,413					2,990		4.27				293,982					3,187		4.31				292,561					3,262		4.48				295,785					3,221		4.38
Total Interest-Bearing Liabilities		2,058,769					9,200		1.81				1,634,098					6,269		1.53				1,635,347					6,299		1.53				1,644,234					5,905		1.44				1,636,479					5,381		1.32
Noninterest-bearing demand deposits		512,966											464,949											477,350											485,351											486,648
Other liabilities		36,934											27,887											29,946											28,348											26,904
Stockholders’ Equity		360,446											306,008											297,473											281,365											279,019
Total Liabilities and Stockholders’ Equity	$	2,969,115										$	2,432,942										$	2,440,116										$	2,439,298										$	2,429,050
Taxable Equivalent Net Interest Income							27,245											21,264											21,100											21,122											20,753
Taxable Equivalent Adjustment							(155	)										(152	)										(158	)										(158	)										(160	)
Net Interest Income						$	27,090										$	21,112										$	20,942										$	20,964										$	20,593
Cost of Funds									1.45		%									1.19		%									1.19		%									1.12		%									1.02		%
FTE Net Interest Margin									4.07		%									3.81		%									3.77		%									3.82		%									3.77		%

________________________________________
¹ Income on interest-earning assets has been computed on a fully taxable equivalent (FTE) basis using the 21% federal income tax statutory rate.
² Average balances include non-accrual loans and are net of unearned income.
³ Average balances of investment securities is computed at fair value.

Non-GAAP Reconciliation

Note: The Corporation has presented the following non-GAAP financial measures because it believes that these measures provide useful and comparative information to assess trends in the Corporation’s results of operations and financial condition. These non-GAAP financial measures are frequently used by securities analysts, investors and other interested parties in the evaluation of companies in the Corporation’s industry. Investors should recognize that the Corporation’s presentation of these non- GAAP financial measures might not be comparable to similarly-titled measures of other corporations. These non-GAAP financial measures should not be considered a substitute for GAAP basis measures, and the Corporation strongly encourages a review of its condensed consolidated financial statements in their entirety.

	Three Months Ended
(Dollars in thousands, except per share data)	March 31, 2025				December 31, 2024				September 30, 2024				June 30, 2024				March 31, 2024
Tangible book value per share
Stockholders’ equity	$	386,883			$	303,273			$	306,755			$	289,331			$	279,920
Less: Goodwill and intangible assets		(90,284	)			(52,023	)			(52,327	)			(52,631	)			(52,946	)
Tangible common stockholders’ equity (numerator)	$	296,599			$	251,250			$	254,428			$	236,700			$	226,974
Shares outstanding, less unvested shares, end of period (denominator)		10,506,822				8,515,347				8,510,187				8,507,191				8,501,137
Tangible book value per share	$	28.23			$	29.51			$	29.90			$	27.82			$	26.70
Tangible common equity to tangible assets (TCE/TA Ratio)
Tangible common stockholders’ equity (numerator)	$	296,599			$	251,250			$	254,428			$	236,700			$	226,974
Total assets	$	3,270,041			$	2,394,830			$	2,420,914			$	2,457,753			$	2,414,288
Less: Goodwill and intangible assets		(90,284	)			(52,023	)			(52,327	)			(52,631	)			(52,946	)
Total tangible assets (denominator)	$	3,179,757			$	2,342,807			$	2,368,587			$	2,405,122			$	2,361,342
Tangible common equity to tangible assets		9.33		%		10.72		%		10.74		%		9.84		%		9.61		%
Efficiency Ratio
Noninterest expense	$	29,335			$	18,388			$	18,244			$	16,391			$	17,662
Less: Intangible amortization		857				304				304				315				321
Less: Merger-related expense		8,031				885				1,137				23				—
Noninterest expense (numerator)	$	20,447			$	17,199			$	16,803			$	16,053			$	17,341
Net interest income	$	27,090			$	21,112			$	20,942			$	20,964			$	20,593
Plus: Total noninterest income		7,184				5,803				6,833				6,427				5,667
Less: Gain on life insurance proceeds		254				—				—				—				—
Less: Net gains on sales or calls of securities		—				—				—				—				69
Less: Net gains (losses) on equity securities		14				(28	)			28				1				(10	)
Total revenue (denominator)	$	34,006			$	26,943			$	27,747			$	27,390			$	26,201
Efficiency ratio		60.13		%		63.83		%		60.56		%		58.61		%		66.18		%

Contact:	Jason H. Weber
	EVP/Treasurer & Chief Financial Officer
	717.339.5090
	jweber@acnb.com

The MIL Network –

April 25, 2025

MIL-OSI: Progress Congratulates Chairman Jack Egan on NACD New England Leadership in Corporate Governance Award

Source: GlobeNewswire (MIL-OSI)

Prestigious honor recognizes Egan’s outstanding contributions to corporate governance and board leadership

BURLINGTON, Mass., April 24, 2025 (GLOBE NEWSWIRE) — Progress (Nasdaq: PRGS), the trusted provider of AI-powered digital experience and infrastructure software, today announced that its Board Chair, John R. “Jack” Egan, has been honored with the Leadership in Corporate Governance Award by the National Association of Corporate Directors New England Chapter (NACDNE). This distinguished recognition highlights Egan’s exceptional leadership, dedication to corporate governance excellence and commitment to fostering strong, responsible board practices.

A highly respected leader in the business and investment community, Egan is the founding managing partner of Egan-Managed Capital, L.P., a Boston-based venture capital firm. Throughout his career, he has served on the boards of numerous prominent organizations. In addition to his role at Progress, he is the Lead Independent Director of NETSCOUT and has previously been a board member for EMC Corp., Verint Systems, Inc., VMware and Boston College’s Board of Trustees.

“Jack’s strategic vision and steadfast leadership have been invaluable to Progress,” said Yogesh Gupta, CEO of Progress. “His recognition by NACDNE is a testament to his unwavering commitment to corporate governance excellence. We are privileged to benefit from his insight and experience.”

The Leadership in Corporate Governance Award is part of NACDNE’s Annual Director of the Year Awards, which celebrate the achievements of board directors across New England. Now in its 17th year, the ceremony honors individuals and boards that have demonstrated outstanding leadership in enhancing stakeholder value, strengthening governance structures and driving long-term corporate success.

Egan will be formally recognized at the NACDNE Director of the Year Awards Gala in Boston on April 28, 2025.

About Progress
Progress (Nasdaq: PRGS) empowers organizations to achieve transformational success in the face of disruptive change. Our software enables our customers to develop, deploy and manage responsible AI-powered applications and digital experiences with agility and ease. Customers get a trusted provider in Progress, with the products, expertise and vision they need to succeed. Over 4 million developers and technologists at hundreds of thousands of enterprises depend on Progress. Learn more at www.progress.com.

Progress is a trademark or registered trademark of Progress Software Corporation and/or its subsidiaries or affiliates in the U.S. and other countries. Any other names contained herein may be trademarks of their respective owners.  

Press Contact:
Jeff Young
Progress
+1-800-477-6473
pr@progress.com

The MIL Network –

April 25, 2025

MIL-OSI: Main Street Financial Services Corp. Announces Earnings for First Quarter of 2025

Source: GlobeNewswire (MIL-OSI)

Business Highlights

Net income for the first quarter of 2025 totaled $3.6 million, or $0.47 per common share
Deposit growth of $28.3 million, or 9.8% annualized, for the quarter ended March 31, 2025
Loan growth of $17.8 million, or 6.4% annualized, for the quarter ended March 31, 2025
Continued reduction of wholesale funding by $31 million during the first quarter of 2025. The wholesale funding balance decreased to $69 million, or 4.8% of assets, as of March 31, 2025.
Declared cash dividend of $0.14 per share on April 11, 2025

WOOSTER, Ohio, April 24, 2025 (GLOBE NEWSWIRE) — Main Street Financial Services Corp. (OTCQX: MSWV), (the “Company”), the holding company parent of Main Street Bank Corp. reported a net income of $3.6 million, or $0.47 per common share, for the three months ended March 31, 2025. The return on average equity and return on average assets for the first quarter of 2025 was 13.27% and 1.03%, compared to 12.94% and 0.86%, for the first quarter of 2024 with merger costs excluded.

The Company announced a merger of equals transaction with Wayne Savings Bancshares, Inc. (“Legacy Wayne”) on February 23, 2023. On May 31, 2024 (the “Merger Date”), the Company completed the transaction, forming a financial holding company with assets of $1.4 billion. On the Merger Date, Legacy Wayne merged with and into Main Street, with Main Street surviving the merger (the “Merger”). Immediately following the Merger, Main Street’s wholly owned bank subsidiary, Main Street Bank Corp., merged with and into Wayne Savings Community Bank, with Wayne Savings Community Bank surviving the merger. Upon completion of the Merger, Wayne Savings Community Bank was renamed Main Street Bank Corp.

The Merger was accounted for as a reverse merger using the acquisition method of accounting, therefore, Legacy Wayne was deemed the acquirer for financial reporting purposes, even though Main Street was the legal acquirer. Accordingly, Legacy Wayne’s historical financial statements are the historical financial statements of the combined company for all periods before the Merger Date. Our consolidated statements of income for the quarters ended June 30, 2024 and forward, include the results from Main Street on and after May 31, 2024. Results for periods before May 31, 2024, reflect only those of Legacy Wayne and do not include the consolidated statements of income of Main Street. Accordingly, comparisons of our results for the quarter ended March 31, 2025, with those of prior periods may not be meaningful. The number of shares issued and outstanding, earnings per share, dividends paid and all references to share quantities of Main Street have been retrospectively adjusted to reflect the equivalent number of shares issued in the Merger.

President and CEO James R. VanSickle commented “We are proud of the progress we have made as a combined organization. The merger has created meaningful opportunities for growth and enhanced our ability to deliver long-term value to our shareholders. Our team’s dedication and our communities’ ongoing support have been instrumental in this success, and we’re deeply grateful for the trust placed in us.”

First Quarter 2025 Financial Results

Net interest income was $11.5 million for the quarter ended March 31, 2025, an increase of 128% from $5.1 million for the quarter ended March 31, 2024. The net interest margin of 3.44% for the first quarter of 2025 increased 83 basis points from 2.61% for the first quarter of 2024. Loan yields were 6.14% for the quarter ended March 31, 2025, an increase of 81 basis points when compared to 5.33% for the quarter ended March 31, 2024. During the first quarter of 2025, $68.5 million of the existing loan portfolio repriced and the bank funded $62.0 million in term loans and lines of credit at current market rates. Investment yields increased 157 basis points to 3.89% as of March 31, 2025, compared to the quarter ended March 31, 2024. The cost of funds for the first quarter of 2025, was 2.43%, a decrease of 5 basis points when compared to the first quarter of 2024. The cost of funds is impacted by the acquisition of new deposit accounts in the local market at rates lower than wholesale funding, such as FHLB advances. The cost of deposits was 2.27% for the quarter ended March 31, 2025, a 13 basis point increase when compared to 2.40% for the quarter ended March 31, 2024. The cost of borrowings for the quarter ended March 31, 2025 totaled 4.32%, an decrease of 42 basis points when compared to the quarter ended March 31, 2024.

A provision for credit losses and unfunded commitments of $245,000 was recorded for the quarter ended March 31, 2025. During the quarter, the Company recognized $22,000 in charge-offs and $39,000 in recoveries, reflecting relatively stable asset quality.

Noninterest income totaled $0.8 million for the quarter ended March 31, 2025, an increase of $141,000, or 20.8%, when compared to the quarter ended March 31, 2024. The increase in noninterest income is primarily attributed to interchange fees and service charges generated from the acquired deposit accounts.

Noninterest expense totaled $7.5 million for the quarter ended March 31, 2025, an increase of $3.6 million when compared to the quarter ended March 31, 2024. The increase reflects a quarter of combined expenses after the merger. The continued realization of expected cost savings from the merger have progressed as planned during the quarter. Noninterest expense decreased by $436,000 when compared to the quarter ended December 31, 2024 due to decreased compensation expense and supplies.

The provision for income taxes for the quarter ended March 31, 2025, increased by $464,000 compared to the quarter ended December 31, 2024. During the quarter ended December 31, 2024, the Company reassessed the West Virginia state income tax position and a $177,000 credit adjustment was realized during the quarter.

March 31, 2025 Financial Condition

At March 31, 2025, the Company had total assets of $1.41 billion with net loan balances totaling $1.13 billion. Loan balances grew by $17.8 million, or 6.4% annualized, during the first quarter of 2025. The increase is primarily attributed to $17.4 million growth in the commercial loan portfolio.

The allowance for credit losses was $12.0 million at March 31, 2025, compared to $11.8 million at December 31, 2024. The allowance for credit losses as a percent of total loans was 1.05% for March 31, 2025 and December 31, 2024. The allowance for credit losses and the related provision for credit losses is based on management’s judgment and evaluation of the loan portfolio. Management believes the current allowance for credit losses is adequate, however, changing economic and other conditions may require future adjustments to the allowance for credit losses.

Total nonperforming loans (NPLs) was $4.9 million at March 31, 2025, a decrease from $6.1 million at December 31, 2024. The NPL to net loan receivable ratio was 0.43% as of March 31, 2025. Past due loan balances of 30 days and more increased from $13.8 million at December 31, 2024, to $14.5 million, or 1.28% of net loans outstanding, at March 31, 2025.

Improvement in Asset Quality Since Merger Announcement: The combined level of classified loans for Legacy Wayne and Main Street was $24.4 million as of December 31, 2022. Since the merger announcement on February 23, 2023, the management teams of both Main Street and Wayne invested a great deal of time ensuring our combined organization utilizes strong underwriting standards and proactively monitors credit quality. Main Street sold approximately $15.2 million of loans in August 2023 and April 2024, of which approximately $12.7 million were classified loans. As of March 31, 2025, the resultant Company has $12.0 million of classified loans.

Total liabilities was $1.30 billion at March 31, 2025 with deposits totaling $1.18 billion and wholesale funding totaling $69.0 million. Deposits grew by $28.3 million, or 9.8% annualized, during the first quarter of 2025, mainly attributed to growth from Maximize Money Market accounts and the Short-Term Relationship Certificates of Deposits. The Company primarily utilizes FHLB advances as the primary source of wholesale funding due to their accessibility and alignment with prevailing market rates. During the first quarter of 2025, the Company reduced the reliance on FHLB advances by $36 million.

Total stockholders’ equity was $114.8 million at March 31, 2025, an increase of $4.2 million when compared to the December 31, 2024 balance. Total stockholders’ equity increased during the first quarter of 2025 primarily from net income of $3.6 million and an increase in accumulated other comprehensive income of $1.5 million, partially offset by dividends of $1.1 million.

Main Street Financial Services Corp. is a holding company headquartered in Wooster, Ohio. Its primary subsidiary, Main Street Bank Corp. was founded in 1899 and provides full-service banking, commercial lending, and mortgage services across its branch infrastructure. Today, Main Street Bank Corp. operates 19 branch locations in Wooster, Ohio, Wheeling, West Virginia and other surrounding communities in Ohio and West Virginia. Additional information about Main Street Bank Corp. is available at www.mymainstreetbank.bank.

Non-GAAP Disclosure
This press release includes disclosures of the Company’s return on average equity, return on average assets, net income, and efficiency ratios which are excluding costs related to merger activities which are financial measures not prepared in accordance with generally accepted accounting principles in the United States (GAAP). A non-GAAP financial measure is a numerical measure of historical or future financial performance, financial position or cash flow that excludes or includes amounts that are required to be disclosed by GAAP. The Company believes that these non-GAAP financial measures provide both management and investors a more complete understanding of the underlying operational results and trends and the Company’s marketplace performance. The presentation of this additional information is not meant to be considered in isolation or as a substitute for the numbers prepared in accordance with GAAP.

Forward-Looking–Statements
This release contains forward-looking statements that are not historical facts and that are intended to be “forward-looking statements” as that term is defined by the Private Securities Litigation Reform Act of 1995. These forward-looking statements may include, but are not limited to, statements about the Company’s plans, objectives, expectations and intentions and other statements contained in this release that are not historical facts and pertain to the Company’s future operating results. When used in this release, the words “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates” and similar expressions are generally intended to identify forward-looking statements. Actual results may differ materially from the results discussed in these forward-looking statements, because such statements are inherently subject to significant assumptions, risks and uncertainties, many of which are difficult to predict and are generally beyond the Company’s control. These include but are not limited to: the possibility of adverse economic developments that may, among other things, increase default and delinquency risks in the Company’s loan portfolios; shifts in interest rates; shifts in the rate of inflation; shifts in the demand for the Company’s loan and other products; unforeseen increases in costs and expenses; lower-than-expected revenue or cost savings in connection with acquisitions; changes in accounting policies; changes in the monetary and fiscal policies of the federal government; and changes in laws, regulations and the competitive environment. Unless legally required, the Company disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

Contact Information:
Matthew Hartzler
Senior Vice President, Chief Financial Officer
(330) 264-5767


MAIN STREET FINANCIAL SERVICES CORP.
Condensed Consolidated Balance Sheets
(Dollars in thousands, except share data – unaudited)

	March 31, 2025			December 31, 2024
ASSETS

Cash and cash equivalents	$	42,734		$	54,422
Securities, net (1)	162,763			163,819
Loans receivable, net	1,131,661			1,113,900
Federal Home Loan Bank stock	4,951			5,924
Premises & equipment, net	8,018			8,013
Bank-owned life insurance	21,893			22,155
Other assets	41,103			41,368
TOTAL ASSETS	$	1,413,123		$	1,409,601

LIABILITIES AND STOCKHOLDERS’ EQUITY

Deposit accounts	$	1,184,669		$	1,156,327
Other borrowings	35,852			28,399
Federal Home Loan Bank advances	64,000			100,000
Accrued interest payable and other liabilities	13,699			14,239
TOTAL LIABILITIES	1,298,220			1,298,965


Common stock (7,801,011 shares of $1.00 par value issued)	7,801			7,801
Additional paid-in capital	56,584			56,387
Retained earnings	59,893			57,356
Accumulated other comprehensive loss	(9,375		)	(10,908		)
TOTAL STOCKHOLDERS’ EQUITY	114,903			110,636

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	1,413,123		$	1,409,601

(1) Includes available-for-sale and held-to-maturity classifications.
Note: The December 31, 2024 Condensed Consolidated Balance Sheet has been derived from the audited Consolidated Balance Sheet as of that date.


MAIN STREET FINANCIAL SERVICES CORP.
Condensed Consolidated Statements of Income
(Dollars in thousands, except share data – unaudited)

	Three Months Ended
	March 31,
		2025		2024

Interest income	$	19,397	$	9,694
Interest expense		7,872		4,641
Net interest income		11,525		5,053
Provision for credit losses		245		(126	)
Net interest income after provision for credit losses		11,280		5,179
Non-interest income		819		678
Non-interest expense
Salaries and employee benefits		3,716		2,000
Net occupancy and equipment expense		1,475		682
Federal deposit insurance premiums		171		143
Franchise taxes		105		127
Advertising and marketing		170		68
Legal		83		133
Professional fees		359		85
ATM network		80		129
Auditing and accounting		176		72
Other		1,179		495
Total non-interest expense		7,514		3,934
Income before federal income taxes		4,585		1,923
Provision for federal income taxes		956		384
Net income	$	3,629	$	1,539

Earnings per share
Basic	$	0.47	$	0.40
Diluted	$	0.47	$	0.40


MAIN STREET FINANCIAL SERVICES CORP.
Selected Condensed Consolidated Financial Data
(Dollars in thousands, except share data – unaudited)

	March			December			September			June
		2025			2024			2024			2024

Interest and dividend income	$	19,397		$	19,138		$	18,930		$	12,572
Interest expense		7,872			8,531			8,308			6,185
Net interest income		11,525			10,607			10,622			6,387
Provision for credit losses		245			79			109			4,720
Net interest income after
provision for credit losses		11,280			10,528			10,513			1,666
Non-interest income		819			1,165			1,600			716
Non-interest expense		7,514			7,950			7,863			6,723
Income before federal income taxes		4,585			3,744			4,251			(4,341	)
Provision for federal income taxes		956			558			804			(873	)
Net income	$	3,629		$	3,186		$	3,446		$	(3,468	)

Earnings per share – basic	$	0.47		$	0.41		$	0.44		$	(0.68	)
Earnings per share – diluted	$	0.47		$	0.41		$	0.44		$	(0.67	)
Dividends per share	$	0.14		$	0.14		$	0.14		$	0.13
Return on average assets		1.03	%		0.90	%		1.00	%		(1.38	%)
Return on average equity		13.27	%		11.69	%		12.58	%		(17.16	%)
Shares outstanding at quarter end		7,801,011			7,801,011			7,801,011			7,787,055
Book value per share	$	14.73		$	14.18		$	14.27		$	13.60
Tangible equity per share	$	12.73		$	12.13		$	12.15		$	11.49
Return on common tangible equity		14.62	%		13.46	%		14.54	%		(15.51	%)


	March			December			September			June
		2024			2023			2023			2023

Interest and dividend income	$	9,694		$	9,545		$	9,078		$	8,571
Interest expense		4,641			4,330			3,673			2,867
Net interest income		5,053			5,215			5,405			5,704
Provision for credit losses		(126	)		4			138			170
Net interest income after
provision for credit losses		5,179			5,211			5,267			5,534
Non-interest income		678			1,017			691			706
Non-interest expense		3,934			3,748			3,733			3,949
Income before federal income taxes		1,923			2,480			2,225			2,291
Provision for federal income taxes		384			443			452			547
Net income	$	1,539		$	2,037		$	1,773		$	1,744

Earnings per share – basic	$	0.40		$	0.53		$	0.46		$	0.46
Earnings per share – diluted	$	0.40		$	0.53		$	0.46		$	0.45
Dividends per share	$	0.13		$	0.13		$	0.13		$	0.13
Return on average assets		0.76	%		1.02	%		0.91	%		0.92	%
Return on average equity		11.63	%		16.90	%		14.41	%		14.36	%
Shares outstanding at quarter end		3,840,575			3,839,702			3,837,609			3,837,085
Book value per share	$	13.81		$	13.80		$	12.40		$	12.64
Tangible equity per share	$	13.36		$	13.35		$	11.95		$	12.20
Return on common tangible equity		12.00	%		15.90	%		15.46	%		14.90	%


MAIN STREET FINANCIAL SERVICES CORP.
Non-GAAP reconciliation
(Dollars in thousands, except per share data – unaudited)

	For three months ended
	March,
		2025			2024

Net Income as reported – GAAP	$	3,629		$	1,539
Effect of merger related expenses (net of tax benefit)		–			174
Net Income non-GAAP	$	3,629		$	1,713

Earnings per share – GAAP	$	0.47		$	0.40
Effect of merger related expenses		–			0.05
Earnings per share non-GAAP	$	0.47		$	0.45

Return on average assets – GAAP		1.03	%		0.77	%
Effect of merger related expenses		–			0.09	%
Return on average assets non-GAAP		1.03	%		0.86	%

Return on average equity – GAAP		13.27	%		11.63	%
Effect of merger related expenses		–			1.31	%
Return on average equity non-GAAP		13.27	%		12.94	%

Efficiency Ratio – GAAP		60.87	%		68.64	%
Effect of merger related expenses		–			(3.04	%)
Efficiency Ratio non-GAAP		60.87	%		65.61	%

The MIL Network –

April 25, 2025

MIL-OSI: Truxton Corporation Reports First Quarter 2025 Results

Source: GlobeNewswire (MIL-OSI)

NASHVILLE, Tenn., April 24, 2025 (GLOBE NEWSWIRE) — Truxton Corporation, the parent company for Truxton Trust Company (“Truxton” or “the Bank”) and subsidiaries, announced its operating results for the quarter ended March 31, 2025. First quarter net income attributable to common shareholders was $5.1 million, or $1.75 per diluted share, compared to $4.3 million, or $1.48 per diluted share, for the same quarter in 2024. Net income and fully diluted earnings per share for the quarter rose by 17% and 18%, respectively, compared to the first quarter of 2024.

“We are pleased to start 2025 with another quarter of financial growth lead by our core businesses,” said Chairman and CEO Tom Stumb. “Net Interest Income increased by 18% compared to the first quarter of 2024 while non-interest income increased by 23%. We achieved another quarterly earnings high-water mark while continuing to invest in technology and human capital to better serve our clients.”

Key Highlights

Non-interest income totaled $6.4 million in the first quarter of 2025, which was $657 thousand higher than the fourth quarter of 2024 and $1.2 million over the first quarter of 2024. Wealth revenue in the first quarter of 2025 was $5.3 million, up 2% from the fourth quarter of 2024 and 8% from the first quarter of 2024. Other non-interest income was elevated due to capital advisory fee revenue associated with a successful sell-side engagement.
Loans increased by 5% to $702 million at quarter end compared to $670 million on December 31, 2024, and were up 6% compared to $660 million on March 31, 2024.
Total deposits increased by 19% from $866 million at December 31, 2024, to $1.03 billion at March 31, 2025, and were 21% higher in comparison to $850 million at March 31, 2024. Truxton continues to fund its growth from a single banking location led by its commitment to provide what it believes is superior deposit operations service and technology.
Net interest margin for the first quarter of 2025 was 2.90%, an increase of 11 basis points from the 2.79% experienced in the quarter ended December 31, 2024, and an increase of 28 basis points from the 2.62% in the quarter ended March 31, 2024. Cost of funds was 2.91% in the first quarter of 2025, down from 3.08% for the quarter ended December 31, 2024, and down from 3.33% for the quarter ended March 31, 2024.
Allowance for credit losses, excluding that for unfunded commitments, was $6.7 million at quarter end March 31, 2025, compared to $6.4 million at December 31, 2024, and $6.3 million at March 31, 2024. For each of those three periods, such allowance amounts were 0.96% of gross loans outstanding at period end. For the same three periods, the Bank’s allowance for unfunded commitments was $589 thousand, $483 thousand, and $374 thousand, respectively.
The Bank’s capital position remains strong. Its Tier 1 leverage ratio was 10.46% at March 31, 2025, compared to 10.63% at December 31, 2024, and 10.53% at March 31, 2024. Book value per common share was $34.46, $34.42, and $30.62 at March 31, 2025, December 31, 2024, and March 31, 2024, respectively.
During the three months ended March 31, 2025, Truxton Corporation paid dividends of $1.50 per common share, inclusive of a $1.00 special cash dividend, and repurchased 5,000 shares of its common stock for $400 thousand in aggregate, or an average price of $80.00 per share.

About Truxton
Truxton is a premier provider of wealth, banking, and family office services for wealthy individuals, their families, and their business interests. Serving clients across the world, Truxton’s vastly experienced team of professionals provides customized solutions to its clients’ complex financial needs. Founded in 2004 in Nashville, Tennessee, Truxton upholds its original guiding principle: do the right thing. Truxton Trust Company is a subsidiary of financial holding company, Truxton Corporation (OTCPK: TRUX). For more information, visit truxtontrust.com.

Investor Relations
Austin Branstetter
615-250-0783
austin.branstetter@truxtontrust.com

Media Relations
Swan Burrus
615-250-0773
swan.burrus@truxtontrust.com

Truxton Corporation
Consolidated Balance Sheets
(000’s)
(Unaudited)

	March 31, 2025*			December 31, 2024			March 31, 2024*
ASSETS
Cash and due from financial institutions	$	10,704		$	4,225		$	4,909
Interest bearing deposits in other financial institutions		24,887			25,698			34,361
Federal funds sold		10,231			4,054			6,733
Cash and cash equivalents		45,822			33,977			46,003

Time deposits in other financial institutions		–			245			490
Securities available for sale		414,190			258,322			256,517

Gross loans, excluding Paycheck Protection Program		701,660			669,962			659,622
Allowance for credit losses**		(6,708	)		(6,433	)		(6,324	)
Paycheck Protection Program Loans		–			20			48
Net loans		694,952			663,549			653,346

Bank owned life insurance		16,863			16,722			10,865
Restricted equity securities		3,718			2,272			1,822
Premises and equipment, net		3,176			3,293			2,089
Accrued interest receivable		4,989			4,567			4,522
Deferred tax asset, net		5,297			5,257			5,576
Other assets		14,440			15,577			16,484

Total assets	$	1,203,447		$	1,003,781		$	997,714


LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits
Non-interest bearing	$	127,851		$	126,016		$	126,838
Interest bearing	$	900,489		$	740,406		$	723,645
Total deposits		1,028,340			866,422			850,483

Federal funds purchased		–			–			–
Swap counterparty cash collateral		2,790			4,230			5,570
Federal Home Loan Bank advances		45,000			8,250			3,250
Federal Reserve Bank borrowings		2,400			–			22,700
Subordinated debt		14,439			14,426			14,514
Other liabilities		11,154			11,747			11,706
Total liabilities		1,104,123			905,075			908,223

SHAREHOLDERS’ EQUITY
Common stock, $0.10 par value	$	284		$	286		$	290
Additional paid-in capital		28,957			28,945			31,881
Retained earnings		75,396			61,316			65,035
Accumulated other comprehensive income (loss)		(10,365	)		(10,252	)		(12,055	)
Net Income	$	5,052		$	18,411		$	4,340
Total shareholders’ equity		99,324			98,706			89,491

Total liabilities and shareholders’ equity	$	1,203,447		$	1,003,781		$	997,714

The information is preliminary, unaudited and based on company data available at the time of presentation. *Truxton adopted the Current Expected Credit Loss methodology as of January 1, 2023. The total excludes reserve for credit losses on unfunded commitments recorded in Other liabilities.

Truxton Corporation
Consolidated Statements of Net Income
(000’s)
(Unaudited)

	Three Months Ended
	March 31, 2025*		December 31, 2024*			March 31, 2024*
Non-interest income
Wealth management services	$	5,338	$	5,242		$	4,907
Capital advisory fees		555		70			40
Service charges on deposit accounts		45		85			91
Securities gains (losses), net		0		(122	)		0
Bank owned life insurance income		142		124			58
Other		297		321			68
Total non-interest income		6,377		5,720			5,164

Interest income
Loans, including fees	$	10,378	$	10,354		$	10,357
Taxable securities		3,371		3,039			2,599
Tax-exempt securities		182		217			188
Interest bearing deposits		331		348			231
Federal funds sold		34		75			41
Total interest income		14,296		14,033			13,414

Interest expense
Deposits		6,599		6,798			6,450
Short-term borrowings		60		90			618
Long-term borrowings		199		85			15
Subordinated debentures		188		188			188
Total interest expense		7,046		7,161			7,270

Net interest income		7,250		6,872			6,144

Provision for credit losses		390		145			(6	)

Net interest income after provision for loan losses		6,860		6,727			6,150

Total revenue, net		13,237		12,447			11,314

Non interest expense
Salaries and employee benefits		5,127		4,635			4,076
Occupancy		351		326			453
Furniture and equipment		109		107			4
Data processing		407		282			418
Wealth management processing fees		215		195			214
Advertising and public relations		53		96			34
Professional services		222		247			209
FDIC insurance assessments		108		33			190
Other		391		291			278
Total non interest expense		6,983		6,212			5,877
		0
Income before income taxes		6,254		6,235			5,438

Income tax expense		1,202		1,242			1,104

Net income	$	5,052	$	4,993		$	4,334

Earnings per share:
Basic	$	1.75	$	1.74		$	1.49
Diluted	$	1.75	$	1.74		$	1.48

*The information is preliminary, unaudited and based on company data available at the time of presentation. Totals may not foot due to rounding.

Truxton Corporation
Selected Quarterly Financial data
At Or For The Three Months Ended
(000’s)
(Unaudited)

	March 31, 2024*	December 31, 2024*	March 31, 2024*

Per Common Share Data
Net income attributable to shareholders, per share
Basic	$1.75	$1.74	$1.49
Diluted	$1.75	$1.74	$1.48
Book value per common share	$34.46	$34.42	$30.62
Tangible book value per common share	$34.46	$34.42	$30.62
Basic weighted average common shares	2,793,834	2,787,805	2,831,217
Diluted weighted average common shares	2,797,388	2,792,363	2,838,003
Common shares outstanding at period end	2,882,241	2,867,850	2,922,761


Selected Balance Sheet Data
Tangible common equity (TCE) ratio	8.25%	9.83%	8.97%
Average Loans	$691,360	$667,957	$656,790
Average earning assets (1)	$1,047,778	$998,861	$958,138
Average total assets	$1,085,506	$1,025,415	$970,228
Average shareholders’ equity	$99,923	$97,026	$89,441


Selected Asset Quality Measures
Nonaccrual loans	$0	$0	$0
90+ days past due still accruing	$0	$11	$0
Total nonperforming loans	$0	$11	$0
Total nonperforming assets	$0	$11	$0
Net charge offs (recoveries)	$8	$4	$11
Nonperforming loans to assets	0.00%	0.00%	0.00%
Nonperforming assets to total assets	0.00%	0.00%	0.00%
Nonperforming assets to total loans and other real estate	0.00%	0.00%	0.00%
Allowance for credit losses to total loans**	0.96%	0.96%	0.96%
Net charge offs to average loans	0.00%	0.00%	0.00%


Capital Ratios (Bank Subsidiary Only)
Tier 1 leverage	10.46%	10.63%	10.53%
Common equity tier 1	13.82%	15.19%	14.58%
Total risk-based capital	14.73%	16.15%	15.53%

Selected Performance Ratios
Efficiency ratio	51.2%	48.5%	51.5%
Return on average assets (ROA)	1.89%	1.94%	1.80%
Return on average shareholders’ equity (ROE)	20.50%	20.47%	19.52%
Return on average tangible common equity (ROTCE)	20.50%	20.47%	19.52%
Net interest margin	2.90%	2.79%	2.62%

*The information is preliminary, unaudited and based on company data available at the time of presentation.
(1) Average earning assets is the daily average of earning assets. Earning assets consists of loans, mortgage loans held for sale, federal funds sold, deposits with banks, and investment securities.

Truxton Corporation
Yield Tables
For The Periods Indicated
(000’s)
(Unaudited)

The following table sets forth the amount of our average balances, interest income or interest expense for each category of interest earning assets and interest bearing liabilities and the average interest rate for interest earning assets and interest bearing liabilities, net interest spread and net interest margin for the periods indicated below:
	Three Months Ended				Three Months Ended				Three Months Ended
	March 31, 2024*				December 31, 2024*				March 31, 2024*

	Average Balances		Rates/ Yields (%)	Interest Income/ Expense	Average Balances		Rates/ Yields (%)	Interest Income/ Expense	Average Balances		Rates/ Yields (%)	Interest Income/ Expense

Earning Assets
Loans	$691,360		6.04	$10,300	$667,957		6.08	$10,215	$656,790		6.28	$10,261
Loan fees	$0		0.16	$271	$0		0.09	$146	$0		0.06	$95
Loans with fees	$691,360		6.2	$10,571		667,957	6.17	$10,361	$656,790		6.34	$10,356
Mortgage loans held for sale	$0		0.00	$0	$0		0.00	$0	$0		0.00	$0
Federal funds sold	$3,308		4.15	$34	$6,232		4.71	$75	$3,255		4.93	$41
Deposits with banks	$29,756		4.51	$331	$28,570		4.85	$348	$19,536		4.75	$231
Investment securities – taxable	$291,104		4.63	$3,371	$260,605		4.66	$3,039	$245,516		4.23	$2,599
Investment securities – tax-exempt	$32,250		3.37	$182	$35,497		3.65	$217	$33,041		3.4	$188
Total Earning Assets	$1,047,778		5.62	$14,489	$998,861		5.64	$14,040	$958,138		5.66	$13,415
Non interest earning assets
Allowance for loan losses		(6,618)				(6,359)				(6,309)
Cash and due from banks	$17,307				$5,985				$5,270
Premises and equipment	$3,249				$3,305				$1,260
Accrued interest receivable	$3,608				$3,721				$3,478
Other real estate	$0				$0				$0
Other assets	$37,447				$36,453				$30,494
Unrealized gain (loss) on inv. securities		(17,265)				(16,551)				(22,103)
Total Assets	$1,085,506				$1,025,415				$970,228
Interest bearing liabilities
Interest bearing demand	$326,793		3.04	$2,448	$329,625		3.26	$2,703	$330,343		3.53	$2,898
Savings and money market	$229,304		2.63	$1,486	$200,257		2.83	$1,427	$162,640		3.4	$1,375
Time deposits – retail	$12,965		3.61	$115	$13,170		3.39	$112	$15,557		3.43	$133
Time deposits – wholesale	$241,662		4.28	$2,550	$228,144		4.46	$2,556	$173,570		4.74	$2,044
Total interest bearing deposits	$810,724		3.3	$6,599	$771,196		3.51	$6,798	$682,110		3.8	$6,450
Federal Home Loan Bank advances	$20,369		3.9	$199	$9,554		3.48	$85	$3,401		1.7	$15
Subordinated debt	$14,687		5.09	$188	$14,520		5.08	$188	$14,610		5.09	$188
Other borrowings	$9,419		4.12	$60	$12,369		4.04	$90	$57,060		4.28	$618
Total borrowed funds	$44,475		4.02	$447	$36,443		3.90	$363	$75,071		4.32	$821
Total interest bearing liabilities	$855,199		3.34	$7,046	$807,639		3.52	$7,161	$757,181		3.85	$7,271
Net interest rate spread			2.28	$7,443			2.12	$6,879			1.81	$6,144
Non-interest bearing deposits	$126,049				$115,593				$118,809
Other liabilities	$4,335				$5,157				$4,797
Shareholder’s equity	$99,923				$97,026				$89,441
Total Liabilities and Shareholder’s Equity	$1,085,506				$1,025,415				$970,228
Cost of funds			2.91				3.08				3.33
Net interest margin			2.90				2.79				2.62

*The information is preliminary, unaudited and based on company data available at the time of presentation. Totals may not foot due to rounding.

Yield Table Assumptions – Average loan balances are inclusive of nonperforming loans. Yields computed on tax-exempt instruments are on a tax equivalent basis. Net interest spread is calculated as the yields realized on interest-bearing assets less the rates paid on interest-bearing liabilities. Net interest margin is the result of net interest income calculated on a tax-equivalent basis divided by average interest earning assets for the period. Changes in net interest income are attributed to either changes in average balances (volume change) or changes in average rates (rate change) for earning assets and sources of funds on which interest is received or paid. Volume change is calculated as change in volume times the previous rate while rate change is change in rate times the previous volume. Changes not due solely to volume or rate changes are allocated to volume change and rate change in proportion to the relationship of the absolute dollar amounts of the change in each category.

The MIL Network –

April 25, 2025

MIL-OSI: West Bancorporation, Inc. Announces First Quarter 2025 Financial Results and Declares Quarterly Dividend

Source: GlobeNewswire (MIL-OSI)

WEST DES MOINES, Iowa, April 24, 2025 (GLOBE NEWSWIRE) — West Bancorporation, Inc. (Nasdaq: WTBA; the “Company”), parent company of West Bank, today reported first quarter 2025 net income of $7.8 million, or $0.46 per diluted common share, compared to fourth quarter 2024 net income of $7.1 million, or $0.42 per diluted common share, and first quarter 2024 net income of $5.8 million, or $0.35 per diluted common share. On April 23, 2025, the Company’s Board of Directors declared a regular quarterly dividend of $0.25 per common share. The dividend is payable on May 21, 2025, to stockholders of record on May 7, 2025.

David Nelson, President and Chief Executive Officer of the Company, commented, “In the first quarter of 2025, we have continued to see improvements in net interest margin and efficiency ratio compared to 2024, resulting in a significant improvement in net income compared to the first quarter of 2024. We are pleased with our progress in our balance sheet repricing efforts. Loan growth was modest in the first quarter, as expected with the current economic uncertainty.”

David Nelson added, “One thing that remains the same is our best-in-class credit quality metrics. We had no loans past due greater than 90 days at March 31, 2025, and only one loan past due greater than 30 days with an insignificant balance of $181 thousand. We continue to identify high-quality opportunities for growing our core customer base in all of our markets.”

First Quarter 2025 Financial Highlights

	Quarter Ended March 31, 2025	Quarter Ended December 31, 2024	Quarter Ended March 31, 2024
Net income (in thousands)	$7,842	$7,097	$5,809
Return on average equity	13.84%	12.24%	10.63%
Return on average assets	0.81%	0.68%	0.61%
Efficiency ratio (a non-GAAP measure)	56.37%	60.79%	62.04%
Nonperforming assets to total assets	0.00%	0.00%	0.01%

First Quarter 2025 Compared to Fourth Quarter 2024 Overview

Loans increased $11.6 million in the first quarter of 2025, primarily due to an increase in commercial loans and commercial real estate loans, partially offset by a decline in construction loans.
No credit loss expense on loans was recorded in the first quarter of 2025, compared to credit loss expense on loans of $1.0 million recorded in the fourth quarter of 2024. The credit loss expense on loans in the fourth quarter of 2024 was due to an adjustment to qualitative factors in the commercial real estate loan segment.
The allowance for credit losses to total loans was 1.01 percent at both March 31, 2025 and December 31, 2024. Nonaccrual loans at March 31, 2025 consisted of one loan with a balance of $181 thousand, compared to one loan with a balance of $133 thousand at December 31, 2024.
Deposits decreased $33.1 million, or 1.0 percent, in the first quarter of 2025. Brokered deposits totaled $335.5 million at March 31, 2025, compared to $266.4 million at December 31, 2024, an increase of $69.1 million. Excluding brokered deposits, deposits decreased $102.2 million, or 3.3 percent, during the first quarter of 2025. The decline in deposits was due to normal cash flow fluctuations of our core depositors. As of March 31, 2025, estimated uninsured deposits, which exclude deposits in the IntraFi^® reciprocal network, brokered deposits and public funds protected by state programs, accounted for approximately 28.0 percent of total deposits.
Net interest margin, on a fully tax-equivalent basis (a non-GAAP measure), was 2.28 percent for the first quarter of 2025, compared to 1.98 percent for the fourth quarter of 2024. Net interest income for the first quarter of 2025 was $20.9 million, compared to $19.4 million for the fourth quarter of 2024. The increase in net interest margin and net interest income was primarily due to a decrease in deposit rates, driven by the Federal Reserve’s reductions of the federal funds target rate in the fourth quarter of 2024. The cost of deposits decreased 38 basis points in the first quarter of 2025, compared to the fourth quarter of 2024.
The efficiency ratio (a non-GAAP measure) was 56.37 percent for the first quarter of 2025, compared to 60.79 percent for the fourth quarter of 2024. The improvement in the efficiency ratio was primarily due to the increase in net interest income and decrease in noninterest expense, partially offset by a decrease in trust services income.
The tangible common equity ratio was 5.97 percent as of March 31, 2025, compared to 5.68 percent as of December 31, 2024. The increase in the tangible common equity ratio was due to retained net income and the decrease in accumulated other comprehensive loss, which was the result of an increase in the market value of our available for sale securities portfolio.

Income tax expense increased $2.8 million in the first quarter of 2025 compared to the fourth quarter of 2024. This was primarily due to recording an income tax benefit of $1.8 million in the fourth quarter of 2024 for an energy related investment tax credit associated with the construction of the Company’s new headquarters building.

First Quarter 2025 Compared to First Quarter 2024 Overview

Loans increased $36.3 million at March 31, 2025, or 1.2 percent, compared to March 31, 2024. The increase is primarily due to the increase in commercial real estate loans, partially offset by decreases in commercial loans and construction loans.
Deposits increased $259.5 million, or 8.5 percent, at March 31, 2025, compared to March 31, 2024. Included in deposits were brokered deposits totaling $335.5 million at March 31, 2025, compared to $396.4 million at March 31, 2024. Excluding brokered deposits, deposits increased $320.4 million, or 12.0 percent, as of March 31, 2025, compared to March 31, 2024. Deposit growth included a mix of public funds and commercial and consumer deposits and was used to reduce wholesale funding, build liquidity and fund loan growth.
Borrowed funds decreased to $391.4 million at March 31, 2025, compared to $639.7 million at March 31, 2024. The decrease was primarily attributable to a decrease of $198.5 million in federal funds purchased and other short-term borrowings and a decrease of $45.0 million in Federal Home Loan Bank advances. The decrease in borrowed funds balances was due to the increase in deposits since March 31, 2024. The reduction in the Federal Home Loan Bank advances was due to the maturity of two advances with a total balance of $45.0 million. One of these advances, with a balance of $25.0 million, was hedged with a long-term interest rate swap, which matured and was not renewed.
The efficiency ratio (a non-GAAP measure) was 56.37 percent for the first quarter of 2025, compared to 62.04 percent for the first quarter of 2024. The improvement in the efficiency ratio in the first quarter of 2025 compared to the first quarter of 2024 was primarily due to the increase in net interest income, partially offset by an increase in noninterest expense. Occupancy and equipment expense increased primarily due to the occupancy costs associated with the Company’s newly constructed headquarters.
Net interest margin, on a fully tax-equivalent basis (a non-GAAP measure), was 2.28 percent for the first quarter of 2025, compared to 1.88 percent for the first quarter of 2024. Net interest income for the first quarter of 2025 was $20.9 million, compared to $16.8 million for the first quarter of 2024. The increase in net interest margin and net interest income was primarily due to the decrease in deposit rates. The cost of deposits decreased by 42 basis points in the first quarter of 2025 compared to the first quarter of 2024. Also contributing to the improvement was an increase in average deposit balances of $335.2 million, in comparing the same time periods, which resulted in the reduction of higher-cost borrowed funds and an increase in interest-bearing deposits with other financial institutions.

The Company filed its report on Form 10-Q with the Securities and Exchange Commission today. Please refer to that document for a more in-depth discussion of the Company’s financial results. The Form 10-Q is available on the Investor Relations section of West Bank’s website at www.westbankstrong.com.

The Company will discuss its results in a conference call scheduled for 2:00 p.m. Central Time on Thursday, April 24, 2025. The telephone number for the conference call is 800-715-9871. The conference ID for the conference call is 7846129. A recording of the call will be available until May 8, 2025, by dialing 800-770-2030. The conference ID for the replay call is 7846129, followed by the # key.

About West Bancorporation, Inc. (Nasdaq: WTBA)

West Bancorporation, Inc. is headquartered in West Des Moines, Iowa. Serving customers since 1893, West Bank, a wholly-owned subsidiary of West Bancorporation, Inc., is a community bank that focuses on lending, deposit services, and trust services for small- to medium-sized businesses and consumers. West Bank has six offices in the Des Moines, Iowa metropolitan area, one office in Coralville, Iowa, and four offices in Minnesota in the cities of Rochester, Owatonna, Mankato and St. Cloud.

Certain statements in this report, other than purely historical information, including estimates, projections, statements relating to the Company’s business plans, objectives and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements” within the meanings of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements may appear throughout this report. These forward-looking statements are generally identified by the words “believes,” “expects,” “intends,” “anticipates,” “projects,” “future,” “confident,” “may,” “should,” “will,” “strategy,” “plan,” “opportunity,” “will be,” “will likely result,” “will continue” or similar references, or references to estimates, predictions or future events. Such forward-looking statements are based upon certain underlying assumptions, risks and uncertainties. Because of the possibility that the underlying assumptions are incorrect or do not materialize as expected in the future, actual results could differ materially from these forward-looking statements. Risks and uncertainties that may affect future results include: interest rate risk, including the effects of changes in interest rates; fluctuations in the values of the securities held in our investment portfolio, including as a result of changes in interest rates; competitive pressures, including from non-bank competitors such as credit unions, “fintech” companies and digital asset service providers; pricing pressures on loans and deposits; our ability to successfully manage liquidity risk; changes in credit and other risks posed by the Company’s loan portfolio, including declines in commercial or residential real estate values or changes in the allowance for credit losses dictated by new market conditions, accounting standards or regulatory requirements; the concentration of large deposits from certain clients, including those who have balances above current FDIC insurance limits; the imposition of domestic or foreign tariffs or other governmental policies impacting the global supply chain and the value of products produced by our commercial borrowers; changes in local, national and international economic conditions, including the level and impact of inflation, and future monetary policies of the Federal Reserve in response thereto, and possible recession; the effects of recent developments and events in the financial services industry, including the large-scale deposit withdrawals over a short period of time that resulted in several bank failures; changes in legal and regulatory requirements, limitations and costs; changes in customers’ acceptance of the Company’s products and services; the occurrence of fraudulent activity, breaches or failures of our or our third-party partners’ information security controls or cyber-security related incidents, including as a result of sophisticated attacks using artificial intelligence and similar tools; unexpected outcomes of existing or new litigation involving the Company; the monetary, trade and other regulatory policies of the U.S. government; acts of war or terrorism, including the ongoing Israeli-Palestinian conflict and the Russian invasion of Ukraine, widespread disease or pandemics, or other adverse external events; risks related to climate change and the negative impact it may have on our customers and their businesses; changes to U.S. tax laws, regulations and guidance; potential changes in federal policy and at regulatory agencies as a result of the 2024 presidential election; new or revised accounting policies and practices, as may be adopted by state and federal regulatory agencies, the Financial Accounting Standards Board, the Securities and Exchange Commission or the Public Company Accounting Oversight Board; talent and labor shortages and employee turnover; and any other risks described in the “Risk Factors” sections of reports filed by the Company with the Securities and Exchange Commission. The Company undertakes no obligation to revise or update such forward-looking statements to reflect current or future events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

WEST BANCORPORATION, INC. AND SUBSIDIARY
Financial Information (unaudited)
(in thousands)
	As of
CONDENSED BALANCE SHEETS	March 31, 2025			December 31, 2024			September 30, 2024			June 30, 2024			March 31, 2024
Assets
Cash and due from banks	$	39,253		$	28,750		$	34,157		$	27,994		$	27,071
Interest-bearing deposits		171,357			214,728			123,646			121,825			120,946
Securities available for sale, at fair value		546,619			544,565			597,745			588,452			605,735
Federal Home Loan Bank stock, at cost		15,216			15,129			17,195			21,065			26,181
Loans		3,016,471			3,004,860			3,021,221			2,998,774			2,980,133
Allowance for credit losses		(30,526	)		(30,432	)		(29,419	)		(28,422	)		(28,373	)
Loans, net		2,985,945			2,974,428			2,991,802			2,970,352			2,951,760
Premises and equipment, net		110,270			109,985			106,771			101,965			95,880
Bank-owned life insurance		45,272			44,990			44,703			44,416			44,138
Other assets		72,737			82,416			72,547			89,046			90,981
Total assets	$	3,986,669		$	4,014,991		$	3,988,566		$	3,965,115		$	3,962,692

Liabilities and Stockholders’ Equity
Deposits	$	3,324,518		$	3,357,596		$	3,278,553		$	3,180,922		$	3,065,030
Federal funds purchased and other short-term borrowings		—			—			—			85,500			198,500
Other borrowings		391,445			392,629			438,814			439,998			441,183
Other liabilities		32,833			36,891			35,846			34,812			34,223
Stockholders’ equity		237,873			227,875			235,353			223,883			223,756
Total liabilities and stockholders’ equity	$	3,986,669		$	4,014,991		$	3,988,566		$	3,965,115		$	3,962,692

	For the Quarter Ended
AVERAGE BALANCES	March 31, 2025			December 31, 2024			September 30, 2024			June 30, 2024			March 31, 2024
Assets	$	3,944,789		$	4,135,049		$	3,973,824		$	3,964,109		$	3,812,199
Loans		3,016,119			3,007,558			2,991,272			2,994,492			2,949,672
Deposits		3,284,394			3,434,234			3,258,669			3,123,282			2,956,635
Stockholders’ equity		229,874			230,720			227,513			219,771			219,835

WEST BANCORPORATION, INC. AND SUBSIDIARY
Financial Information (unaudited)
(in thousands)
	As of
LOANS	March 31, 2025			December 31, 2024			September 30, 2024			June 30, 2024			March 31, 2024
Commercial	$	531,267		$	514,232		$	512,884		$	526,589		$	544,293
Real estate:
Construction, land and land development		451,230			508,147			520,516			496,864			465,247
1-4 family residential first mortgages		86,292			87,858			89,749			92,230			108,065
Home equity		21,961			19,294			17,140			15,264			14,020
Commercial		1,909,330			1,861,195			1,870,132			1,856,301			1,839,580
Consumer and other		19,323			17,287			14,261			15,234			12,844
		3,019,403			3,008,013			3,024,682			3,002,482			2,984,049
Net unamortized fees and costs		(2,932	)		(3,153	)		(3,461	)		(3,708	)		(3,916	)
Total loans	$	3,016,471		$	3,004,860		$	3,021,221		$	2,998,774		$	2,980,133
Less: allowance for credit losses		(30,526	)		(30,432	)		(29,419	)		(28,422	)		(28,373	)
Net loans	$	2,985,945		$	2,974,428		$	2,991,802		$	2,970,352		$	2,951,760

CREDIT QUALITY
Pass	$	3,011,231		$	2,999,531		$	3,016,493		$	2,994,310		$	2,983,618
Watch		7,991			8,349			7,956			7,651			142
Substandard		181			133			233			521			289
Doubtful		—			—			—			—			—
Total loans	$	3,019,403		$	3,008,013		$	3,024,682		$	3,002,482		$	2,984,049

DEPOSITS
Noninterest-bearing demand	$	519,771		$	541,053		$	525,332		$	530,441		$	521,377
Interest-bearing demand		517,409			543,855			438,402			443,658			449,946
Savings and money market – non-brokered		1,490,189			1,517,510			1,481,840			1,483,264			1,315,698
Money market – brokered		143,423			126,381			123,780			97,259			119,840
Total nonmaturity deposits		2,670,792			2,728,799			2,569,354			2,554,622			2,406,861
Time – non-brokered		461,655			488,760			407,109			353,269			381,646
Time – brokered		192,071			140,037			302,090			273,031			276,523
Total time deposits		653,726			628,797			709,199			626,300			658,169
Total deposits	$	3,324,518		$	3,357,596		$	3,278,553		$	3,180,922		$	3,065,030

BORROWINGS
Federal funds purchased and other short-term borrowings	$	—		$	—		$	—		$	85,500		$	198,500
Subordinated notes, net		79,959			79,893			79,828			79,762			79,697
Federal Home Loan Bank advances		270,000			270,000			315,000			315,000			315,000
Long-term debt		41,486			42,736			43,986			45,236			46,486
Total borrowings	$	391,445		$	392,629		$	438,814		$	525,498		$	639,683

STOCKHOLDERS’ EQUITY
Preferred stock	$	—		$	—		$	—		$	—		$	—
Common stock		3,000			3,000			3,000			3,000			3,000
Additional paid-in capital		35,072			35,619			34,960			34,322			33,685
Retained earnings		282,247			278,613			275,724			273,981			272,997
Accumulated other comprehensive loss		(82,446	)		(89,357	)		(78,331	)		(87,420	)		(85,926	)
Total stockholders’ equity	$	237,873		$	227,875		$	235,353		$	223,883		$	223,756

WEST BANCORPORATION, INC. AND SUBSIDIARY
Financial Information (unaudited)
(in thousands)
	For the Quarter Ended
CONSOLIDATED STATEMENTS OF INCOME	March 31, 2025		December 31, 2024			September 30, 2024		June 30, 2024		March 31, 2024
Interest income:
Loans, including fees	$	40,988	$	41,822		$	42,504	$	41,700	$	40,196
Securities:
Taxable		2,788		2,959			3,261		3,394		3,416
Tax-exempt		743		795			806		808		810
Interest-bearing deposits		1,617		3,740			2,041		1,666		148
Total interest income		46,136		49,316			48,612		47,568		44,570
Interest expense:
Deposits		21,423		25,706			26,076		23,943		21,559
Federal funds purchased and other short-term borrowings		—		—			115		1,950		2,183
Subordinated notes		1,105		1,106			1,112		1,105		1,108
Federal Home Loan Bank advances		2,235		2,522			2,748		2,718		2,325
Long-term debt		518		560			601		622		645
Total interest expense		25,281		29,894			30,652		30,338		27,820
Net interest income		20,855		19,422			17,960		17,230		16,750
Credit loss expense		—		1,000			—		—		—
Net interest income after credit loss expense		20,855		18,422			17,960		17,230		16,750
Noninterest income:
Service charges on deposit accounts		471		462			459		462		460
Debit card usage fees		446		471			500		490		458
Trust services		777		1,051			828		794		776
Increase in cash value of bank-owned life insurance		282		287			287		278		274
Realized securities losses, net		—		(1,172	)		—		—		—
Other income		267		331			285		322		331
Total noninterest income		2,243		1,430			2,359		2,346		2,299
Noninterest expense:
Salaries and employee benefits		7,004		7,107			6,823		7,169		6,489
Occupancy and equipment		1,963		2,095			1,926		1,852		1,447
Data processing		617		752			771		754		714
Technology and software		786		743			722		731		700
FDIC insurance		587		699			711		631		519
Professional fees		308		301			239		244		257
Director fees		206		170			223		236		199
Other expenses		1,592		1,532			1,477		1,577		1,543
Total noninterest expense		13,063		13,399			12,892		13,194		11,868
Income before income taxes		10,035		6,453			7,427		6,382		7,181
Income taxes		2,193		(644	)		1,475		1,190		1,372
Net income	$	7,842	$	7,097		$	5,952	$	5,192	$	5,809

Basic earnings per common share	$	0.47	$	0.42		$	0.35	$	0.31	$	0.35
Diluted earnings per common share	$	0.46	$	0.42		$	0.35	$	0.31	$	0.35

WEST BANCORPORATION, INC. AND SUBSIDIARY
Financial Information (unaudited)

	As of and for the Quarter Ended
COMMON SHARE DATA	March 31, 2025			December 31, 2024			September 30, 2024			June 30, 2024			March 31, 2024
Earnings per common share (basic)	$	0.47		$	0.42		$	0.35		$	0.31		$	0.35
Earnings per common share (diluted)		0.46			0.42			0.35			0.31			0.35
Dividends per common share		0.25			0.25			0.25			0.25			0.25
Book value per common share⁽¹⁾		14.06			13.54			13.98			13.30			13.31
Closing stock price		19.94			21.65			19.01			17.90			17.83
Market price/book value⁽²⁾		141.82	%		159.90	%		135.98	%		134.59	%		133.96	%
Price earnings ratio⁽³⁾		10.46			12.96			13.65			14.36			12.77
Annualized dividend yield⁽⁴⁾		5.02	%		4.62	%		5.26	%		5.59	%		5.61	%

REGULATORY CAPITAL RATIOS
Consolidated:
Total risk-based capital ratio		12.18	%		12.11	%		11.95	%		11.85	%		11.78	%
Tier 1 risk-based capital ratio		9.59			9.51			9.39			9.30			9.23
Tier 1 leverage capital ratio		8.36			7.93			8.15			8.08			8.36
Common equity tier 1 ratio		9.02			8.95			8.83			8.74			8.67
West Bank:
Total risk-based capital ratio		12.90	%		12.86	%		12.73	%		12.66	%		12.63	%
Tier 1 risk-based capital ratio		11.99			11.96			11.86			11.79			11.76
Tier 1 leverage capital ratio		10.46			9.97			10.29			10.25			10.65
Common equity tier 1 ratio		11.99			11.96			11.86			11.79			11.76

KEY PERFORMANCE RATIOS AND OTHER METRICS
Return on average assets⁽⁵⁾		0.81	%		0.68	%		0.60	%		0.53	%		0.61	%
Return on average equity⁽⁶⁾		13.84			12.24			10.41			9.50			10.63
Net interest margin^(7)(13)		2.28			1.98			1.91			1.86			1.88
Yield on interest-earning assets^(8)(13)		5.04			5.02			5.16			5.13			4.99
Cost of interest-bearing liabilities		3.25			3.57			3.84			3.83			3.70
Efficiency ratio^(9)(13)		56.37			60.79			63.28			67.14			62.04
Nonperforming assets to total assets⁽¹⁰⁾		0.00			0.00			0.01			0.01			0.01
ACL ratio⁽¹¹⁾		1.01			1.01			0.97			0.95			0.95
Loans/total assets		75.66			74.84			75.75			75.63			75.20
Loans/total deposits		90.73			89.49			92.15			94.27			97.23
Tangible common equity ratio⁽¹²⁾		5.97			5.68			5.90			5.65			5.65

^{(1) Includes accumulated other comprehensive loss.}
^{(2) Closing stock price divided by book value per common share.}
^{(3) Closing stock price divided by annualized earnings per common share (basic).}
^{(4) Annualized dividend divided by period end closing stock price.}
^{(5) Annualized net income divided by average assets.}
^{(6) Annualized net income divided by average stockholders’ equity.}
^{(7) Annualized tax-equivalent net interest income divided by average interest-earning assets.}
^{(8) Annualized tax-equivalent interest income on interest-earning assets divided by average interest-earning assets.}
^{(9) Noninterest expense (excluding other real estate owned expense and write-down of premises) divided by noninterest income (excluding net securities gains/losses and gains/losses on disposition of premises and equipment) plus tax-equivalent net interest income.}
^{(10) Total nonperforming assets divided by total assets.}
^{(11) Allowance for credit losses on loans divided by total loans.}
^{(12) Common equity less intangible assets (none held) divided by tangible assets.}
^{(13) A non-GAAP measure.}

NON-GAAP FINANCIAL MEASURES

This report contains references to financial measures that are not defined in GAAP. Such non-GAAP financial measures include the Company’s presentation of net interest income and net interest margin on a fully taxable equivalent (FTE) basis and the presentation of the efficiency ratio on an adjusted and FTE basis, excluding certain income and expenses. Management believes these non-GAAP financial measures provide useful information to both management and investors to analyze and evaluate the Company’s financial performance. These measures are considered standard measures of comparison within the banking industry. Additionally, management believes providing measures on a FTE basis enhances the comparability of income arising from taxable and nontaxable sources. Limitations associated with non-GAAP financial measures include the risks that persons might disagree as to the appropriateness of items included in these measures and that different companies might calculate these measures differently. These non-GAAP disclosures should not be considered an alternative to the Company’s GAAP results. The following table reconciles the non-GAAP financial measures of net interest income and net interest margin on a fully taxable equivalent basis and efficiency ratio on an adjusted and FTE basis.

(in thousands)	For the Quarter Ended
	March 31, 2025			December 31, 2024			September 30, 2024			June 30, 2024			March 31, 2024
Reconciliation of net interest income and net interest margin on a FTE basis to GAAP:
Net interest income (GAAP)	$	20,855		$	19,422		$	17,960		$	17,230		$	16,750
Tax-equivalent adjustment ⁽¹⁾		66			16			29			55			82
Net interest income on a FTE basis (non-GAAP)		20,921			19,438			17,989			17,285			16,832
Average interest-earning assets		3,717,441			3,910,978			3,749,688			3,731,674			3,595,954
Net interest margin on a FTE basis (non-GAAP)		2.28	%		1.98	%		1.91	%		1.86	%		1.88	%

Reconciliation of efficiency ratio on an adjusted and FTE basis to GAAP:
Net interest income on a FTE basis (non-GAAP)	$	20,921		$	19,438		$	17,989		$	17,285		$	16,832
Noninterest income		2,243			1,430			2,359			2,346			2,299
Adjustment for realized securities losses, net		—			1,172			—			—			—
Adjustment for losses on disposal of premises and equipment, net		8			—			26			21			—
Adjusted income		23,172			22,040			20,374			19,652			19,131
Noninterest expense		13,063			13,399			12,892			13,194			11,868
Efficiency ratio on an adjusted and FTE basis (non-GAAP) ⁽²⁾		56.37	%		60.79	%		63.28	%		67.14	%		62.04	%

^{(1) Computed on a tax-equivalent basis using a federal income tax rate of 21 percent, adjusted to reflect the effect of the nondeductible interest expense associated with owning tax-exempt securities and loans. Management believes the presentation of this non-GAAP measure provides supplemental useful information for proper understanding of the financial results, as it enhances the comparability of income arising from taxable and nontaxable sources.}
^{(2) The efficiency ratio expresses noninterest expense as a percent of fully taxable equivalent net interest income and noninterest income, excluding specific noninterest income and expenses. Management believes the presentation of this non-GAAP measure provides supplemental useful information for proper understanding of the Company’s financial performance. It is a standard measure of comparison within the banking industry. A lower ratio is more desirable.}

For more information contact:
Jane Funk, Executive Vice President, Treasurer and Chief Financial Officer (515) 222-5766

The MIL Network –

April 25, 2025

MIL-OSI: PSB Holdings, Inc. Reports Earnings of $0.60 Per Share for Q1 2025; Net Interest Margin Improves For Fourth Consecutive Quarter

Source: GlobeNewswire (MIL-OSI)

WAUSAU, Wis., April 24, 2025 (GLOBE NEWSWIRE) — PSB Holdings, Inc. (“PSB”) (OTCQX: PSBQ), the holding company for Peoples State Bank (“Peoples”) serving Northcentral and Southeastern Wisconsin reported first quarter earnings ending March 31, 2025 of $0.60 per common share on net income of $2.4 million, compared to $0.73 per common share on net income of $3.0 million during the fourth quarter ending December 31, 2024, and $0.39 per common share on net income of $1.6 million during the first quarter ending March 31, 2024.

PSB’s first quarter 2025 operating results reflected the following changes from the fourth quarter of 2024: (1) a stronger net interest margin as asset yields rose and funding costs declined; (2) the addition of a provision for loan losses due to loan growth; (3) higher non-interest income due to lower losses on the sale of securities and an increase in investment and insurance sale commissions; (4) higher non-interest expenses due to higher salaries and employee benefit expenses associated with commercial loan growth incentives and the addition of wealth management personnel; and (5) loan growth of 2% during the quarter.

“We are encouraged with the steady improvements in our net interest margin while also continuing solid loan growth as customers are seeing value in our relationship. We expect operating expenses to decline in the coming quarter and are cautiously optimistic for earnings growth for the remainder of 2025,” stated Scott Cattanach, President and CEO.

March 31, 2025, Highlights:

Net interest income decreased $121,000 to $10.3 million for the quarter ended March 31, 2025, from $10.4 million for the quarter ended December 31, 2024, due in part to two fewer days during the quarter. Meanwhile, asset and loan yields increased while funding costs declined slightly.

Noninterest income increased $589,000 to $1.9 million for the quarter ended March 31, 2025, compared to $1.3 million the prior quarter due to a smaller loss on the sale of securities and an increase in investment and insurance sales commissions.

Noninterest expenses increased to $967,000 to $9.0 million during the quarter ended March 31, 2025 from $8.0 million for the quarter ended December 31, 2024, reflecting higher salary and benefit expenses associated with growth incentive payments and the addition of wealth management personnel in the purchase of the Larson Financial Group, LLC.

Loans increased $18.2 million, or 2% in the first quarter ended March 31, 2025, to $1.10 billion largely due to new commercial & industrial, commercial real estate and construction and development loans. Allowance for credit losses was 1.12% of gross loans.

Non-performing assets increased $2.6 million to $13.0 million, or 0.89% of total assets at March 31, 2025 compared to the previous quarter, from addition of commercial rental real estate units undergoing a sale process.

Total deposits decreased $17.3 million to $1.13 billion at March 31, 2025 from $1.15 billion at December 31, 2024, with the decrease largely consisting of normal commercial money market deposit outflows and seasonal municipal deposit outflows.

Return on average tangible common equity was 9.21% for the quarter ended March 31, 2025, compared to 11.07% the prior quarter and 6.57% in the year ago quarter.

Tangible book value per common share was up 11.3% over the past year to $26.94 at March 31, 2025, compared to $24.21 at March 31, 2024. Additionally, PSB paid dividends totaling $0.64 per share during the past year.

On January 21, 2025, the Bank acquired Larson Financial Group, LLC, a financial advisory company based in Wausau, WI.

Balance Sheet and Asset Quality Review

Total assets decreased $6.2 million during the first quarter to $1.46 billion at March 31, 2025, compared to $1.47 billion at December 31, 2024. Cash and cash equivalents decreased $17.8 million to $22.7 million at March 31, 2025 from $40.5 million at December 31, 2024 as funds were used to originate new loans and fund the outflow of seasonal municipal deposits and normal commercial customer treasury management operations. Cash and cash equivalents increased $6.8 million from one year earlier. Investment securities available for sale decreased $6.5 million to $182.6 million at March 31, 2025, from $189.1 million one quarter earlier. Total collateralized liquidity available to meet cash demands was approximately $323 million at March 31, 2025, with an additional $323 million that could be raised in a short time frame from the brokered CDs market.

Gross loans receivable increased $19.3 million to $1.14 billion at March 31, 2025, compared to one quarter earlier, due primarily to increased commercial real estate, construction & development and commercial & industrial lending. Commercial real estate loans increased $11.3 million to $562.9 million at March 31, 2025 and gross construction and development lending increased $7.7 million to $87.1 million at March 31, 2025, compared to one quarter earlier. Commercial & industrial loans increased $7.2 million to $124.1 million at March 31, 2025. Offsetting gross loan growth, residential real estate loans decreased $3.7 million from the prior quarter to $333.7 million, municipal loans decreased $2.8 million to $12.9 million and consumer installment loans decreased $0.4 million to $4.7 million. The loan portfolio remains well diversified with commercial real estate and construction loans totaling 57.2% of gross loans, followed by residential real estate loans at 29.3% of gross loans, commercial non-real estate loans at 13.1% and consumer loans at 0.4%.

The allowance for credit losses decreased slightly to 1.12% of gross loans at March 31, 2025, from 1.13% the prior quarter. Annualized net charge-offs to average loans were 0.02% for the quarter ended March 31, 2025. Non-performing assets increased $2.6 million to $13.0 million, or 0.89% of total assets at March 31, 2025 from 0.71% at December 31, 2024. The increase reflects a loan relationship we expect to have $1.5 million in repayment in the next 6 months as collateral undergoes a sales process. No specific reserves have been established on the loan as ample collateral currently appears available. Approximately 80% of the non-performing assets consisted of four loan relationships.

Goodwill and other intangibles increased slightly during the quarter ended March 31, 2025 to $3.8 million from $2.7 million one quarter earlier. The increase in intangibles relates to the acquisition of Larson Financial Group, LLC in January 2025.

Total deposits decreased $17.3 million to $1.13 billion at March 31, 2025, from $1.15 billion at December 31, 2024. The decrease in deposits reflects a $22.9 million decrease in uninsured deposits during the first quarter composed primarily of money market deposits, consisting of normal commercial customer operation outflows, particularly with one customer accounting for $18 million of the decline who reinvested following the sale of their business in 2024. Meanwhile, brokered deposits increased $22.9 million and insured and collateralized deposits increased $5.6 million in the quarter ended March 31, 2025.

At March 31, 2025, non-interest bearing demand deposits decreased to 21.8% of total deposits from 22.6% the prior quarter, while interest-bearing demand and savings deposits remained at 29.4% of deposits.

FHLB advances increased $8.0 million to $170.3 million at March 31, 2025, compared to $162.3 million at December 31, 2024.

Tangible stockholder equity as a percentage of total tangible assets increased to 8.05% at March 31, 2025, compared to 7.76% at December 31, 2024, and 7.60% at March 31, 2024.

Tangible net book value per common share increased $2.73 to $26.94, at March 31, 2025, compared to $24.21 one year earlier, an increase of 11.3% after dividends of $0.64 were paid to shareholders. Relative to the prior quarter’s tangible book value per common share of $25.98, tangible net book value per common share increased primarily due to earnings and an increase in the fair market value in the investment portfolios. The accumulated other comprehensive loss on the investment portfolio was $16.7 million at March 31, 2025, compared to $19.3 million one quarter earlier.

Operations Review

Net interest income decreased to $10.3 million (on a net margin of 3.03%) for the first quarter of 2025, from $10.4 million (on a net margin of 2.96%) for the fourth quarter of 2024, and increased from $9.3 million (on a net margin of 2.80%) for the first quarter of 2024. The lower net interest income in the current period while net margin also increased primarily relates to a lower level of earnings assets during the quarter. Meanwhile, earning asset yields increased to 5.35% during the first quarter of 2025 from 5.29% the prior period and interest bearing deposit and borrowing costs decreased four basis points to 3.02% compared to 3.06% during the fourth quarter of 2024. Relative to one year earlier, earning asset yields were up 23 basis points while interest bearing deposit and borrowing costs increased two basis points.

The increase in earning asset yields was due to higher yields on loan originations, loan renewals, security purchases and security repricing. Loan yields increased during the first quarter of 2025 to 5.82% from 5.80% for the fourth quarter of 2024. Taxable security yields were 3.35% for the quarter ended March 31, 2025, compared to 3.16% for the quarter ended December 31, 2024, while tax-exempt security yields increased to 3.35% for the quarter ended March 31, 2025 from 3.31% the previous quarter. The increase in taxable security yields reflects some security restructuring activity from security sales in the prior quarter more fully realized in the current quarter.

The cost of all deposits increased slightly to 2.09% for the quarter ended March 31, 2025, compared to 2.08% the prior quarter, while the overall cost of funds decreased four basis points to 3.02% from 3.06% during the same time period. Deposit costs for time deposits decreased during the first quarter with time deposits decreasing five basis points to 3.97% and money market deposits decreasing 12 basis points to 2.44%. Savings and demand deposits increased three basis points to 1.87%. FHLB advances increased one basis point to 4.41% for the quarter ended March 31, 2025.

Total noninterest income increased $589,000 during the first quarter of 2025 to $1.9 million, from $1.3 million for the fourth quarter of 2024 due primarily to a lower net loss on sale of securities and increased investment and insurance sales commissions of $100,000. Mortgage banking income decreased to $250,000 in the first quarter from $414,000 the prior quarter while various increases in nominal revenue sources accounted for the remaining increase in noninterest income. At March 31, 2025, the Bank serviced $373.4 million in secondary market residential mortgage loans for others which provide fee income.

Noninterest expenses increased $967,000 to $9.0 million for the first quarter of 2025, compared to $8.0 million for the fourth quarter of 2024, and increased $644,000 from $8.3 million for the first quarter of 2024. On a linked quarter basis, December 2024 quarter salary and benefits expense was reduced from year-end final adjustments to incentive estimates, while March 2025 quarterly salary and benefits increased as commercial growth, and related incentives, were greater than budgeted. The LFG acquisition also increased wage and benefit expense. Intangible amortization increased slightly during the first quarter related to the acquisition. Occupancy and facilities costs increased $95,000, data processing and other office operation expenses increased $90,000 and various other noninterest expenses increased $177,000 during the first quarter ended March 31, 2025.

Taxes decreased $51,000 during the first quarter to $473,000, from $524,000 one quarter earlier. The effective tax rate for the quarter ended March 31, 2025, was 15.6% compared to 14.4% for the fourth quarter ended December 31, 2024.

About PSB Holdings, Inc.

PSB Holdings, Inc. is the parent company of Peoples State Bank. Peoples is a community bank headquartered in Wausau, Wisconsin, serving northcentral and southeastern Wisconsin from twelve full-service banking locations in Marathon, Oneida, Vilas, Portage, Milwaukee and Waukesha counties and a loan production office in Dane County. Peoples also provides investment and insurance products, along with retirement planning services, through Peoples Wealth Management, a division of Peoples. PSB Holdings, Inc. is traded under the stock symbol PSBQ on the OTCQX Market. More information about PSB, its management, and its financial performance may be found at www.psbholdingsinc.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on current expectations, estimates and projections about PSB’s business based, in part, on assumptions made by management and include, without limitation, statements with respect to the potential growth of PSB, its future profits, expected stock repurchase levels, future dividend rates, future interest rates, and the adequacy of its capital position. Forward-looking statements can be affected by known and unknown risks, uncertainties, and other factors, including, but not limited to, strength of the economy, the effects of government policies, including interest rate policies, risks associated with the execution of PSB’s vision and growth strategy, including with respect to current and future M&A activity, and risks associated with global economic instability. The forward-looking statements in this press release speak only as of the date on which they are made and PSB does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this release.


PSB Holdings, Inc.
Consolidated Balance Sheets
March 31, 2025, September 30, June 30, and March 31, 2024, unaudited, December 31, 2024 derived from audited financial statements

	Mar. 31,			Dec. 31,			Sep. 30,			Jun. 30,			Mar. 31,
(dollars in thousands, except per share data)		2025			2024			2024			2024			2024

Assets

Cash and due from banks	$	19,628		$	21,414		$	23,554		$	16,475		$	13,340
Interest-bearing deposits		702			3,724			5,126			251			105
Federal funds sold		2,351			15,360			58,434			69,249			2,439

Cash and cash equivalents		22,681			40,498			87,114			85,975			15,884
Securities available for sale (at fair value)		182,594			189,086			174,911			165,177			165,566
Securities held to maturity (fair values of $77,375, $79,654, $82,389, $79,993 and $81,234 respectively)		85,373			86,748			86,847			86,825			87,104
Equity securities		2,847			2,782			1,752			1,661			1,474
Loans held for sale		734			217			–			2,268			865
Loans receivable, net (allowance for credit losses of $12,392, $12,342, $12,598, $12,597 and $12,494 respectively)		1,096,422			1,078,204			1,057,974			1,074,844			1,081,394
Accrued interest receivable		5,184			5,042			4,837			5,046			5,467
Foreclosed assets		300			–			–			–			–
Premises and equipment, net		13,522			13,805			14,065			14,048			13,427
Mortgage servicing rights, net		1,717			1,742			1,727			1,688			1,657
Federal Home Loan Bank stock (at cost)		8,825			8,825			8,825			8,825			7,006
Cash surrender value of bank-owned life insurance		24,897			24,732			24,565			24,401			24,242
Other intangibles		353			195			212			229			249
Goodwill		3,495			2,541			2,541			2,541			2,541
Other assets		10,828			11,539			10,598			12,111			11,682

TOTAL ASSETS	$	1,459,772		$	1,465,956		$	1,475,968		$	1,485,639		$	1,418,558

Liabilities

Non-interest-bearing deposits	$	245,672		$	259,515		$	265,078		$	250,435		$	247,608
Interest-bearing deposits		884,364			887,834			874,035			901,886			865,744

Total deposits		1,130,036			1,147,349			1,139,113			1,152,321			1,113,352

Federal Home Loan Bank advances		170,250			162,250			181,250			184,900			158,250
Other borrowings		6,343			6,872			6,128			5,775			8,096
Senior subordinated notes		4,783			4,781			4,779			4,778			4,776
Junior subordinated debentures		13,049			13,023			12,998			12,972			12,947
Allowance for credit losses on unfunded commitments		672			672			477			477			477
Accrued expenses and other liabilities		13,554			14,723			12,850			13,069			10,247

Total liabilities		1,338,687			1,349,670			1,357,595			1,374,292			1,308,145

Stockholders’ equity

Preferred stock – no par value:
Authorized – 30,000 shares; Issued – 7,200 shares
Outstanding – 7,200 shares, respectively		7,200			7,200			7,200			7,200			7,200
Common stock – no par value with a stated value of $1.00 per share:
Authorized – 18,000,000 shares; Issued – 5,490,798 shares
Outstanding – 4,084,708, 4,092,977, 4,105,594, 4,128,382 and 4,147,649 shares, respectively		1,830			1,830			1,830			1,830			1,830
Additional paid-in capital		8,608			8,610			8,567			8,527			8,466
Retained earnings		142,277			139,838			138,142			135,276			134,271
Accumulated other comprehensive income (loss), net of tax		(16,692	)		(19,314	)		(15,814	)		(20,503	)		(20,775	)
Treasury stock, at cost – 1,406,090, 1,397,821, 1,385,204, 1,362,416 and 1,343,149 shares, respectively		(22,138	)		(21,878	)		(21,552	)		(20,983	)		(20,579	)

Total stockholders’ equity		121,085			116,286			118,373			111,347			110,413

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	1,459,772		$	1,465,956		$	1,475,968		$	1,485,639		$	1,418,558

PSB Holdings, Inc.
Consolidated Statements of Income

	Quarter Ended
	Mar. 31,			Dec. 31,			Sep. 30,		Jun. 30,		Mar. 31,
(dollars in thousands, except per share data – unaudited)		2025			2024			2024		2024		2024

Interest and dividend income:
Loans, including fees	$	15,782		$	15,646		$	15,634	$	15,433	$	15,109
Securities:
Taxable		1,641			1,545			1,345		1,295		1,197
Tax-exempt		517			522			522		521		526
Other interest and dividends		345			948			699		265		343

Total interest and dividend income		18,285			18,661			18,200		17,514		17,175

Interest expense:
Deposits		5,884			6,027			5,905		5,838		6,082
FHLB advances		1,792			1,890			2,038		1,860		1,450
Other borrowings		47			57			57		58		60
Senior subordinated notes		59			59			59		58		59
Junior subordinated debentures		248			252			252		255		251

Total interest expense		8,030			8,285			8,311		8,069		7,902

Net interest income		10,255			10,376			9,889		9,445		9,273
Provision for credit losses		117			–			–		100		95

Net interest income after provision for credit losses		10,138			10,376			9,889		9,345		9,178

Noninterest income:
Service fees		358			362			367		350		336
Mortgage banking income		250			414			433		433		308
Investment and insurance sales commissions		326			226			230		222		121
Net loss on sale of securities		(1	)		(511	)		–		–		(495	)
Increase in cash surrender value of life insurance		163			166			165		159		157
Other noninterest income		770			620			648		742		617

Total noninterest income		1,866			1,277			1,843		1,906		1,044

Noninterest expense:
Salaries and employee benefits		5,302			4,691			4,771		5,167		5,123
Occupancy and facilities		786			691			757		733		721
Loss (gain) on foreclosed assets		–			–			1		–		–
Data processing and other office operations		1,201			1,111			1,104		1,047		1,022
Advertising and promotion		129			141			164		171		129
Amortization of intangibles		23			17			17		20		24
Other noninterest expenses		1,528			1,351			1,337		1,257		1,306

Total noninterest expense		8,969			8,002			8,151		8,395		8,325

Income before provision for income taxes		3,035			3,651			3,581		2,856		1,897
Provision for income taxes		473			524			593		410		169

Net income	$	2,562		$	3,127		$	2,988	$	2,446	$	1,728
Preferred stock dividends declared	$	122		$	122		$	122	$	122	$	122

Net income available to common shareholders	$	2,440		$	3,005		$	2,866	$	2,324	$	1,606
Basic earnings per common share	$	0.60		$	0.73		$	0.69	$	0.56	$	0.39
Diluted earnings per common share	$	0.60		$	0.73		$	0.69	$	0.56	$	0.39

PSB Holdings, Inc.
Quarterly Financial Summary
(dollars in thousands, except per share data)	Quarter ended
	Mar. 31,			Dec. 31,			Sep. 30,			Jun. 30,			Mar. 31,
Earnings and dividends:		2025			2024			2024			2024			2024

Interest income	$	18,285		$	18,661		$	18,200		$	17,514		$	17,175
Interest expense	$	8,030		$	8,285		$	8,311		$	8,069		$	7,902
Net interest income	$	10,255		$	10,376		$	9,889		$	9,445		$	9,273
Provision for credit losses	$	117		$	–		$	–		$	100		$	95
Other noninterest income	$	1,866		$	1,277		$	1,843		$	1,906		$	1,044
Other noninterest expense	$	8,969		$	8,002		$	8,151		$	8,395		$	8,325
Net income available to common shareholders	$	2,440		$	3,005		$	2,866		$	2,324		$	1,606

Basic earnings per common share (3)	$	0.60		$	0.73		$	0.69		$	0.56		$	0.39
Diluted earnings per common share (3)	$	0.60		$	0.73		$	0.69		$	0.56		$	0.39
Dividends declared per common share (3)	$	–		$	0.32		$	–		$	0.32		$	–
Tangible net book value per common share (4)	$	26.94		$	25.98		$	26.41		$	24.55		$	24.21

Semi-annual dividend payout ratio		n/a			23.27	%		n/a			33.61	%		n/a
Average common shares outstanding		4,088,824			4,094,360			4,132,218			4,139,456			4,154,702

Balance sheet – average balances:
Loans receivable, net of allowances for credit loss	$	1,091,533		$	1,064,619		$	1,066,795		$	1,088,013		$	1,081,936
Assets	$	1,462,862		$	1,479,812		$	1,445,613		$	1,433,749		$	1,429,437
Deposits	$	1,140,397		$	1,151,450		$	1,110,854		$	1,111,240		$	1,138,010
Stockholders’ equity	$	118,576		$	118,396		$	114,458		$	110,726		$	109,473

Performance ratios:
Return on average assets (1)		0.71	%		0.84	%		0.82	%		0.69	%		0.49	%
Return on average common stockholders’ equity (1)		8.88	%		10.75	%		10.63	%		9.03	%		6.32	%
Return on average tangible common stockholders’ equity (1)(4)		9.21	%		11.07	%		10.96	%		9.34	%		6.57	%
Net loan charge-offs to average loans (1)		0.02	%		0.02	%		0.00	%		0.00	%		0.00	%
Nonperforming loans to gross loans		1.15	%		0.95	%		0.97	%		1.15	%		1.08	%
Nonperforming assets to total assets		0.89	%		0.71	%		0.71	%		0.84	%		0.83	%
Allowance for credit losses to gross loans		1.12	%		1.13	%		1.18	%		1.16	%		1.14	%
Nonperforming assets to tangible equity plus the allowance for credit losses (4)		10.71	%		8.85	%		8.71	%		11.09	%		10.59	%
Net interest rate margin (1)(2)		3.03	%		2.96	%		2.90	%		2.84	%		2.80	%
Net interest rate spread (1)(2)		2.33	%		2.23	%		2.16	%		2.15	%		2.12	%
Service fee revenue as a percent of average demand deposits (1)		0.58	%		0.53	%		0.56	%		0.56	%		0.54	%
Noninterest income as a percent of gross revenue		9.26	%		6.40	%		9.20	%		9.81	%		5.73	%
Efficiency ratio (2)		72.88	%		67.59	%		68.43	%		72.52	%		78.93	%
Noninterest expenses to average assets (1)		2.49	%		2.15	%		2.24	%		2.35	%		2.34	%
Average stockholders’ equity less accumulated other comprehensive income (loss) to average assets		9.22	%		9.08	%		9.06	%		9.03	%		8.98	%
Tangible equity to tangible assets (4)		8.05	%		7.76	%		7.85	%		7.32	%		7.60	%

Stock price information:

High	$	26.50		$	27.90		$	25.00		$	21.40		$	22.50
Low	$	25.60		$	25.00		$	20.30		$	19.75		$	20.05
Last trade value at quarter-end	$	25.70		$	26.50		$	25.00		$	20.40		$	21.25

^{(1) Annualized}
^{(2) The yield on tax-exempt loans and securities is computed on a tax-equivalent basis using a federal tax rate of 21%.}
^{(3) Due to rounding, cumulative quarterly per share performance may not equal annual per share totals.}
^{(4) Tangible stockholders’ equity excludes goodwill and other intangibles.}

PSB Holdings, Inc.
Consolidated Statements of Comprehensive Income

	Quarter Ended
	Mar. 31,			Dec. 31,			Sep. 30,			Jun. 30,			Mar. 31,
(dollars in thousands – unaudited)		2025			2024			2024			2024			2024

Net income	$	2,562		$	3,127		$	2,988		$	2,446		$	1,728

Other comprehensive income, net of tax:

Unrealized gain (loss) on securities available for sale		2,551			(3,955	)		4,738			184			(615	)

Reclassification adjustment for security loss included in net income		1			404			–			–			391

Accretion of unrealized loss included in net income on securities available for sale deferred tax adjustment for Wisconsin Act 19		–			(76	)		–			–			(35	)

Amortization of unrealized loss included in net income on securities available for sale transferred to securities held to maturity		89			90			90			89			91

Unrealized gain (loss) on interest rate swap		(6	)		65			(101	)		39			122

Reclassification adjustment of interest rate swap settlements included in earnings		(13	)		(27	)		(38	)		(40	)		(41	)


Other comprehensive income (loss)		2,622			(3,499	)		4,689			272			(87	)

Comprehensive income (loss)	$	5,184		$	(372	)	$	7,677		$	2,718		$	1,641

PSB Holdings, Inc.
Nonperforming Assets as of:
	Mar 31,			Dec 31,			Sep 30,			Jun 30,			Mar 31,
(dollars in thousands)		2025			2024			2024			2024			2024

Nonaccrual loans (excluding restructured loans)	$	12,404		$	10,109		$	10,116		$	12,184		$	11,498
Nonaccrual restructured loans		17			18			25			28			30
Restructured loans not on nonaccrual		280			286			292			299			304
Accruing loans past due 90 days or more		–			–			–			–			–

Total nonperforming loans		12,701			10,413			10,433			12,511			11,832
Other real estate owned		300			–			–			–			–

Total nonperforming assets	$	13,001		$	10,413		$	10,433		$	12,511		$	11,832

Nonperforming loans as a % of gross loans receivable		1.15	%		0.95	%		0.97	%		1.15	%		1.08	%
Total nonperforming assets as a % of total assets		0.89	%		0.71	%		0.71	%		0.84	%		0.83	%
Allowance for credit losses as a % of nonperforming loans		97.57	%		118.52	%		120.75	%		100.69	%		105.59	%

PSB Holdings, Inc.
Nonperforming Assets >= $500,000 net book value before specific reserves
At March 31, 2025
(dollars in thousands)
		Gross			Specific
Collateral Description	Asset Type	Principal			Reserves

Real estate – Recreational Facility	Nonaccrual		4,051			148
Real estate – Independent Auto Repair	Nonaccrual		514			0
Real estate – Dealership	Nonaccrual		2,708			560
Real estate – Rental Units	Nonaccrual		3,077			0


Total listed nonperforming assets		$	10,350		$	708
Total bank wide nonperforming assets		$	13,001		$	1,055
Listed assets as a % of total nonperforming assets			80	%		67	%

PSB Holding, Inc.
Loan Composition by Collateral Type
Quarter-ended (dollars in thousands)	Mar 31, 2025			Dec 31, 2024			Sep 30, 2024			Jun 30, 2024			Mar 31, 2024

Commercial:
Commercial and industrial	$	124,074		$	116,864		$	115,234		$	125,508		$	118,821
Agriculture		11,632			11,568			11,203			11,480			12,081
Municipal		12,878			15,733			12,596			11,190			28,842

Total Commercial		148,584			144,165			139,033			148,178			159,744

Commercial Real Estate:
Commercial real estate		562,901			551,641			541,577			544,171			546,257
Construction and development		87,080			79,377			60,952			70,540			63,375

Total Commercial Real Estate		649,981			631,018			602,529			614,711			609,632

Residential real estate:
Residential		268,490			271,643			269,954			270,944			274,300
Construction and development		26,884			28,959			34,655			36,129			34,158
HELOC		38,364			36,887			36,734			33,838			31,357

Total Residential Real Estate		333,738			337,489			341,343			340,911			339,815

Consumer installment		4,683			5,060			4,770			4,423			4,867

Subtotals – Gross loans		1,136,986			1,117,732			1,087,675			1,108,223			1,114,058
Loans in process of disbursement		(28,752	)		(27,791	)		(17,836	)		(21,484	)		(20,839	)

Subtotals – Disbursed loans		1,108,234			1,089,941			1,069,839			1,086,739			1,093,219
Net deferred loan costs		580			605			733			702			669
Allowance for credit losses		(12,392	)		(12,342	)		(12,598	)		(12,597	)		(12,494	)

Total loans receivable	$	1,096,422		$	1,078,204		$	1,057,974		$	1,074,844		$	1,081,394

PSB Holding, Inc.
Selected Commercial Real Estate Loans by Purpose

	Mar 31,				Dec 31,				Sept 30,				June 30,				Mar 31,
(dollars in thousands)	2025				2024				2024				2024				2024

	Total Exposure		% of Portfolio (1)		Total Exposure		% of Portfolio (1)		Total Exposure		% of Portfolio (1)		Total Exposure		% of Portfolio (1)		Total Exposure		% of Portfolio (1)
Multi Family	$	143,674	13.9	%	$	140,087	14.0	%	$	140,307	14.7	%	$	146,873	15.2	%	$	142,001	14.4	%
Industrial and Warehousing		100,494	9.7			88,297	8.8			86,818	9.1			86,025	8.9			85,409	8.6
Retail		40,779	3.9			33,991	3.4			33,020	3.5			34,846	3.6			33,177	3.4
Hotels		30,928	3.0			31,101	3.1			31,611	3.3			34,613	3.6			35,105	3.6
Office		7,254	0.7			6,234	0.6			6,378	0.7			6,518	0.7			6,655	0.7

^{(1) Percentage of commercial and commercial real estate portfolio and commitments.}

PSB Holdings, Inc.
Deposit Composition

Insured and Collateralized Deposits	March 31,				December 31,				September 30,				June 30,				March 31,
(dollars in thousands)	2025				2024				2024				2024				2024
	$		%		$		%		$		%		$		%		$		%

Non-interest bearing demand	$	206,562	18.3	%	$	204,167	17.8	%	$	210,534	18.5	%	$	202,343	17.5	%	$	199,076	17.8	%
Interest-bearing demand and savings		314,957	27.9	%		315,900	27.6	%		305,631	26.8	%		304,392	26.5	%		318,673	28.7	%
Money market deposits		118,047	10.4	%		141,024	12.3	%		138,376	12.2	%		137,637	12.0	%		143,167	12.9	%
Retail and local time deposits <= $250		158,066	14.0	%		155,099	13.5	%		155,988	13.7	%		149,298	13.0	%		148,404	13.3	%

Total core deposits		797,632	70.6	%		816,190	71.2	%		810,529	71.2	%		793,670	69.0	%		809,320	72.7	%
Retail and local time deposits > $250		26,750	2.3	%		25,500	2.2	%		23,500	2.1	%		22,500	2.0	%		24,508	2.3	%
Broker & national time deposits <= $250		1,241	0.1	%		1,241	0.1	%		1,241	0.1	%		1,490	0.1	%		2,229	0.2	%
Broker & national time deposits > $250		79,090	7.0	%		56,164	4.9	%		56,164	4.9	%		56,328	4.9	%		61,752	5.5	%

Totals	$	904,713	80.0	%	$	899,095	78.4	%	$	891,434	78.3	%	$	873,988	76.0	%	$	897,809	80.7	%

PSB Holdings, Inc.
Deposit Composition

Uninsured Deposits	March 31,				December 31,				September 30,				June 30,				March 31,
(dollars in thousands)	2025				2024				2024				2024				2024
	$		%		$		%		$		%		$		%		$		%

Non-interest bearing demand	$	39,110	3.5	%	$	55,348	4.8	%	$	54,544	4.8	%	$	48,092	4.1	%	$	48,532	4.4	%
Interest-bearing demand and savings		17,262	1.5	%		20,934	1.8	%		18,317	1.6	%		32,674	2.8	%		20,535	1.8	%
Money market deposits		150,222	13.3	%		153,334	13.4	%		157,489	13.8	%		177,954	15.4	%		124,766	11.2	%
Retail and local time deposits <= $250		–	0.0	%		–	0.0	%		–	0.0	%		–	0.0	%		–	0.0	%

Total core deposits		206,594	18.3	%		229,616	20.0	%		230,350	20.2	%		258,720	22.3	%		193,833	17.4	%
Retail and local time deposits > $250		18,729	1.7	%		18,638	1.6	%		17,329	1.5	%		19,613	1.7	%		21,710	1.9	%
Broker & national time deposits <= $250		–	0.0	%		–	0.0	%		–	0.0	%		–	0.0	%		–	0.0	%
Broker & national time deposits > $250		–	0.0	%		–	0.0	%		–	0.0	%		–	0.0	%		–	0.0	%

Totals	$	225,323	20.0	%	$	248,254	21.6	%	$	247,679	21.7	%	$	278,333	24.0	%	$	215,543	19.3	%

PSB Holdings, Inc.
Deposit Composition

Total Deposits	March 31,				December 31,				September 30,				June 30,				March 31,
(dollars in thousands)	2025				2024				2024				2024				2024
	$		%		$		%		$		%		$		%		$		%

Non-interest bearing demand	$	245,672	21.8	%	$	259,515	22.6	%	$	265,078	23.3	%	$	250,435	21.6	%	$	247,608	22.2	%
Interest-bearing demand and savings		332,219	29.4	%		336,834	29.4	%		323,948	28.4	%		337,066	29.3	%		339,208	30.5	%
Money market deposits		268,269	23.7	%		294,358	25.7	%		295,865	26.0	%		315,591	27.4	%		267,933	24.1	%
Retail and local time deposits <= $250		158,066	14.0	%		155,099	13.5	%		155,988	13.7	%		149,298	13.0	%		148,404	13.3	%

Total core deposits		1,004,226	88.9	%		1,045,806	91.2	%		1,040,879	91.4	%		1,052,390	91.3	%		1,003,153	90.1	%
Retail and local time deposits > $250		45,479	4.0	%		44,138	3.8	%		40,829	3.6	%		42,113	3.7	%		46,218	4.2	%
Broker & national time deposits <= $250		1,241	0.1	%		1,241	0.1	%		1,241	0.1	%		1,490	0.1	%		2,229	0.2	%
Broker & national time deposits > $250		79,090	7.0	%		56,164	4.9	%		56,164	4.9	%		56,328	4.9	%		61,752	5.5	%

Totals	$	1,130,036	100.0	%	$	1,147,349	100.0	%	$	1,139,113	100.0	%	$	1,152,321	100.0	%	$	1,113,352	100.0	%

PSB Holdings, Inc.
Average Balances ($000) and Interest Rates
(dollars in thousands)


	Quarter ended March 31, 2025							Quarter ended December 31, 2024							Quarter ended March 31, 2024
	Average					Yield /		Average					Yield /		Average					Yield /
	Balance			Interest		Rate		Balance			Interest		Rate		Balance			Interest		Rate
Assets
Interest-earning assets:
Loans (1)(2)	$	1,103,895		$	15,830	5.82	%	$	1,077,242		$	15,693	5.80	%	$	1,094,321		$	15,199	5.59	%
Taxable securities		198,426			1,641	3.35	%		194,272			1,545	3.16	%		171,788			1,197	2.80	%
Tax-exempt securities (2)		79,282			654	3.35	%		79,475			661	3.31	%		80,434			666	3.33	%
FHLB stock		8,825			241	11.08	%		8,825			227	10.23	%		6,499			165	10.21	%
Other		8,960			104	4.71	%		58,405			721	4.91	%		12,885			178	5.56	%

Total (2)		1,399,388			18,470	5.35	%		1,418,219			18,847	5.29	%		1,365,927			17,405	5.12	%

Non-interest-earning assets:
Cash and due from banks		16,292							15,500							17,367
Premises and equipment, net		13,728							14,001							13,183
Cash surrender value ins		24,795							24,625							24,144
Other assets		21,021							20,090							21,201
Allowance for credit losses		(12,362	)						(12,623	)						(12,385	)

Total	$	1,462,862						$	1,479,812						$	1,429,437

Liabilities & stockholders’ equity
Interest-bearing liabilities:
Savings and demand deposits	$	339,909		$	1,567	1.87	%	$	319,777		$	1,479	1.84	%	$	350,497		$	1,672	1.92	%
Money market deposits		280,396			1,685	2.44	%		304,897			1,961	2.56	%		274,186			1,897	2.78	%
Time deposits		268,821			2,632	3.97	%		256,201			2,587	4.02	%		264,657			2,513	3.82	%
FHLB borrowings		164,968			1,792	4.41	%		170,701			1,890	4.40	%		142,926			1,450	4.08	%
Other borrowings		6,321			47	3.02	%		6,848			57	3.31	%		8,554			60	2.82	%
Senior sub. notes		4,782			59	5.00	%		4,780			59	4.91	%		4,775			59	4.97	%
Junior sub. debentures		13,036			248	7.72	%		13,011			252	7.71	%		12,934			251	7.81	%

Total		1,078,233			8,030	3.02	%		1,076,215			8,285	3.06	%		1,058,529			7,902	3.00	%

Non-interest-bearing liabilities:
Demand deposits		251,271							270,575							248,670
Other liabilities		14,782							14,626							12,765
Stockholders’ equity		118,576							118,396							109,473

Total	$	1,462,862						$	1,479,812						$	1,429,437

Net interest income				$	10,440						$	10,562						$	9,503
Rate spread						2.33	%						2.23	%						2.12	%
Net yield on interest-earning assets						3.03	%						2.96	%						2.80	%

^{(1) Nonaccrual loans are included in the daily average loan balances outstanding.}
^{(2) The yield on federally tax-exempt loans and securities is computed on a tax-equivalent basis using a federal tax rate of 21%.}

Investor Relations Contact
PSB Holdings, Inc.
1905 Stewart Avenue
Wausau, WI 54401
888.929.9902
InvestorRelations@bankpeoples.com

The MIL Network –

April 25, 2025

MIL-OSI: CALIFORNIA BANCORP REPORTS NET INCOME OF $16.9 MILLION FOR THE FIRST QUARTER OF 2025

Source: GlobeNewswire (MIL-OSI)

San Diego, Calif., April 24, 2025 (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 first quarter of 2025.

The Company reported net income of $16.9 million, or $0.52 per diluted share, for the first quarter of 2025, compared to $16.8 million, or $0.51 per diluted share for the fourth quarter of 2024, and net income of $4.9 million, or $0.26 per diluted share for the first quarter of 2024.

“I’m pleased to report our strong first quarter earnings of $16.9 million, the second strong quarter of combined financial results since the close of our merger last July,” said David Rainer, Executive Chairman of the Company and Bank. “We continue to execute on our strategy of derisking the consolidated balance sheet through decreasing our exposure in the Sponsor Finance portfolio, and reducing our reliance on brokered deposits. We remain focused on building tangible book value, which increased to $12.29 per common share in the first quarter, up $0.58 from the prior quarter and $1.37 in the eight months since the merger closed.”

“We continue with our successful integration, as demonstrated by the strong performance achieved in our first two quarters of combined operations,” said Steven Shelton, CEO of the Company and Bank. “Markets have been volatile lately with the recent changes in tariff policies and given the fluid dynamics of the situation we are reaching out to our clients to assess the potential impact of these changing policies on their businesses. As always, we continue to focus on providing them the highest level of outstanding service, and on building shareholder value.”

First Quarter 2025 Highlights

	●	Net income of $16.9 million or $0.52 diluted earnings per share for the first quarter.
	●	Net interest margin of 4.65%, compared with 4.61% in the prior quarter; average total loan yield of 6.61% compared with 6.84% in the prior quarter.
	●	Reversal of credit losses of $3.8 million for the first quarter, compared with $3.8 million for the prior quarter.
	●	Return on average assets of 1.71%, compared with 1.60% in the prior quarter.
	●	Return on average common equity of 13.18%, compared with 13.21% in the prior quarter.
	●	Efficiency ratio (non-GAAP¹) of 55.6% compared with 57.4% in the prior quarter; excluding merger related expenses the efficiency ratio was 55.6%, compared with 55.9% in the prior quarter.
	●	Tangible book value per common share (non-GAAP¹) of $12.29 at March 31, 2025, up $0.58 from $11.71 at December 31, 2024.
	●	Total assets of $3.98 billion at March 31, 2025, compared with $4.03 billion at December 31, 2024.
	●	Total loans, including loans held for sale of $3.07 billion at March 31, 2025, compared with $3.16 billion at December 31, 2024.
	●	Nonperforming assets to total assets ratio of 0.68% at March 31, 2025, compared with 0.76% at December 31, 2024.
	●	Allowance for credit losses (“ACL”) was 1.57% of total loans held for investment at March 31, 2025; allowance for loan losses (“ALL”) was 1.49% of total loans held for investment at March 31, 2025.
	●	Total deposits of $3.34 billion at March 31, 2025, decreased $56.3 million or 1.7% compared with $3.40 billion at December 31, 2024.
	●	Noninterest-bearing demand deposits of $1.29 billion at March 31, 2025, an increase of $35.7 million or 2.8% from December 31, 2024; noninterest bearing deposits represented 38.7% of total deposits, compared with $1.26 billion, or 37.0% of total deposits at December 31, 2024.
	●	Total brokered deposits of $13.8 million, a decrease of $107.4 million from December 31, 2024.
	●	Cost of deposits was 1.59%, compared with 1.87% in the prior quarter.
	●	Cost of funds was 1.72%, compared with 1.99% in the prior quarter.
	●	The Company’s preliminary capital ratios at March 31, 2025 exceed the minimums required to be “well-capitalized,” the highest regulatory capital category.

First Quarter Operating Results

Net Income

Net income for the first quarter of 2025 was $16.9 million, or $0.52 per diluted share, compared to $16.8 million, or $0.51 per diluted share in the fourth quarter of 2024. Pre-tax, pre-provision income (non-GAAP¹) for the first quarter was $19.9 million, an increase of $481 thousand from the prior quarter. Excluding the merger and related expenses, the adjusted pre-tax, pre-provision income (non-GAAP¹) for the first quarter was $19.9 million, a decrease of $162 thousand from the prior quarter. The net income and diluted earnings per share increases were largely driven by the merger with predecessor California BanCorp (the “Merger”) and the operating results since the closing date of the Merger.

Net Interest Income and Net Interest Margin

Net interest income for the first quarter of 2025 was $42.3 million, compared with $44.5 million in the prior quarter. The decrease in net interest income was primarily due to a $5.7 million decrease in total interest and dividend income, partially offset by a $3.4 million decrease in total interest expense in the first quarter of 2025, as compared to the prior quarter. During the first quarter of 2025, loan interest income decreased by $4.1 million, including a decrease of $421 thousand of accretion income from the net purchase accounting discounts on acquired loans, total debt securities income decreased $174 thousand, and interest and dividend income from other financial institutions decreased $1.5 million. The decrease in interest income was mainly due to decreases in average loan balances and average deposits in other financial institutions. Average total interest-earning assets decreased $160.8 million in the first quarter of 2025, the result of a $75.2 million decrease in average total loans, a $8.5 million decrease in average total debt securities, a $105.5 million decrease in average deposits in other financial institutions, partially offset by a $27.1 million increase in average Fed funds sold/resale agreements and a $1.3 million increase in average restricted stock investments and other bank stock. The decrease in interest expense for the first quarter of 2025 was primarily due to a $3.4 million decrease in interest expense on interest-bearing deposits, the result of a $151.1 million decrease in average interest-bearing deposits and a 39 basis point decrease in average interest-bearing deposit costs in the first quarter of 2025.

Net interest margin for the first quarter of 2025 was 4.65%, compared with 4.61% in the prior quarter. The increase was primarily related to a 27 basis point decrease in the cost of funds, partially offset by a 22 basis point decrease in the total interest-earning assets yield. The yield on total average interest-earning assets in the first quarter of 2025 was 6.26%, compared with 6.48% in the prior quarter. The yield on average total loans in the first quarter of 2025 was 6.61%, a decrease of 23 basis points from 6.84% in the prior quarter. Accretion income from the net purchase accounting discounts on acquired loans was $5.7 million, increasing the yield on average total loans by 62 basis points; the net amortization expense from the purchase accounting discounts on acquired subordinated debt and acquired time deposits premium increased the interest expense by $526 thousand, the combination of which increased the net interest margin by 57 basis points in the first quarter of 2025. In the prior quarter, accretion income from the net purchase accounting discounts on acquired loans was $6.1 million, increasing the yield on average total loans by 76 basis points; the net amortization expense from the purchase accounting discounts on acquired subordinated debt and acquired time deposits premium increased the interest expense by $467 thousand, the combination of which increased the net interest margin by 58 basis points.

Cost of funds for the first quarter of 2025 was 1.72%, a decrease of 27 basis points from 1.99% in the prior quarter. The decrease was primarily driven by a 39 basis point decrease in the cost of average interest-bearing deposits, partially offset by an increase of 9 basis points in the cost of total borrowings, which was driven primarily by the amortization expense of $559 thousand from the purchase accounting discounts on acquired subordinated debt which increased the cost on total borrowings by 7 basis points. Average noninterest-bearing demand deposits decreased $27.7 million to $1.26 billion and represented 37.4% of total average deposits for the first quarter of 2025, compared with $1.28 billion and 36.3%, respectively, in the prior quarter; average interest-bearing deposits decreased $151.1 million to $2.10 billion during the first quarter of 2025. The total cost of deposits in the first quarter of 2025 was 1.59%, a decrease of 28 basis points from 1.87% in the prior quarter. The cost of total interest-bearing deposits decreased primarily due to the Company’s deposit repricing strategy and the ongoing pay off of high cost brokered deposits in the first quarter of 2025.

Average total borrowings increased $607 thousand to $70.0 million in the first quarter of 2025, primarily due to the amortization related to the purchase accounting discounts on acquired subordinated debt. The average cost of total borrowings was 8.06% for the first quarter of 2025, up from 7.97% in the prior quarter.

Reversal of Credit Losses

The Company recorded a reversal of credit losses of $3.8 million in both the first quarter of 2025 and the prior quarter. Total net charge-offs were $1.5 million in the first quarter of 2025, which included $273 thousand from an acquired consumer solar loan portfolio, $1.2 million from commercial and industrial dental loans acquired from the Merger and $1.7 million from a purchase credit deteriorated (“PCD”) commercial real-estate loan, partially offset by a $1.6 million recovery from a PCD commercial and industrial loan. The reversal of credit losses in the first quarter of 2025 included a $618 thousand reversal of credit losses for unfunded loan commitments related to the decrease in unfunded loan commitments during the first quarter of 2025, coupled with lower loss rates used to estimate the allowance for credit losses on unfunded commitments. Total unfunded loan commitments decreased $33.2 million to $892.1 million at March 31, 2025, compared to $925.3 million in unfunded loan commitments at December 31, 2024.

The reversal of credit losses for loans held for investment in the first quarter of 2025 was $3.2 million, an increase of $291 thousand from a reversal of credit losses of $2.9 million in the prior quarter. The increase was driven primarily by changes in the composition of the loans held for investment portfolio, coupled with changes in qualitative factors and the reasonable and supportable forecast, primarily related to the economic outlook for California. The Company’s management continues to monitor macroeconomic variables related to changes in interest rates 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 $2.6 million in the first quarter of 2025, an increase of $1.6 million compared to $1.0 million in the fourth quarter of 2024. The Company reported a gain on sale of loans of $577 thousand from SBA 7A loan sales, in the first quarter of 2025, compared to a loss on sale of loans of $1.1 million related to the sale of certain Sponsor Finance loans in the prior quarter. Service charges and fees on deposit accounts of $1.2 million in the first quarter of 2025 increased $275 thousand from the prior quarter, related to the one-time waiver of analysis charges for certain deposit accounts in light of the core system conversion in the prior quarter. Bank owned life insurance income of $463 thousand in the first quarter of 2025 decreased $360 thousand from the prior quarter, primarily related to a $368 thousand death benefit income recorded in the prior quarter. No comparable death benefit income was recorded in the first quarter of 2025.

Noninterest Expense

Total noninterest expense for the first quarter of 2025 was $24.9 million, a decrease of $1.2 million from total noninterest expense of $26.1 million in the prior quarter, which was largely due to the decrease in merger related expenses.

Salaries and employee benefits decreased $210 thousand during the quarter to $15.9 million. The decrease in salaries and employee benefits was primarily related to the decrease in average headcount. There were no merger related expenses in the first quarter of 2025, compared to $643 thousand in the prior quarter. Regulatory assessments of $722 thousand increased $286 thousand due to an increase in the FDIC assessment rates. Other real estate owned expense of $68 thousand in the first quarter of 2025 decreased by $152 thousand, due primarily to lower receivership expenses and property tax. Other expenses of $2.0 million in the first quarter of 2025 decreased by $175 thousand, due primarily to lower loan related expenses, customer service related expenses, travel expenses and insurance expenses.

Efficiency ratio (non-GAAP¹) for the first quarter of 2025 was 55.6%, compared to 57.4% in the prior quarter. Excluding the merger and related expenses of zero and $643 thousand, the efficiency ratio (non-GAAP¹) for the first quarter of 2025 and fourth quarter of 2024 would have been 55.6% and 55.9%, respectively.

Income Tax

In the first quarter of 2025, the Company’s income tax expense was $6.8 million, compared with $6.5 million in the fourth quarter of 2024. The effective rate was 28.8% for the first quarter of 2025 and 27.9% for the fourth quarter of 2024. The increase in the effective tax rate for the first quarter of 2025 was primarily attributable to the impact of the non-tax deductible portion of the merger expenses and the vesting and exercise of equity awards combined with changes in the Company’s stock price over time, partially offset by the impact of the tax on the excess executive compensation.

Balance Sheet

Assets

Total assets at March 31, 2025 were $3.98 billion, a decrease of $48.6 million or 1.2% from December 31, 2024. The decrease in total assets from the prior quarter was primarily related to a decrease in loans, including loans held for sale, of $82.9 million, partially offset by an increase in cash and cash equivalents of $51.1 million as compared to the prior quarter. The decrease in assets primarily relates to the decreases in wholesale funding sources and loan sales and payoffs.

Loans

Total loans held for investment were $3.07 billion at March 31, 2025, a decrease of $70.4 million, compared to December 31, 2024. During the first quarter of 2025, there were new originations of $69.4 million, offset by net paydowns of $21.5 million, loan sales and payoffs of $115.1 million, and the partial charge-offs of loans in the amount of $3.2 million. Total loans secured by real estate decreased by $30.7 million, of which construction and land development loans decreased by $5.9 million, commercial real estate and other loans decreased by $11.8 million, 1-4 family residential loans decreased by $7.0 million and multifamily loans decreased by $6.1 million. Commercial and industrial loans decreased by $38.5 million, and consumer loans decreased by $1.2 million. The Company had $4.6 million in loans held for sale at March 31, 2025, compared to $17.2 million at December 31, 2024.

Deposits

Total deposits at March 31, 2025 were $3.34 billion, a decrease of $56.3 million from December 31, 2024. The decrease primarily consisted of $107.4 million of brokered time deposits, partially offset by a $35.7 million increase in noninterest-bearing demand deposits, $10.9 million in interest-bearing non-maturity deposits, and $4.5 million of non-brokered time deposits. Noninterest-bearing demand deposits at March 31, 2025, were $1.29 billion, or 38.7% of total deposits, compared with $1.26 billion, or 37.0% of total deposits at December 31, 2024. At March 31, 2025, total interest-bearing deposits were $2.05 billion, compared to $2.14 billion at December 31, 2024. At March 31, 2025, total brokered time deposits were $13.8 million, compared to $121.1 million at December 31, 2024. The Company offers the Insured Cash Sweep (ICS) product, Certificate of Deposit Account Registry Service (CDARS), and Reich & Tang Deposit Solutions (R&T) network, all of which provide reciprocal deposit placement services to fully qualified large customer deposits for FDIC insurance among other participating banks. At March 31, 2025, total reciprocal deposits were $763.6 million, or 22.8% of total deposits at March 31, 2025, compared to $754.4 million, or 22.2% of total deposits at December 31, 2024.

Federal Home Loan Bank (“FHLB”) and Liquidity

At March 31, 2025 and December 31, 2024, the Company had no overnight FHLB borrowings. There were no outstanding Federal Reserve Discount Window borrowings at March 31, 2025 or December 31, 2024.

At March 31, 2025, the Company had available borrowing capacity from an FHLB secured line of credit of approximately $687.8 million and available borrowing capacity from the Federal Reserve Discount Window of approximately $353.0 million. The Company also had available borrowing capacity from four unsecured credit lines from correspondent banks of approximately $90.5 million at March 31, 2025, with no outstanding borrowings. Total available borrowing capacity was $1.13 billion at March 31, 2025. Additionally, the Company had unpledged liquid securities at fair value of approximately $118.5 million and cash and cash equivalents of $439.2 million at March 31, 2025.

Asset Quality

Total non-performing assets decreased to $26.9 million, or 0.68% of total assets at March 31, 2025, compared with $30.6 million, or 0.76% of total assets at December 31, 2024. Total non-performing loans decreased to $22.8 million, or 0.74% of total loans held for investment at March 31, 2025, compared with $26.5 million, or 0.85% of total loans held for investment at December 31, 2024.

There were four loans totaling $6.8 million downgraded to nonaccrual, partially offset by one 1-4 family residential loan of $2.9 million upgraded to accrual status and one commercial real estate loan of $7.2 million sold with an additional charge-off of $1.7 million during the first quarter of 2025. Non-performing assets in the first quarter of 2025 included OREO, net of valuation allowance, of $4.1 million related to a multifamily building, the same balance as the prior quarter.

Special mention loans increased by $5.1 million during the first quarter of 2025 to $74.4 million at March 31, 2025. The increase in the special mention loans was due mostly to $18.9 million in downgrades from Pass loans and $8.6 million in net advances, partially offset by $15.9 million in downgrades to substandard loans, $2.1 million upgrades to Pass loans, and $4.5 million in payoffs. Substandard loans decreased by $5.8 million during the first quarter of 2025 to $111.8 million at March 31, 2025. The decrease in the substandard loans was due primarily to a 1-4 family residential loan and a commercial real estate nonaccrual PCD loan totaling $11.6 million that were both sold, $16.0 million in paydowns and payoffs, and $1.2 million in net charge-offs, partially offset by $7.2 million in downgrades from Pass loans, and $15.9 million in downgrades from special mention loans.

The Company had $45 thousand in consumer solar loans that were over 90 days past due and still accruing interest at March 31, 2025, compared to $150 thousand in such delinquencies at December 31, 2024.

There were $5.1 million in loan delinquencies (30-89 days past due, excluding nonaccrual loans) at March 31, 2025, compared to $12.1 million in such loan delinquencies at December 31, 2024.

The allowance for credit losses, which is comprised of the allowance for loan losses (“ALL”) and reserve for unfunded loan commitments, totaled $48.3 million at March 31, 2025, compared to $53.6 million at December 31, 2024. The decrease in the allowance for credit losses included a $3.2 million and $618 thousand reversal of provision for credit losses for the loan portfolio and reserve for unfunded loan commitments, respectively, coupled with total net charge-offs of $1.5 million for the quarter ended March 31, 2025.

The ALL was $45.8 million, or 1.49% of total loans held for investment at March 31, 2025, compared with $50.5 million, or 1.61% at December 31, 2024.

Capital

Tangible book value per common share (non-GAAP¹) at March 31, 2025, was $12.29, compared with $11.71 at December 31, 2024. In the first quarter of 2025, tangible book value was primarily impacted by net income of $16.9 million for the first quarter, stock-based compensation expense, coupled with a decrease in net of tax unrealized 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 $2.2 million to $4.4 million at March 31, 2025, from $6.6 million at December 31, 2024. The decrease in the net of tax unrealized losses on available-for-sale debt securities was attributable to non-credit related factors, including an increase in bond prices at the long end of the yield curve and the general interest rate environment. Tangible common equity (non-GAAP¹) as a percentage of total tangible assets (non-GAAP¹) at March 31, 2025, increased to 10.34% from 9.69% 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 March 31, 2025 decreased to 1.1% from 1.8% in the prior quarter.

The Company’s preliminary capital ratios exceed the minimums required to be “well-capitalized” at March 31, 2025.

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 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 risks related to the Merger, including the risks that 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, 2024, 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, 2024, 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
	March 31, 2025			December 31, 2024			March 31, 2024
	($ in thousands except share and per share data)
EARNINGS
Net interest income	$	42,255		$	44,541		$	20,494
Reversal of credit losses	$	(3,776	)	$	(3,835	)	$	(331	)
Noninterest income	$	2,566		$	1,004		$	1,413
Noninterest expense	$	24,920		$	26,125		$	14,981
Income tax expense	$	6,824		$	6,483		$	2,322
Net income	$	16,853		$	16,772		$	4,935
Pre-tax pre-provision income ⁽¹⁾	$	19,901		$	19,420		$	6,926
Adjusted pre-tax pre-provision income ⁽¹⁾	$	19,901		$	20,063		$	7,475
Diluted earnings per share	$	0.52		$	0.51		$	0.26
Shares outstanding at period end		32,402,140			32,265,935			18,527,178

PERFORMANCE RATIOS
Return on average assets		1.71	%		1.60	%		0.86	%
Adjusted return on average assets ⁽¹⁾		1.71	%		1.64	%		0.95	%
Return on average common equity		13.18	%		13.21	%		6.85	%
Adjusted return on average common equity ⁽¹⁾		13.18	%		13.57	%		7.61	%
Yield on total loans		6.61	%		6.84	%		6.02	%
Yield on interest earning assets		6.26	%		6.48	%		5.79	%
Cost of deposits		1.59	%		1.87	%		2.05	%
Cost of funds		1.72	%		1.99	%		2.17	%
Net interest margin		4.65	%		4.61	%		3.80	%
Efficiency ratio ⁽¹⁾		55.60	%		57.36	%		68.38	%
Adjusted efficiency ratio ⁽¹⁾		55.60	%		55.95	%		65.88	%

	As of
	March 31, 2025			December 31, 2024
	($ in thousands except share and per share data)
CAPITAL
Tangible equity to tangible assets ⁽¹⁾		10.34	%		9.69	%
Book value (BV) per common share	$	16.40		$	15.86
Tangible BV per common share ⁽¹⁾	$	12.29		$	11.71

ASSET QUALITY
Allowance for loan losses (ALL)	$	45,839		$	50,540
Reserve for unfunded loan commitments	$	2,485		$	3,103
Allowance for credit losses (ACL)	$	48,324		$	53,643
Allowance for loan losses to nonperforming loans		2.01	x		1.90	x
ALL to total loans held for investment		1.49	%		1.61	%
ACL to total loans held for investment		1.57	%		1.71	%
30-89 days past due, excluding nonaccrual loans	$	5,103		$	12,082
Over 90 days past due, excluding nonaccrual loans	$	45		$	150
Special mention loans	$	74,421		$	69,339
Special mention loans to total loans held for investment		2.43	%		2.21	%
Substandard loans	$	111,786		$	117,598
Substandard loans to total loans held for investment		3.64	%		3.75	%
Nonperforming loans	$	22,825		$	26,536
Nonperforming loans to total loans held for investment		0.74	%		0.85	%
Other real estate owned, net	$	4,083		$	4,083
Nonperforming assets	$	26,908		$	30,619
Nonperforming assets to total assets		0.68	%		0.76	%

END OF PERIOD BALANCES
Total loans, including loans held for sale	$	3,073,399		$	3,156,345
Total assets	$	3,983,090		$	4,031,654
Deposits	$	3,342,503		$	3,398,760
Loans to deposits		91.9	%		92.9	%
Shareholders’ equity	$	531,384		$	511,836

(1) Non-GAAP measure. See – GAAP to Non-GAAP reconciliation.

	At or for the Three Months Ended
ALLOWANCE for CREDIT LOSSES	March 31, 2025			December 31, 2024			March 31, 2024
	($ in thousands)
Allowance for loan losses
Balance at beginning of period	$	50,540		$	53,552		$	22,569
Reversal of credit losses		(3,158	)		(2,867	)		(314	)
Charge-offs		(3,159	)		(154	)		(1	)
Recoveries		1,616			9			—
Net charge-offs		(1,543	)		(145	)		(1	)
Balance, end of period	$	45,839		$	50,540		$	22,254
Reserve for unfunded loan commitments ⁽¹⁾
Balance, beginning of period	$	3,103		$	4,071		$	933
Reversal of credit losses		(618	)		(968	)		(17	)
Balance, end of period		2,485			3,103			916
Allowance for credit losses	$	48,324		$	53,643		$	23,170

ALL to total loans held for investment		1.49	%		1.61	%		1.18	%
ACL to total loans held for investment		1.57	%		1.71	%		1.23	%
Net charge-offs to average total loans		(0.20	)%		(0.02	)%		0.00	%

(1) Included in “Accrued interest and other liabilities” on the consolidated balance sheet.

California BanCorp and Subsidiary
Balance Sheets (Unaudited)

	March 31, 2025			December 31, 2024
	($ in thousands)
ASSETS
Cash and due from banks	$	80,441		$	60,471
Federal funds sold & interest-bearing balances		358,800			327,691
Total cash and cash equivalents		439,241			388,162

Debt securities available-for-sale, at fair value (amortized cost of $137,855, and $151,429 at March 31, 2025 and December 31, 2024)		131,593			142,001
Debt securities held-to-maturity, at cost (fair value of $47,329 and $47,823 at March 31, 2025 and December 31, 2024)		53,194			53,280
Loans held for sale		4,625			17,180
Loans held for investment:
Construction & land development		221,437			227,325
1-4 family residential		157,442			164,401
Multifamily		237,896			243,993
Other commercial real estate		1,755,962			1,767,727
Commercial & industrial		672,468			710,970
Other consumer		23,569			24,749
Total loans held for investment		3,068,774			3,139,165
Allowance for credit losses – loans		(45,839	)		(50,540	)
Total loans held for investment, net		3,022,935			3,088,625

Restricted stock at cost		30,845			30,829
Premises and equipment		13,154			13,595
Right of use asset		13,384			14,350
Other real estate owned, net		4,083			4,083
Goodwill		111,780			111,787
Intangible assets		21,323			22,271
Bank owned life insurance		66,867			66,636
Deferred taxes, net		36,473			43,127
Accrued interest and other assets		33,593			35,728
Total assets	$	3,983,090		$	4,031,654

LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits:
Noninterest-bearing demand	$	1,292,689		$	1,257,007
Interest-bearing NOW accounts		674,460			673,589
Money market and savings accounts		1,192,960			1,182,927
Time deposits		182,394			285,237
Total deposits		3,342,503			3,398,760

Borrowings		70,308			69,725
Operating lease liability		17,142			18,310
Accrued interest and other liabilities		21,753			33,023
Total liabilities		3,451,706			3,519,818

Shareholders’ Equity:
Common stock – 50,000,000 shares authorized, no par value; issued and outstanding 32,402,140 and 32,265,935 at March 31, 2025 and December 31, 2024		442,934			442,469
Retained earnings		92,861			76,008
Accumulated other comprehensive loss – net of taxes		(4,411	)		(6,641	)
Total shareholders’ equity		531,384			511,836
Total liabilities and shareholders’ equity	$	3,983,090		$	4,031,654

California BanCorp and Subsidiary
Income Statements – Quarterly and Year-to-Date (Unaudited)

	Three Months Ended
	March 31, 2025			December 31, 2024			March 31, 2024
	($ in thousands except share and per share data)
INTEREST AND DIVIDEND INCOME
Interest and fees on loans	$	50,686		$	54,791		$	28,584
Interest on debt securities		1,524			1,698			1,213
Interest on tax-exempted debt securities		305			305			306
Interest and dividends from other institutions		4,310			5,764			1,161
Total interest and dividend income		56,825			62,558			31,264

INTEREST EXPENSE
Interest on NOW, savings, and money market accounts		11,116			12,447			6,770
Interest on time deposits		2,063			4,179			3,021
Interest on borrowings		1,391			1,391			979
Total interest expense		14,570			18,017			10,770
Net interest income		42,255			44,541			20,494
Reversal of credit losses ⁽¹⁾		(3,776	)		(3,835	)		(331	)
Net interest income after reversal of credit losses		46,031			48,376			20,825

NONINTEREST INCOME
Service charges and fees on deposit accounts		1,186			911			525
Gain (loss) on sale of loans		577			(1,095	)		415
Bank owned life insurance income		463			823			261
Servicing and related income on loans		142			157			73
Other charges and fees		199			208			139
Total noninterest income		2,566			1,004			1,413

NONINTEREST EXPENSE
Salaries and employee benefits		15,864			16,074			9,610
Occupancy and equipment expenses		2,152			2,314			1,452
Data processing		1,935			1,960			1,150
Legal, audit and professional		859			817			516
Regulatory assessments		722			436			387
Director and shareholder expenses		404			458			203
Merger and related expenses		—			643			549
Intangible assets amortization		948			1,060			65
Other real estate owned expense		68			220			88
Other expense		1,968			2,143			961
Total noninterest expense		24,920			26,125			14,981
Income before income taxes		23,677			23,255			7,257
Income tax expense		6,824			6,483			2,322
Net income	$	16,853		$	16,772		$	4,935

Net income per share – basic	$	0.52		$	0.52		$	0.27
Net income per share – diluted	$	0.52		$	0.51		$	0.26
Weighted average common shares-diluted		32,698,227			32,698,714			18,801,716
Pre-tax, pre-provision income ⁽²⁾	$	19,901		$	19,420		$	6,926

(1) Included reversal of credit losses on unfunded loan commitments of $618 thousand, $968.0 thousand and $17 thousand for the three months ended March 31, 2025, December 31, 2024, and March 31, 2024, 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
	March 31, 2025							December 31, 2024							March 31, 2024
	Average Balance		Income/ Expense		Yield/ Cost			Average Balance		Income/ Expense		Yield/ Cost			Average Balance		Income/ Expense		Yield/ Cost
	($ in thousands)
Assets
Interest-earning assets:
Total loans	$	3,109,722	$	50,686		6.61	%	$	3,184,918	$	54,791		6.84	%	$	1,909,271	$	28,584		6.02	%
Taxable debt securities		139,481		1,524		4.43	%		147,895		1,698		4.57	%		126,803		1,213		3.85	%
Tax-exempt debt securities ⁽¹⁾		53,522		305		2.93	%		53,607		305		2.87	%		53,842		306		2.89	%
Deposits in other financial institutions		316,582		3,468		4.44	%		422,032		5,123		4.83	%		54,056		716		5.33	%
Fed funds sold/resale agreements		30,413		335		4.47	%		3,353		38		4.51	%		9,771		134		5.52	%
Restricted stock investments and other bank stock		31,657		507		6.50	%		30,341		603		7.91	%		16,412		311		7.62	%
Total interest-earning assets		3,681,377		56,825		6.26	%		3,842,146		62,558		6.48	%		2,170,155		31,264		5.79	%
Total noninterest-earning assets		318,132							326,601							139,672
Total assets	$	3,999,509						$	4,168,747						$	2,309,827

Liabilities and Shareholders’ Equity
Interest-bearing liabilities:
Interest-bearing NOW accounts	$	735,209	$	3,366		1.86	%	$	704,017	$	3,784		2.14	%	$	359,784	$	2,045		2.29	%
Money market and savings accounts		1,161,960		7,750		2.70	%		1,192,692		8,663		2.89	%		648,640		4,725		2.93	%
Time deposits		207,519		2,063		4.03	%		359,111		4,179		4.63	%		255,474		3,021		4.76	%
Total interest-bearing deposits		2,104,688		13,179		2.54	%		2,255,820		16,626		2.93	%		1,263,898		9,791		3.12	%
Borrowings:
FHLB advances		—		—		—	%		—		—		—	%		50,593		708		5.63	%
Subordinated debt		70,027		1,391		8.06	%		69,420		1,391		7.97	%		17,878		271		6.10	%
Total borrowings		70,027		1,391		8.06	%		69,420		1,391		7.97	%		68,471		979		5.75	%
Total interest-bearing liabilities		2,174,715		14,570		2.72	%		2,325,240		18,017		3.08	%		1,332,369		10,770		3.25	%

Noninterest-bearing liabilities:
Noninterest-bearing deposits ⁽²⁾		1,255,883							1,283,591							661,265
Other liabilities		50,368							55,007							26,430
Shareholders’ equity		518,543							504,909							289,763
Total Liabilities and Shareholders’ Equity	$	3,999,509						$	4,168,747						$	2,309,827

Net interest spread						3.54	%						3.40	%						2.54	%
Net interest income and margin			$	42,255		4.65	%			$	44,541		4.61	%			$	20,494		3.80	%
Cost of deposits	$	3,360,571	$	13,179		1.59	%	$	3,539,411	$	16,626		1.87	%	$	1,925,163	$	9,791		2.05	%
Cost of funds	$	3,430,598	$	14,570		1.72	%	$	3,608,831	$	18,017		1.99	%	$	1,993,634	$	10,770		2.17	%

(1) Tax-exempt debt securities yields are presented on a tax equivalent basis using a 21% tax rate.
(2) Average noninterest-bearing deposits represent 37.37%, 36.27% and 34.35% of average total deposits for the three months ended March 31, 2025, December 31, 2024 and March 31, 2024, 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 income (loss), (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 common 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
	March 31, 2025			December 31, 2024			March 31, 2024
	($ in thousands)
Adjusted net income
Net income	$	16,853		$	16,772		$	4,935
Add: After-tax merger and related expenses ⁽¹⁾		—			453			547
Adjusted net income (non-GAAP)	$	16,853		$	17,225		$	5,482

Efficiency Ratio
Noninterest expense	$	24,920		$	26,125		$	14,981
Deduct: Merger and related expenses		—			643			549
Adjusted noninterest expense		24,920			25,482			14,432

Net interest income		42,255			44,541			20,494
Noninterest income		2,566			1,004			1,413
Total net interest income and noninterest income	$	44,821		$	45,545		$	21,907
Efficiency ratio (non-GAAP)		55.6	%		57.4	%		68.4	%
Adjusted efficiency ratio (non-GAAP)		55.6	%		55.9	%		65.9	%

Pre-tax pre-provision income
Net interest income	$	42,255		$	44,541		$	20,494
Noninterest income		2,566			1,004			1,413
Total net interest income and noninterest income		44,821			45,545			21,907
Less: Noninterest expense		24,920			26,125			14,981
Pre-tax pre-provision income (non-GAAP)		19,901			19,420			6,926
Add: Merger and related expenses		—			643			549
Adjusted pre-tax pre-provision income (non-GAAP)	$	19,901		$	20,063		$	7,475

(1) After-tax merger and related expenses are presented using a 29.56% tax rate.

Return on Average Assets, Equity, and Tangible Equity
Net income	$	16,853		$	16,772		$	4,935
Adjusted net income (non-GAAP)	$	16,853		$	17,225		$	5,482

Average assets	$	3,999,509		$	4,168,747		$	2,309,827
Average shareholders’ equity		518,543			504,909			289,763
Less: Average intangible assets		133,567			135,064			38,964
Average tangible common equity (non-GAAP)	$	384,976		$	369,845		$	250,799

Return on average assets		1.71	%		1.60	%		0.86	%
Adjusted return on average assets (non-GAAP)		1.71	%		1.64	%		0.95	%
Return on average equity		13.18	%		13.21	%		6.85	%
Adjusted return on average equity (non-GAAP)		13.18	%		13.57	%		7.61	%
Return on average tangible common equity (non-GAAP)		17.75	%		18.04	%		7.91	%
Adjusted return on average tangible common equity (non-GAAP)		17.75	%		18.53	%		8.79	%

	March 31, 2025			December 31, 2024
	($ in thousands except share and per share data)
Tangible Common Equity Ratio/Tangible Book Value Per Share
Shareholders’ equity	$	531,384		$	511,836
Less: Intangible assets		133,103			134,058
Tangible common equity (non-GAAP)	$	398,281		$	377,778

Total assets	$	3,983,090		$	4,031,654
Less: Intangible assets		133,103			134,058
Tangible assets (non-GAAP)	$	3,849,987		$	3,897,596

Equity to asset ratio		13.34	%		12.70	%
Tangible common equity to tangible asset ratio (non-GAAP)		10.34	%		9.69	%
Book value per share	$	16.40		$	15.86
Tangible book value per share (non-GAAP)	$	12.29		$	11.71
Shares outstanding		32,402,140			32,265,935

INVESTOR RELATIONS CONTACT
Kevin Mc Cabe
California Bank of Commerce, N.A.
kmccabe@bankcbc.com
818.637.7065

The MIL Network –

April 25, 2025

MIL-OSI: First Merchants Corporation Announces First Quarter 2025 Earnings Per Share

Source: GlobeNewswire (MIL-OSI)

MUNCIE, Ind., April 24, 2025 (GLOBE NEWSWIRE) — First Merchants Corporation (NASDAQ – FRME)

First Quarter 2025 Highlights:

Net income available to common stockholders was $54.9 million and diluted earnings per common share totaled $0.94 compared to adjusted net income and diluted earnings per common share¹of $50.1 million and $0.85 in the first quarter of 2024. Adjusted net income and diluted earnings per common share¹in the fourth quarter of 2024 were $58.1 million and $1.00, respectively.
Robust capital position with Common Equity Tier 1 Capital Ratio of 11.50%.
Repurchased 246,751 shares totaling $10 million year-to-date; Redeemed $30 million of sub debt.
Total loans grew $154.9 million, or 4.8% annualized, on a linked quarter basis, and $547.2 million, or 4.4%, during the last twelve months.
Total deposits declined $59.6 million, or 1.6% annualized, on a linked quarter basis, and declined $422.6 million, or 2.8%, during the last twelve months primarily due to the sale of five Illinois branches with $267.4 million in deposits to Old Second National Bank on December 6, 2024.
Nonperforming assets to total assets were 47 basis points compared to 43 basis points on a linked quarter basis.
The efficiency ratio totaled 54.54% for the quarter.

“The first quarter was a strong start to the year with healthy loan growth and increasing profitability,” said Mark Hardwick, Chief Executive Officer of First Merchants Bank. “Our 2025 priorities continue to focus on organic loan growth funded by low-cost core deposits, margin stabilization, fee income growth, expense management and credit quality. Given the market volatility and headlines, we are closely monitoring our clients and our markets but have yet to see any signs of stress.”

First Quarter Financial Results:

First Merchants Corporation (the “Corporation”) reported first quarter 2025 net income available to common stockholders of $54.9 million compared to adjusted net income available to common stockholders¹ of $50.1 million during the same period in 2024. Diluted earnings per common share for the period totaled $0.94 compared to the first quarter of 2024 adjusted diluted earnings per common share¹ of $0.85 per share.

Total assets equaled $18.4 billion as of quarter-end and loans totaled $13.0 billion. During the past twelve months, total loans grew by $547.2 million, or 4.4%. On a linked quarter basis, loans grew $154.9 million, or 4.8% annualized.

Investment securities, totaling $3.4 billion, decreased $356.5 million, or 9.4%, during the last twelve months and decreased $33.6 million, or 3.9% annualized on a linked quarter basis. The decline in the last twelve months reflected sales of available for sale securities in 2024 totaling $268.5 million.

Total deposits equaled $14.5 billion as of quarter-end and decreased by $422.6 million, or 2.8%, over the past twelve months. The decline reflected the sale of the Illinois branches during the prior quarter which included $267.4 million in deposits. Total deposits decreased $59.6 million, or 1.6% annualized on a linked quarter basis. The loan to deposit ratio increased to 90.1% at period end from 88.6% in the prior quarter.

The Corporation’s Allowance for Credit Losses – Loans (ACL) totaled $192.0 million as of quarter-end, or 1.47% of total loans, a decrease of $0.7 million from prior quarter. Net charge-offs totaled $4.9 million and provision for loans of $4.2 million was recorded during the quarter. Reserves for unfunded commitments totaling $18.0 million remain unchanged from the previous quarter. Non-performing assets to total assets were 0.47% for the first quarter of 2025, an increase of four basis points compared to 0.43% in the prior quarter.

Net interest income totaled $130.3 million for the quarter, a decrease of $4.1 million, or 3.1%, compared to prior quarter and increased $3.2 million, or 2.5%, compared to the first quarter of 2024. Fully taxable equivalent net interest margin was 3.22%, a decrease of six basis points compared to the fourth quarter of 2024 and an increase of 12 basis points compared to the first quarter of 2024. The lower day count in the quarter caused a decline of five basis points in net interest margin from the prior quarter.

Noninterest income totaled $30.0 million for the quarter, a decrease of $12.7 million, compared to the fourth quarter of 2024 and an increase of $3.4 million compared to the first quarter of 2024. Customer-related fees declined by $2.3 million from the previous quarter due to lower derivative hedge fees, gains on sales of mortgage loans and card payment fees. Non-customer-related fees declined $10.4 million from the prior quarter primarily due to the gain on the Illinois branch sale, partially offset by realized losses on the sales of securities recorded in the prior quarter.

Noninterest expense totaled $92.9 million for the quarter, a decrease of $3.4 million from the fourth quarter of 2024 and a decrease of $4.0 million from the first quarter of 2024. The decrease from the fourth quarter of 2024 was due primarily to a decline in marketing expenses, and lower professional fees and employee incentives.

The Corporation’s total risk-based capital ratio totaled 13.22%, common equity tier 1 capital ratio totaled 11.50%, and the tangible common equity ratio totaled 8.90%. These ratios continue to demonstrate the Corporation’s strong capital position.

¹ See “Non-GAAP Financial Information” for reconciliation

CONFERENCE CALL

First Merchants Corporation will conduct a fourth quarter earnings conference call and web cast at 11:30 a.m. (ET) on Thursday, April 24, 2025.

To access via phone, participants will need to register using the following link where they will be provided a phone number and access code: (https://register-conf.media-server.com/register/BI4ae3a07cb07a47258d30e4f3dba2448b)

To view the webcast and presentation slides, please go to (https://edge.media-server.com/mmc/p/uqvoojku) during the time of the call. A replay of the webcast will be available until April 24, 2026.

Detailed financial results are reported on the attached pages.

About First Merchants Corporation

First Merchants Corporation is a financial holding company headquartered in Muncie, Indiana. The Corporation has one full-service bank charter, First Merchants Bank. The Bank also operates as First Merchants Private Wealth Advisors (as a division of First Merchants Bank).

First Merchants Corporation’s common stock is traded on the NASDAQ Global Select Market System under the symbol FRME. Quotations are carried in daily newspapers and can be found on the company’s Internet web page (http://www.firstmerchants.com).

FIRST MERCHANTS and the Shield Logo are federally registered trademarks of First Merchants Corporation.

Forward-Looking Statements

This release contains forward-looking statements made pursuant to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements can often, but not always, be identified by the use of words like “believe”, “continue”, “pattern”, “estimate”, “project”, “intend”, “anticipate”, “expect” and similar expressions or future or conditional verbs such as “will”, “would”, “should”, “could”, “might”, “can”, “may”, or similar expressions. These statements include statements about First Merchants’ goals, intentions and expectations; statements regarding the First Merchants’ business plan and growth strategies; statements regarding the asset quality of First Merchants’ loan and investment portfolios; and estimates of First Merchants’ risks and future costs and benefits. These forward-looking statements are subject to significant risks, assumptions and uncertainties that may cause results to differ materially from those set forth in forward-looking statements, including, among other things: possible changes in monetary and fiscal policies, and laws and regulations; the effects of easing restrictions on participants in the financial services industry; the cost and other effects of legal and administrative cases; possible changes in the credit worthiness of customers and the possible impairment of collectability of loans; fluctuations in market rates of interest; competitive factors in the banking industry; changes in the banking legislation or regulatory requirements of federal and state agencies applicable to bank holding companies and banks like First Merchants’ affiliate bank; continued availability of earnings and excess capital sufficient for the lawful and prudent declaration of dividends; changes in market, economic, operational, liquidity (including the ability to grow and maintain core deposits and retain large, uninsured deposits), credit and interest rate risks associated with the First Merchants’ business; and other risks and factors identified in each of First Merchants’ filings with the Securities and Exchange Commission. First Merchants does not undertake any obligation to update any forward-looking statement, whether written or oral, relating to the matters discussed in this press release. In addition, First Merchants’ past results of operations do not necessarily indicate its anticipated future results.


CONSOLIDATED BALANCE SHEETS
(Dollars In Thousands)	March 31,
	2025			2024
ASSETS
Cash and due from banks	$	86,113		$	100,514
Interest-bearing deposits		331,534			410,497
Investment securities available for sale		1,378,489			1,620,213
Investment securities held to maturity, net of allowance for credit losses		2,048,632			2,163,361
Loans held for sale		23,004			15,118
Loans		13,004,905			12,465,582
Less: Allowance for credit losses – loans		(192,031	)		(204,681	)
Net loans		12,812,874			12,260,901
Premises and equipment		128,749			132,706
Federal Home Loan Bank stock		45,006			41,758
Interest receivable		88,352			92,550
Goodwill		712,002			712,002
Other intangibles		18,302			25,142
Cash surrender value of life insurance		304,918			306,028
Other real estate owned		4,966			4,886
Tax asset, deferred and receivable		87,665			101,121
Other assets		369,181			331,006
TOTAL ASSETS	$	18,439,787		$	18,317,803
LIABILITIES
Deposits:
Noninterest-bearing	$	2,185,057		$	2,338,364
Interest-bearing		12,276,921			12,546,220
Total Deposits		14,461,978			14,884,584
Borrowings:
Federal funds purchased		185,000			—
Securities sold under repurchase agreements		122,947			130,264
Federal Home Loan Bank advances		972,478			612,778
Subordinated debentures and other borrowings		62,619			118,612
Total Borrowings		1,343,044			861,654
Interest payable		13,304			19,262
Other liabilities		289,247			327,500
Total Liabilities		16,107,573			16,093,000
STOCKHOLDERS’ EQUITY
Preferred Stock, $1,000 par value, $1,000 liquidation value:
Authorized — 600 cumulative shares
Issued and outstanding – 125 cumulative shares		125			125
Preferred Stock, Series A, no par value, $2,500 liquidation preference:
Authorized — 10,000 non-cumulative perpetual shares
Issued and outstanding – 10,000 non-cumulative perpetual shares		25,000			25,000
Common Stock, $.125 stated value:
Authorized — 100,000,000 shares
Issued and outstanding – 57,810,232 and 58,564,819 shares		7,226			7,321
Additional paid-in capital		1,183,263			1,208,447
Retained earnings		1,306,911			1,181,939
Accumulated other comprehensive loss		(190,311	)		(198,029	)
Total Stockholders’ Equity		2,332,214			2,224,803
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	18,439,787		$	18,317,803


CONSOLIDATED STATEMENTS OF INCOME	Three Months Ended
(Dollars In Thousands, Except Per Share Amounts)	March 31,
	2025			2024
INTEREST INCOME
Loans:
Taxable	$	187,728		$	198,023
Tax-exempt		10,532			8,190
Investment securities:
Taxable		8,372			8,748
Tax-exempt		12,517			13,611
Deposits with financial institutions		2,372			6,493
Federal Home Loan Bank stock		997			835
Total Interest Income		222,518			235,900
INTEREST EXPENSE
Deposits		80,547			98,285
Federal funds purchased		812			—
Securities sold under repurchase agreements		742			1,032
Federal Home Loan Bank advances		9,364			6,773
Subordinated debentures and other borrowings		783			2,747
Total Interest Expense		92,248			108,837
NET INTEREST INCOME		130,270			127,063
Provision for credit losses		4,200			2,000
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES		126,070			125,063
NONINTEREST INCOME
Service charges on deposit accounts		8,072			7,907
Fiduciary and wealth management fees		8,644			8,200
Card payment fees		4,526			4,500
Net gains and fees on sales of loans		5,022			3,254
Derivative hedge fees		404			263
Other customer fees		415			427
Earnings on cash surrender value of life insurance		2,179			1,592
Net realized losses on sales of available for sale securities		(7	)		(2	)
Other income		793			497
Total Noninterest Income		30,048			26,638
NONINTEREST EXPENSES
Salaries and employee benefits		54,982			58,293
Net occupancy		7,216			7,312
Equipment		7,008			6,226
Marketing		1,353			1,198
Outside data processing fees		5,929			6,889
Printing and office supplies		347			353
Intangible asset amortization		1,526			1,957
FDIC assessments		3,648			4,287
Other real estate owned and foreclosure expenses		600			534
Professional and other outside services		3,261			3,952
Other expenses		7,032			5,934
Total Noninterest Expenses		92,902			96,935
INCOME BEFORE INCOME TAX		63,216			54,766
Income tax expense		7,877			6,825
NET INCOME		55,339			47,941
Preferred stock dividends		469			469
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS	$	54,870		$	47,472
Per Share Data:
Basic Net Income Available to Common Stockholders	$	0.95		$	0.80
Diluted Net Income Available to Common Stockholders	$	0.94		$	0.80
Cash Dividends Paid to Common Stockholders	$	0.35		$	0.34
Tangible Common Book Value Per Share	$	27.34		$	25.07
Average Diluted Common Shares Outstanding (in thousands)		58,242			59,273


FINANCIAL HIGHLIGHTS
(Dollars in thousands)	Three Months Ended
	March 31,
	2025			2024
NET CHARGE-OFFS	$	4,926		$	2,253

AVERAGE BALANCES:
Total Assets	$	18,341,738		$	18,430,521
Total Loans		12,941,353			12,477,066
Total Earning Assets		16,960,475			17,123,851
Total Deposits		14,419,338			14,881,205
Total Stockholders’ Equity		2,340,874			2,242,139

FINANCIAL RATIOS:
Return on Average Assets		1.21	%		1.04	%
Return on Average Stockholders’ Equity		9.38			8.47
Return on Tangible Common Stockholders’ Equity		14.12			13.21
Average Earning Assets to Average Assets		92.47			92.91
Allowance for Credit Losses – Loans as % of Total Loans		1.47			1.64
Net Charge-offs as % of Average Loans (Annualized)		0.15			0.07
Average Stockholders’ Equity to Average Assets		12.76			12.17
Tax Equivalent Yield on Average Earning Assets		5.39			5.65
Interest Expense/Average Earning Assets		2.17			2.55
Net Interest Margin (FTE) on Average Earning Assets		3.22			3.10
Efficiency Ratio		54.54			59.21


NONPERFORMING ASSETS
(Dollars In Thousands)	March 31,			December 31,			September 30,			June 30,			March 31,
	2025			2024			2024			2024			2024
Nonaccrual Loans	$	81,922		$	73,773		$	59,088		$	61,906		$	62,478
Other Real Estate Owned and Repossessions		4,966			4,948			5,247			4,824			4,886
Nonperforming Assets (NPA)		86,888			78,721			64,335			66,730			67,364
90+ Days Delinquent		4,280			5,902			14,105			1,686			2,838
NPAs & 90 Day Delinquent	$	91,168		$	84,623		$	78,440		$	68,416		$	70,202

Allowance for Credit Losses – Loans	$	192,031		$	192,757		$	187,828		$	189,537		$	204,681
Quarterly Net Charge-offs		4,926			771			6,709			39,644			2,253
NPAs / Actual Assets %		0.47	%		0.43	%		0.35	%		0.36	%		0.37	%
NPAs & 90 Day / Actual Assets %		0.49	%		0.46	%		0.43	%		0.37	%		0.38	%
NPAs / Actual Loans and OREO %		0.67	%		0.61	%		0.51	%		0.53	%		0.54	%
Allowance for Credit Losses – Loans / Actual Loans (%)		1.47	%		1.50	%		1.48	%		1.50	%		1.64	%
Net Charge-offs as % of Average Loans (Annualized)		0.15	%		0.02	%		0.21	%		1.26	%		0.07	%


CONSOLIDATED BALANCE SHEETS
(Dollars In Thousands)	March 31,			December 31,			September 30,			June 30,			March 31,
	2025			2024			2024			2024			2024
ASSETS
Cash and due from banks	$	86,113		$	87,616		$	84,719		$	105,372		$	100,514
Interest-bearing deposits		331,534			298,891			359,126			168,528			410,497
Investment securities available for sale		1,378,489			1,386,475			1,553,496			1,618,893			1,620,213
Investment securities held to maturity, net of allowance for credit losses		2,048,632			2,074,220			2,108,649			2,134,195			2,163,361
Loans held for sale		23,004			18,663			40,652			32,292			15,118
Loans		13,004,905			12,854,359			12,646,808			12,639,650			12,465,582
Less: Allowance for credit losses – loans		(192,031	)		(192,757	)		(187,828	)		(189,537	)		(204,681	)
Net loans		12,812,874			12,661,602			12,458,980			12,450,113			12,260,901
Premises and equipment		128,749			129,743			129,582			133,245			132,706
Federal Home Loan Bank stock		45,006			41,690			41,716			41,738			41,758
Interest receivable		88,352			91,829			92,055			97,546			92,550
Goodwill		712,002			712,002			712,002			712,002			712,002
Other intangibles		18,302			19,828			21,599			23,371			25,142
Cash surrender value of life insurance		304,918			304,906			304,613			306,379			306,028
Other real estate owned		4,966			4,948			5,247			4,824			4,886
Tax asset, deferred and receivable		87,665			92,387			86,732			107,080			101,121
Other assets		369,181			387,169			348,384			367,845			331,006
TOTAL ASSETS	$	18,439,787		$	18,311,969		$	18,347,552		$	18,303,423		$	18,317,803
LIABILITIES
Deposits:
Noninterest-bearing	$	2,185,057		$	2,325,579		$	2,334,197		$	2,303,313		$	2,338,364
Interest-bearing		12,276,921			12,196,047			12,030,903			12,265,757			12,546,220
Total Deposits		14,461,978			14,521,626			14,365,100			14,569,070			14,884,584
Borrowings:
Federal funds purchased		185,000			99,226			30,000			147,229			—
Securities sold under repurchase agreements		122,947			142,876			124,894			100,451			130,264
Federal Home Loan Bank advances		972,478			822,554			832,629			832,703			612,778
Subordinated debentures and other borrowings		62,619			93,529			93,562			93,589			118,612
Total Borrowings		1,343,044			1,158,185			1,081,085			1,173,972			861,654
Deposits and other liabilities held for sale		—			—			288,476			—			—
Interest payable		13,304			16,102			18,089			18,554			19,262
Other liabilities		289,247			311,073			292,429			329,302			327,500
Total Liabilities		16,107,573			16,006,986			16,045,179			16,090,898			16,093,000
STOCKHOLDERS’ EQUITY
Preferred Stock, $1,000 par value, $1,000 liquidation value:
Authorized — 600 cumulative shares
Issued and outstanding – 125 cumulative shares		125			125			125			125			125
Preferred Stock, Series A, no par value, $2,500 liquidation preference:
Authorized — 10,000 non-cumulative perpetual shares
Issued and outstanding – 10,000 non-cumulative perpetual shares		25,000			25,000			25,000			25,000			25,000
Common Stock, $.125 stated value:
Authorized — 100,000,000 shares
Issued and outstanding		7,226			7,247			7,265			7,256			7,321
Additional paid-in capital		1,183,263			1,188,768			1,192,683			1,191,193			1,208,447
Retained earnings		1,306,911			1,272,528			1,229,125			1,200,930			1,181,939
Accumulated other comprehensive loss		(190,311	)		(188,685	)		(151,825	)		(211,979	)		(198,029	)
Total Stockholders’ Equity		2,332,214			2,304,983			2,302,373			2,212,525			2,224,803
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	18,439,787		$	18,311,969		$	18,347,552		$	18,303,423		$	18,317,803

CONSOLIDATED STATEMENTS OF INCOME
(Dollars In Thousands, Except Per Share Amounts)	March 31,			December 31,			September 30,			June 30,			March 31,
	2025			2024			2024			2024			2024
INTEREST INCOME
Loans:
Taxable	$	187,728		$	197,536		$	206,680		$	201,413		$	198,023
Tax-exempt		10,532			9,020			8,622			8,430			8,190
Investment securities:
Taxable		8,372			9,024			9,263			9,051			8,748
Tax-exempt		12,517			12,754			13,509			13,613			13,611
Deposits with financial institutions		2,372			5,350			2,154			2,995			6,493
Federal Home Loan Bank stock		997			958			855			879			835
Total Interest Income		222,518			234,642			241,083			236,381			235,900
INTEREST EXPENSE
Deposits		80,547			89,835			98,856			99,151			98,285
Federal funds purchased		812			26			329			126			—
Securities sold under repurchase agreements		742			680			700			645			1,032
Federal Home Loan Bank advances		9,364			8,171			8,544			6,398			6,773
Subordinated debentures and other borrowings		783			1,560			1,544			1,490			2,747
Total Interest Expense		92,248			100,272			109,973			107,810			108,837
NET INTEREST INCOME		130,270			134,370			131,110			128,571			127,063
Provision for credit losses		4,200			4,200			5,000			24,500			2,000
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES		126,070			130,170			126,110			104,071			125,063
NONINTEREST INCOME
Service charges on deposit accounts		8,072			8,124			8,361			8,214			7,907
Fiduciary and wealth management fees		8,644			8,665			8,525			8,825			8,200
Card payment fees		4,526			4,957			5,121			4,739			4,500
Net gains and fees on sales of loans		5,022			5,681			6,764			5,141			3,254
Derivative hedge fees		404			1,594			736			489			263
Other customer fees		415			316			344			460			427
Earnings on cash surrender value of life insurance		2,179			2,188			2,755			1,929			1,592
Net realized losses on sales of available for sale securities		(7	)		(11,592	)		(9,114	)		(49	)		(2	)
Gain on branch sale		—			19,983			—			—			—
Other income		793			2,826			1,374			1,586			497
Total Noninterest Income		30,048			42,742			24,866			31,334			26,638
NONINTEREST EXPENSES
Salaries and employee benefits		54,982			55,437			55,223			52,214			58,293
Net occupancy		7,216			7,335			6,994			6,746			7,312
Equipment		7,008			7,028			6,949			6,599			6,226
Marketing		1,353			2,582			1,836			1,773			1,198
Outside data processing fees		5,929			6,029			7,150			7,072			6,889
Printing and office supplies		347			377			378			354			353
Intangible asset amortization		1,526			1,771			1,772			1,771			1,957
FDIC assessments		3,648			3,744			3,720			3,278			4,287
Other real estate owned and foreclosure expenses		600			227			942			373			534
Professional and other outside services		3,261			3,777			3,035			3,822			3,952
Other expenses		7,032			7,982			6,630			7,411			5,934
Total Noninterest Expenses		92,902			96,289			94,629			91,413			96,935
INCOME BEFORE INCOME TAX		63,216			76,623			56,347			43,992			54,766
Income tax expense		7,877			12,274			7,160			4,067			6,825
NET INCOME		55,339			64,349			49,187			39,925			47,941
Preferred stock dividends		469			469			468			469			469
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS	$	54,870		$	63,880		$	48,719		$	39,456		$	47,472
Per Share Data:
Basic Net Income Available to Common Stockholders	$	0.95		$	1.10		$	0.84		$	0.68		$	0.80
Diluted Net Income Available to Common Stockholders	$	0.94		$	1.10		$	0.84		$	0.68		$	0.80
Cash Dividends Paid to Common Stockholders	$	0.35		$	0.35		$	0.35		$	0.35		$	0.34
Tangible Common Book Value Per Share	$	27.34		$	26.78		$	26.64		$	25.10		$	25.07
Average Diluted Common Shares Outstanding (in thousands)		58,242			58,247			58,289			58,328			59,273
FINANCIAL RATIOS:
Return on Average Assets		1.21	%		1.39	%		1.07	%		0.87	%		1.04	%
Return on Average Stockholders’ Equity		9.38			11.05			8.66			7.16			8.47
Return on Tangible Common Stockholders’ Equity		14.12			16.75			13.39			11.29			13.21
Average Earning Assets to Average Assets		92.47			92.48			92.54			92.81			92.91
Allowance for Credit Losses – Loans as % of Total Loans		1.47			1.50			1.48			1.50			1.64
Net Charge-offs as % of Average Loans (Annualized)		0.15			0.02			0.21			1.26			0.07
Average Stockholders’ Equity to Average Assets		12.76			12.51			12.26			12.02			12.17
Tax Equivalent Yield on Average Earning Assets		5.39			5.63			5.82			5.69			5.65
Interest Expense/Average Earning Assets		2.17			2.35			2.59			2.53			2.55
Net Interest Margin (FTE) on Average Earning Assets		3.22			3.28			3.23			3.16			3.10
Efficiency Ratio		54.54			48.48			53.76			53.84			59.21


LOANS
(Dollars In Thousands)	March 31,			December 31,			September 30,			June 30,			March 31,
	2025			2024			2024			2024			2024
Commercial and industrial loans	$	4,306,597		$	4,114,292		$	4,041,217		$	3,949,817		$	3,722,365
Agricultural land, production and other loans to farmers		243,864			256,312			238,743			239,926			234,431
Real estate loans:
Construction		793,175			792,144			814,704			823,267			941,726
Commercial real estate, non-owner occupied		2,177,869			2,274,016			2,251,351			2,323,533			2,368,360
Commercial real estate, owner occupied		1,214,739			1,157,944			1,152,751			1,174,195			1,137,894
Residential		2,389,852			2,374,729			2,366,943			2,370,905			2,316,490
Home equity		650,499			659,811			641,188			631,104			618,258
Individuals’ loans for household and other personal expenditures		140,954			166,028			158,480			162,089			161,459
Public finance and other commercial loans		1,087,356			1,059,083			981,431			964,814			964,599
Loans		13,004,905			12,854,359			12,646,808			12,639,650			12,465,582
Allowance for credit losses – loans		(192,031	)		(192,757	)		(187,828	)		(189,537	)		(204,681	)
NET LOANS	$	12,812,874		$	12,661,602		$	12,458,980		$	12,450,113		$	12,260,901

DEPOSITS
(Dollars In Thousands)	March 31,		December 31,		September 30,		June 30,		March 31,
	2025		2024		2024		2024		2024
Demand deposits	$	7,786,554	$	7,980,061	$	7,678,510	$	7,757,679	$	7,771,976
Savings deposits		4,791,874		4,522,758		4,302,236		4,339,161		4,679,593
Certificates and other time deposits of $100,000 or more		896,143		1,043,068		1,277,833		1,415,131		1,451,443
Certificates and other time deposits of $100,000 or less		625,203		692,068		802,949		889,949		901,280
Brokered certificates of deposits¹		362,204		283,671		303,572		167,150		80,292
TOTAL DEPOSITS	$	14,461,978	$	14,521,626	$	14,365,100	$	14,569,070	$	14,884,584

^{1 –} Total brokered deposits of $1.1 billion, which includes brokered CD’s of $362.2 million at March 31, 2025.


CONSOLIDATED AVERAGE BALANCE SHEET AND NET INTEREST MARGIN ANALYSIS
(Dollars in Thousands)
	For the Three Months Ended
	March 31, 2025						March 31, 2024
	Average Balance		Interest Income / Expense		Average Rate		Average Balance		Interest Income / Expense		Average Rate
ASSETS
Interest-bearing deposits	$	294,016	$	2,372	3.23	%	$	575,699	$	6,493	4.51	%
Federal Home Loan Bank stock		43,980		997	9.07			41,764		835	8.00
Investment Securities: ⁽¹⁾
Taxable		1,634,452		8,372	2.05			1,783,057		8,748	1.96
Tax-exempt ⁽²⁾		2,046,674		15,844	3.10			2,246,265		17,229	3.07
Total Investment Securities		3,681,126		24,216	2.63			4,029,322		25,977	2.58
Loans held for sale		20,965		319	6.09			21,782		328	6.02
Loans: ⁽³⁾
Commercial		8,770,282		147,772	6.74			8,598,110		159,209	7.41
Real estate mortgage		2,191,384		24,446	4.46			2,130,947		22,357	4.20
HELOC and installment		828,874		15,191	7.33			821,815		16,129	7.85
Tax-exempt ⁽²⁾		1,129,848		13,332	4.72			904,412		10,367	4.59
Total Loans		12,941,353		201,060	6.21			12,477,066		208,390	6.68
Total Earning Assets		16,960,475		228,645	5.39	%		17,123,851		241,695	5.65	%
Total Non-Earning Assets		1,381,263						1,306,670
TOTAL ASSETS	$	18,341,738					$	18,430,521
LIABILITIES
Interest-Bearing Deposits:
Interest-bearing deposits	$	5,522,434	$	34,606	2.51	%	$	5,419,821	$	39,491	2.91	%
Money market deposits		3,437,998		25,952	3.02			3,045,478		27,383	3.60
Savings deposits		1,299,405		2,445	0.75			1,559,877		3,801	0.97
Certificates and other time deposits		1,947,854		17,544	3.60			2,427,859		27,610	4.55
Total Interest-Bearing Deposits		12,207,691		80,547	2.64			12,453,035		98,285	3.16
Borrowings		1,262,926		11,701	3.71			1,011,812		10,552	4.17
Total Interest-Bearing Liabilities		13,470,617		92,248	2.74			13,464,847		108,837	3.23
Noninterest-bearing deposits		2,211,647						2,428,170
Other liabilities		318,600						295,365
Total Liabilities		16,000,864						16,188,382
STOCKHOLDERS’ EQUITY		2,340,874						2,242,139
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	18,341,738		92,248			$	18,430,521		108,837
Net Interest Income (FTE)			$	136,397					$	132,858
Net Interest Spread (FTE) ⁽⁴⁾					2.65	%					2.42	%

Net Interest Margin (FTE):
Interest Income (FTE) / Average Earning Assets					5.39	%					5.65	%
Interest Expense / Average Earning Assets					2.17	%					2.55	%
Net Interest Margin (FTE) ⁽⁵⁾					3.22	%					3.10	%

⁽¹⁾ Average balance of securities is computed based on the average of the historical amortized cost balances without the effects of the fair value adjustments. Annualized amounts are computed using a 30/360 day basis.
⁽²⁾ Tax-exempt securities and loans are presented on a fully taxable equivalent basis, using a marginal tax rate of 21 percent for 2024 and 2023. These totals equal $6,127 and $5,795 for the three months ended March 31, 2025 and 2024, respectively.
⁽³⁾ Non accruing loans have been included in the average balances.
⁽⁴⁾ Net Interest Spread (FTE) is interest income expressed as a percentage of average earning assets minus interest expense expressed as a percentage of average interest-bearing liabilities.
⁽⁵⁾ Net Interest Margin (FTE) is interest income expressed as a percentage of average earning assets minus interest expense expressed as a percentage of average earning assets.


ADJUSTED NET INCOME AND DILUTED EARNINGS PER COMMON SHARE – NON-GAAP
(Dollars In Thousands, Except Per Share Amounts)	Three Months Ended
	March 31,			December 31,			September 30,			June 30,			March 31,
	2025			2024			2024			2024			2024
Net Income Available to Common Stockholders – GAAP	$	54,870		$	63,880		$	48,719		$	39,456		$	47,472
Adjustments:
Net realized losses on sales of available for sale securities		7			11,592			9,114			49			2
Gain on branch sale		—			(19,983	)		—			—			—
Non-core expenses^1,2		—			762			—			—			3,481
Tax on adjustments		(2	)		1,851			(2,220	)		(12	)		(848	)
Adjusted Net Income Available to Common Stockholders – Non-GAAP	$	54,875		$	58,102		$	55,613		$	39,493		$	50,107

Average Diluted Common Shares Outstanding (in thousands)		58,242			58,247			58,289			58,328			59,273

Diluted Earnings Per Common Share – GAAP	$	0.94		$	1.10		$	0.84		$	0.68		$	0.80
Adjustments:
Net realized losses on sales of available for sale securities		—			0.20			0.15			—			—
Gain on branch sale		—			(0.34	)		—			—			—
Non-core expenses^1,2		—			0.01			—			—			0.06
Tax on adjustments		—			0.03			(0.04	)		—			(0.01	)
Adjusted Diluted Earnings Per Common Share – Non-GAAP	$	0.94		$	1.00		$	0.95		$	0.68		$	0.85

¹ – Non-core expenses in 4Q24 included $0.8 million of costs directly related to the branch sale.
² – Non-core expenses in 1Q24 included $2.4 million from duplicative online banking conversion costs and $1.1 million from the FDIC special assessment.


NET INTEREST MARGIN (“NIM”), ADJUSTED
(Dollars in Thousands)
	Three Months Ended
	March 31,			December 31,			September 30,			June 30,			March 31,
	2025			2024			2024			2024			2024
Net Interest Income (GAAP)	$	130,270		$	134,370		$	131,110		$	128,571		$	127,063
Fully Taxable Equivalent (“FTE”) Adjustment		6,127			5,788			5,883			5,859			5,795
Net Interest Income (FTE) (non-GAAP)	$	136,397		$	140,158		$	136,993		$	134,430		$	132,858

Average Earning Assets (GAAP)	$	16,960,475		$	17,089,198		$	16,990,358		$	17,013,984		$	17,123,851
Net Interest Margin (GAAP)		3.07	%		3.15	%		3.09	%		3.02	%		2.97	%
Net Interest Margin (FTE) (non-GAAP)		3.22	%		3.28	%		3.23	%		3.16	%		3.10	%

RETURN ON TANGIBLE COMMON EQUITY – NON-GAAP
(Dollars In Thousands)	Three Months Ended
	March 31,			December 31,			September 30,			June 30,			March 31,
	2025			2024			2024			2024			2024
Total Average Stockholders’ Equity (GAAP)	$	2,340,874		$	2,312,270		$	2,251,547		$	2,203,361		$	2,242,139
Less: Average Preferred Stock		(25,125	)		(25,125	)		(25,125	)		(25,125	)		(25,125	)
Less: Average Intangible Assets, Net of Tax		(726,917	)		(728,218	)		(729,581	)		(730,980	)		(732,432	)
Average Tangible Common Equity, Net of Tax (Non-GAAP)	$	1,588,832		$	1,558,927		$	1,496,841		$	1,447,256		$	1,484,582

Net Income Available to Common Stockholders (GAAP)	$	54,870		$	63,880		$	48,719		$	39,456		$	47,472
Plus: Intangible Asset Amortization, Net of Tax		1,206			1,399			1,399			1,399			1,546
Tangible Net Income (Non-GAAP)	$	56,076		$	65,279		$	50,118		$	40,855		$	49,018

Return on Tangible Common Equity (Non-GAAP)		14.12	%		16.75	%		13.39	%		11.29	%		13.21	%

EFFICIENCY RATIO – NON-GAAP
(Dollars In Thousands)	Three Months Ended
	March 31,			December 31,			September 30,			June 30,			March 31,
	2025			2024			2024			2024			2024
Non Interest Expense (GAAP)	$	92,902		$	96,289		$	94,629		$	91,413		$	96,935
Less: Intangible Asset Amortization		(1,526	)		(1,771	)		(1,772	)		(1,771	)		(1,957	)
Less: OREO and Foreclosure Expenses		(600	)		(227	)		(942	)		(373	)		(534	)
Adjusted Non Interest Expense (Non-GAAP)	$	90,776		$	94,291		$	91,915		$	89,269		$	94,444

Net Interest Income (GAAP)	$	130,270		$	134,370		$	131,110		$	128,571		$	127,063
Plus: Fully Taxable Equivalent Adjustment		6,127			5,788			5,883			5,859			5,795
Net Interest Income on a Fully Taxable Equivalent Basis (Non-GAAP)	$	136,397		$	140,158		$	136,993		$	134,430		$	132,858

Non Interest Income (GAAP)	$	30,048		$	42,742		$	24,866		$	31,334		$	26,638
Less: Investment Securities (Gains) Losses		7			11,592			9,114			49			2
Adjusted Non Interest Income (Non-GAAP)	$	30,055		$	54,334		$	33,980		$	31,383		$	26,640
Adjusted Revenue (Non-GAAP)	$	166,452		$	194,492		$	170,973		$	165,813		$	159,498
Efficiency Ratio (Non-GAAP)		54.54	%		48.48	%		53.76	%		53.84	%		59.21	%

Adjusted Non Interest Expense (Non-GAAP)	$	90,776		$	94,291		$	91,915		$	89,269		$	94,444
Less: Non-core Expenses^1,2		—			(762	)		—			—			(3,481	)
Adjusted Non Interest Expense Excluding Non-core Expenses (Non-GAAP)	$	90,776		$	93,529		$	91,915		$	89,269		$	90,963

Adjusted Revenue (Non-GAAP)	$	166,452		$	194,492		$	170,973		$	165,813		$	159,498
Less: Gain on Branch Sale		—			(19,983	)		—			—			—
Adjusted Revenue Excluding Gain on Branch Sale (Non-GAAP)	$	166,452		$	174,509		$	170,973		$	165,813		$	159,498
Adjusted Efficiency Ratio (Non-GAAP)		54.54	%		53.60	%		53.76	%		53.84	%		57.03	%
¹ – Non-core expenses in 4Q24 included $0.8 million of costs directly related to the branch sale.
² – Non-core expenses in 1Q24 included $2.4 million from duplicative online banking conversion costs and $1.1 million from the FDIC special assessment.

For more information, contact:
Nicole M. Weaver, Vice President and Director of Corporate Administration
765-521-7619
http://www.firstmerchants.com

SOURCE: First Merchants Corporation, Muncie, Indiana

The MIL Network –

April 25, 2025

MIL-OSI: ConnectOne Bancorp, Inc. Reports First Quarter 2025 Results; Declares Common and Preferred Dividends

Source: GlobeNewswire (MIL-OSI)

ENGLEWOOD CLIFFS, N.J., April 24, 2025 (GLOBE NEWSWIRE) — ConnectOne Bancorp, Inc. (Nasdaq: CNOB) (the “Company” or “ConnectOne”), parent company of ConnectOne Bank (the “Bank”), today reported net income available to common stockholders of $18.7 million for the first quarter of 2025 compared with $18.9 million for the fourth quarter of 2024 and $15.7 million for the first quarter of 2024. Diluted earnings per share were $0.49 for the first quarter of 2025 compared with $0.49 for the fourth quarter of 2024 and $0.41 for the first quarter of 2024. Return on average assets was 0.84%, 0.84% and 0.70% for the three months ended March 31, 2025, December 31, 2024 and March 31, 2024, respectively. Return on average tangible common equity was 8.25%, 8.27% and 7.15% for the three months ended March 31, 2025, December 31, 2024 and March 31, 2024, respectively.

Operating net income available to common stockholders, which excludes non-operating items (primarily merger and branch closure related expenses), was $19.7 million for the first quarter of 2025, $20.2 million for the fourth quarter of 2024 and $15.9 million for the first quarter of 2024. Operating diluted earnings per share were $0.51 for the first quarter of 2025, $0.52 for the fourth quarter of 2024 and $0.41 for the first quarter of 2024. Operating return on average assets was 0.88%, 0.90% and 0.71% for the three months ended March 31, 2025, December 31, 2024 and March 31, 2024, respectively. Operating return on average tangible common equity was 8.59%, 8.77% and 7.12% for the three months ended March 31, 2025, December 31, 2024 and March 31, 2024, respectively. See supplemental tables for a complete reconciliation of GAAP earnings to operating earnings, and other non-GAAP measures.

Net income available to common stockholders and diluted earnings per share during the first quarter of 2025 were essentially flat when compared to the fourth quarter of 2024, reflecting modest changes in all statement of income categories. The increase of $3.0 million in net income available to common stockholders versus the first quarter of 2024 was primarily due to a $5.5 million increase in net interest income, a $0.5 million decrease in provision for credit losses and a $0.6 million increase in noninterest income, partially offset by a $2.2 million increase in noninterest expenses and a $1.3 million increase in income tax expense.

“We are pleased with ConnectOne’s solid performance to start the year, demonstrating disciplined execution across the organization,” said Frank Sorrentino, Chairman and Chief Executive Officer of ConnectOne. “We look forward to finalizing our planned merger with The First of Long Island Corporation in the second quarter- bringing together two highly compatible relationship focused institutions to create a premier New York Metro community bank, providing attractive opportunities for our combined client base and the markets we serve.”

“Our net interest margin widened meaningfully again as expected — increasing 7 basis points during the 2025 first quarter — driven by a strengthened balance sheet and favorable interest rate positioning. We anticipate this positive momentum to carry through the remainder of the year and into 2026, supporting continued margin expansion.” Mr. Sorrentino commented, “Although the loan portfolio contracted slightly since year-end, our loan pipeline is robust, backed by solid credits at attractive spreads, and continues to reflect steady, diversified growth.”

“Credit quality trends remained stable during the first quarter with nonaccrual loans decreasing to 0.61% of total loans and annualized quarterly charge-offs remaining below 0.18% for the fifth consecutive quarter,” Mr. Sorrentino added. “In addition, our tangible book value per share continues to build ahead of the merger, increasing by more than 3% since announcing the transaction, our loan to deposit ratio declined to 105.6%, and our regulatory CRE concentration ratio improved by 15 percentage points to 420%.”

Mr. Sorrentino concluded, “Although there is an increasing industry-wide focus on the impact of potential tariff policy on borrower health in various loan segments, our direct exposure to import/export-dependent segments is very limited. Our ongoing portfolio reviews have shown very limited disruption to date, and we remain confident in the stability and resilience of our credit portfolio.”

Dividend Declarations

The Company announced that its Board of Directors declared a cash dividend on both its common stock and its outstanding preferred stock. A cash dividend on common stock of $0.18 per share will be paid on June 2, 2025, to common stockholders of record on May 15, 2025. A dividend of $0.328125 per depositary share, representing a 1/40^th interest in a share of the Company’s 5.25% Fixed Rate Reset Non-Cumulative Perpetual Preferred Stock, Series A, will also be paid on June 2, 2025 to holders of record on May 15, 2025.

Operating Results

Fully taxable equivalent net interest income for the first quarter of 2025 was $65.8 million, an increase of $1.0 million, or 1.6%, from the fourth quarter of 2024, due to a seven basis-point widening of the net interest margin to 2.93% from 2.86%, and a 1.2% increase in average interest earning assets, partially offset by a lower day-count. The widening of the net interest margin was primarily due to a 21 basis-point decrease in the average costs of deposits, including noninterest-bearing deposits, partially offset by an 11 basis-point decline in the rate earned on interest-earning assets.

Fully taxable equivalent net interest income for the first quarter of 2025 increased by $5.5 million, or 9.0%, from the first quarter of 2024. The increase from the first quarter of 2024 resulted primarily from a 29 basis-point widening in the net interest margin to 2.93% from 2.64%. During the first quarter of 2025, average total loans decreased by $123.8 million, or 1.5% when compared to the first quarter of 2024. The widening of the net interest margin for the first quarter of 2025 when compared to the first quarter of 2024 was primarily due to a 42 basis-point decrease in the average cost of total funds, including noninterest-bearing deposits, partially offset by a nine basis-point decrease in the loan portfolio yield.

Noninterest income was $4.5 million in the first quarter of 2025, $3.7 million in the fourth quarter of 2024 and $3.8 million in the first quarter of 2024. The $0.7 million increase in noninterest income for the first quarter of 2025 when compared to the fourth quarter of 2024 was primarily due to a $0.8 million increase in net gains on equity securities, including a $0.4 million gain on the sale of a strategic equity investment, and a $0.3 million decrease in net gains on sale of loans held-for-sale. The $0.6 million increase in noninterest income for the first quarter of 2025 when compared to the first quarter of 2024 was primarily due to a $0.4 million increase in deposit, loan and other income and a $0.4 million gain on the sale of a strategic equity investment, partially offset by a $0.2 million decrease in net gains on sale of loans held-for-sale.

Noninterest expenses were $39.3 million for the first quarter of 2025, $38.5 million for the fourth quarter of 2024 and $37.1 million for the first quarter of 2024. The $0.8 million increase in noninterest expenses for the first quarter of 2025 when compared to the fourth quarter of 2024 was primarily due to a $0.5 million increase in merger expenses, a $0.3 million increase in salaries and employee benefits and a $0.3 million bank owned life insurance (“BOLI”) restructuring charge in the first quarter of 2025, partially offset by a $0.5 million decrease in charges related to a branch closing in the fourth quarter of 2024. The $2.2 million increase in noninterest expenses for the first quarter of 2025 when compared to the first quarter of 2024 was primarily due to a $1.3 million increase in merger expenses, a $0.5 million increase in salaries and employee benefits and the aforementioned $0.3 million BOLI restructuring charge. The increases in merger expenses when compared to the fourth quarter of 2024 and the first quarter of 2024 are due to the planned merger with The First of Long Island Corporation.

Income tax expense was $7.2 million for the first quarter of 2025, $6.1 million for the fourth quarter of 2024 and $5.9 million for the first quarter of 2024. The effective tax rates for the first quarter of 2025, fourth quarter of 2024 and first quarter of 2024 were 26.1%, 23.0% and 25.5%, respectively. The effective tax rate for the fourth quarter of 2024 reflects year-end adjustments for the effective tax rate for the full-year 2024. The overall increase in the effective tax rate during the first quarter of 2025 when compared to the fourth quarter of 2024 and the first quarter of 2024 was due to an increase in income before income tax expense and a decrease in tax-free adjustments.

Asset Quality

The provision for credit losses was $3.5 million for the first quarter of 2025, $3.5 million for the fourth quarter of 2024 and $4.0 million for the first quarter of 2024. In each of the quarters presented, the provision for credit losses reflected net portfolio growth, charges related to individually evaluated loans, and changing economic forecasts and conditions.

Nonperforming assets, which includes nonaccrual loans and other real estate owned (the Bank had no other real estate owned during the periods reported), were $49.9 million as of March 31, 2025, $57.3 million as of December 31, 2024 and $47.4 million as of March 31, 2024. Nonperforming assets as a percentage of total assets were 0.51% as of March 31, 2025, 0.58% as of December 31, 2024 and 0.48% as of March 31, 2024. The ratio of nonaccrual loans to loans receivable was 0.61%, 0.69% and 0.57%, as of March 31, 2025, December 31, 2024 and March 31, 2024, respectively. The annualized net loan charge-offs ratio was 0.17% for the first quarter of 2025, 0.16% for the fourth quarter of 2024 and 0.15% for the first quarter of 2024. The allowance for credit losses represented 1.00% of loans receivable as of March 31, 2025, December 31, 2024, and March 31, 2024. The allowance for credit losses as a percentage of nonaccrual loans was 165.3% as of March 31, 2025, 144.3% as of December 31, 2024 and 174.7% as of March 31, 2024. Criticized and classified loans as a percentage of loans receivable was 2.79% as of March 31, 2025, up slightly from 2.68% as of December 31, 2024 and up from 1.30% as of March 31, 2024. Loans delinquent 30 to 89 days were 0.18% of loans receivable as of March 31, 2025, up from 0.04% as of December 31, 2024 and up from 0.04% as of March 31, 2024. The overall credit quality metrics of the Bank’s loan portfolio are sound, reflecting charge-offs, nonaccruals, delinquencies and classified loans all remaining within historical ranges.

Selected Balance Sheet Items

The Company’s total assets were $9.759 billion as of March 31, 2025, compared to $9.880 billion as of December 31, 2024. Loans receivable were $8.201 billion as of March 31, 2025 and $8.275 billion as of December 31, 2024. Total deposits were $7.767 billion as of March 31, 2025 and $7.820 billion as of December 31, 2024.

The Company’s total stockholders’ equity was $1.253 billion as of March 31, 2025 and $1.242 billion as of December 31, 2024. The increase in total stockholders’ equity was primarily due to an increase in retained earnings of $11.8 million. As of March 31, 2025, the Company’s tangible common equity ratio and tangible book value per share were 9.73% and $24.16, respectively, compared to 9.49% and $23.92, respectively, as of December 31, 2024. Total goodwill and other intangible assets were $212.7 million as of March 31, 2025, and $213.0 million as of December 31, 2024.

Use of Non-GAAP Financial Measures

In addition to the results presented in accordance with Generally Accepted Accounting Principles (“GAAP”), ConnectOne routinely supplements its evaluation with an analysis of certain non-GAAP measures. ConnectOne believes these non-GAAP financial measures, in addition to the related GAAP measures, provide meaningful information to investors in understanding our operating performance and trends. These non-GAAP measures have inherent limitations and are not required to be uniformly applied and are not audited. They should not be considered in isolation or as a substitute for an analysis of results reported under GAAP. These non-GAAP measures may not be comparable to similarly titled measures reported by other companies. Reconciliations of non-GAAP financial measures disclosed in this earnings release to the comparable GAAP measures are provided in the accompanying tables.

First Quarter 2025 Results Conference Call

Management will also host a conference call and audio webcast at 10:00 a.m. ET on April 24, 2025 to review the Company’s financial performance and operating results. The conference call dial-in number is 1 (646) 307-1963, access code 5043609. Please dial in at least five minutes before the start of the call to register. An audio webcast of the conference call will be available to the public, on a listen-only basis, via the “Investor Relations” link on the Company’s website https://www.ConnectOneBank.com or at http://ir.connectonebank.com.

A replay of the conference call will be available beginning at approximately 1:00 p.m. ET on Thursday, April 24, 2025 and ending on Thursday, May 1, 2025 by dialing 1 (609) 800-9909, access code 5043609. An online archive of the webcast will be available following the completion of the conference call at https://www.ConnectOneBank.com or at http://ir.connectonebank.com.

About ConnectOne Bancorp, Inc.

ConnectOne Bancorp, Inc., is a modern financial services company that operates, through its subsidiary, ConnectOne Bank, and the Bank’s fintech subsidiary, BoeFly, Inc. ConnectOne Bank is a high-performing commercial bank offering a full suite of banking & lending products and services that focus on small to middle-market businesses. BoeFly, Inc. is a fintech marketplace that connects borrowers in the franchise space with funding solutions through a network of partner banks. ConnectOne Bancorp, Inc. is traded on the Nasdaq Global Market under the trading symbol “CNOB,” and information about ConnectOne may be found at https://www.connectonebank.com.

This news release contains certain forward-looking statements which are based on certain assumptions and describe future plans, strategies, and expectations of the Company. These forward-looking statements are generally identified by use of the words “believe,” “expect,” “intend,” “anticipate,” “estimate,” “project,” or similar expressions. The Company’s ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse effect on the operations of the Company and its subsidiaries include, but are not limited to, those factors set forth in Item 1A – Risk Factors of the Company’s Annual Report on Form 10-K, as filed with the U.S. Securities and Exchange Commission, as supplemented by the Company’s subsequent filings with the U.S. Securities and Exchange Commission, and changes in interest rates, general economic conditions, legislative/regulatory changes, monetary and fiscal policies of the U.S. Government, including policies of the U.S. Treasury and the Federal Reserve Board, the quality or composition of the loan or investment portfolios, demand for loan products, deposit flows, competition, demand for financial services in the Company’s market area, changes in accounting principles and guidelines and the impact of the health emergencies and natural disasters on the Company, its employees and operations, and its customers. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. The Company does not undertake, and specifically disclaims any obligation, to publicly release the result of any revisions which may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.

Investor Contact:
William S. Burns
Senior Executive Vice President & CFO
201.816.4474; bburns@cnob.com

Media Contact:
Shannan Weeks
MikeWorldWide
732.299.7890; sweeks@mww.com

CONNECTONE BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF FINANCIAL CONDITION
(in thousands)

	March 31,			December 31,			March 31,
		2025			2024			2024
	(unaudited)						(unaudited)
ASSETS
Cash and due from banks	$	49,759		$	57,816		$	45,322
Interest-bearing deposits with banks		242,844			298,672			232,261
Cash and cash equivalents		292,603			356,488			277,583

Investment securities		636,806			612,847			619,397
Equity securities		18,859			20,092			19,457

Loans held-for-sale		202			743			–

Loans receivable		8,201,134			8,274,810			8,297,957
Less: Allowance for credit losses – loans		82,403			82,685			82,869
Net loans receivable		8,118,731			8,192,125			8,215,088

Investment in restricted stock, at cost		37,031			40,449			48,931
Bank premises and equipment, net		27,624			28,447			29,827
Accrued interest receivable		46,740			45,498			49,731
Bank owned life insurance		244,651			243,672			239,308
Right of use operating lease assets		13,755			14,489			11,725
Goodwill		208,372			208,372			208,372
Core deposit intangibles		4,360			4,639			5,553
Other assets		109,521			111,739			128,992
Total assets	$	9,759,255		$	9,879,600		$	9,853,964

LIABILITIES
Deposits:
Noninterest-bearing	$	1,319,196		$	1,422,044		$	1,290,523
Interest-bearing		6,448,034			6,398,070			6,298,131
Total deposits		7,767,230			7,820,114			7,588,654
Borrowings		613,053			688,064			877,568
Subordinated debentures, net		80,071			79,944			79,566
Operating lease liabilities		14,737			15,498			12,843
Other liabilities		31,225			34,276			78,724
Total liabilities		8,506,316			8,637,896			8,637,355

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS’ EQUITY
Preferred stock		110,927			110,927			110,927
Common stock		586,946			586,946			586,946
Additional paid-in capital		36,007			36,347			32,866
Retained earnings		643,265			631,446			600,118
Treasury stock		(76,116	)		(76,116	)		(76,116	)
Accumulated other comprehensive loss		(48,090	)		(47,846	)		(38,132	)
Total stockholders’ equity		1,252,939			1,241,704			1,216,609
Total liabilities and stockholders’ equity	$	9,759,255		$	9,879,600		$	9,853,964

CONNECTONE BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(dollars in thousands, except for per share data)

	Three Months Ended
	03/31/25		12/31/24			03/31/24
Interest income
Interest and fees on loans	$	115,351	$	118,346		$	120,088
Interest and dividends on investment securities:
Taxable		4,987		4,804			4,334
Tax-exempt		1,097		1,109			1,154
Dividends		889		959			1,125
Interest on federal funds sold and other short-term investments		2,465		2,815			2,906
Total interest income		124,789		128,033			129,607
Interest expense
Deposits		53,992		58,568			60,407
Borrowings		5,041		4,754			8,900
Total interest expense		59,033		63,322			69,307

Net interest income		65,756		64,711			60,300
Provision for credit losses		3,500		3,500			4,000
Net interest income after provision for credit losses		62,256		61,211			56,300

Noninterest income
Deposit, loan and other income		2,006		1,798			1,592
Income on bank owned life insurance		1,584		1,656			1,664
Net gains on sale of loans held-for-sale		332		597			506
Net gains (losses) on equity securities		529		(307	)		86
Total noninterest income		4,451		3,744			3,848

Noninterest expenses
Salaries and employee benefits		22,578		22,244			22,131
Occupancy and equipment		2,680		2,818			3,009
FDIC insurance		1,800		1,800			1,800
Professional and consulting		2,366		2,449			1,928
Marketing and advertising		595		495			677
Information technology and communications		4,604		4,523			4,389
Merger expenses		1,320		863			–
Branch closing expenses		–		477			–
Bank owned life insurance restructuring charge		327		–			–
Amortization of core deposit intangibles		279		296			321
Other expenses		2,756		2,533			2,810
Total noninterest expenses		39,305		38,498			37,065

Income before income tax expense		27,402		26,457			23,083
Income tax expense		7,160		6,086			5,878
Net income		20,242		20,371			17,205
Preferred dividends		1,509		1,509			1,509
Net income available to common stockholders	$	18,733	$	18,862		$	15,696

Earnings per common share:
Basic	$	0.49	$	0.49		$	0.41
Diluted		0.49		0.49			0.41

ConnectOne’s management believes that the supplemental financial information, including non-GAAP measures provided below, is useful to investors. The non-GAAP measures should not be viewed as a substitute for financial results determined in accordance with GAAP, and are not necessarily comparable to non-GAAP financial measures presented by other companies.

CONNECTONE BANCORP, INC.
SUPPLEMENTAL GAAP AND NON-GAAP FINANCIAL MEASURES

	As of
	Mar. 31,				Dec. 31,				Sept. 30,				Jun. 30,				Mar. 31,
		2025				2024				2024				2024				2024
Selected Financial Data	(dollars in thousands)
Total assets	$	9,759,255			$	9,879,600			$	9,639,603			$	9,723,731			$	9,853,964
Loans receivable:
Commercial		1,483,392			$	1,522,308			$	1,505,743			$	1,491,079			$	1,561,063
Commercial real estate		3,356,943				3,384,319				3,261,160				3,274,941				3,333,488
Multifamily		2,490,256				2,506,782				2,482,258				2,499,581				2,507,893
Commercial construction		617,593				616,246				616,087				639,168				646,593
Residential		256,555				249,691				250,249				256,786				254,214
Consumer		1,604				1,136				835				945				850
Gross loans		8,206,343				8,280,482				8,116,332				8,162,500				8,304,101
Net deferred loan fees		(5,209	)			(5,672	)			(4,356	)			(4,597	)			(6,144	)
Loans receivable		8,201,134				8,274,810				8,111,976				8,157,903				8,297,957
Loans held-for-sale		202				743				–				435				–
Total loans	$	8,201,336			$	8,275,553			$	8,111,976			$	8,158,338			$	8,297,957

Investment and equity securities	$	655,665			$	632,939			$	667,112			$	640,322			$	638,854
Goodwill and other intangible assets		212,732				213,011				213,307				213,604				213,925
Deposits:
Noninterest-bearing demand	$	1,319,196			$	1,422,044			$	1,262,568			$	1,268,882			$	1,290,523
Time deposits		2,550,223				2,557,200				2,614,187				2,593,165				2,623,391
Other interest-bearing deposits		3,897,811				3,840,870				3,647,350				3,713,967				3,674,740
Total deposits	$	7,767,230			$	7,820,114			$	7,524,105			$	7,576,014			$	7,588,654

Borrowings	$	613,053			$	688,064			$	742,133			$	756,144			$	877,568
Subordinated debentures (net of debt issuance costs)		80,071				79,944				79,818				79,692				79,566
Total stockholders’ equity		1,252,939				1,241,704				1,239,496				1,224,227				1,216,609

Quarterly Average Balances
Total assets	$	9,748,605			$	9,563,446			$	9,742,853			$	9,745,853			$	9,860,753
Loans receivable:
Commercial	$	1,488,962			$	1,487,850			$	1,485,777			$	1,517,446			$	1,552,360
Commercial real estate (including multifamily)		5,852,342				5,733,188				5,752,467				5,789,498				5,890,853
Commercial construction		610,859				631,022				628,740				652,227				637,993
Residential		256,430				250,589				252,975				254,284				252,965
Consumer		5,687				5,204				7,887				5,155				5,091
Gross loans		8,214,280				8,107,853				8,127,846				8,218,610				8,339,262
Net deferred loan fees		(5,525	)			(4,727	)			(4,513	)			(5,954	)			(6,533	)
Loans receivable		8,208,755				8,103,126				8,123,333				8,212,656				8,332,729
Loans held-for-sale		259				498				83				169				99
Total loans	$	8,209,014			$	8,103,624			$	8,123,416			$	8,212,825			$	8,332,828

Investment and equity securities	$	655,191			$	653,988			$	650,897			$	637,551			$	633,270
Goodwill and other intangible assets		212,915				213,205				213,502				213,813				214,133
Deposits:
Noninterest-bearing demand	$	1,305,722			$	1,304,699			$	1,259,912			$	1,256,251			$	1,254,201
Time deposits		2,480,990				2,478,163				2,625,329				2,587,706				2,567,767
Other interest-bearing deposits		3,888,131				3,838,575				3,747,427				3,721,167				3,696,374
Total deposits	$	7,674,843			$	7,621,437			$	7,632,668			$	7,565,124			$	7,518,342

Borrowings	$	686,391			$	648,300			$	717,586			$	787,256			$	947,003
Subordinated debentures (net of debt issuance costs)		79,988				79,862				79,735				79,609				79,483
Total stockholders’ equity		1,254,373				1,241,738				1,234,724				1,220,621				1,220,818

	Three Months Ended
	Mar. 31,				Dec. 31,				Sept. 30,				Jun. 30,				Mar. 31,
		2025				2024				2024				2024				2024
	(dollars in thousands, except for per share data)
Net interest income	$	65,756			$	64,711			$	60,887			$	61,439			$	60,300
Provision for credit losses		3,500				3,500				3,800				2,500				4,000
Net interest income after provision for credit losses		62,256				61,211				57,087				58,939				56,300
Noninterest income
Deposit, loan and other income		2,006				1,798				1,817				1,654				1,592
Income on bank owned life insurance		1,584				1,656				2,145				1,677				1,664
Net gains on sale of loans held-for-sale		332				597				343				1,277				506
Net gains (losses) on equity securities		529				(307	)			432				(209	)			86
Total noninterest income		4,451				3,744				4,737				4,399				3,848
Noninterest expenses
Salaries and employee benefits		22,578				22,244				22,957				22,721				22,131
Occupancy and equipment		2,680				2,818				2,889				2,899				3,009
FDIC insurance		1,800				1,800				1,800				1,800				1,800
Professional and consulting		2,366				2,449				2,147				1,923				1,928
Marketing and advertising		595				495				635				613				677
Information technology and communications		4,604				4,523				4,464				4,198				4,389
Merger expenses		1,320				863				742				–				–
Branch closing expenses		–				477				–				–				–
Bank owned life insurance restructuring charge		327				–				–				–				–
Amortization of core deposit intangible		279				296				297				321				321
Other expenses		2,756				2,533				2,710				3,119				2,810
Total noninterest expenses		39,305				38,498				38,641				37,594				37,065

Income before income tax expense		27,402				26,457				23,183				25,744				23,083
Income tax expense		7,160				6,086				6,022				6,688				5,878
Net income		20,242				20,371				17,161				19,056				17,205
Preferred dividends		1,509				1,509				1,509				1,509				1,509
Net income available to common stockholders	$	18,733			$	18,862			$	15,652			$	17,547			$	15,696

Weighted average diluted common shares outstanding		38,511,237				38,519,581				38,525,484				38,448,594				38,511,747
Diluted EPS	$	0.49			$	0.49			$	0.41			$	0.46			$	0.41

Reconciliation of GAAP Net Income to Operating Net Income:
Net income	$	20,242			$	20,371			$	17,161			$	19,056			$	17,205
Merger expenses		1,320				863				742				–				–
Branch closing expenses		–				477				–				–				–
Bank owned life insurance restructuring charge		327				–				–				–				–
Amortization of core deposit intangibles		279				296				297				321				321
Net (gains) losses on equity securities		(529	)			307				(432	)			209				(86	)
Tax impact of adjustments		(420	)			(585	)			(171	)			(149	)			(66	)
Operating net income	$	21,219			$	21,729			$	17,597			$	19,437			$	17,374
Preferred dividends		1,509				1,509				1,509				1,509				1,509
Operating net income available to common stockholders	$	19,710			$	20,220			$	16,088			$	17,928			$	15,865

Operating diluted EPS (non-GAAP) ⁽¹⁾	$	0.51			$	0.52			$	0.42			$	0.47			$	0.41

Return on Assets Measures
Average assets	$	9,748,605			$	9,653,446			$	9,742,853			$	9,745,853			$	9,860,753
Return on avg. assets		0.84	%			0.84	%			0.70	%			0.79	%			0.70
Operating return on avg. assets (non-GAAP) ⁽²⁾		0.88				0.90				0.72				0.80				0.71

⁽¹⁾ Operating net income available to common stockholders divided by weighted average diluted shares outstanding.
⁽²⁾ Operating net income divided by average assets.

	Three Months Ended
	Mar. 31,				Dec. 31,				Sept. 30,				Jun. 30,				Mar. 31,
		2025				2024				2024				2024				2024
Return on Equity Measures	(dollars in thousands)
Average stockholders’ equity	$	1,254,373			$	1,241,738			$	1,234,724			$	1,220,621			$	1,220,818
Less: average preferred stock		(110,927	)			(110,927	)			(110,927	)			(110,927	)			(110,927	)
Average common equity	$	1,143,446			$	1,130,811			$	1,123,797			$	1,109,694			$	1,109,891
Less: average intangible assets		(212,915	)			(213,205	)			(213,502	)			(213,813	)			(214,133	)
Average tangible common equity	$	930,531			$	917,606			$	910,295			$	895,881			$	895,758
Return on avg. common equity (GAAP)		6.64		%		6.64		%		5.54		%		6.36		%		5.69
Operating return on avg. common equity (non-GAAP) ⁽³⁾		6.99				7.11				5.70				6.50				5.75
Return on avg. tangible common equity (non-GAAP) ⁽⁴⁾		8.25				8.27				6.93				7.98				7.15
Operating return on avg. tangible common equity (non-GAAP) ⁽⁵⁾		8.59				8.77				7.03				8.05				7.12

Efficiency Measures
Total noninterest expenses	$	39,305			$	38,498			$	38,641			$	37,594			$	37,065
Merger expenses		(1,320	)			(863	)			(742	)			–				–
Branch closing expenses		–				(477	)			–				–				–
Bank owned life insurance restructuring charge		(327	)			–				–				–				–
Amortization of core deposit intangibles		(279	)			(296	)			(297	)			(321	)			(321	)
Operating noninterest expense	$	37,379			$	36,862			$	37,602			$	37,273			$	36,744

Net interest income (tax equivalent basis)	$	66,580			$	65,593			$	61,710			$	62,255			$	61,111
Noninterest income		4,451				3,744				4,737				4,399				3,848
Net (gains) losses on equity securities		(529	)			307				(432	)			209				(86	)
Operating revenue	$	70,502			$	69,644			$	66,015			$	66,863			$	64,873

Operating efficiency ratio (non-GAAP) ⁽⁶⁾		53.0	%			52.9	%			57.0	%			55.7	%			56.6

Net Interest Margin
Average interest-earning assets	$	9,224,712			$	9,117,201			$	9,206,038			$	9,210,050			$	9,323,291
Net interest income (tax equivalent basis)		66,580				65,593				61,710				62,255				61,111
Net interest margin (GAAP)		2.93	%			2.86	%			2.67	%			2.72	%			2.64

⁽³⁾ Operating net income available to common stockholders divided by average common equity.
⁽⁴⁾ Net income available to common stockholders, excluding amortization of intangible assets, divided by average tangible common equity.
⁽⁵⁾ Operating net income available to common stockholders, divided by average tangible common equity.
⁽⁶⁾ Operating noninterest expense divided by operating revenue.

	As of
	Mar. 31,				Dec. 31,				Sept. 30,				Jun. 30,				Mar. 31,
		2025				2024				2024				2024				2024
Capital Ratios and Book Value per Share	(dollars in thousands, except for per share data)
Stockholders equity	$	1,252,939			$	1,241,704			$	1,239,496			$	1,224,227			$	1,216,609
Less: preferred stock		(110,927	)			(110,927	)			(110,927	)			(110,927	)			(110,927	)
Common equity	$	1,142,012			$	1,130,777			$	1,128,569			$	1,113,300			$	1,105,682
Less: intangible assets		(212,732	)			(213,011	)			(213,307	)			(213,604	)			(213,925	)
Tangible common equity	$	929,280			$	917,766			$	915,262			$	899,696			$	891,757

Total assets	$	9,759,255			$	9,879,600			$	9,639,603			$	9,723,731			$	9,853,964
Less: intangible assets		(212,732	)			(213,011	)			(213,307	)			(213,604	)			(213,925	)
Tangible assets	$	9,546,523			$	9,666,589			$	9,426,296			$	9,510,127			$	9,640,039

Common shares outstanding		38,469,975				38,370,317				38,368,217				38,365,069				38,333,053

Common equity ratio (GAAP)		11.70	%			11.45	%			11.71	%			11.45	%			11.22
Tangible common equity ratio (non-GAAP) ⁽⁷⁾		9.73				9.49				9.71				9.46				9.25

Regulatory capital ratios (Bancorp):
Leverage ratio		11.33	%			11.33	%			11.10	%			10.97	%			10.73
Common equity Tier 1 risk-based ratio		11.14				10.97				11.07				10.90				10.70
Risk-based Tier 1 capital ratio		12.46				12.29				12.42				12.25				12.03
Risk-based total capital ratio		14.29				14.11				14.29				14.10				13.88

Regulatory capital ratios (Bank):
Leverage ratio		11.67	%			11.66	%			11.43	%			11.29	%			11.10
Common equity Tier 1 risk-based ratio		12.82				12.63				12.79				12.60				12.43
Risk-based Tier 1 capital ratio		12.82				12.63				12.79				12.60				12.43
Risk-based total capital ratio		13.79				13.60				13.77				13.58				13.41

Book value per share (GAAP)	$	29.69			$	29.47			$	29.41			$	29.02			$	28.84
Tangible book value per share (non-GAAP) ⁽⁸⁾		24.16				23.92				23.85				23.45				23.26

Net Loan Charge-offs (Recoveries):
Net loan charge-offs (recoveries):
Charge-offs	$	3,555			$	3,363			$	3,559			$	3,595			$	3,185
Recoveries		(155	)			(29	)			(53	)			(324	)			(23	)
Net loan charge-offs	$	3,400			$	3,334			$	3,506			$	3,271			$	3,162
Net loan charge-offs as a % of average loans receivable (annualized)		0.17	%			0.16	%			0.17	%			0.16	%			0.15

Asset Quality
Nonaccrual loans	$	49,860			$	57,310			$	51,300			$	46,026			$	47,438
Other real estate owned		–				–				–				–				–
Nonperforming assets	$	49,860			$	57,310			$	51,300			$	46,026			$	47,438

Allowance for credit losses – loans (“ACL”)	$	82,403			$	82,685			$	82,494			$	82,077			$	82,869
Loans receivable		8,201,134				8,274,810				8,111,976				8,157,903				8,297,957

Nonaccrual loans as a % of loans receivable		0.61		%		0.69		%		0.63		%		0.56	%			0.57
Nonperforming assets as a % of total assets		0.51				0.58				0.53				0.47				0.48
ACL as a % of loans receivable		1.00				1.00				1.02				1.01				1.00
ACL as a % of nonaccrual loans		165.3				144.3				160.8				178.3				174.7

⁽⁷⁾ Tangible common equity divided by tangible assets
⁽⁸⁾ Tangible common equity divided by common shares outstanding at period-end

CONNECTONE BANCORP, INC.
NET INTEREST MARGIN ANALYSIS
(dollars in thousands)

	For the Quarter Ended
	March 31, 2025								December 31, 2024									March 31, 2024
	Average									Average									Average
Interest-earning assets:	Balance			Interest			Rate ⁽⁷⁾			Balance			Interest			Rate ⁽⁷⁾			Balance			Interest			Rate ⁽⁷⁾
Investment securities ^{(1) (2)}	$	745,873		$	6,375		3.47	%		$	736,131		$	6,207		3.35	%		$	720,303		$	5,794		3.24	%
Loans receivable and loans held-for-sale ^{(2) (3) (4)}		8,209,014			115,883		5.73				8,103,624			118,934		5.84				8,332,828			120,592		5.82
Federal funds sold and interest-
bearing deposits with banks		229,491			2,466		4.36				238,957			2,815		4.69				218,212			2,906		5.36
Restricted investment in bank stock		40,334			889		8.94				38,489			959		9.91				51,948			1,126		8.72
Total interest-earning assets		9,224,712			125,613		5.52				9,117,201			128,915		5.63				9,323,291			130,418		5.63
Allowance for loan losses		(84,027	)								(83,938	)								(84,005	)
Noninterest-earning assets		607,920									620,183									621,467
Total assets	$	9,748,605								$	9,653,446								$	9,860,753

Interest-bearing liabilities:
Money market deposits		1,572,287			11,287		2.91				1,642,737			12,694		3.07				1,571,640			13,191		3.38
Savings deposits		656,789			5,227		3.23				559,450			4,710		3.35				441,551			3,385		3.08
Time deposits		2,480,990			25,154		4.11				2,478,163			27,374		4.39				2,567,767			28,038		4.39
Other interest-bearing deposits		1,659,055			12,324		3.01				1,636,388			13,790		3.35				1,683,183			15,793		3.77
Total interest-bearing deposits		6,369,121			53,992		3.44				6,316,738			58,568		3.69				6,264,141			60,407		3.88

Borrowings		686,391			3,725		2.20				648,300			3,430		2.10				947,003			7,567		3.21
Subordinated debentures		79,988			1,298		6.58				79,862			1,305		6.50				79,483			1,311		6.63
Finance lease		1,210			18		6.03				1,280			19		5.91				1,483			22		5.97
Total interest-bearing liabilities		7,136,710			59,033		3.35				7,046,180			63,322		3.58				7,292,110			69,307		3.82

Noninterest-bearing demand deposits		1,305,722									1,304,699									1,254,201
Other liabilities		51,800									60,829									93,624
Total noninterest-bearing liabilities		1,357,522									1,365,528									1,347,825
Stockholders’ equity		1,254,373									1,241,738									1,220,818
Total liabilities and stockholders’ equity	$	9,748,605								$	9,653,446								$	9,860,753

Net interest income (tax equivalent basis)					66,580									65,593									61,111
Net interest spread ⁽⁵⁾							2.17	%								2.05	%								1.80	%

Net interest margin ⁽⁶⁾							2.93	%								2.86	%								2.64	%

Tax equivalent adjustment					(824	)								(882	)								(811	)
Net interest income				$	65,756								$	64,711								$	60,300

⁽¹⁾ Average balances are calculated on amortized cost.
⁽²⁾ Interest income is presented on a tax equivalent basis using 21% federal tax rate.
⁽³⁾ Includes loan fee income.
⁽⁴⁾ Loans include nonaccrual loans.
⁽⁵⁾ Represents difference between the average yield on interest-earning assets and the average cost of interest-bearing
liabilities and is presented on a tax equivalent basis.
⁽⁶⁾ Represents net interest income on a tax equivalent basis divided by average total interest-earning
assets.
⁽⁷⁾ Rates are annualized.

The MIL Network –

April 24, 2025

MIL-OSI: First Northwest Bancorp Reports First Quarter 2025 Improved Profitability

Source: GlobeNewswire (MIL-OSI)

PORT ANGELES, Wash., April 24, 2025 (GLOBE NEWSWIRE) — First Northwest Bancorp (Nasdaq: FNWB) (“First Northwest” or the “Company”) today reported net income of $1.5 million for the first quarter of 2025, compared to a net loss of $2.8 million for the fourth quarter of 2024 and net income of $396,000 for the first quarter of 2024. Basic and diluted income per share were $0.17 for the first quarter of 2025, compared to basic and diluted loss per share of $0.32 for the fourth quarter of 2024 and basic and diluted income per share of $0.04 for the first quarter of 2024.

In the first quarter of 2025, the Company recorded adjusted pre-tax, pre-provision net revenue (“PPNR”)⁽¹⁾ of $1.5 million, compared to $1.4 million for the preceding quarter and $1.2 million for the first quarter of 2024.

The Board of Directors of First Northwest declared a quarterly cash dividend of $0.07 per common share, payable on May 23, 2025, to shareholders of record as of the close of business on May 9, 2025.

Quote from First Northwest President and CEO, Matthew P. Deines:
“We were pleased to see improved profitability in the first quarter of 2025, which helped grow capital levels and tangible book value. We saw improvement on our asset quality metrics, with nonperforming loans 14% lower than the prior quarter, and remain focused on continued asset quality improvement over the balance of 2025. Core commercial and consumer customer growth was positive during the first quarter, with lower net loans and deposits largely the result of a decrease in funding to one large wholesale relationship and reduced brokered deposit balances. We expect better core growth and asset quality trends, combined with ongoing expense discipline and modest margin improvement, will continue to improve profitability and capital in future quarters. With improved profitability, we are evaluating the potential for future stock buybacks.”

Key Points for First Quarter and Going Forward

Positive Balance Sheet Trends:

A favorable deposit mix shift included a $45.0 million decrease in brokered deposits while core customer deposits grew $23.0 million. The loan-to-deposit ratio was stable at 99.9% compared to 99.3% in the fourth quarter of 2024.
The Company reduced borrowings by $28.9 million. The total cost of funds decreased to 2.67% compared to 2.80% in the fourth quarter of 2024.

Update on provision for credit losses:

The Company recorded a $1.6 million provision for credit losses on loans in the first quarter of 2025, primarily due to $1.4 million of charge-offs related to three commercial business loans, one commercial construction loan and a small number of consumer loans. This compares to loan credit loss provisions of $3.8 million for the preceding quarter and $1.2 million for the first quarter of 2024.
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 and expect further improvement in nonperforming loans over the course of 2025.

Other significant events:

First Fed Bank’s (“First Fed” or the “Bank”) balance sheet restructuring continued with the remaining bank-owned life insurance policy (“BOLI”) surrender transaction recorded in the first quarter of 2025, with $266,000 of tax and penalties recorded in the provision for income tax. The surrendered policy value was reinvested in the second quarter of 2025. We expect to receive the return of the surrendered funds early in the third quarter of 2025.
We sadly lost a former Bank employee in the first quarter of 2025, resulting in a $1.1 million BOLI death benefit gain.
The Company recorded a $846,000 gain on extinguishment of debt related to repurchasing $5.0 million of subordinated debt at a discount during the first quarter of 2025. In addition to the current quarter gain, the future cost related to interest expense on the subordinated debt will be reduced.
The Company also recognized a $315,000 gain on the conversion of a commercial business loan receivable into a Series A equity investment during the first quarter of 2025.

(1) See reconciliation of Non-GAAP Financial Measures later in this release.

Selected Quarterly Financial Ratios:

	As of or For the Quarter Ended
	March 31, 2025			December 31, 2024			September 30, 2024			June 30, 2024			March 31, 2024
Performance ratios: ⁽¹⁾
Return on average assets		0.28	%		-0.51	%		-0.36	%		-0.40	%		0.07	%
Adjusted PPNR return on average assets ⁽²⁾		0.27			0.26			0.17			0.10			0.22
Return on average equity		3.92			-6.92			-4.91			-5.47			0.98
Net interest margin ⁽³⁾		2.76			2.73			2.70			2.76			2.76
Efficiency ratio ⁽⁴⁾		79.4			92.2			100.3			72.3			88.8
Equity to total assets		7.22			6.89			7.13			7.17			7.17
Book value per common share	$	16.63		$	16.45		$	17.17		$	16.81		$	17.00
Tangible performance ratios: ⁽¹⁾
Tangible common equity to tangible assets ⁽²⁾		7.15	%		6.83	%		7.06	%		7.10	%		7.10	%
Return on average tangible common equity ⁽²⁾		3.96			-6.99			-4.96			-5.53			0.99
Tangible book value per common share ⁽²⁾	$	16.48		$	16.29		$	17.00		$	16.64		$	16.83
Capital ratios (First Fed): ⁽⁵⁾
Tier 1 leverage		9.5	%		9.4	%		9.4	%		9.4	%		9.7	%
Common equity Tier 1 capital		12.7			12.4			12.2			12.4			12.6
Total risk-based		13.9			13.6			13.4			13.5			13.6

(1	)	Performance ratios are annualized, where appropriate.
(2	)	See reconciliation of Non-GAAP Financial Measures later in this release.
(3	)	Net interest income divided by average interest-earning assets.
(4	)	Total noninterest expense as a percentage of net interest income and total other noninterest income.
(5	)	Current period capital ratios are preliminary and subject to finalization of the FDIC Call Report.

Adjusted Pre-tax, Pre-Provision Net Revenue ⁽¹⁾

Adjusted PPNR for the first quarter of 2025 increased $40,000 to $1.5 million, compared to $1.4 million for the preceding quarter, and increased $308,000 from $1.2 million in the first quarter one year ago.

	For the Quarter Ended
(Dollars in thousands)	March 31, 2025		December 31, 2024			September 30, 2024			June 30, 2024			March 31, 2024
Net interest income	$	13,847	$	14,137		$	14,020		$	14,235		$	13,928
Total noninterest income		4,092		1,300			1,779			7,347			2,188
Total revenue		17,939		15,437			15,799			21,582			16,116
Total noninterest expense		14,249		14,233			15,848			15,609			14,303
PPNR ⁽¹⁾		3,690		1,204			(49	)		5,973			1,813
Less selected nonrecurring adjustments to PPNR:
BOLI death benefit		1,059		1,536			—			—			—
Gain on extinguishment of subordinated debt included in other income		846		—			—			—			—
Gain on conversion of loan receivable into Series A equity investment		315		—			—			—			—
Equity investment repricing adjustment		—		(1,762	)		—			—			651
One-time compensation payouts related to reduction in force		—		—			(996	)		—			—
Net gain on sale of premises and equipment		—		—			—			7,919			—
Sale leaseback taxes and assessments included in occupancy and equipment		—		—			—			(359	)		—
Net gain on sale of investment securities		—		—			—			(2,117	)		—
Adjusted PPNR ⁽¹⁾	$	1,470	$	1,430		$	947		$	530		$	1,162

(1) See reconciliation of Non-GAAP Financial Measures later in this release.

Total interest income decreased $1.4 million to $26.8 million for the first quarter of 2025, compared to $28.2 million for the previous quarter, and decreased $503,000 compared to $27.3 million in the first quarter of 2024. Interest income decreased in the first quarter of 2025 primarily due to a decrease in the income earned on loans receivable and reduced interest income received on Company deposit accounts as both yields earned and average volumes decreased. Average loan balances and related interest income were impacted by a significant decrease in the Northpointe Bank Mortgage Purchase Program (“Northpointe Bank MPP”) of $24.7 million and $461,000, respectively. Variable-rate yields on loans and investments were impacted by the cumulative 100 basis points Federal Reserve rate cuts which occurred between September and December 2024.
Total interest expense decreased $1.1 million to $13.0 million for the first quarter of 2025, compared to $14.1 million for the previous quarter, and decreased $422,000 compared to $13.4 million in the first quarter of 2024. Interest expense decreased in the first quarter of 2025 primarily due to decreases in interest paid on brokered certificates of deposit (“CDs”), money market accounts and customer CDs.
The net interest margin increased to 2.76% for the first quarter of 2025, from 2.73% for the prior quarter, and was flat compared to the first quarter of 2024. The Company reported reduced rates and declining volumes of CDs and money market accounts during the first quarter of 2025 which lowered costs; however, these savings were partially offset by a decrease in interest earned on loans and an increase in cost due to higher average borrowings.
Noninterest income included a $1.1 million BOLI death benefit payment received due to the passing of a former employee, a $846,000 gain on extinguishment of debt and a $315,000 gain on the conversion of a loan receivable into an equity investment during the current quarter.
Noninterest expense was relatively unchanged at $14.3 million for the first quarter of 2025, compared to the previous quarter and the first quarter of 2024.

Allowance for Credit Losses on Loans (“ACLL”) and Credit Quality

The allowance for credit losses on loans (“ACLL”) increased $176,000 to $20.6 million at March 31, 2025, from $20.5 million at December 31, 2024. The ACLL as a percentage of total loans was 1.24% at March 31, 2025, an increase from 1.21% at December 31, 2024, and an increase from 1.05% one year earlier. The small increase to the pooled loan reserve combined with charge-offs totaling $1.4 million resulted in a provision expense of $1.6 million for the quarter ended March 31, 2025.

Nonperforming loans totaled $26.4 million at March 31, 2025, a decrease of $4.1 million, or 13.5%, from December 31, 2024. ACLL to nonperforming loans increased to 78% at March 31, 2025, from 67% at December 31, 2024, and decreased from 92% at March 31, 2024. This ratio increased during the first quarter as principal payments and charge-offs decreased balances on loans that were already adequately reserved.

Classified loans decreased $4.7 million to $37.9 million at March 31, 2025, from $42.5 million at December 31, 2024, primarily due to $3.9 million in principal payments received on two commercial construction loans and charge-offs totaling $825,000 on two commercial business loans and one commercial construction loan during the first quarter. An $8.1 million construction loan relationship, which became a classified loan in the fourth quarter of 2022; a $7.2 million commercial construction loan relationship, which became classified in the second quarter of 2024; and a $6.2 million commercial loan relationship, which became classified in the fourth quarter of 2023, account for 57% of the classified loan balance at March 31, 2025. 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 a group of commercial business loans that have similar collateral, with 16 loans totaling $1.7 million included in classified loans at March 31, 2025, and an additional seven loans totaling $2.4 million included in the special mention risk grading category.

	For the Quarter Ended
ACLL ($ in thousands)	March 31, 2025			December 31, 2024			September 30, 2024			June 30, 2024			March 31, 2024
Balance at beginning of period	$	20,449		$	21,970		$	19,343		$	17,958		$	17,510
Charge-offs:
Construction and land		(374	)		(411	)		—			(3,978	)		—
Auto and other consumer		(243	)		(364	)		(492	)		(832	)		(806	)
Commercial business		(811	)		(4,596	)		(24	)		(2,643	)		(33	)
Total charge-offs		(1,428	)		(5,371	)		(516	)		(7,453	)		(839	)
Recoveries:
One-to-four family		—			—			42			—			2
Commercial real estate		6			2			—			—			—
Auto and other consumer		43			52			24			198			46
Commercial business		2			36			—			—			—
Total recoveries		51			90			66			198			48
Net loan charge-offs		(1,377	)		(5,281	)		(450	)		(7,255	)		(791	)
Provision for credit losses		1,553			3,760			3,077			8,640			1,239
Balance at end of period	$	20,625		$	20,449		$	21,970		$	19,343		$	17,958

Average total loans		1,662,164			1,708,232			1,718,402			1,717,830			1,678,656
Annualized net charge-offs to average outstanding loans		0.34	%		1.23	%		0.10	%		1.70	%		0.19	%

Asset Quality ($ in thousands)	March 31, 2025			December 31, 2024			September 30, 2024			June 30, 2024			March 31, 2024
Nonaccrual loans:
One-to-four family	$	1,404		$	1,477		$	1,631		$	1,750		$	1,237
Multi-family		—			—			—			708			708
Commercial real estate		5,574			5,598			5,634			14			22
Construction and land		15,280			19,544			19,382			19,292			14,440
Home equity		54			55			116			118			121
Auto and other consumer		710			700			894			746			1,012
Commercial business		3,365			3,141			2,719			1,003			1,941
Total nonaccrual loans		26,387			30,515			30,376			23,631			19,481
Other real estate owned		—			—			—			—			—
Total nonperforming assets	$	26,387		$	30,515		$	30,376		$	23,631		$	19,481

Nonaccrual loans as a % of total loans ⁽¹⁾		1.59	%		1.80	%		1.75	%		1.39	%		1.14	%
Nonperforming assets as a % of total assets ⁽²⁾		1.21			1.37			1.35			1.07			0.87
ACLL as a % of total loans		1.24			1.21			1.27			1.14			1.05
ACLL as a % of nonaccrual loans		78.16			67.01			72.33			81.85			92.18
Total past due loans to total loans		1.74			1.98			1.92			1.45			1.91

(1	)	Nonperforming loans consists of nonaccruing loans and accruing loans more than 90 days past due.
(2	)	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.

Financial Condition and Capital

Investment securities decreased $24.9 million, or 7.3%, to $315.4 million at March 31, 2025, compared to $340.3 million three months earlier, and decreased $10.5 million compared to $326.0 million at March 31, 2024. The market value of the portfolio increased $3.1 million during the first quarter of 2025. The estimated average life of the securities portfolio was approximately 6.9 years at March 31, 2025, 6.9 years at the prior quarter end and 7.8 years at the end of the first quarter of 2024. The effective duration of the portfolio was approximately 4.3 years at March 31, 2025, compared to 3.9 years at the prior quarter end and 4.4 years at the end of the first quarter of 2024. The MBS non-agency portfolio decreased $20.2 million due to early redemptions and maturities and $2.4 million from regular repayment activity during the most recent quarter.

Investment Securities ($ in thousands)		March 31, 2025		December 31, 2024		March 31, 2024	Three Month % Change		One Year % Change
Available for Sale at Fair Value
Municipal bonds	$	78,295	$	77,876	$	87,004	0.5	%	-10.0	%
U.S. government agency issued asset-backed securities (ABS agency)		12,643		12,876		14,822	-1.8		-14.7
Corporate issued asset-backed securities (ABS corporate)		15,671		16,122		13,929	-2.8		12.5
Corporate issued debt securities (Corporate debt)		55,067		54,491		53,031	1.1		3.8
U.S. Small Business Administration securities (SBA)		8,061		8,666		7,911	-7.0		1.9
Mortgage-backed securities:
U.S. government agency issued mortgage-backed securities (MBS agency)		96,642		98,697		83,271	-2.1		16.1
Non-agency issued mortgage-backed securities (MBS non-agency)		49,054		71,616		65,987	-31.5		-25.7
Total securities available for sale	$	315,433	$	340,344	$	325,955	-7.3		-3.2

Net loans, excluding loans held for sale, decreased $31.4 million, or 1.9%, to $1.64 billion at March 31, 2025, from $1.68 billion at December 31, 2024, and decreased $49.0 million, or 2.9%, from $1.69 billion one year prior. Construction loans that converted into fully amortizing loans during the quarter totaled $13.3 million. Loan payoffs of $71.0 million, regular payments of $29.4 million and charge-offs totaling $1.4 million outpaced new loan funding totaling $45.3 million and draws on existing loans totaling $23.3 million. The large decrease in commercial business loans was due to the change in funding needs of the Northpointe Bank MPP, which dropped $36.2 million compared to the prior quarter.

Loans ($ in thousands)		March 31, 2025			December 31, 2024		March 31, 2024	Three Month % Change		One Year % Change
Real Estate:
One-to-four family	$	394,428		$	395,315	$	383,905	-0.2	%	2.7	%
Multi-family		338,147			332,596		339,538	1.7		-0.4
Commercial real estate		392,882			390,379		385,130	0.6		2.0
Construction and land		64,877			78,110		125,347	-16.9		-48.2
Total real estate loans		1,190,334			1,196,400		1,233,920	-0.5		-3.5
Consumer:
Home equity		79,151			79,054		72,391	0.1		9.3
Auto and other consumer		273,878			268,876		268,834	1.9		1.9
Total consumer loans		353,029			347,930		341,225	1.5		3.5
Commercial business		120,486			151,493		136,297	-20.5		-11.6
Total loans receivable		1,663,849			1,695,823		1,711,442	-1.9		-2.8
Less:
Derivative basis adjustment		(566	)		188		710	-401.1		-179.7
Allowance for credit losses on loans		20,625			20,449		17,958	0.9		14.9
Total loans receivable, net	$	1,643,790		$	1,675,186	$	1,692,774	-1.9		-2.9

Total deposits decreased $22.0 million to $1.67 billion at March 31, 2025, compared to $1.69 billion at December 31, 2024, and was relatively unchanged compared to one year prior. During the first quarter of 2025, total customer deposit balances increased $23.0 million and brokered deposit balances decreased $45.0 million. Overall, the current rate environment continues to contribute to greater competition for deposits leading to higher rates paid on interest-bearing demand deposits and savings accounts during the current quarter. The deposit mix compared to March 31, 2024, also reflects a shift to higher demand and money market account balances with increased rates paid on those accounts while rates paid on certificate and savings accounts decreased.

Deposits ($ in thousands)		March 31, 2025		December 31, 2024		March 31, 2024	Three Month % Change		One Year % Change
Noninterest-bearing demand deposits	$	247,890	$	256,416	$	252,761	-3.3	%	-1.9	%
Interest-bearing demand deposits		169,912		164,891		170,729	3.0		-0.5
Money market accounts		424,469		413,822		395,480	2.6		7.3
Savings accounts		235,188		205,055		236,550	14.7		-0.6
Certificates of deposit, customer		450,663		464,928		418,904	-3.1		7.6
Certificates of deposit, brokered		137,946		182,914		192,200	-24.6		-28.2
Total deposits	$	1,666,068	$	1,688,026	$	1,666,624	-1.3		0.0

Total shareholders’ equity increased to $157.0 million at March 31, 2025, compared to $153.9 million three months earlier, due to an increase in the after-tax fair market values of the available-for-sale investment securities portfolio of $2.4 million and net income of $1.5 million, partially offset by dividends declared of $656,000 and a decrease in the after-tax fair market values of derivatives of $425,000.

Capital levels for both the Company and the Bank remain in excess of applicable regulatory requirements and the Bank was categorized as “well-capitalized” at March 31, 2025. Preliminary calculations of Common Equity Tier 1 and Total Risk-Based Capital Ratios at March 31, 2025, were 12.7% and 13.9%, respectively.

First Northwest continued to return capital to our shareholders through cash dividends during the first quarter of 2025. The Company paid cash dividends totaling $649,000 in the first quarter of 2025. No shares of common stock were repurchased under the Company’s April 2024 Stock Repurchase Plan (the “Repurchase Plan”) during the quarter ended March 31, 2025. There are 846,123 shares that remain available for repurchase under the Repurchase Plan.

We recommend reading this earnings release in conjunction with the First Quarter 2025 Investor Presentation, located at http://investor.ourfirstfed.com/quarterly-reports and included as an exhibit to our April 24, 2025, Current Report on Form 8-K.

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 18 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 and execution on certain strategies, 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, including potential recessionary and other unfavorable conditions and trends relating to housing markets, costs of living, unemployment levels, interest rates, supply chain difficulties and inflationary pressures, among other things; legislative, regulatory, and policy changes; 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 2025 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
Phyllis Nomura, EVP and Chief Financial Officer
IRGroup@ourfirstfed.com
360-457-0461

FIRST NORTHWEST BANCORP AND SUBSIDIARY CONSOLIDATED BALANCE SHEETS (Dollars in thousands, except share data) (Unaudited)

	March 31, 2025			December 31, 2024			September 30, 2024			June 30, 2024			March 31, 2024
ASSETS
Cash and due from banks	$	18,911		$	16,811		$	17,953		$	19,184		$	15,562
Interest-earning deposits in banks		51,412			55,637			64,769			63,995			61,784
Investment securities available for sale, at fair value		315,433			340,344			310,860			306,714			325,955
Loans held for sale		2,940			472			378			1,086			988
Loans receivable (net of allowance for credit losses on loans $20,625, $20,449, $21,970, $19,343, and $17,958)		1,643,790			1,675,186			1,714,416			1,677,764			1,692,774
Federal Home Loan Bank (FHLB) stock, at cost		13,106			14,435			14,435			13,086			15,876
Accrued interest receivable		8,319			8,159			8,939			9,466			8,909
Premises held for sale, net		—			—			—			—			6,751
Premises and equipment, net		9,870			10,129			10,436			10,714			11,028
Servicing rights on sold loans, at fair value		3,301			3,281			3,584			3,740			3,820
Bank-owned life insurance, net		31,786			41,150			41,429			41,113			34,681
Equity and partnership investments		15,026			13,229			14,912			15,085			15,121
Goodwill and other intangible assets, net		1,082			1,082			1,083			1,084			1,085
Deferred tax asset, net		13,179			13,738			10,802			12,216			12,704
Right-of-use (“ROU”) asset, net		16,687			17,001			17,315			17,627			5,841
Prepaid expenses and other assets		31,588			21,352			24,175			23,088			27,141
Total assets	$	2,176,430		$	2,232,006		$	2,255,486		$	2,215,962		$	2,240,020

LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits	$	1,666,068		$	1,688,026		$	1,711,641		$	1,708,288		$	1,666,624
Borrowings		307,091			336,014			334,994			302,575			371,455
Accrued interest payable		2,163			3,295			2,153			3,143			2,830
Lease liability, net		17,266			17,535			17,799			18,054			6,227
Accrued expenses and other liabilities		24,217			31,770			25,625			23,717			29,980
Advances from borrowers for taxes and insurance		2,583			1,484			2,485			1,304			2,398
Total liabilities		2,019,388			2,078,124			2,094,697			2,057,081			2,079,514

Shareholders’ Equity
Preferred stock, $0.01 par value, authorized 5,000,000 shares, no shares issued or outstanding		—			—			—			—			—
Common stock, $0.01 par value, 75,000,000 shares authorized; issued and outstanding at each period end: 9,440,618; 9,353,348; 9,365,979; 9,453,247; and 9,442,796		94			93			94			94			94
Additional paid-in capital		93,450			93,357			93,218			93,985			93,763
Retained earnings		98,056			97,198			100,660			103,322			106,202
Accumulated other comprehensive loss, net of tax		(28,129	)		(30,172	)		(26,424	)		(31,597	)		(32,465	)
Unearned employee stock ownership plan (ESOP) shares		(6,429	)		(6,594	)		(6,759	)		(6,923	)		(7,088	)
Total shareholders’ equity		157,042			153,882			160,789			158,881			160,506
Total liabilities and shareholders’ equity	$	2,176,430		$	2,232,006		$	2,255,486		$	2,215,962		$	2,240,020

FIRST NORTHWEST BANCORP AND SUBSIDIARY CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars in thousands, except per share data) (Unaudited)

	For the Quarter Ended
	March 31, 2025		December 31, 2024			September 30, 2024			June 30, 2024			March 31, 2024
INTEREST INCOME
Interest and fees on loans receivable	$	22,231	$	23,716		$	23,536		$	23,733		$	22,767
Interest on investment securities		3,803		3,658			3,786			3,949			3,632
Interest on deposits in banks		482		550			582			571			645
FHLB dividends		307		273			302			358			282
Total interest income		26,823		28,197			28,206			28,611			27,326
INTEREST EXPENSE
Deposits		9,737		11,175			10,960			10,180			10,112
Borrowings		3,239		2,885			3,226			4,196			3,286
Total interest expense		12,976		14,060			14,186			14,376			13,398
Net interest income		13,847		14,137			14,020			14,235			13,928
PROVISION FOR CREDIT LOSSES
Provision for credit losses on loans		1,553		3,760			3,077			8,640			1,239
Provision for (recapture of) credit losses on unfunded commitments		15		(105	)		57			99			(269	)
Provision for credit losses		1,568		3,655			3,134			8,739			970
Net interest income after provision for credit losses		12,279		10,482			10,886			5,496			12,958
NONINTEREST INCOME
Loan and deposit service fees		1,106		1,054			1,059			1,076			1,102
Sold loan servicing fees and servicing rights mark-to-market		195		(115	)		10			74			219
Net gain on sale of loans		11		52			58			150			52
Net gain on sale of investment securities		—		—			—			(2,117	)		—
Net gain on sale of premises and equipment		—		—			—			7,919			—
Increase in cash surrender value of bank-owned life insurance		372		328			315			293			243
Income from death benefit on bank-owned life insurance, net		1,059		1,536			—			—			—
Other income (loss)		1,349		(1,555	)		337			(48	)		572
Total noninterest income		4,092		1,300			1,779			7,347			2,188
NONINTEREST EXPENSE
Compensation and benefits		7,715		7,367			8,582			8,588			8,128
Data processing		2,011		2,065			2,085			2,008			1,944
Occupancy and equipment		1,592		1,559			1,553			1,799			1,240
Supplies, postage, and telephone		298		296			360			317			293
Regulatory assessments and state taxes		479		460			548			457			513
Advertising		265		362			409			377			309
Professional fees		777		813			698			684			910
FDIC insurance premium		434		491			533			473			386
Other expense		678		820			1,080			906			580
Total noninterest expense		14,249		14,233			15,848			15,609			14,303
Income (loss) before provision for income taxes		2,122		(2,451	)		(3,183	)		(2,766	)		843
Provision for income taxes		608		359			(1,203	)		(547	)		447
Net income (loss)	$	1,514	$	(2,810	)	$	(1,980	)	$	(2,219	)	$	396

Basic and diluted earnings (loss) per common share	$	0.17	$	(0.32	)	$	(0.23	)	$	(0.25	)	$	0.04

FIRST NORTHWEST BANCORP AND SUBSIDIARY ADDITIONAL INFORMATION (Dollars in thousands) (Unaudited)

Selected Loan Detail	March 31, 2025		December 31, 2024		September 30, 2024		June 30, 2024		March 31, 2024
Construction and land loans breakout
1-4 Family construction	$	42,371	$	39,319	$	43,125	$	56,514	$	69,075
Multifamily construction		9,223		15,407		29,109		43,341		45,776
Nonresidential construction		7,229		16,857		17,500		1,015		3,374
Land and development		6,054		6,527		5,975		6,403		7,122
Total construction and land loans	$	64,877	$	78,110	$	95,709	$	107,273	$	125,347

Auto and other consumer loans breakout
Triad Manufactured Home loans	$	134,740	$	128,231	$	129,600	$	110,510	$	119,309
Woodside auto loans		118,972		117,968		126,129		131,151		128,072
First Help auto loans		13,012		14,283		15,971		17,427		8,326
Other auto loans		1,313		1,647		2,064		2,690		3,313
Other consumer loans		5,841		6,747		7,434		23,845		9,814
Total auto and other consumer loans	$	273,878	$	268,876	$	281,198	$	285,623	$	268,834

Commercial business loans breakout
Northpointe Bank MPP	$	–	$	36,230	$	38,155	$	9,150	$	15,047
Secured lines of credit		39,986		35,701		37,686		28,862		41,014
Unsecured lines of credit		2,030		1,717		1,571		1,133		1,001
SBA loans		6,889		7,044		7,219		7,146		8,944
Other commercial business loans		71,581		70,801		70,696		70,803		70,291
Total commercial business loans	$	120,486	$	151,493	$	155,327	$	117,094	$	136,297

Loans by Collateral and Unfunded Commitments	March 31, 2025		December 31, 2024		September 30, 2024		June 30, 2024		March 31, 2024
One-to-four family construction	$	38,221	$	44,468	$	51,607	$	49,440	$	70,100
All other construction and land		30,947		34,290		45,166		58,346		55,286
One-to-four family first mortgage		428,081		466,046		469,053		434,840		436,543
One-to-four family junior liens		15,155		15,090		14,701		13,706		12,608
One-to-four family revolving open-end		51,832		51,481		48,459		44,803		45,536
Commercial real estate, owner occupied:
Health care		29,386		29,129		29,407		29,678		29,946
Office		19,363		17,756		17,901		19,215		17,951
Warehouse		14,843		14,948		11,645		14,613		14,683
Other		74,915		78,170		64,535		56,292		55,063
Commercial real estate, non-owner occupied:
Office		41,885		49,417		49,770		50,158		53,099
Retail		50,737		49,591		49,717		50,101		50,478
Hospitality		62,226		61,919		62,282		62,628		66,982
Other		93,549		81,640		82,573		84,428		93,040
Multi-family residential		339,217		333,419		354,118		350,382		339,907
Commercial business loans		76,330		77,381		86,904		79,055		90,781
Commercial agriculture and fishing loans		22,914		21,833		15,369		14,411		10,200
State and political subdivision obligations		369		369		404		405		405
Consumer automobile loans		133,209		133,789		144,036		151,121		139,524
Consumer loans secured by other assets		137,619		131,429		132,749		129,293		122,895
Consumer loans unsecured		3,051		3,658		4,411		5,209		6,415
Total loans	$	1,663,849	$	1,695,823	$	1,734,807	$	1,698,124	$	1,711,442

Unfunded commitments under lines of credit or existing loans	$	172,260	$	163,827	$	166,446	$	155,005	$	148,736

FIRST NORTHWEST BANCORP AND SUBSIDIARY NET INTEREST MARGIN ANALYSIS (Dollars in thousands) (Unaudited)

	Three Months Ended March 31,
	2025								2024
	Average			Interest					Average			Interest
	Balance			Earned/		Yield/			Balance			Earned/		Yield/
	Outstanding			Paid		Rate			Outstanding			Paid		Rate
	(Dollars in thousands)
Interest-earning assets:
Loans receivable, net ^{(1) (2)}	$	1,642,007		$	22,231		5.49	%	$	1,661,420		$	22,767		5.51	%
Investment securities		333,208			3,803		4.63			307,490			3,632		4.75
FHLB dividends		13,609			307		9.15			12,328			282		9.20
Interest-earning deposits in banks		42,917			482		4.55			46,583			645		5.57
Total interest-earning assets ⁽³⁾		2,031,741			26,823		5.35			2,027,821			27,326		5.42
Noninterest-earning assets		143,033								138,366
Total average assets	$	2,174,774							$	2,166,187
Interest-bearing liabilities:
Interest-bearing demand deposits	$	168,414		$	260		0.63		$	165,379		$	187		0.45
Money market accounts		414,425			2,345		2.29			377,505			1,949		2.08
Savings accounts		216,499			783		1.47			235,784			953		1.63
Certificates of deposit, customer		451,936			4,522		4.06			437,525			4,494		4.13
Certificates of deposit, brokered		158,269			1,827		4.68			205,923			2,529		4.94
Total interest-bearing deposits ⁽⁴⁾		1,409,543			9,737		2.80			1,422,116			10,112		2.86
Advances		279,500			2,796		4.06			252,912			2,892		4.60
Subordinated debt		38,370			443		4.68			39,446			394		4.02
Total interest-bearing liabilities		1,727,413			12,976		3.05			1,714,474			13,398		3.14
Noninterest-bearing deposits ⁽⁴⁾		243,569								249,283
Other noninterest-bearing liabilities		47,238								40,563
Total average liabilities		2,018,220								2,004,320
Average equity		156,554								161,867
Total average liabilities and equity	$	2,174,774							$	2,166,187

Net interest income				$	13,847							$	13,928
Net interest rate spread							2.30								2.28
Net earning assets	$	304,328							$	313,347
Net interest margin ⁽⁵⁾							2.76								2.76
Average interest-earning assets to average interest-bearing liabilities		117.6	%							118.3	%

(1)	The average loans receivable, net balances include nonaccrual loans.
(2)	Interest earned on loans receivable includes net deferred costs of ($338,000) and ($171,000) for the three months ended March 31, 2025 and 2024, respectively.
(3)	Includes interest-earning deposits (cash) at other financial institutions.
(4)	Cost of all deposits, including noninterest-bearing demand deposits, was 2.39% and 2.43% for the three months ended March 31, 2025 and 2024, respectively.
(5)	Net interest income divided by average interest-earning assets.

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.

Calculations Based on PPNR and Adjusted PPNR:

	For the Quarter Ended
(Dollars in thousands)	March 31, 2025			December 31, 2024			September 30, 2024			June 30, 2024			March 31, 2024
Net income (loss)	$	1,514		$	(2,810	)	$	(1,980	)	$	(2,219	)	$	396
Plus: provision for credit losses		1,568			3,655			3,134			8,739			970
Provision for income taxes		608			359			(1,203	)		(547	)		447
PPNR ⁽¹⁾		3,690			1,204			(49	)		5,973			1,813
Less selected nonrecurring adjustments to PPNR:
BOLI death benefit		1,059			1,536			—			—			—
Gain on extinguishment of subordinated debt included in other income		846			—			—			—			—
Gain on conversion of loan receivable into Series A equity investment		315			—			—			—			—
Equity investment repricing adjustment		—			(1,762	)		—			—			651
One-time compensation payouts related to reduction in force		—			—			(996	)		—			—
Net gain on sale of premises and equipment		—			—			—			7,919			—
Sale leaseback taxes and assessments included in occupancy and equipment		—			—			—			(359	)		—
Net gain on sale of investment securities		—			—			—			(2,117	)		—
Adjusted PPNR ⁽¹⁾	$	1,470		$	1,430		$	947		$	530		$	1,162

Average total assets	$	2,174,774		$	2,205,502		$	2,209,333		$	2,219,370		$	2,166,187
Return on average assets (GAAP)		0.28	%		-0.51	%		-0.36	%		-0.40	%		0.07	%
PPNR return on average assets (Non-GAAP) ⁽¹⁾		0.69	%		0.22	%		-0.01	%		1.08	%		0.34	%
Adjusted PPNR return on average assets (Non-GAAP) ⁽¹⁾		0.27	%		0.26	%		0.17	%		0.10	%		0.22	%

(1)

PPNR removes the provisions for credit loss and income tax from net income. This removes potentially volatile estimates, providing a comparative amount limited to income and expense recorded during the period. Adjusted PPNR further removes large nonrecurring transactions recorded during the period. We believe these metrics provide comparative amounts for a better review of recurring net revenue.

FIRST NORTHWEST BANCORP AND SUBSIDIARY ADDITIONAL INFORMATION (Dollars in thousands) (Unaudited)

Calculations Based on Tangible Common Equity:

	For the Quarter Ended
(Dollars in thousands, except per share data)		March 31, 2025			December 31, 2024			September 30, 2024			June 30, 2024			March 31, 2024
Total shareholders’ equity	$	157,042		$	153,882		$	160,789		$	158,881		$	160,506
Less: Goodwill and other intangible assets		1,082			1,082			1,083			1,084			1,085
Disallowed non-mortgage loan servicing rights		415			423			489			517			489
Total tangible common equity	$	155,545		$	152,377		$	159,217		$	157,280		$	158,932

Total assets	$	2,176,430		$	2,232,006		$	2,255,486		$	2,215,962		$	2,240,020
Less: Goodwill and other intangible assets		1,082			1,082			1,083			1,084			1,085
Disallowed non-mortgage loan servicing rights		415			423			489			517			489
Total tangible assets	$	2,174,933		$	2,230,501		$	2,253,914		$	2,214,361		$	2,238,446

Average shareholders’ equity	$	156,554		$	161,560		$	160,479		$	163,079		$	161,867
Less: Average goodwill and other intangible assets		1,082			1,083			1,084			1,085			1,085
Average disallowed non-mortgage loan servicing rights		423			489			517			489			481
Total average tangible common equity	$	155,049		$	159,988		$	158,878		$	161,505		$	160,301

Net income (loss)	$	1,514		$	(2,810	)	$	(1,980	)	$	(2,219	)	$	396
Common shares outstanding		9,440,618			9,353,348			9,365,979			9,453,247			9,442,796
GAAP Ratios:
Equity to total assets		7.22	%		6.89	%		7.13	%		7.17	%		7.17	%
Return on average equity		3.92	%		-6.92	%		-4.91	%		-5.47	%		0.98	%
Book value per common share	$	16.63		$	16.45		$	17.17		$	16.81		$	17.00
Non-GAAP Ratios:
Tangible common equity to tangible assets ⁽¹⁾		7.15	%		6.83	%		7.06	%		7.10	%		7.10	%
Return on average tangible common equity ⁽¹⁾		3.96	%		-6.99	%		-4.96	%		-5.53	%		0.99	%
Tangible book value per common share ⁽¹⁾	$	16.48		$	16.29		$	17.00		$	16.64		$	16.83

(1

)

We believe that the 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.

Photos accompanying this announcement are available at:

https://www.globenewswire.com/NewsRoom/AttachmentNg/d5c93711-67c1-4664-a49c-37df22040147

https://www.globenewswire.com/NewsRoom/AttachmentNg/4a3584b1-1204-464b-8080-7fcc46d66470

https://www.globenewswire.com/NewsRoom/AttachmentNg/37ce187a-5662-457d-bd13-66e409ac2710

https://www.globenewswire.com/NewsRoom/AttachmentNg/4b958691-2f11-4ceb-a89a-ab88b1b1d702

https://www.globenewswire.com/NewsRoom/AttachmentNg/7207465f-e4fb-4f05-8218-e87558fb913c

https://www.globenewswire.com/NewsRoom/AttachmentNg/1c8a4efe-4d1b-4b02-bdac-6fd686314c0b

The MIL Network –

April 24, 2025

MIL-OSI: Manhattan Bridge Capital, Inc. Reports First Quarter Results for 2025

Source: GlobeNewswire (MIL-OSI)

GREAT NECK, N.Y., April 24, 2025 (GLOBE NEWSWIRE) — Manhattan Bridge Capital, Inc. (Nasdaq: LOAN) (the “Company”) announced today that its net income for the three months ended March 31, 2025 was approximately $1,373,000, or $0.12 per share (based on approximately 11.4 million weighted-average outstanding common shares), compared to approximately $1,476,000, or $0.13 per share (based on approximately 11.4 million weighted-average outstanding common shares) for the three months ended March 31, 2024, a decrease of $103,000, or 7.0%. This decrease is primarily attributable to a decrease in interest income from loans, partially offset by a decrease in interest expense.

Total revenues for the three months ended March 31, 2025 were approximately $2,274,000 compared to approximately $2,573,000 for the three months ended March 31, 2024, a decrease of $299,000, or 11.6%. The decrease in revenue was primarily attributable to lower interest income, resulting from a reduction in loans receivable, period over period. For the three months ended March 31, 2025, approximately $1,834,000 of the Company’s revenue represents interest income on secured commercial loans that the Company offers to real estate investors, compared to approximately $2,142,000 for the same period in 2024, and approximately $440,000 and $431,000, respectively, represent origination fees on such loans. The loans are principally secured by collateral consisting of real estate and accompanied by personal guarantees from the principals of the borrowers.

As of March 31, 2025, total shareholders’ equity was approximately $43,326,000.

Assaf Ran, Chairman of the Board and Chief Executive Officer of the Company, stated, “The first quarter of 2025 began with an optimistic consensus among the real estate investor community. However, due to the delays in the reduction of interest rates and global economic uncertainty, we now sense some concerns about the likelihood of an immediate recovery of the real estate market. Again, thanks to our low leverage, strict underwriting, and strong relationships with our borrowers, we believe that we remain well-positioned to navigate these challenges.”

About Manhattan Bridge Capital, Inc.

Manhattan Bridge Capital, Inc. offers short-term secured, non–banking loans (sometimes referred to as ‘‘hard money’’ loans) to real estate investors to fund their acquisition, renovation, rehabilitation or improvement of properties located in the New York metropolitan area, including New Jersey and Connecticut, and in Florida. We operate the website: https://www.manhattanbridgecapital.com.

Forward Looking Statements

This press release and the statements of the Company’s representatives related thereto contain or may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the generality of the foregoing, words such as “plan,” “project,” “potential,” “seek,” “may,” “will,” “expect,” “believe,” “anticipate,” “intend,” “could,” “estimate,” or “continue” are intended to identify forward-looking statements. For example, when the Company discusses its belief that it remains well-positioned to navigate market challenges, it is using forward looking statements. Readers are cautioned that certain important factors may affect the Company’s actual results and could cause such results to differ materially from any forward-looking statements that may be made in this news release. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties. Actual results may differ materially from those projected, expressed or implied in the forward-looking statements as a result of various factors, including but not limited to the following: (i) our loan origination activities, revenues and profits are limited by available funds; (ii) we operate in a highly competitive market and competition may limit our ability to originate loans with favorable interest rates; (iii) our Chief Executive Officer is critical to our business and our future success may depend on our ability to retain him; (iv) if we overestimate the yields on our loans or incorrectly value the collateral securing the loan, we may experience losses; (v) we may be subject to “lender liability” claims; (vi) our due diligence may not uncover all of a borrower’s liabilities or other risks to its business; (vii) borrower concentration could lead to significant losses; (viii) we may choose to make distributions in our own stock, in which case you may be required to pay income taxes in excess of the cash dividends you receive; (ix) an increase in interest rates may impact our profitability; (x) we may be unsuccessful in our efforts to extend or replace our existing credit line; and (xi) we may be unsuccessful in our efforts to refinance our 6% senior secured notes, due April 22, 2026. The risk factors contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 filed with the Securities and Exchange Commission identify important factors that could cause such differences. These forward-looking statements speak only as of the date of this press release, and we caution potential investors not to place undue reliance on such statements. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.

MANHATTAN BRIDGE CAPITAL, INC. AND SUBSIDIARY CONSOLIDATED BALANCE SHEETS

Assets	March 31, 2025 (unaudited)		December 31, 2024 (audited)
Loans receivable, net of deferred origination and other fees	$	63,672,278	$	65,405,731
Interest and other fees receivable on loans		1,618,826		1,521,033
Cash		201,363		178,012
Cash – restricted		21,769		23,750
Other assets		119,642		62,080
Right-of-use asset – operating lease, net		140,836		154,039
Deferred financing costs, net		12,706		16,171
Total assets	$	65,787,420	$	67,360,816

Liabilities and Stockholders’ Equity
Liabilities:
Line of credit	$	14,825,735	$	16,427,874
Senior secured notes (net of deferred financing costs of $78,214 and $96,985, respectively)		5,921,786		5,903,015
Accounts payable and accrued expenses		194,801		232,236
Operating lease liability		153,571		167,119
Loan holdback		50,000		50,000
Dividends payable		1,315,445		1,315,445
Total liabilities		22,461,338		24,095,689
Commitments and contingencies

Stockholders’ equity:
Preferred shares – $.01 par value; 5,000,000 shares authorized; none issued and outstanding		—		—
Common shares – $.001 par value; 25,000,000 shares authorized; 11,757,058 issued; 11,438,651 outstanding		11,757		11,757
Additional paid-in capital		45,565,207		45,561,941
Less: Treasury stock, at cost – 318,407 shares		(1,070,406)		(1,070,406)
Accumulated deficit		(1,180,476)		(1,238,165)
Total stockholders’ equity		43,326,082		43,265,127
Total liabilities and stockholders’ equity	$	65,787,420	$	67,360,816

MANHATTAN BRIDGE CAPITAL, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

	Three Months Ended March 31,
		2025		2024
Revenue:
Interest income from loans	$1,833,914		$2,142,487
Origination fees		439,799		430,591
Total revenue		2,273,713		2,573,078
Operating costs and expenses:
Interest and amortization of deferred financing costs		451,365		690,589
Referral fees		144		500
General and administrative expenses		453,570		410,278
Total operating costs and expenses		905,079		1,101,367

Income from operations		1,368,634		1,471,711
Other income		4,500		4,500
Net income	$1,373,134		$1,476,211

Basic and diluted net income per common share outstanding:
–Basic	$0.12		$0.13
–Diluted	$0.12		$0.13

Weighted average number of common shares outstanding:
–Basic		11,438,651		11,438,673
–Diluted		11,438,651		11,438,673

MANHATTAN BRIDGE CAPITAL, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(unaudited)

FOR THE THREE MONTHS ENDED MARCH 31, 2025

Common Shares

Additional
Paid-in
Capital

Treasury Stock

Accumulated
Deficit

Totals

Shares

Amount

Shares

Cost

Balance, January 1, 2025

11,757,058

$11,757

$45,561,941

318,407

$(1,070,406)

$(1,238,165)

$43,265,127

Non-cash compensation

3,266

Dividends declared and payable

(1,315,445)

Net income

.

1,373,134

Balance, March 31, 2025

11,757,058

$11,757

$45,565,207

318,407

$(1,070,406)

$(1,180,476)

$43,326,082

FOR THE THREE MONTHS ENDED MARCH 31, 2024

Common Shares

Additional
Paid-in
Capital

Treasury Stock

Accumulated
Deficit

Totals

Shares

Amount

Shares

Cost

Balance, January 1, 2024

11,757,058

$11,757

$45,548,876

316,407

$(1,060,606)

$(1,567,321)

$42,932,706

Non-cash compensation

3,266

Purchase of treasury shares

2,000

(9,800)

Dividends declared and payable

(1,315,445)

Net income

.

1,476,211

Balance, March 31, 2024

11,757,058

$11,757

$45,552,142

318,407

$(1,070,406)

$(1,406,555)

$43,086,938

MANHATTAN BRIDGE CAPITAL, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

	Three Months Ended March 31,
		2025		2024
Cash flows from operating activities:
Net income	$	1,373,134	$	1,476,211
Adjustments to reconcile net income to net cash provided by operating activities –
Amortization of deferred financing costs		22,237		21,954
Adjustment to right-of-use asset – operating lease and liability		(345)		121
Depreciation		1,390		1,055
Non-cash compensation expense		3,266		3,266
Changes in operating assets and liabilities:
Interest and other fees receivable on loans		(110,915)		(231,202)
Other assets		(58,952)		(35,153)
Accounts payable and accrued expenses		(37,435)		(31,600)
Deferred origination and other fees		(11,437)		(63,996)
Net cash provided by operating activities		1,180,943		1,140,656

Cash flows from investing activities:
Issuance of short-term loans		(10,940,040)		(9,538,000)
Collections received from loans		12,698,051		10,102,525
Net cash provided by investing activities		1,758,011		564,525

Cash flows from financing activities:
Repayment of line of credit, net		(1,602,139)		(1,701,661)
Dividend paid		(1,315,445)		(1,287,073)
Purchase of treasury shares		—		(9,800
Net cash used in financing activities		(2,917,584)		(2,998,534)

Net increase (decrease) in cash		21,370		(1,293,353)
Cash and restricted cash, beginning of period⁽¹⁾		201,762		1,691,995
Cash and restricted cash, end of period⁽²⁾	$	223,132	$	398,642

Supplemental Disclosure of Cash Flow Information:
Cash paid during the period for interest	$	437,993	$	667,488
Cash paid during the period for operating leases	$	15,991	$	16,370

Supplemental Schedule of Noncash Financing Activities:
Dividend declared and payable	$	1,315,445	$	1,315,445

Supplemental Schedule of Noncash Operating and Investing Activities:
Reduction in interest receivable in connection with the increase in loans receivable	$	13,122	$	112,271

⁽¹⁾ At December 31, 2024 and 2023, cash and restricted cash included $23,750 and $1,587,773, respectively, of restricted cash.
⁽²⁾ At March 31, 2025 and 2024, cash and restricted cash included $21,769 and $311,545, respectively, of restricted cash.

SOURCE: Manhattan Bridge Capital, Inc.

The MIL Network –

April 24, 2025

MIL-OSI: Donegal Group Inc. Announces First Quarter 2025 Results

Source: GlobeNewswire (MIL-OSI)

MARIETTA, Pa., April 24, 2025 (GLOBE NEWSWIRE) — Donegal Group Inc. (NASDAQ: DGICA) and (NASDAQ: DGICB) today reported its financial results for the first quarter of 2025.

Significant Items for First Quarter of 2025 (all comparisons to first quarter of 2024):

Net premiums earned increased 2.2% to $232.7 million
Combined ratio of 91.6%, compared to 102.4%
Net income of $25.2 million, or $0.71 per diluted Class A share, compared to $6.0 million, or $0.18 per diluted Class A share
Net investment losses (after tax) of $0.4 million, or 1 cent per diluted Class A share, compared to net investment gains (after tax) of $1.7 million, or 5 cents per diluted Class A share, are included in net income
Annualized return on average equity of 17.8%, compared to 4.9%
Book value per share of $16.24 at March 31, 2025, compared to $14.53 at March 31, 2024

Financial Summary

	Three Months Ended March 31,
		2025			2024		% Change
	(dollars in thousands, except per share amounts)

Income Statement Data
Net premiums earned	$	232,702		$	227,749			2.2	%
Investment income, net		11,984			10,972			9.2
Net investment (losses) gains		(471	)		2,113			NM²
Total revenues		245,174			241,141			1.7
Net income		25,205			5,956			323.2
Non-GAAP operating income¹		25,577			4,286			496.8
Annualized return on average equity		17.8	%		4.9	%		12.9 pts

Per Share Data
Net income – Class A (diluted)	$	0.71		$	0.18			294.4	%
Net income – Class B		0.65			0.16			306.3
Non-GAAP operating income – Class A (diluted)		0.72			0.13			453.8
Non-GAAP operating income – Class B		0.66			0.12			450.0
Book value		16.24			14.53			11.8

¹The “Definitions of Non-GAAP Financial Measures” section of this release defines and reconciles data that we prepare on an accounting basis other than U.S. generally accepted accounting principles (“GAAP”).
²Not meaningful.

Management Commentary

Kevin G. Burke, President and Chief Executive Officer of Donegal Group Inc., stated, “We are pleased that positive momentum, which began to emerge in the second half of 2024, continued into the first quarter of 2025 with our achievement of record earnings for the second straight quarter. We believe this accomplishment reflects the deliberate actions and strong operational discipline of our team in prioritizing sustained profitability while pursuing targeted premium growth.

“Net premiums earned rose by 2.2% to $232.7 million, while net premiums written¹ declined modestly by 1.7% compared to the prior-year quarter, with that decline primarily due to lower new business volume and planned attrition, offset partially by solid premium rate increases and strong retention of desired risks. We achieved a combined ratio of 91.6% for the first quarter of 2025, marking significant improvement over the 102.4% combined ratio for the prior-year quarter. We attribute the improvement to core loss ratio decreases that resulted from the strategic initiatives and profit improvement plans we implemented over the past several years, coupled with lower-than-average weather-related and large fire losses and a higher level of favorable development of reserves related to prior accident years.

“In our commercial lines business, we are actively promoting our small commercial products and capabilities while actively seeking to grow our middle market business segment. In our personal lines business, our strategic focus remains on maintaining profitability through rate adequacy. Our personal lines growth in the first quarter of 2025 was constrained by two intentional strategies. We limited new business volume and continued the non-renewal of a legacy Maryland book of business. We are taking proactive steps to stabilize personal lines premium level as the year progresses, and we will continue to emphasize higher levels of profitable growth in commercial lines that we believe will lead to long-term success.”

Mr. Burke concluded, “We believe we are well positioned to navigate the evolving insurance landscape, as we continue to enhance and refine our systems and operational capabilities. We are confident in our ability to achieve sustainable excellent financial performance and capitalize on future growth opportunities that will further enhance shareholder value over time.”

Insurance Operations

Donegal Group is an insurance holding company whose insurance subsidiaries and affiliates offer property and casualty lines of insurance in three Mid-Atlantic states (Delaware, Maryland and Pennsylvania), five Southern states (Georgia, North Carolina, South Carolina, Tennessee and Virginia), eight Midwestern states (Illinois, Indiana, Iowa, Michigan, Nebraska, Ohio, South Dakota and Wisconsin) and five Southwestern states (Arizona, Colorado, New Mexico, Texas and Utah). Donegal Mutual Insurance Company and the insurance subsidiaries of Donegal Group conduct business together as the Donegal Insurance Group.

	Three Months Ended March 31,
		2025		2024	% Change
	(dollars in thousands)

Net Premiums Earned
Commercial lines	$	136,216	$	132,092		3.1	%
Personal lines		96,486		95,657		0.9
Total net premiums earned	$	232,702	$	227,749		2.2	%

Net Premiums Written
Commercial lines:
Automobile	$	56,525	$	53,514		5.6	%
Workers’ compensation		28,754		31,074		-7.5
Commercial multi-peril		60,790		57,503		5.7
Other		14,549		13,403		8.6
Total commercial lines		160,618		155,494		3.3
Personal lines:
Automobile		55,192		61,381		-10.1
Homeowners		28,788		31,759		-9.4
Other		2,494		2,808		-11.2
Total personal lines		86,474		95,948		-9.9
Total net premiums written	$	247,092	$	251,442		-1.7	%

Net Premiums Written

The 1.7% decrease in net premiums written for the first quarter of 2025 compared to the first quarter of 2024, as shown in the table above, represents the net combination of a 3.3% increase in commercial lines net premiums written and a 9.9% decrease in personal lines net premiums written. The $4.4 million decrease in net premiums written for the first quarter of 2025 compared to the first quarter of 2024 included:

Commercial Lines: $5.1 million increase that we attribute primarily to solid retention and a continuation of renewal premium increases in lines other than workers’ compensation, offset partially by lower new business writings.
Personal Lines: $9.5 million decrease that we attribute primarily to planned attrition due to lower new business writings and non-renewal actions, offset partially by a continuation of renewal premium rate increases and solid retention.

Underwriting Performance

We evaluate the performance of our commercial lines and personal lines segments primarily based upon the underwriting results of our insurance subsidiaries as determined under statutory accounting practices. The following table presents comparative details with respect to the GAAP and statutory combined ratios¹ for the three months ended March 31, 2025 and 2024:

	Three Months Ended
	March 31,
		2025		2024

GAAP Combined Ratios (Total Lines)
Loss ratio – core losses		54.4	%	58.7	%
Loss ratio – weather-related losses		3.7		4.7
Loss ratio – large fire losses		3.1		6.6
Loss ratio – net prior-year reserve development		-4.5		-3.7
Loss ratio		56.7		66.3
Expense ratio		34.6		35.7
Dividend ratio		0.3		0.4
Combined ratio		91.6	%	102.4	%

Statutory Combined Ratios
Commercial lines:
Automobile		91.4	%	99.6	%
Workers’ compensation		117.6		111.2
Commercial multi-peril		90.3		102.7
Other		80.8		82.2
Total commercial lines		94.7		101.6
Personal lines:
Automobile		85.0		99.8
Homeowners		83.8		102.9
Other		56.6		85.2
Total personal lines		83.6		100.3
Total lines		90.3	%	101.2	%

Loss Ratio

For the first quarter of 2025, the loss ratio decreased to 56.7%, compared to 66.3% for the first quarter of 2024. The core loss ratio, which excludes weather-related losses, large fire losses and net favorable development of reserves for losses incurred in prior accident years, was 54.2% for the first quarter of 2025, compared to 58.7% for the first quarter of 2024. For the commercial lines segment, the core loss ratio of 58.3% for the first quarter of 2025 decreased modestly from 59.0% for the first quarter of 2024, primarily as the result of ongoing premium rate increases in all lines except workers’ compensation and reduced exposures in underperforming states and classes of business. For the personal lines segment, the core loss ratio of 48.7% for the first quarter of 2025 decreased significantly from 58.1% for the first quarter of 2024, due largely to the favorable impact of ongoing premium rate increases on net premiums earned for that segment. While we did not see a material impact in the first quarter of 2025, we are monitoring the impact of tariffs and other inflationary factors, which may result in increases in loss costs in future quarters.

Weather-related losses were $8.6 million, or 3.7 percentage points of the loss ratio, for the first quarter of 2025, compared to $10.8 million, or 4.7 percentage points of the loss ratio, for the first quarter of 2024. The weather-related loss ratio for the first quarter of 2025 was modestly lower than our previous five-year first-quarter average of 4.6 percentage points of the loss ratio.

Large fire losses, which we define as individual fire losses in excess of $50,000, for the first quarter of 2025 were $7.7 million, or 3.3 percentage points of the loss ratio. That amount was substantially lower than the large fire losses of $15.0 million, or 6.6 percentage points of the loss ratio, for the first quarter of 2024. We primarily attribute the decrease to lower loss frequency and severity compared to the prior-year quarter. We experienced a $5.3 million decrease in commercial property fire losses and a $2.0 million decrease in homeowner fire losses.

Net favorable development of reserves for losses incurred in prior accident years of $10.5 million decreased the loss ratio for the first quarter of 2025 by 4.5 percentage points, compared to $8.4 million that decreased the loss ratio for the first quarter of 2024 by 3.7 percentage points. Our insurance subsidiaries experienced favorable development primarily in the personal automobile, commercial automobile and commercial multi-peril lines of business, offset partially by modest unfavorable development in workers’ compensation for the first quarter of 2025.

Expense Ratio

The expense ratio was 34.6% for the first quarter of 2025, compared to 35.7% for the first quarter of 2024. The decrease in the expense ratio primarily reflected the favorable impact of ongoing expense management initiatives, offset partially by higher underwriting-based incentive costs for agents and employees. The impact from costs that Donegal Mutual Insurance Company allocated to our insurance subsidiaries related to its ongoing systems modernization project peaked at approximately 1.3 percentage points of the full year 2024 expense ratio, and we expect that impact to subside gradually over the next several years. Allocated costs related to that project represented approximately 1.2 percentage points of the expense ratio for the first quarter of 2025, and we expect the full year 2025 expense ratio impact will be approximately 1.0 percentage point.

Investment Operations

Donegal Group’s investment strategy is to generate an appropriate amount of after-tax income on its invested assets while minimizing credit risk through investment in high-quality securities. As a result, we had invested 95.7% of our consolidated investment portfolio in diversified, highly rated and marketable fixed-maturity securities at March 31, 2025.

	March 31, 2025						December 31, 2024
	Amount			%			Amount			%
	(dollars in thousands)
Fixed maturities, at carrying value:
U.S. Treasury securities and obligations of U.S.
government corporations and agencies	$	176,090			12.5	%	$	170,423			12.3	%
Obligations of states and political subdivisions		412,304			29.3			409,560			29.6
Corporate securities		442,275			31.4			440,552			31.8
Mortgage-backed securities		317,236			22.5			304,459			22.0
Allowance for expected credit losses		(1,351	)		-0.1			(1,388	)		-0.1
Total fixed maturities		1,346,554			95.6			1,323,606			95.6
Equity securities, at fair value		40,206			2.9			36,808			2.6
Short-term investments, at cost		20,622			1.5			24,558			1.8
Total investments	$	1,407,382			100.0	%	$	1,384,972			100.0	%

Average investment yield		3.4	%					3.3	%
Average tax-equivalent investment yield		3.5	%					3.4	%
Average fixed-maturity duration (years)		5.2						5.2

Net investment income of $12.0 million for the first quarter of 2025 increased 9.2% compared to $11.0 million for the first quarter of 2024. The increase in net investment income reflected an increase in average investment yield and higher average invested assets relative to the prior-year first quarter.

Net investment losses were $0.5 million for the first quarter of 2025, compared to net investment gains of $2.1 million for the first quarter of 2024. We attribute the losses to the decrease in the market value of the equity securities we held at March 31, 2025.

Our book value per share was $16.24 at March 31, 2025, compared to $15.36 at December 31, 2024, with the increase partially related to net income, as well as $6.7 million of after-tax unrealized gains within our available-for-sale fixed-maturity portfolio during 2025 that increased our book value by $0.19 per share. Consistent with our historical practice, we did not declare any cash dividends in the first quarter of 2025 or 2024.

Definitions of Non-GAAP Financial Measures

We prepare our consolidated financial statements on the basis of GAAP. Our insurance subsidiaries also prepare financial statements based on statutory accounting principles state insurance regulators prescribe or permit (“SAP”). In addition to using GAAP-based performance measurements, we also utilize certain non-GAAP financial measures that we believe provide value in managing our business and for comparison to the financial results of our peers. These non-GAAP measures are net premiums written, operating income or loss and statutory combined ratio.

Net premiums written and operating income or loss are non-GAAP financial measures investors in insurance companies commonly use. We define net premiums written as the amount of full-term premiums our insurance subsidiaries record for policies effective within a given period less premiums our insurance subsidiaries cede to reinsurers. We define operating income or loss as net income or loss excluding after-tax net investment gains or losses, after-tax restructuring charges and other significant non-recurring items. Because our calculation of operating income or loss may differ from similar measures other companies use, investors should exercise caution when comparing our measure of operating income or loss to the measure of other companies.

The following table provides a reconciliation of net premiums earned to net premiums written for the periods indicated:

	Three Months Ended March 31,
		2025		2024	% Change
	(dollars in thousands)

Reconciliation of Net Premiums
Earned to Net Premiums Written
Net premiums earned	$	232,702	$	227,749		2.2	%
Change in net unearned premiums		14,390		23,693		-39.3
Net premiums written	$	247,092	$	251,442		-1.7	%

The following table provides a reconciliation of net income to operating income for the periods indicated:

	Three Months Ended March 31,
		2025		2024		% Change
	(dollars in thousands, except per share amounts)

Reconciliation of Net Income
to Non-GAAP Operating Income
Net income	$	25,205	$	5,956			323.2	%
Investment losses (gains) (after tax)		372		(1,670	)		NM
Non-GAAP operating income	$	25,577	$	4,286			496.8	%

Per Share Reconciliation of Net Income
to Non-GAAP Operating Income
Net income – Class A (diluted)	$	0.71	$	0.18			294.4	%
Investment losses (gains) (after tax)		0.01		(0.05	)		NM
Non-GAAP operating income – Class A	$	0.72	$	0.13			453.8	%

Net income – Class B	$	0.65	$	0.16			306.3	%
Investment losses (gains) (after tax)		0.01		(0.04	)		NM
Non-GAAP operating income – Class B	$	0.66	$	0.12			450.0	%

The statutory combined ratio is a non-GAAP standard measurement of underwriting profitability that is based upon amounts determined under SAP. The statutory combined ratio is the sum of:

the statutory loss ratio, which is the ratio of calendar-year incurred losses and loss expenses, excluding anticipated salvage and subrogation recoveries, to premiums earned;
the statutory expense ratio, which is the ratio of expenses incurred for net commissions, premium taxes and underwriting expenses to premiums written; and
the statutory dividend ratio, which is the ratio of dividends to holders of workers’ compensation policies to premiums earned.

The statutory combined ratio does not reflect investment income, federal income taxes or other non-operating income or expense. A statutory combined ratio of less than 100% generally indicates underwriting profitability.

Dividend Information

On April 17, 2025, we declared regular quarterly cash dividends of $0.1825 per share for our Class A common stock and $0.165 per share for our Class B common stock, which are payable on May 15, 2025 to stockholders of record as of the close of business on May 1, 2025.

Pre-Recorded Webcast

At approximately 8:30 am EST on Thursday, April 24, 2025, we will make available in the Investors section of our website a pre-recorded audio webcast featuring management commentary on our quarterly results and general business updates. You may listen to the pre-recorded webcast by accessing the link on our website at http://investors.donegalgroup.com. A supplemental investor presentation is also available via our website.

About the Company

Donegal Group Inc. is an insurance holding company whose insurance subsidiaries and affiliates offer property and casualty lines of insurance in certain Mid-Atlantic, Midwestern, Southern and Southwestern states. Donegal Mutual Insurance Company and the insurance subsidiaries of Donegal Group Inc. conduct business together as the Donegal Insurance Group. The Donegal Insurance Group has an A.M. Best rating of A (Excellent).

The Class A common stock and Class B common stock of Donegal Group Inc. trade on the NASDAQ Global Select Market under the symbols DGICA and DGICB, respectively. We are focused on several primary strategies, including achieving sustained excellent financial performance, strategically modernizing our operations and processes to transform our business, capitalizing on opportunities to grow profitably and providing superior experiences to our agents, policyholders and employees.

Safe Harbor

We base all statements contained in this release that are not historic facts on our current expectations. Such statements are forward-looking in nature (as defined in the Private Securities Litigation Reform Act of 1995) and necessarily involve risks and uncertainties. Forward-looking statements we make may be identified by our use of words such as “will,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “seek,” “estimate” and similar expressions. Our actual results could vary materially from our forward-looking statements. The factors that could cause our actual results to vary materially from the forward-looking statements we have previously made include, but are not limited to, adverse litigation and other trends that could increase our loss costs (including social inflation, labor shortages and escalating medical, automobile and property repair costs, including due to tariffs), adverse and catastrophic weather events (including from changing climate conditions), our ability to maintain profitable operations (including our ability to underwrite risks effectively and charge adequate premium rates), the adequacy of the loss and loss expense reserves of our insurance subsidiaries, the availability and successful operation of the information technology systems our insurance subsidiaries utilize, the successful development of new information technology systems to allow our insurance subsidiaries to compete effectively, business and economic conditions in the areas in which we and our insurance subsidiaries operate, interest rates, competition from various insurance and other financial businesses, terrorism, the availability and cost of reinsurance, legal and judicial developments, changes in regulatory requirements, our ability to attract and retain independent insurance agents, changes in our A.M. Best rating and the other risks that we describe from time to time in our filings with the Securities and Exchange Commission. We disclaim any obligation to update such statements or to announce publicly the results of any revisions that we may make to any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements.

Investor Relations Contacts

Karin Daly, Vice President, The Equity Group Inc.

Phone: (212) 836-9623
E-mail: kdaly@equityny.com

Jeffrey D. Miller, Executive Vice President & Chief Financial Officer
Phone: (717) 426-1931
E-mail: investors@donegalgroup.com

Financial Supplement

Donegal Group Inc.
Consolidated Statements of Income
(unaudited; in thousands, except share data)

	Quarter Ended March 31,
		2025			2024

Net premiums earned	$	232,702		$	227,749
Investment income, net of expenses		11,984			10,972
Net investment (losses) gains		(471	)		2,113
Lease income		77			82
Installment payment fees		882			225
Total revenues		245,174			241,141

Net losses and loss expenses		132,033			150,896
Amortization of deferred acquisition costs		39,231			39,602
Other underwriting expenses		41,195			41,740
Policyholder dividends		760			1,055
Interest		333			155
Other expenses, net		461			445
Total expenses		214,013			233,893

Income before income tax expense		31,161			7,248
Income tax expense		5,956			1,292

Net income	$	25,205		$	5,956

Net income per common share:
Class A – basic	$	0.72		$	0.18
Class A – diluted	$	0.71		$	0.18
Class B – basic and diluted	$	0.65		$	0.16

Supplementary Financial Analysts’ Data

Weighted-average number of shares
outstanding:
Class A – basic		30,120,649			27,811,312
Class A – diluted		30,430,042			27,846,313
Class B – basic and diluted		5,576,775			5,576,775

Net premiums written	$	247,092		$	251,442

Book value per common share
at end of period	$	16.24		$	14.53

Annualized operating return on average equity		17.8	%		4.9	%

Donegal Group Inc.
Consolidated Balance Sheets
(in thousands)

	March 31,			December 31,
		2025			2024
	(unaudited)

ASSETS
Investments:
Fixed maturities:
Held to maturity, at amortized cost	$	706,098		$	705,714
Available for sale, at fair value		640,456			617,892
Equity securities, at fair value		40,206			36,808
Short-term investments, at cost		20,622			24,558
Total investments		1,407,382			1,384,972
		64,315			52,926
Premiums receivable		193,975			181,107
Reinsurance receivable		403,382			420,742
Deferred policy acquisition costs		76,194			73,347
Prepaid reinsurance premiums		182,860			176,162
Other assets		40,169			46,776
Total assets	$	2,368,277		$	2,336,032

LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities:
Losses and loss expenses	$	1,092,624		$	1,120,985
Unearned premiums		633,564			612,476
Borrowings under lines of credit		35,000			35,000
Other liabilities		22,366			21,795
Total liabilities		1,783,554			1,790,256
Stockholders’ equity:
Class A common stock		334			329
Class B common stock		56			56
Additional paid-in capital		376,864			369,680
Accumulated other comprehensive loss		(21,472	)		(28,200	)
Retained earnings		270,167			245,137
Treasury stock		(41,226	)		(41,226	)
Total stockholders’ equity		584,723			545,776
Total liabilities and stockholders’ equity	$	2,368,277		$	2,336,032

The MIL Network –

April 24, 2025

MIL-OSI: FirstCash Reports Record First Quarter Operating Results; Earnings per Share Increase 39% in Total and 34% on an Adjusted Basis; Operating Cash Flows Fund Store Additions, $60 Million of First Quarter Share Repurchases and Continued Quarterly Cash Dividend

Source: GlobeNewswire (MIL-OSI)

FORT WORTH, Texas, April 24, 2025 (GLOBE NEWSWIRE) — FirstCash Holdings, Inc. (“FirstCash” or the “Company”) (Nasdaq: FCFS), the leading international operator of more than 3,000 retail pawn stores and a leading provider of retail point-of-sale payment solutions, today announced operating results for the three month period ended March 31, 2025. The Company also announced that the Board of Directors declared a quarterly cash dividend of $0.38 per share, which will be paid in May 2025.

Mr. Rick Wessel, chief executive officer, stated, “FirstCash posted record first quarter results, driven by the continued revenue and earnings growth from core pawn operations coupled with strong operating margins in the AFF POS payment solutions segment. Resulting first quarter net income grew 36% on a GAAP basis and 32% on an adjusted basis.

“Demand for pawn loans was robust during the quarter in both the U.S. and Latin America, with ending same-store pawn receivables increasing 13% in the U.S. and 14% in Latin America (local currency basis) versus last year. This marked seven consecutive quarters of double-digit same-store receivable growth in the U.S. segment which drove a 17% increase in earnings from the Company’s largest operating segment.

“Driven by a 19% increase in the number of merchant locations and further diversification outside of the furniture vertical, AFF delivered strong results as well, with earnings growth benefiting from solid credit performance and significant cost reductions. Excluding certain furniture retailers that closed last year due to bankruptcies, the number of active doors increased 29%, which should drive future revenue growth with greater merchant vertical diversification.

“Strong cash flows for the first quarter provided funding for the addition of 12 pawn locations, further purchases of store real estate and $60 million of stock repurchases in addition to the ongoing quarterly cash dividend. These investments are expected to deliver further earnings accretion in 2025 and beyond.”

This release contains adjusted financial measures, which exclude certain non-operating and/or non-cash income and expenses, that are non-GAAP financial measures. Please refer to the descriptions and reconciliations to GAAP of these and other non-GAAP financial measures at the end of this release.

	Three Months Ended March 31,
	As Reported (GAAP)				Adjusted (Non-GAAP)
In thousands, except per share amounts		2025		2024		2025		2024
Revenue	$	836,423	$	836,370	$	836,423	$	836,370
Net income	$	83,591	$	61,368	$	92,781	$	70,189
Diluted earnings per share	$	1.87	$	1.35	$	2.07	$	1.55
EBITDA (non-GAAP measure)	$	162,961	$	132,587	$	162,880	$	131,592
Weighted-average diluted shares		44,789		45,387		44,789		45,387

Consolidated Operating Highlights

Diluted earnings per share for the first quarter increased 39% over the prior-year quarter on a GAAP basis while adjusted diluted earnings per share increased 34% compared to the prior-year quarter.
Net income for the first quarter increased 36% over the prior-year quarter on a GAAP basis while adjusted net income increased 32% compared to the prior-year quarter.
Gross revenues totaled $836 million in the first quarter, flat on a U.S. dollar basis and up 4% on a constant currency basis, compared to the prior-year quarter.
For the trailing twelve month period ended March 31, 2025:
- Revenues totaled a record $3.4 billion
- Net income totaled $281 million on a GAAP basis while adjusted net income was $325 million
- Adjusted EBITDA was $590 million
- Operating cash flows were $544 million and adjusted free cash flows (a non-GAAP measure) were $269 million

Store Base and Platform Growth

Pawn Stores – 12 pawn locations were added in the first quarter through an acquisition and new store openings in three countries.
- In the U.S., a high profile luxury buy/sell retail store was acquired in Las Vegas, Nevada, and one new location in Texas was opened during the first quarter.
- There were 10 new store openings in Latin America in the first quarter which included nine locations in Mexico and one location in El Salvador.
- The Company purchased the underlying real estate of seven U.S. stores during the quarter, bringing the total number of company owned locations to 407 at quarter end.
- As of March 31, 2025, the Company had 3,023 locations, comprised of 1,197 U.S. locations and 1,826 locations in Latin America.
Retail POS Payment Solutions (AFF) Merchant Partnerships – At March 31, 2025, there were approximately 14,500 active retail and e-commerce merchant partner locations, representing a 19% increase in the number of active merchant locations compared to a year ago. Excluding furniture locations that closed in the prior year due to merchant partner bankruptcies, the number of active doors increased 29%.

U.S. Pawn Segment Operating Results

Segment pre-tax operating income in the first quarter of 2025 was a record $113 million, an increase of $17 million, or 17%, compared to the prior-year quarter. The resulting segment pre-tax operating margin increased to a record 27% for the first quarter of 2025 compared to 26% for the prior-year quarter.
Pawn receivables increased 16% in total at March 31, 2025 compared to the prior year, driven by a 2% increase in the year-to-date weighted-average store count coupled with an impressive 13% increase in same-store pawn receivables. On a two-year stacked basis, same-store pawn receivables were up 27%.
Pawn loan fees increased 12% for the first quarter, while on a same-store basis, they increased 10% compared to the respective prior-year period.
Retail merchandise sales increased 6% in the first quarter of 2025 compared to the prior-year quarter, while same-store retail sales increased 2% compared to the prior-year quarter.
Retail sales margins increased to 42% for the first quarter compared to 41% in the prior-year quarter.
Annualized inventory turnover was 2.8 times for the trailing twelve months ended March 31, 2025, which equaled the inventory turnover during the same prior-year period. Inventories aged greater than one year at March 31, 2025 remained low at 2% of total inventories.
Operating expenses for the first quarter increased 8% as compared to the prior-year quarter, primarily due to store additions and increased labor and variable compensation expenses. On a same-store basis, expenses increased 6% for the quarter compared to the respective prior-year period.

Latin America Pawn Segment Operating Results

Note: Certain growth rates below are calculated on a constant currency basis, a non-GAAP financial measure defined at the end of this release. The average Mexican peso to U.S. dollar exchange rate for the first quarter of 2025 was 20.4 pesos / dollar, an unfavorable change of 20% versus the comparable prior-year period.

Given the 20% decrease in the average Mexican peso exchange rate, first quarter segment pre-tax operating income decreased 2% on a U.S. dollar basis compared to last year. Segment earnings increased 13% over last year on a constant currency basis, with resulting segment pre-tax operating margins of 17% under both measures, compared to 16% in the prior year.
Pawn receivables at March 31, 2025 decreased 5% on a U.S. dollar basis while increasing 15% on a constant currency basis compared to the prior year. On a same-store basis, pawn receivables decreased 5% on a U.S. dollar basis but increased 14% on a constant currency basis compared to the prior year.
While total and same-store pawn loan fees in the first quarter decreased 5% on a U.S. dollar-basis, they increased 13% on a constant currency basis compared to the prior-year quarter.
Retail merchandise sales in the first quarter of 2025 decreased 8% on a U.S. dollar-basis compared to the prior-year quarter while increasing 9% on a constant currency basis. On a same-store basis, first quarter retail merchandise sales decreased 9% on a U.S. dollar basis while increasing 9% on a constant currency basis compared to the prior-year quarter.
Retail margins were 35% for the first quarter of 2025 compared to 36% in the prior-year quarter. Annualized inventory turnover was 4.2 times for the trailing twelve months ended March 31, 2025 compared to 4.4 times in the prior-year period. Inventories aged greater than one year at March 31, 2025 remained low at 2%.
Operating expenses decreased 9% in total and 8% on a same-store basis compared to the prior-year quarter. On a constant currency basis, they increased 8% both in total and on a same-store basis. The increase in constant currency expenses from all stores reflected increased store counts and higher labor costs (due primarily to further increases in the federal minimum wage), along with other inflationary impacts.

American First Finance (AFF) – Retail POS Payment Solutions Segment Operating Results

First quarter segment pre-tax operating income totaled $52 million, an increase of 58% compared to the prior-year quarter. The growth in earnings was driven primarily by gross margin improvement and operating expense reductions.
While gross revenues, comprised of lease-to-own (“LTO”) fees and interest and fees on finance receivables, decreased 12% compared to the prior-year quarter, net revenue increased 12%. The improvement in net revenue reflected lower LTO depreciation expense resulting from lower early buyout activity in the current quarter combined with lower lease and loan loss provisioning expense as discussed below.
Gross transaction volume of lease and loan originations during the first quarter decreased $21 million, or 8%, compared to the first quarter of last year. Excluding 2024 originations from American Freight and Conn’s Home Plus (both of which ceased operations in the fourth quarter of 2024 due to bankruptcy), first quarter 2025 origination volume increased approximately 24%.
Combined gross leased merchandise and finance receivables outstanding at March 31, 2025 decreased 4% compared to the March 31, 2024 balances due to lower first quarter originations.
The combined first quarter lease and loan loss provision expense decreased $10 million, or 13%, compared to last year. The decrease reflected reduced up-front provisioning given the $21 million decline in origination activity, coupled with lower than expected charge-offs resulting in reserve releases on older vintages. As a percentage of the total gross transaction volume, the combined lease and loan loss provision expense was 27% for the first quarter of 2025 compared to 29% in the first quarter of 2024. The combined allowance as a percentage of combined leased merchandise and finance receivables at March 31, 2025 was 43% compared to 42% a year ago.
Operating expenses decreased 30% compared to the prior-year quarter, primarily due to the elimination of certain expenses associated with supporting the American Freight and Conn’s Home Plus relationships along with continued realization of operating synergies, including greater efficiencies in technology and development infrastructure, coupled with other cost reduction initiatives.

Cash Flow and Liquidity

Consolidated operating cash flows for the twelve month period ended March 31, 2025 grew 27% and totaled $544 million compared to $428 million in the same prior-year period, with significant contributions from each of the Company’s three business segments.
Adjusted free cash flows increased 33% to $269 million in the twelve month period ended March 31, 2025 compared to $201 million in the same prior-year period.
The operating cash flows helped fund significant growth in earning assets and continued investments in the pawn store platform over the past twelve months with a nominal increase in net debt:
- Pawn earning assets (pawn receivables and inventories) increased $76 million compared to last year.
- A total of 38 pawn stores were acquired for a combined purchase price of $103 million.
- 53 new pawn stores were added with a combined investment of $19 million in fixed assets and working capital.
- Real estate purchases totaled $82 million as the Company purchased the underlying real estate at 56 of its existing pawn stores, bringing the number of Company-owned properties to 407 locations.
Net debt at March 31, 2025 was $1.6 billion, of which $1.5 billion is fixed rate debt with favorable interest rates ranging from 4.625% to 6.875% and maturity dates that do not begin until 2028 and continue into 2032. The outstanding balance under the Company’s $700 million revolving line of credit totaled $175 million at March 31, 2025.
Based on trailing twelve month results, the Company’s net debt to adjusted EBITDA ratio improved to 2.68x at March 31, 2025.

Shareholder Returns

The Board of Directors declared a $0.38 per share second quarter cash dividend, which will be paid on May 30, 2025 to stockholders of record as of May 15, 2025. This represents an annualized dividend of $1.52 per share. Any future dividends are subject to approval by the Company’s Board of Directors.
During the first quarter, the Company repurchased 525,000 shares of common stock at a total cost of $60 million and an average price of $113.54 per share.
Over the past twelve months, the Company has repurchased 1,246,000 shares of common stock at a total cost of $145 million and paid out $67 million in cash dividends, representing a payout ratio of approximately 75% of net income over the same period.
The Company has $55 million available under the $200 million share repurchase program authorized in July 2023. Future share repurchases are subject to expected liquidity, acquisitions and other investment opportunities, debt covenant restrictions, market conditions and other relevant factors.
The Company generated a 14% return on equity and a 6% return on assets for the twelve months ended March 31, 2025. Using adjusted net income for the twelve months ended March 31, 2025, the adjusted return on equity was 16% while the adjusted return on assets was 7%.

2025 Outlook

Driven by the strong first quarter results and continued demand for pawn loans, the outlook for 2025 remains highly positive, with expected year-over-year growth in income driven by the continued growth in earning asset balances coupled with store additions. Anticipated conditions and trends for the remainder of 2025 include the following:

Pawn Operations:

Pawn operations are expected to remain the primary earnings driver in 2025 as the Company expects segment income from the combined U.S. and Latin America pawn segments to be over 80% of total segment level pre-tax income for the full year.
The Company expects further growth in the pawn store base in 2025 through a combination of new store openings and potential acquisitions. The guidance provided below does not assume any material acquisition activity.

U.S. Pawn

Same-store pawn loans at March 31, 2025 were up 13% compared to a year ago, with April balances to date up similarly. Given the strength of the first quarter same-store results, the increase in pawn fee growth is estimated to be in a range of 9% to 11% for the full year.
Retail sales are expected to grow mid-single digits in 2025, with retail sales margins targeted at approximately 41% to 42%.

Latin America Pawn

U.S. dollar-reported results for Latin America in 2025 are expected to be impacted by the lower exchange rate for the Mexican peso, which has most recently been in a range of approximately 20 to 21 pesos per U.S. dollar compared to the average exchange rate of 18.3 to 1 in 2024.
Same-store pawn receivables at March 31, 2025 were down 5% on a U.S. dollar basis but up 14% on a constant currency basis, with April balances to date up similarly. Full year pawn fee growth is now expected to increase in a range of 10% to 12% on a local currency basis while it is projected to be flat to down slightly on a U.S. dollar basis, given the current exchange rate.
Retail sales in Latin America are also expected to track similarly to pawn fees in 2025 with consistent retail margins.

Retail POS Payment Solutions (AFF) Operations:

Despite an 8% year-over-year decrease in first quarter originations, the forecast for full year origination volume for 2025 is expected to be consistent with or slightly above full year 2024 volume. Excluding 2024 originations from Conn’s Home Plus and American Freight, origination volumes are expected to increase in a range of 20% to 25% over 2024, reflecting continued diversification outside the furniture vertical.
While net revenue in the first quarter benefited from lower credit provisioning on reduced originations and older vintage reserve releases, the remainder of the year will see increased loss provisioning consistent with the expected growth in origination activity over the balance of 2025.
Given the above origination and provisioning dynamics, second quarter net revenues are expected to decline 14% to 16% over last year, with full year net revenues forecast to decline in a range of 8% to 12% compared to the prior year. Quarterly operating expenses for the balance of 2025 are expected to remain consistent with the first quarter run rate.
The Company is raising AFF segment earnings expectations for 2025, with full year segment income now expected to increase over last year in a mid single-digit percentage range given the strong first quarter results coupled with the continued operating expense savings.

Tax Rates and Currency:

The full year 2025 effective income tax rate under current tax codes in the U.S. and Latin America is expected to range from 24.5% to 25.5%.
Each full point change in the exchange rate of the Mexican peso is projected to have an annual earnings impact of approximately $0.10 per share.

Additional Commentary and Analysis

Mr. Wessel further commented on FirstCash’s strong first quarter results and the outlook for the remainder of 2025, “As reported, our first quarter operating results were outstanding for each business segment and provide tremendous momentum as we begin the second quarter.

“The operating fundamentals in our core pawn segments remain especially strong given current demand for pawn loans. Total outstanding pawn loans at the end of the quarter were up 16% in the U.S. and 15% in Latin America, on a local currency basis, while the average loan amounts were up 11% in the U.S and 7% in Latin America on a local currency basis. At the same time, retail sales and margins remain solid given the deep-value, treasure-hunt nature of our retail showrooms.

“FirstCash continued to invest in the long-term growth of its core pawn assets by expanding its presence in existing markets and entering new markets across both segments. Over the last 12 months, we have added a total of 91 locations through new store openings and acquisitions. The Las Vegas location acquired in the first quarter is expected to deliver significantly higher retail revenue than a typical store, and with the addition of pawn products, should drive even greater profitability and further raise our profile in the high-end segment of the pawn market. Most importantly, the pipeline driving pawn store growth remains robust as we continue to open new stores and evaluate additional acquisition opportunities across multiple markets.

“In addition, we continue to purchase the underlying real estate of high-performing U.S. stores where we now own over 400 locations, representing over a third of our domestic locations. These real estate acquisitions give us not only long-term control of our prime locations, but also reduce future operating costs. At the same time, we continue to reduce current expenses in certain markets in both the U.S. and Latin America, where we often have overlapping locations arising from acquisitions. By consolidating the operations of these overlapping stores into single locations, we can achieve significant cost savings.

“First quarter results for AFF were also positive in almost every aspect despite the bankruptcies of two of its larger furniture lease-to-own merchant partners in late 2024. While revenues declined slightly as expected, we more than offset the impact with strong collection results on the existing portfolios and reduced operating expenses. Our resulting outlook for 2025 earnings is improved and we continue to see a clear path for long-term growth of the AFF segment.

“Strong consolidated cash flows again supported the growth and further shareholder returns through year-over-year growth in earning assets, new and acquired stores and further share repurchases and dividends. The 525,000 shares repurchased in the first quarter for $60 million were executed at an average price of less than $114 per share. At the same time, we reduced outstanding debt on our revolving credit facility by $23 million and decreased the leverage ratio during the quarter.

“In summary, the current market environment remains extremely strong for our pawn-focused business model. Pawn products do well in challenging or uncertain economic cycles and combine well with a deep-value retail sales channel that has limited direct impact from tariffs. With our excellent balance sheet and cash flows, we have a strong platform to continue to drive expected long-term growth in revenues, earnings and shareholder value,” concluded Mr. Wessel.

About FirstCash

FirstCash is the leading international operator of pawn stores focused on serving cash and credit-constrained consumers. FirstCash’s more than 3,000 pawn stores in the U.S. and Latin America buy and sell a wide variety of jewelry, electronics, tools, appliances, sporting goods, musical instruments and other merchandise, and make small non-recourse pawn loans secured by pledged personal property. FirstCash’s pawn segments in the U.S. and Latin America currently account for approximately 80% of annualized segment earnings, with the remainder provided by its wholly owned subsidiary, AFF, which provides lease-to-own and retail finance payment solutions for consumer goods and services.

FirstCash is a component company in both the Standard & Poor’s MidCap 400 Index® and the Russell 2000 Index®. FirstCash’s common stock (ticker symbol “FCFS”) is traded on the Nasdaq, the creator of the world’s first electronic stock market. For additional information regarding FirstCash and the services it provides, visit FirstCash’s websites located at http://www.firstcash.com and http://www.americanfirstfinance.com.

Forward-Looking Information

This release contains forward-looking statements about the business, financial condition, outlook and prospects of FirstCash Holdings, Inc. and its wholly owned subsidiaries (together, the “Company”), including the Company’s outlook for 2025. Forward-looking statements, as that term is defined in the Private Securities Litigation Reform Act of 1995, can be identified by the use of forward-looking terminology such as “outlook,” “believes,” “projects,” “expects,” “may,” “estimates,” “should,” “plans,” “targets,” “intends,” “could,” “would,” “anticipates,” “potential,” “confident,” “optimistic,” or the negative thereof, or other variations thereon, or comparable terminology, or by discussions of strategy, objectives, estimates, guidance, expectations, outlook and future plans. Forward-looking statements can also be identified by the fact these statements do not relate strictly to historical or current matters. Rather, forward-looking statements relate to anticipated or expected events, activities, trends or results. Because forward-looking statements relate to matters that have not yet occurred, these statements are inherently subject to risks and uncertainties.

While the Company believes the expectations reflected in forward-looking statements are reasonable, there can be no assurances such expectations will prove to be accurate. Security holders are cautioned that such forward-looking statements involve risks and uncertainties. Certain factors may cause results to differ materially from those anticipated by the forward-looking statements made in this release. Such factors may include, without limitation, risks related to the extensive regulatory environment in which the Company operates, including uncertainty involving the current regulatory environment under the current presidential administration; risks associated with the legal and regulatory proceedings that the Company is a party to or may become a party to in the future, including the Consumer Financial Protection Bureau (the “CFPB”) lawsuit filed against the Company; risks related to the Company’s acquisitions, including the failure of the Company’s acquisitions to deliver the estimated value and benefits expected by the Company and the ability of the Company to continue to identify and consummate acquisitions on favorable terms, if at all; potential changes in consumer behavior and shopping patterns which could impact demand for the Company’s pawn loan, retail, lease-to-own (“LTO”) and retail finance products; labor shortages and increased labor costs; a deterioration in the economic conditions in the United States and Latin America, including as a result of inflation, elevated interest rates and trade policy, which potentially could have an impact on discretionary consumer spending and demand for the Company’s products; currency fluctuations, primarily involving the Mexican peso; competition the Company faces from other retailers and providers of retail payment solutions; the ability of the Company to successfully execute on its business strategies; contraction in sales activity at merchant partners of the Company’s retail point-of-sale (“POS”) payment solutions business; impact of store closures, financial difficulties or even bankruptcies at the merchant partners of the Company’s retail POS payment solutions business; the ability of the Company’s retail POS payment solutions business to continue to grow its base of merchant partners, including those outside of the furniture vertical; and other risks discussed and described in the Company’s most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”), including the risks described in Part 1, Item 1A, “Risk Factors” thereof, and other reports filed with the SEC. Many of these risks and uncertainties are beyond the ability of the Company to control, nor can the Company predict, in many cases, all of the risks and uncertainties that could cause its actual results to differ materially from those indicated by the forward-looking statements. The forward-looking statements contained in this release speak only as of the date of this release, and the Company expressly disclaims any obligation or undertaking to report any updates or revisions to any such statement to reflect any change in the Company’s expectations or any change in events, conditions or circumstances on which any such statement is based, except as required by law.


FIRSTCASH HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF INCOME
(unaudited, in thousands)

	Three Months Ended
	March 31,
		2025			2024
Revenue:
Retail merchandise sales	$	371,056		$	366,821
Pawn loan fees		191,871			179,535
Leased merchandise income		156,918			205,671
Interest and fees on finance receivables		73,413			57,387
Wholesale scrap jewelry sales		43,165			26,956
Total revenue		836,423			836,370

Cost of revenue:
Cost of retail merchandise sold		224,124			223,529
Depreciation of leased merchandise		88,819			120,284
Provision for lease losses		27,562			43,010
Provision for loan losses		36,360			30,418
Cost of wholesale scrap jewelry sold		35,355			23,289
Total cost of revenue		412,220			440,530

Net revenue		424,203			395,840

Expenses and other income:
Operating expenses		214,586			221,136
Administrative expenses		48,523			44,018
Depreciation and amortization		25,502			26,027
Interest expense		27,471			25,418
Interest income		(1,229	)		(743	)
Gain on foreign exchange		(14	)		(186	)
Merger and acquisition expenses		462			597
Other income, net		(2,315	)		(2,312	)
Total expenses and other income		312,986			313,955

Income before income taxes		111,217			81,885

Provision for income taxes		27,626			20,517

Net income	$	83,591		$	61,368

Certain amounts in the consolidated statement of income for the three months ended March 31, 2024 have been reclassified in order to conform to the 2025 presentation.

FIRSTCASH HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands)

	March 31,						December 31,
		2025			2024			2024
ASSETS
Cash and cash equivalents	$	146,034		$	135,070		$	175,095
Accounts receivable, net		71,166			69,703			73,325
Pawn loans		499,710			456,079			517,867
Finance receivables, net		145,079			105,653			147,501
Inventories		334,700			302,385			334,580
Leased merchandise, net		103,612			157,785			128,437
Prepaid expenses and other current assets		26,033			30,460			26,943
Total current assets		1,326,334			1,257,135			1,403,748

Property and equipment, net		724,213			658,349			717,916
Operating lease right of use asset		329,183			320,515			324,646
Goodwill		1,815,139			1,730,353			1,787,172
Intangible assets, net		216,736			265,184			228,858
Other assets		9,952			10,080			9,934
Deferred tax assets, net		4,720			5,836			4,712
Total assets	$	4,426,277		$	4,247,452		$	4,476,986

LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable and accrued liabilities	$	129,137		$	138,812		$	171,540
Customer deposits and prepayments		76,211			75,423			72,703
Lease liability, current		96,539			100,874			95,161
Total current liabilities		301,887			315,109			339,404

Revolving unsecured credit facilities		175,000			15,000			198,000
Senior unsecured notes		1,532,099			1,529,147			1,531,346
Deferred tax liabilities, net		129,936			133,606			128,574
Lease liability, non-current		228,995			209,208			225,498
Total liabilities		2,367,917			2,202,070			2,422,822

Stockholders’ equity:
Common stock		575			573			575
Additional paid-in capital		1,755,591			1,727,564			1,767,569
Retained earnings		1,477,730			1,263,564			1,411,083
Accumulated other comprehensive loss		(130,540	)		(36,702	)		(129,596	)
Common stock held in treasury, at cost		(1,044,996	)		(909,617	)		(995,467	)
Total stockholders’ equity		2,058,360			2,045,382			2,054,164
Total liabilities and stockholders’ equity	$	4,426,277		$	4,247,452		$	4,476,986

FIRSTCASH HOLDINGS, INC.
SEGMENT RESULTS
(UNAUDITED)

The Company organizes its operations into three reportable segments as follows:

U.S. pawn
Latin America pawn
Retail POS payment solutions (AFF)

Corporate expenses and income, which include administrative expenses, corporate depreciation and amortization, interest expense, interest income, gain on foreign exchange, merger and acquisition expenses, and other income, net, are presented on a consolidated basis and are not allocated to the segments. Intersegment transactions related to AFF’s LTO payment solution product offered in U.S. pawn stores are eliminated from consolidated totals.

U.S. Pawn Operating Results and Margins (dollars in thousands)

	Three Months Ended
	March 31,
	2025			2024			Increase
Revenue:
Retail merchandise sales	$	251,225		$	236,990		6	%
Pawn loan fees		137,948			122,974		12	%
Wholesale scrap jewelry sales		33,492			17,726		89	%
Total revenue		422,665			377,690		12	%

Cost of revenue:
Cost of retail merchandise sold		145,758			139,914		4	%
Cost of wholesale scrap jewelry sold		27,224			15,266		78	%
Total cost of revenue		172,982			155,180		11	%

Net revenue		249,683			222,510		12	%

Segment expenses:
Operating expenses		128,951			118,895		8	%
Depreciation and amortization		7,600			7,013		8	%
Total segment expenses		136,551			125,908		8	%

Segment pre-tax operating income	$	113,132		$	96,602		17	%

Operating metrics:
Retail merchandise sales margin	42		%	41		%
Net revenue margin	59		%	59		%
Segment pre-tax operating margin	27		%	26		%

FIRSTCASH HOLDINGS, INC.
SEGMENT RESULTS (CONTINUED)
(UNAUDITED)

U.S. Pawn Earning Assets and Portfolio Metrics (dollars in thousands, except as otherwise noted)

	As of March 31,
	2025			2024			Increase
Earning assets:
Pawn loans	$	365,972		$	315,792		16	%
Inventories		246,237			216,762		14	%
	$	612,209		$	532,554		15	%

Average outstanding pawn loan amount (in ones)	$	289		$	261		11	%

Composition of pawn collateral:
General merchandise	27		%	29		%
Jewelry	73		%	71		%
	100		%	100		%

Composition of inventories:
General merchandise	39		%	41		%
Jewelry	61		%	59		%
	100		%	100		%

Percentage of inventory aged greater than one year	2		%	1		%

Inventory turns (trailing twelve months cost of merchandise sales divided by average inventories)	2.8 times			2.8 times

FIRSTCASH HOLDINGS, INC.
SEGMENT RESULTS (CONTINUED)
(UNAUDITED)

Constant currency results are non-GAAP financial measures, which exclude the effects of foreign currency translation and are calculated by translating current-year results at prior-year average exchange rates. See the “Constant Currency Results” section below for additional discussion of constant currency operating results.

Latin America Pawn Operating Results and Margins (dollars in thousands)

												Constant Currency Basis
												Three Months
												Ended
		Three Months Ended										March 31,
		March 31,						Increase /					2025		Increase
			2025			2024		(Decrease)				(Non-GAAP)			(Non-GAAP)
Revenue:
Retail merchandise sales		$	120,532		$	130,849			(8	)%		$	143,211			9	%
Pawn loan fees			53,923			56,561			(5	)%			64,091			13	%
Wholesale scrap jewelry sales			9,673			9,230			5	%			9,673			5	%
Total revenue			184,128			196,640			(6	)%			216,975			10	%

Cost of revenue:
Cost of retail merchandise sold			78,739			84,183			(6	)%			93,439			11	%
Cost of wholesale scrap jewelry sold			8,131			8,023			1	%			9,647			20	%
Total cost of revenue			86,870			92,206			(6	)%			103,086			12	%

Net revenue			97,258			104,434			(7	)%			113,889			9	%

Segment expenses:
Operating expenses			61,417			67,425			(9	)%			72,515			8	%
Depreciation and amortization			4,436			5,105			(13	)%			5,216			2	%
Total segment expenses			65,853			72,530			(9	)%			77,731			7	%

Segment pre-tax operating income		$	31,405		$	31,904			(2	)%		$	36,158			13	%

Operating metrics:
Retail merchandise sales margin	35			%	36		%				35			%
Net revenue margin	53			%	53		%				52			%
Segment pre-tax operating margin	17			%	16		%				17			%

FIRSTCASH HOLDINGS, INC.
SEGMENT RESULTS (CONTINUED)
(UNAUDITED)

Latin America Pawn Earning Assets and Portfolio Metrics (dollars in thousands, except as otherwise noted)

									Constant Currency Basis
									As of
									March 31,
	As of March 31,						Increase /		2025		Increase
	2025			2024			(Decrease)		(Non-GAAP)		(Non-GAAP)
Earning assets:
Pawn loans	$	133,738		$	140,287		(5	)%	$	161,065	15	%
Inventories		88,463			85,623		3	%		106,579	24	%
	$	222,201		$	225,910		(2	)%	$	267,644	18	%

Average outstanding pawn loan amount (in ones)	$	86		$	97		(11	)%	$	104	7	%

Composition of pawn collateral:
General merchandise	58		%	63		%
Jewelry	42		%	37		%
	100		%	100		%

Composition of inventories:
General merchandise	62		%	66		%
Jewelry	38		%	34		%
	100		%	100		%

Percentage of inventory aged greater than one year	2		%	1		%

Inventory turns (trailing twelve months cost of merchandise sales divided by average inventories)	4.2 times			4.4 times

FIRSTCASH HOLDINGS, INC.
SEGMENT RESULTS (CONTINUED)
(UNAUDITED)

Retail POS Payment Solutions Operating Results (dollars in thousands)

	Three Months Ended
	March 31,				Increase /
		2025		2024	(Decrease)
Revenue:
Leased merchandise income	$	156,918	$	205,671	(24	)%
Interest and fees on finance receivables		73,413		57,387	28	%
Total revenue		230,331		263,058	(12	)%

Cost of revenue:
Depreciation of leased merchandise		89,143		120,774	(26	)%
Provision for lease losses		27,604		43,180	(36	)%
Provision for loan losses		36,360		30,418	20	%
Total cost of revenue		153,107		194,372	(21	)%

Net revenue		77,224		68,686	12	%

Segment expenses:
Operating expenses		24,218		34,816	(30	)%
Depreciation and amortization		705		721	(2	)%
Total segment expenses		24,923		35,537	(30	)%

Segment pre-tax operating income	$	52,301	$	33,149	58	%

FIRSTCASH HOLDINGS, INC.
SEGMENT RESULTS (CONTINUED)
(UNAUDITED)

Retail POS Payment Solutions Gross Transaction Volumes (dollars in thousands)

	Three Months Ended
	March 31,				Increase /
		2025		2024	(Decrease)
Leased merchandise	$	94,305	$	154,121		(39	)%
Finance receivables		141,262		102,165		38	%
Total gross transaction volume	$	235,567	$	256,286		(8	)%

Retail POS Payment Solutions Earning Assets (dollars in thousands)

	As of March 31,						Increase /
		2025			2024		(Decrease)
Leased merchandise, net:
Leased merchandise, before allowance for lease losses	$	172,886		$	253,876			(32	)%
Less allowance for lease losses		(69,077	)		(95,786	)		(28	)%
Leased merchandise, net	$	103,809		$	158,090			(34	)%

Finance receivables, net:
Finance receivables, before allowance for loan losses	$	263,421		$	201,673			31	%
Less allowance for loan losses		(118,342	)		(96,020	)		23	%
Finance receivables, net	$	145,079		$	105,653			37	%

FIRSTCASH HOLDINGS, INC.
SEGMENT RESULTS (CONTINUED)
(UNAUDITED)

Allowance for Lease and Loan Losses and Other Portfolio Metrics (dollars in thousands)

	Three Months Ended
	March 31,						Increase /
		2025			2024		(Decrease)
Allowance for lease losses:
Balance at beginning of period	$	80,661		$	95,752			(16	)%
Provision for lease losses		27,604			43,180			(36	)%
Charge-offs		(41,528	)		(45,149	)		(8	)%
Recoveries		2,340			2,003			17	%
Balance at end of period	$	69,077		$	95,786			(28	)%

Leased merchandise portfolio metrics:
Provision rate ⁽¹⁾	29		%	28		%
Average monthly net charge-off rate ⁽²⁾	6.8		%	5.5		%
Delinquency rate ⁽³⁾	22.6		%	20.5		%

Allowance for loan losses:
Balance at beginning of period	$	117,005		$	96,454			21	%
Provision for loan losses		36,360			30,418			20	%
Charge-offs		(38,419	)		(33,279	)		15	%
Recoveries		3,396			2,427			40	%
Balance at end of period	$	118,342		$	96,020			23	%

Finance receivables portfolio metrics:
Provision rate ⁽¹⁾	26		%	30		%
Average monthly net charge-off rate ⁽²⁾	4.4		%	5.0		%
Delinquency rate ⁽³⁾	19.3		%	19.2		%

_{⁽¹⁾Calculated as provision for lease or loan losses as a percentage of the respective gross transaction volume originated.}
_{⁽²⁾Calculated as charge-offs, net of recoveries, as a percentage of the respective average earning asset balance before allowance for lease or loan losses.}
_{⁽³⁾Calculated as the percentage of the respective contractual earning asset balance owed that is 1 to 89 days past due (the Company charges off leases and finance receivables when they are 90 days or more contractually past due).}

FIRSTCASH HOLDINGS, INC.
PAWN STORE LOCATIONS AND MERCHANT PARTNER LOCATIONS

Pawn Operations

As of March 31, 2025, the Company operated 3,023 pawn store locations composed of 1,197 stores in 29 U.S. states and the District of Columbia, 1,724 stores in 32 states in Mexico, 72 stores in Guatemala, 18 stores in El Salvador and 12 stores in Colombia.

The following table details pawn store count activity for the three months ended March 31, 2025:

	Three Months Ended March 31, 2025
	U.S.		Latin America		Total
Total locations, beginning of period	1,200		1,826		3,026
New locations opened	1		10		11
Locations acquired	1		—		1
Consolidation of existing pawn locations ⁽¹⁾	(5	)	(10	)	(15	)
Total locations, end of period	1,197		1,826		3,023

_{⁽¹⁾Store consolidations were primarily acquired locations which have been combined with overlapping stores and for which the Company expects to maintain a significant portion of the acquired customer base in the consolidated location.}

Retail POS Payment Solutions

As of March 31, 2025, AFF provided LTO and retail POS payment solutions for consumer goods and services through a network of approximately 14,500 active retail merchant partner locations. This compares to the active door count of approximately 12,200 locations at March 31, 2024.

FIRSTCASH HOLDINGS, INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
TO GAAP FINANCIAL MEASURES
(UNAUDITED)

The Company uses certain financial calculations such as adjusted net income, adjusted diluted earnings per share, EBITDA, adjusted EBITDA, free cash flow, adjusted free cash flow, adjusted return on equity, adjusted return on assets and constant currency results as factors in the measurement and evaluation of the Company’s operating performance and period-over-period growth. The Company derives these financial calculations on the basis of methodologies other than generally accepted accounting principles (“GAAP”), primarily by excluding from a comparable GAAP measure certain items the Company does not consider to be representative of its actual operating performance. These financial calculations are “non-GAAP financial measures” as defined under the SEC rules. The Company uses these non-GAAP financial measures in operating its business because management believes they are less susceptible to variances in actual operating performance that can result from the excluded items, other infrequent charges and currency fluctuations. The Company presents these financial measures to investors because management believes they are useful to investors in evaluating the primary factors that drive the Company’s core operating performance and provide greater transparency into the Company’s results of operations. However, items that are excluded and other adjustments and assumptions that are made in calculating these non-GAAP financial measures are significant components in understanding and assessing the Company’s financial performance. These non-GAAP financial measures should be evaluated in conjunction with, and are not a substitute for, the Company’s GAAP financial measures. Further, because these non-GAAP financial measures are not determined in accordance with GAAP, and are thus susceptible to varying calculations, the non-GAAP financial measures, as presented, may not be comparable to other similarly-titled measures of other companies.

While acquisitions are an important part of the Company’s overall strategy, the Company has adjusted the applicable financial calculations to exclude merger and acquisition expenses and amortization of acquired AFF intangible assets. The Company does not consider these items to be related to the organic operations of the acquired businesses or its continuing operations and are generally not relevant to assessing or estimating the long-term performance of the acquired businesses. In addition, excluding these items allows for more accurate comparisons of the financial results to prior periods. Merger and acquisition expenses include incremental costs directly associated with merger and acquisition activities, including professional fees, legal expenses, severance, retention and other employee-related costs, contract breakage costs and costs related to the consolidation of technology systems and corporate facilities, among others.

The Company has certain leases in Mexico which are denominated in U.S. dollars. The lease liability of these U.S. dollar-denominated leases, which is considered a monetary liability, is remeasured into Mexican pesos using current period exchange rates, resulting in the recognition of foreign currency exchange gains or losses. The Company has adjusted the applicable financial measures to exclude these remeasurement gains or losses (1) because they are non-cash, non-operating items that could create volatility in the Company’s consolidated results of operations due to the magnitude of the end of period lease liability being remeasured and (2) to improve comparability of current periods presented with prior periods.

FIRSTCASH HOLDINGS, INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
TO GAAP FINANCIAL MEASURES (CONTINUED)
(UNAUDITED)

Adjusted Net Income and Adjusted Diluted Earnings Per Share

Management believes the presentation of adjusted net income and adjusted diluted earnings per share provides investors with greater transparency and provides a more complete understanding of the Company’s financial performance and prospects for the future by excluding items that management believes are non-operating in nature and are not representative of the Company’s core operating performance. In addition, management believes the adjustments shown below are useful to investors in order to allow them to compare the Company’s financial results for the current periods presented with the prior periods presented.

The following tables provide a reconciliation between net income and diluted earnings per share calculated in accordance with GAAP to adjusted net income and adjusted diluted earnings per share, which are shown net of tax (in thousands, except per share amounts):

							Trailing Twelve
	Three Months Ended						Months Ended
	March 31,						March 31,
		2025			2024			2025		2024
	In Thousands			In Thousands			In Thousands		In Thousands
Net income, as reported	$	83,591		$	61,368		$	281,038	$	233,281
Adjustments, net of tax:
Merger and acquisition expenses		354			457			1,603		6,524
Non-cash foreign currency loss (gain) related to lease liability		40			(169	)		2,836		(1,100	)
AFF purchase accounting and other adjustments		9,258			9,573			37,974		52,812
Other expenses (income), net		(462	)		(1,040	)		1,821		(2,154	)
Adjusted net income	$	92,781		$	70,189		$	325,272	$	289,363

	Three Months Ended
	March 31,
		2025			2024
	Per Share			Per Share
Diluted earnings per share, as reported	$	1.87		$	1.35
Adjustments, net of tax:
Merger and acquisition expenses		—			0.01
AFF purchase accounting and other adjustments		0.21			0.21
Other expenses (income), net		(0.01	)		(0.02	)
Adjusted diluted earnings per share	$	2.07		$	1.55

FIRSTCASH HOLDINGS, INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
TO GAAP FINANCIAL MEASURES (CONTINUED)
(UNAUDITED)

Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) and Adjusted EBITDA

The Company defines EBITDA as net income before income taxes, depreciation and amortization, interest expense and interest income and adjusted EBITDA as EBITDA adjusted for certain items, as listed below, that management considers to be non-operating in nature and not representative of its actual operating performance. The Company believes EBITDA and adjusted EBITDA are commonly used by investors to assess a company’s financial performance, and adjusted EBITDA is used as a starting point in the calculation of the consolidated total debt ratio as defined in the Company’s senior unsecured notes. The following table provides a reconciliation of net income to EBITDA and adjusted EBITDA (in thousands):

							Trailing Twelve
	Three Months Ended						Months Ended
	March 31,						March 31,
	2025			2024			2025			2024
Net income	$	83,591		$	61,368		$	281,038		$	233,281
Income taxes		27,626			20,517			91,070			78,240
Depreciation and amortization		25,502			26,027			104,416			108,077
Interest expense		27,471			25,418			107,279			97,764
Interest income		(1,229	)		(743	)		(2,421	)		(1,695	)
EBITDA		162,961			132,587			581,382			515,667
Adjustments:
Merger and acquisition expenses		462			597			2,093			8,488
Non-cash foreign currency loss (gain) related to lease liability		57			(241	)		4,053			(1,571	)
AFF purchase accounting and other adjustments ⁽¹⁾		—			—			—			13,968
Other expenses (income), net		(600	)		(1,351	)		2,197			(2,798	)
Adjusted EBITDA	$	162,880		$	131,592		$	589,725		$	533,754

_{⁽¹⁾For the twelve months ended March 31, 2024, amount represents other non-recurring costs included in administrative expenses related to a discontinued finance product.}

FIRSTCASH HOLDINGS, INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
TO GAAP FINANCIAL MEASURES (CONTINUED)
(UNAUDITED)

Free Cash Flow and Adjusted Free Cash Flow

For purposes of its internal liquidity assessments, the Company considers free cash flow and adjusted free cash flow. The Company defines free cash flow as cash flow from operating activities less purchases of furniture, fixtures, equipment and improvements and net fundings/repayments of pawn loan and finance receivables, which are considered to be operating in nature by the Company but are included in cash flow from investing activities. Adjusted free cash flow is defined as free cash flow adjusted for merger and acquisition expenses paid that management considers to be non-operating in nature.

Free cash flow and adjusted free cash flow are commonly used by investors as additional measures of cash generated by business operations that may be used to repay scheduled debt maturities and debt service or, following payment of such debt obligations and other non-discretionary items, that may be available to invest in future growth through new business development activities or acquisitions, repurchase stock, pay cash dividends or repay debt obligations prior to their maturities. These metrics can also be used to evaluate the Company’s ability to generate cash flow from business operations and the impact that this cash flow has on the Company’s liquidity. However, free cash flow and adjusted free cash flow have limitations as analytical tools and should not be considered in isolation or as a substitute for cash flow from operating activities or other income statement data prepared in accordance with GAAP. The following table reconciles cash flow from operating activities to free cash flow and adjusted free cash flow (in thousands):

							Trailing Twelve
	Three Months Ended						Months Ended
	March 31,						March 31,
		2025			2024			2025			2024
Cash flow from operating activities	$	126,640		$	122,532		$	544,066		$	428,080
Cash flow from certain investing activities:
Pawn loans, net ⁽¹⁾		19,440			25,149			(77,708	)		(54,187	)
Finance receivables, net		(20,566	)		(15,311	)		(144,569	)		(106,213	)
Purchases of furniture, fixtures, equipment and improvements		(12,914	)		(26,427	)		(54,732	)		(72,747	)
Free cash flow		112,600			105,943			267,057			194,933
Merger and acquisition expenses paid, net of tax benefit		354			457			1,603			6,524
Adjusted free cash flow	$	112,954		$	106,400		$	268,660		$	201,457

_{⁽¹⁾Includes the funding of new loans net of cash repayments and recovery of principal through the sale of inventories acquired from forfeiture of pawn collateral.}

FIRSTCASH HOLDINGS, INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
TO GAAP FINANCIAL MEASURES (CONTINUED)
(UNAUDITED)

Adjusted Return on Equity and Adjusted Return on Assets

Management believes the presentation of adjusted return on equity and adjusted return on assets provides investors with greater transparency and provides a more complete understanding of the Company’s financial performance by excluding items that management believes are non-operating in nature and not representative of the Company’s core operating performance.

Annualized adjusted return on equity and adjusted return on assets is calculated as follows (dollars in thousands):

	Trailing Twelve
	Months Ended
	March 31, 2025
Adjusted net income⁽¹⁾	$	325,272

Average stockholders’ equity (average of five most recent quarter-end balances)	$	2,027,110
Adjusted return on equity (trailing twelve months adjusted net income divided by average equity)	16		%

Average total assets (average of five most recent quarter-end balances)	$	4,373,194
Adjusted return on assets (trailing twelve months adjusted net income divided by average total assets)	7		%

_{⁽¹⁾See detail of adjustments to net income in the “Adjusted Net Income and Adjusted Diluted Earnings Per Share” section above.}

Constant Currency Results

The Company’s reporting currency is the U.S. dollar, however, certain performance metrics discussed in this release are presented on a “constant currency” basis, which is considered a non-GAAP financial measure. The Company’s management uses constant currency results to evaluate operating results of business operations in Latin America, which are transacted in local currencies in Mexico, Guatemala and Colombia. The Company also has operations in El Salvador, where the reporting and functional currency is the U.S. dollar.

The Company believes constant currency results provide valuable supplemental information regarding the underlying performance of its business operations in Latin America, consistent with how the Company’s management evaluates such performance and operating results. Constant currency results reported herein are calculated by translating certain balance sheet and income statement items denominated in local currencies using the exchange rate from the prior-year comparable period, as opposed to the current comparable period, in order to exclude the effects of foreign currency rate fluctuations for purposes of evaluating period-over-period comparisons. See the Latin America pawn segment tables elsewhere in this release for additional reconciliation of certain constant currency amounts to as reported GAAP amounts.

FIRSTCASH HOLDINGS, INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
TO GAAP FINANCIAL MEASURES (CONTINUED)
(UNAUDITED)

Exchange Rates for the Mexican Peso, Guatemalan Quetzal and Colombian Peso

	March 31,		Favorable /
	2025	2024	(Unfavorable)
Mexican peso / U.S. dollar exchange rate:
End-of-period	20.3	16.7	(22	)%
Three months ended	20.4	17.0	(20	)%

Guatemalan quetzal / U.S. dollar exchange rate:
End-of-period	7.7	7.8	1	%
Three months ended	7.7	7.8	1	%

Colombian peso / U.S. dollar exchange rate:
End-of-period	4,193	3,842	(9	)%
Three months ended	4,191	3,915	(7	)%

The MIL Network –

April 24, 2025

Category: Emissions Trading

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